Better to Play it Safe: Proactive Estate Planning and Cognitive Impairment

Most financially savvy individuals begin planning their estate when they’re in peak mental shape. The idea that this might change at some point in the distant future is an unpleasant one, and they would rather go about their estate planning as if they’ll be as sharp as a tack late into their golden years. Unfortunately, this common approach of ignoring a potential problem and hoping it simply won’t happen can leave a giant hole in your estate plan. Read on to find out that this common hole can be more easily filled than you might think.

Expect the best, but plan for the worst

The reality is that an individual’s chances of experiencing some form of cognitive impairment rise with age. While it’s never certain whether cognitive impairment will occur, smart estate planning means factoring it in as a very real possibility.

As the huge baby boomer generation transitions from the workforce and begins to make their way into retirement, cases of Alzheimer’s are expected to spike from the current 5.1 million to 13.2 million as soon as 2050. Alzheimer’s is just one of several cognitive impairment conditions along with dementia and the much more common mild cognitive impairment, or MCI, which is often a precursor to those more serious ailments.

As U.S. life expectancies increase, the chances of living with cognitive impairment increase as well — with at least 9.5 percent of Americans over 70 experiencing it in one form or another.

No matter your age or family history, cognitive impairment can affect anyone although it’s widely accepted to affect mostly older adults. As you implement or revise your estate plan, it is well worth the effort to plan for this potential. Luckily, estate planning attorneys have developed good solutions to handle this circumstance and can help guide you on the best way to protect yourself and your family.

An easily-avoidable estate planning mistake

Consider Ashley’s story. A successful real estate agent with a stellar career in her hometown of Kalamazoo, MI, Ashley begins planning her estate in her mid-thirties.

She partners with an estate planning attorney, and together they draft a revocable living trust with Ashley’s preferred beneficiaries and charities in mind, figure out guardianship for her two sons in case she and her husband pass suddenly, and settle on an appropriate beneficiary for her life insurance policy. Now that she knows where her assets will go after her death, Ashley rests easy assuming there’s nothing more that needs doing in her estate plan.

Save your family from obstacles and conundrums

But forty years down the road, Ashley’s children realize her MCI is developing into Alzheimer’s. Although she’s occasionally visited with her attorney to make adjustments to her plan,  she never added any provisions for how she wanted her children and other guardians to handle a situation like this. Here’s where things get complicated.

Ashley did not work with her estate planning attorney to put disability provisions into her trust and never worked with an insurance professional to purchase adequate income insurance or long-term care insurance. The care she requires to live her best life possible with cognitive impairment doesn’t come cheap. Those mounting care costs will likely quickly erode Ashley’s estate. As a result, her estate plan may no longer work as intended, since it no longer lines up with her actual asset portfolio.

But since Ashley does not have the ability to rework her estate plan in her current mental state, her family is left with the burden of figuring out what to do while navigating a complex and bureaucratic legal system in the guardianship or conservatorship court. No one in the family really knows what Ashley’s wishes are regarding both serious medical decisions and financial changes. All Ashley’s family wants is to see her enjoying her remaining years in peace and security, but they are now tasked with using guesswork to make difficult choices on her behalf while a guardianship or conservatorship court watches every move.

Give us a call today  at Lambert Elder Care Law, (229) 292-8989.

Factoring the potential for cognitive impairment into your estate plan doesn’t have to be a headache. In fact, a little effort now by legally designating who you want to be in charge and what you want them to do can have a wonderful impact on you and your family later on. We can work together to ensure your estate plan is ready for whatever life throws your way. Give us a call today to find out how painless and cost-effective this process can be.

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Do It Now: Name a Guardian for Your Minor Child(ren)

We know it’s hard. Thinking about someone else raising your children stops us all in our tracks. It feels crushing and too horrific to consider. But you must. If you don’t, a stranger will determine who raises your children if something happens to you – your child’s guardian could be a relative you despise or even a stranger you’ve never met.

No one will ever be you or parent exactly like you, but there is someone who could muddle through and provide for your children’s general welfare, education, and medical needs. Parents with minor children need to name someone to raise them (a guardian) in the event both parents should die before the child becomes an adult. While the likelihood of that actually happening is slim, the consequences of not naming a guardian are more than intense.

