ARTICLES

Library Fires and Ethical Wills

There are actually three types of documents referred to as “wills.”  First, is the will of inheritance, often known as the Last Will and Testament.  This will is designed to be effective upon death, and its primary purpose is to direct the final administration of the dead person’s estate and the distribution of their property.  The second type is the Living Will.  The Living Will is usually a statement of what type of care a person wants when they are ill and cannot express their wishes themselves.  Most often, it is effective when the person has a terminal illness, their death is imminent, or they may be in a persistent vegetative state or irreversible coma.  If it appears life-sustaining treatment would only prolong the moment of death, the Living Will indicates whether life-sustaining treatment is desired.  Usually, life-sustaining treatment is defined, and the definition may include things like artificially administered food and fluid, CPR, mechanical ventilation, dialysis, etc. The third type of will is the lesser known Ethical Will.  The Ethical Will is a document that is used to communicate values, beliefs, hopes for the future, advice, life lessons, forgiveness, love, and often personal history.  While your Last Will and Testament tells people what you want them to have, the Ethical Will tells people what you want them to know.  Unlike the other two types of wills, the Ethical Will is not a legal document, but can be of great value and utility, and is useful in preparing to complete the other estate planning legal documents.  When properly done, an Ethical Will can make a huge difference for the...

Choosing Your Successor Trustee Agent or Executor

People often struggle with the decision of who should be placed in positions of authority in their estate planning documents.  In fact, not knowing who to choose for these key roles is one reason people often put off their estate planning. There are three or four major roles that must be filled as part of your estate plan.   Each of these roles gives individuals or entities a great deal of power and responsibility over your person and/or your estate.  The major positions are successor trustee, personal representative, financial power of attorney, and health care agent. A successor trustee is needed if you have a trust. Any type of estate plan requires powers of attorney and a personal representative, trust or not. If you have a Revocable Living Trust (RLT), it is most likely you will act as your own trustee unless and until you become incapacitated, or when you die.  If you are married, you will probably be co-trustee with your spouse.  As trustee, you have full authority over your assets while you are alive and well.  Upon your incapacity or death, if there is a spouse serving as co-trustee, that person may be designated to serve alone until their death or incapacity.  A decision must be made, however, who will eventually serve as the successor trustee.  That person will have the responsibility to manage your assets according to the directions you included in your trust.  Duties include paying your expenses, maintaining your property, providing for your care if you are incapacitated, and distributing your assets to others after your death. The personal representative is the person who administers...

Protecting Your Pet

I often say that my dear cat, Lillie, had never disappointed me.  Yes, our pets are very special.  In the United States, over 71 million households own a pet.  Many own more than one pet.  Surveys reveal that people are extremely close to their animals, with 79% admitting they sleep with their pet and 31% admitting they have taken time off work to be with a sick pet.  One source reported that 70% responded that if stranded on a desert isle, they would rather be with a pet than a spouse.  More than 40 billion dollars are spent on pets.  It is only natural that people take steps to protect their pet in the event they become disabled, incapacitated, or die. For the protection and well-being of their pets, there are a number of common sense measures I suggest clients take.  One such measure is to carry a pet emergency alert card in your wallet.  The pet card provides information that a pet is at your home, and a list of emergency caregivers for the pet.  The card will alert emergency personnel of the pet’s existence in the event you are hospitalized or dead.  There have been many cases of pets dying from neglect when the owner is in an accident or killed and people are unaware there is a pet waiting at home.  In fact, this was a very sad occurrence in the aftermath of the terrorist attack on September 11, 2001. Pet owners should also have a door sign at their home alerting emergency workers to pets inside.  If something happens such as a mechanical problem, gas...

Unwinding the Confusion Regarding Veteran Pension Benefits

Many veterans and their families have contacted me to ask about VA benefits, and in particular, VA pension benefits designed to help veterans and widows of veterans, who need financial assistance to pay for health care needs.  There is a great deal of confusion related to these benefits, much of it due to non-attorneys, such as insurance salespeople, who offer “free” assistance with applying for the benefits, in exchange for purchasing insurance products they often insist are necessary to protect the veteran’s assets. The typical scenario goes like this:  An insurance agent sets up informational “seminars” to discuss veterans’ benefits.  Sometimes they include a meal, and often they conduct these events at Assisted Living Facilities.  They explain that veterans may be eligible for benefits that can pay for care, including room and board at an assisted living.   They warn the veterans that in order to qualify, the veteran must move or otherwise shelter assets.  For that purpose, the insurance salesperson will usually offer to sell the veteran or his widow an annuity, which the insurance agent may then put into a boilerplate irrevocable trust. I have had more than one instance of having to help someone unwind the process because it was done unnecessarily, improperly, or resulted in unforeseen consequences.  This sometimes becomes one of those “free” services that end up costing thousands of dollars. This is not to say that all insurance salespeople are bad.  In fact, insurance salespeople are often an important component of the estate planning team.  But the reputable insurance salesperson will work with an attorney when dealing with legal issues. The type of benefit,...

Protecting Beneficiaries – and the Money You Leave Them

Inheritance can be left in many different ways, but there are three major methods.  One of the most common is to leave a sum of money “outright” or sometimes it is written, “outright and free of trust.”  Money can be left this way in a specific bequest (e.g. “I leave my grandson, Ronald Zack, $100,000 outright and free of trust.”), or it could be left as a percentage or share of an estate  (e.g. “I leave the residuary to my descendants in equal shares”).  After working with people inheriting money over many years, I can tell you that “outright” is not the best way to leave money to anyone. A second way is to leave an inheritance is in stages.  This could be a certain percentage at age milestones such as 25, 35, and 60.  This could be written in a trust or will, instructing the trustee or personal representative to distribute one-third of the share at age 25, half of the remaining amount at 35, and the balance at 60.  The share at each stage is distributed outright, in a lump sum.  The theory is that the recipient matures over time and is better able to handle and protect money at older ages.  This also prevents losing the entire amount at once.  Other milestones can also be used for a staged distribution.  Graduating college, getting married, or other such events may be used as triggers for receiving a partial amount. I have heard of studies that demonstrate that large sums of money received outright in a lump sum, often have a very short life expectancy.  In fact, an...