If no guardian is named in your will, a judge – a stranger who does not know you, your child, or your relatives and friends – will decide who will raise your child. Anyone can ask to be considered, and the judge will select the person she deems most appropriate. Families tend to fight over children, especially if there’s money involved – and worse – no one may be willing to take your child; if that happens, the judge will place your child in foster care. On the other hand, if you name a guardian, the judge will likely support your choice.

How to Choose a Guardian

Your child’s guardian can be a relative or friend. Here are factors our clients have considered when selecting guardians (and backup guardians).

  • How well the child and potential guardian know and enjoy each other
  • Parenting style, moral values, educational level, health practices, religious/spiritual beliefs
  • Location – if the guardian lives far away, your child would have to move from a familiar school, friends, and neighborhood
  • The child’s age and the age and health of the guardian-candidates:
    • Grandparents may have the time, and they may or may not have the energy to keep up with a toddler or teenager.
    • An older guardian may become ill and/or even die before the child is grown, so there would be a double loss.
    • A younger guardian, especially a sibling, may be concentrating on finishing college or starting a career.
  • Emotional preparedness:
    • Someone who is single or who doesn’t want children may resent having to care for your children.
    • Someone with a houseful of their own children may or may not want more around.

WARNING: Serving as guardian and raising your child is a big deal; don’t spring such a responsibility on anyone. Ask your top candidates if they would be willing to serve, and name at least one alternate in case the first choice becomes unable to serve.

Who’s in Charge of the Money

Raising your child should not be a financial burden for the guardian, and a candidate’s lack of finances should not be the deciding factor. You will need to provide enough money (from assets and/or life insurance) to provide for your child. Some parents also earmark funds to help the guardian buy a larger car or add onto their existing home, so there’s plenty of room for extra children.

Factors to consider:

  • Naming a separate person to handle this money can be a good idea. That person would be a guardian of the estate or a trustee, but not guardian of the children.
  • However, having the same person raise the child and handle the money can make things simpler because the guardian would not have to ask someone else for money.
  • But the best person to raise the child may not be the best person to handle the money and it may be tempting for them to use this money for their own purposes.

Compromise Will Likely be Necessary

Naming a guardian is a difficult decision for most parents. Keep in mind that this person will probably not raise your child because odds are that at least one parent will survive until the child is grown. By naming a guardian, however, you are being responsible and planning ahead for an unlikely, yet possible, situation. It’s important to realize that no one besides you will be the perfect parent for your child, so typically this means making compromises in some areas. Select the person you think will muddle through the best.

Let’s Continue this Conversation

We know it’s not easy, but don’t let that stop you. We’re happy to talk this through with you and legally document your wishes. Know that you can change your mind and select a different guardian anytime you’d like – and – the chances of needing the guardian named in your will is slim; but, you’re a parent and your job is to provide for and protect your children, so let’s do this – together. Call our office now for an appointment and we’ll get your children protected.  LAMBERT ELDER CARE LAW, 229-292-8989.

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5 Reasons to Embrace the Emotional Nature of Estate Planning

When you hear the phrase “estate plan,” you might first think about paperwork. Or your mind might land on some of the uncomfortable topics that estate planning confronts head-on: end-of-life decisions, incapacity, and your family’s legacy from generation to generation. Those subjects hit home for everyone.

But while that could feel like a reason to avoid estate planning, the emotional nature of these decisions is actually a reason to embrace the process with enthusiasm. Here are a few ways in which emotion in estate planning is a good thing:

  1. Estate planning creates stability in times of loss

If you end up in a state of incapacity later in life, it’s guaranteed to be a difficult time for your family. If your estate plan doesn’t include detailed instructions for a trusted decision maker and an actionable long-term care plan, it’s guaranteed to be even worse. You can save your loved ones from the confusion about what to do and the pressure to make rushed choices if this occurs, allowing them to save their energy for processing the situation. (more…)

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How to Choose a Trustee

When you establish a trust, you name someone to be the trustee. A trustee does what you do right now with your financial affairs – collect income, pay bills and taxes, save and invest for the future, buy and sell assets, provide for your loved ones, keep accurate records, and generally keep things organized and in good order.

The Key Takeaways

  • You can be trustee of your revocable living trust. If you are married, your spouse can be co-trustee.
  • Most irrevocable trusts do not allow you to be trustee.
  • Even though you may be allowed to be your own trustee, you may not be the best choice.
  • You can also choose an adult child, trusted friend or a professional or corporate trustee.
  • Naming someone else to be co-trustee with you helps them become familiar with your trust, allows them to learn firsthand how you want the trust to operate, and lets you evaluate the co-trustee’s abilities.

Who Can Be Your Trustee

If you have a revocable living trust, you can be your own trustee. If you are married, your spouse can be trustee with you. This way, if either of you become incapacitated or die, the other can continue to handle your financial affairs without interruption. Most married couples who own assets together, especially those who have been married for some time, are usually co-trustees.

You don’t have to be your own trustee. Some people choose an adult son or daughter, a trusted friend or another relative. Some like having the experience and investment skills of a professional or corporate trustee (e.g., a bank trust department or trust company). Naming someone else as trustee or co-trustee with you does not mean you lose control. The trustee you name must follow the instructions in your trust and report to you. You can even replace your trustee should you change your mind.

When to Consider a Professional or Corporate Trustee

You may be elderly, widowed, and/or in declining health and have no children or other trusted relatives living nearby. Or your candidates may not have the time or ability to manage your trust. You may simply not have the time, desire or experience to manage your investments by yourself. Also, certain irrevocable trusts will not allow you to be trustee due to restrictions in the tax laws. In these situations, a professional or corporate trustee may be exactly what you need: they have the experience, time and resources to manage your trust and help you meet your investment goals.

What You Need to Know

Professional or corporate trustees will charge a fee to manage your trust, but generally the fee is quite reasonable, especially when you consider their experience, the services provided, and the investment returns that a professional trustee can deliver.

Actions to Consider

  • Honestly evaluate if you are the best choice to be your own trustee. Someone else may truly do a better job than you, especially in investing your assets.
  • Name someone to be co-trustee with you now. This would eliminate the time a successor would need to become knowledgeable about your trust, your assets, and the needs and personalities of your beneficiaries. It would also let you evaluate if the co-trustee is the right choice to manage the trust in your absence.
  • Evaluate your trustee candidates carefully and realistically.
  • If you are considering a professional or corporate trustee, talk to several. Compare their services, investment returns, and fees.

We can help you select, educate, and advise your successor trustees so they will have support and know what to do next to carry out your wishes. Give us a call today.  Lambert Elder Care Law 229-292-8989.

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How to Avoid High Octane Stress and Organize Information for Your Family

Think, for just a few moments, about what would happen if you suddenly became incapacitated or died. Would your spouse or family know what to do? Would they know where to find important records, assets, password, usernames, and insurance documents? Would they be able to access (or even know about) online accounts or files on your computer?

Would they know whom to ask if they need help? Would they miss assets or insurances you’ve paid for? Not knowing what’s out there, where to find it, and how to access it is extremely stressful and burdensome. If you put all of your information in a safe place and let loved ones know where it is, you’re providing for and protecting your family, instead of dumping stress on them at an already stressful time. Putting the effort in now, to establish a formal document inventory, will alleviate unnecessary anxiety and turmoil at one of the hardest times of their lives.

Key Takeaways

  • If you should suddenly become incapacitated or die, your family would need to know where to find the information they need.
  • Let your loved ones and trusted helpers know where to find your document inventory.
  • Do not assume your process will be readily understood by others; hold a trial run to make sure they can find and understand your records.
  • Keep your inventory current with a bi-annual or annual review.

Here’s the Information Your Loved Ones Will Need

There is a large volume of documents and information that your family would need during a calamitous event such as incapacitation (even temporary) or death. This basic list will help you start thinking of the critical information you would want your family to have within reach.

  • Legal documents (will, living trust, and health care documents; adoption, marriage, divorce, military discharge certificates; insurance policies, deeds, and car titles)
  • List of medications (with dosages) you are taking
  • List of your advisors (estate planning attorney, CPA, banker, insurance agent, financial advisor, and physicians)
  • Insurance policies (health, disability, long-term care, business, life, auto, homeowners, renters, and umbrella)
  • Year-end bank and investment account statements as well as the most recent quarter’s statement
  • Storage facility location, access method, and inventory
  • List of all assets and accounts, including location, account numbers, date purchased and purchase price
  • Safe deposit box location, list of contents and location of key
  • List of companies or people to whom you owe money (mortgage, credit cards, friend, etc.)
  • List of people who owe you money
  • Death, disability, pension, and insurance benefits from organizations
  • Past tax returns (6 years)
  • User IDs, passwords, and PINs for all financial, email, social media, photo sharing, bookkeeping, computer, and other online accounts

What You Need to Know

Your document inventory requires a methodical listing of both hardcopy and digital forms. While the effort will be more challenging at the start, the maintenance of the inventory is much simpler. Be mindful that your digital footprint will likely grow much faster in the future than it has in the past, but you’ll be able to keep up with it.

Additional Actions Necessary to Protect You and Your Loved Ones

  • Give current copies of your health care documents to your physicians and designated agent(s).
  • Keep your original documents in one safe place, like a fireproof safe. Make copies for the notebook described next.
  • Buy one or two three-ring binders to organize your personal and financial information. You can enter it by hand or create spreadsheets on your computer, but having it all in one or two binders will make it easy for your family to find and use. If you leave it on your computer, they may never find it. Include locations, contact information, account numbers, and approximate amounts.
  • Include a list of online accounts and how to access them (including passwords).
  • Clean up your computer desktop and put important files in an easy-to-find desktop folder.
  • Have a trial run. Ask your spouse or other trusted helpers (such as your successor trustee or executor) to pretend that he or she needs to access needed information.
  • At least once a year, but preferably every six months, review and update your notebook, computer desktop files, and usernames and passwords for online accounts.

Call us at Lambert Elder Care Law  (229) 292-8989 and let us help you make sure your estate planning is in order and organized for your loved ones.

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The Top 2 Ways the Court Gets Involved in Your Estate, and How to Avoid Them

No one wants unnecessary court involvement in their life. But without careful and proactive estate planning, chances are that some aspect of your estate will end up being decided there.

Here are two of the most common ways court proceedings can make their way into the management and distribution of your assets, along with the estate planning measures you can take to avoid them.

1. Guardianship and conservatorship

If you experience an inability to make decisions on your own behalf, also known as legal incapacity, and you don’t have provisions for what to do in this situation clearly outlined in your estate plan, it falls upon the guardianship or conservatorship court to decide who will become responsible for handling your finances, lifestyle, and medical care. You can become legally incapacitated because of an accident, injury, or degenerative illness. In the case of guardianship and conservatorship (sometimes called “living probate”), your estate’s details, as well as discussion about your medical conditions, may be made public and be the topic of court proceedings.

How to avoid it: To make sure the government doesn’t get involved in your wealth management and health care during your lifetime, you need to determine who will be your power of attorney. You can appoint durable and medical powers of attorney for various categories of management in your life and estate. A solid long-term care plan, living will, and fully-funded revocable trust are also crucial components in avoiding living probate proceedings.

2. The probate process

Probate is the name for the court proceeding that takes place after your death to prove that your will is valid and that its terms are carried out accurately and legally. Probate brings your financial and personal affairs out into the open via public forum, and your estate can dwindle due to legal fees incurred during this time. It can also take an excessive amount of time due to the slow nature of court proceedings, dragging out a potentially stressful episode for your family.

How to avoid it: Having a will does not avoid probate, since all wills must go through probate to be validated. Although you’ll often hear about joint tenancy, beneficiary designations, and other probate avoidance options as alternatives to wills, only a fully funded revocable trust can consolidate the management and preservation of all types of assets. So, the best way to avoid probate is to work with your estate planning attorney to establish and fully fund a revocable living trust and name your beneficiaries and trustees ahead of time.

We’re here to help

Estate planning can be a daunting thing to consider when you’re busy. And we know you are. That’s why we work diligently to present you with the best estate planning tools and strategies in a straightforward manner, letting you get back to focusing on what’s most important to you today. Give us a call to discuss what strategies will work best to keep your assets in your family and the court out of your affairs.   Lambert Elder Care Law 229-292-8989.

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Why Does a Living Trust Cost More than a Will?

 

Yes, you will likely invest more in trust-based planning than will-based planning because you get a whole lot more value. Comparing these estate planning investments is like comparing apples and oranges – and the overall investment may not be what you think.

 

  • A living trust document has more provisions than a will because it protects you and your loved ones while you are alive and well, while you are alive and not-so well, and after your death. A will only handles matters after death.
  • A properly prepared and funded living trust will avoid court proceedings at incapacity and death. A will provides no such protection and ensures court interference at both events, which can be very costly (in time, privacy, dollars, and stress) to your family.

(more…)

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The Real Life Perils of Online and Do-It-Yourself (DIY) Estate Planning

With the number of online and do-it-yourself (DIY) legal providers continuing to grow and advertise heavily, you may be wondering if you could do your estate planning with the help of these forms. The advertising is seductive. Ads say, “attorneys use similar forms,” “the cost is significantly less than hiring an attorney,” and “many of these websites and kits are created by attorneys.” Most folks think their estates are not complicated and many think forms are forms – and – attorneys just charge for forms, right? (more…)

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How to Avoid High Octane Stress and Organize Information for Your Family

Think, for just a few moments, about what would happen if you suddenly became incapacitated or died. Would your spouse or family know what to do? Would they know where to find important records, assets, password, usernames, and insurance documents? Would they be able to access (or even know about) online accounts or files on your computer?

Would they know whom to ask if they need help? Would they miss assets or insurances you’ve paid for? Not knowing what’s out there, where to find it, and how to access it is extremely stressful and burdensome. If you put all of your information in a safe place and let loved ones know where it is, you’re providing for and protecting your family, instead of dumping stress on them at an already stressful time. Putting the effort in now, to establish a formal document inventory, will alleviate unnecessary anxiety and turmoil at one of the hardest times of their lives.

Key Takeaways

  • If you should suddenly become incapacitated or die, your family would need to know where to find the information they need.
  • Let your loved ones and trusted helpers know where to find your document inventory.
  • Do not assume your process will be readily understood by others; hold a trial run to make sure they can find and understand your records.
  • Keep your inventory current with a bi-annual or annual review.

Here’s the Information Your Loved Ones Will Need

There is a large volume of documents and information that your family would need during a calamitous event such as incapacitation (even temporary) or death. This basic list will help you start thinking of the critical information you would want your family to have within reach.

  • Legal documents (will, living trust, and health care documents; adoption, marriage, divorce, military discharge certificates; insurance policies, deeds, and car titles)
  • List of medications (with dosages) you are taking
  • List of your advisors (estate planning attorney, CPA, banker, insurance agent, financial advisor, and physicians)
  • Insurance policies (health, disability, long-term care, business, life, auto, homeowners, renters, and umbrella)
  • Year-end bank and investment account statements as well as the most recent quarter’s statement
  • Storage facility location, access method, and inventory
  • List of all assets and accounts, including location, account numbers, date purchased and purchase price
  • Safe deposit box location, list of contents and location of key
  • List of companies or people to whom you owe money (mortgage, credit cards, friend, etc.)
  • List of people who owe you money
  • Death, disability, pension, and insurance benefits from organizations
  • Past tax returns (6 years)
  • User IDs, passwords, and PINs for all financial, email, social media, photo sharing, bookkeeping, computer, and other online accounts

(more…)

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3 Reasons You Want to Avoid Probate

When you pass away, your family may need to visit a probate court in order to claim their inheritance. This can happen if you own property (like a house, car, bank account, investment account, or other asset) in only your name. Although having a will is a good basic form of planning, a will does not avoid probate. Instead, a will simply lets you inform the probate court of your wishes – your family still has to go through the probate process to make those wishes legal.

Now that you have an idea of why probate might be necessary, here are 3 key reasons why you want to avoid probate if at all possible. (more…)

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