Attorney Abigail V. Poole discusses How to make sure your bills get paid if you become incapacitated, on Smart Counsel for Lunch
Power of Attorney
Attorney Abigail Poole discusses young adults and the Power of Attorney and Health Care Proxy for our Smart Counsel for Lunch Series. Did you know that when a child turns 18 that parents loose the right to make financial and healthcare decisions for them? If you have any questions or want to learn more please call us at 781 461-1020.
In light of the COVID-19 pandemic, many people have questions about what will happen if they get sick or pass away. As estate planners, these are questions we think about and answer every day. Our goal as estate planning attorneys is for everyone to have an updated estate plan that will ensure you and your family are taken care of in the event of illness or death. However, there are many folks for whom estate planning has not made it to the top of their To Do list. Here are five answers to many of the questions we are hearing (over the phone and online), and some steps you can take in the short run to give yourself some peace of mind.
- If I am hospitalized, who will decide what type of treatment I receive?
If you are able to make and communicate your own health care decisions, the doctors will look to you to make those decisions for yourself. If your illness is such that you are no longer able to make or communicate your own decisions, and if you have signed a Health Care Proxy, the doctor will look to the Health Care Agent you named in that document to make health care decisions for you.
Hopefully, if you are hospitalized, you already have a Health Care Proxy. If you do not have a Health Care Proxy, consider downloading, printing and completing the Massachusetts Health Care Proxy form here, and follow the instructions carefully. When the form is completed and signed, give a copy to your primary care physician and to each of your health care agents.
If you do not have a Health Care Proxy and your illness makes it impossible for you to create one, your family or the medical facility where you are resident may need to ask the Court to appoint a guardian for you. Your court appointed guardian would have the legal authority to make health care decisions on your behalf.
If you name a Health Care Agent in a Health Care Proxy, take the time to communicate your health care wishes to your Health Care Agent. There are many online tools available to facilitate these discussions. You can find a lot of good information and tools that will help you create a Health Care Proxy and discuss your health care wishes with your Health Care Agents on the Honoring Choices website. Additional tools can be found on the website of the American Bar Association’s Commission on Law and Aging. For discussions about end of life care, check out the Conversation Project.
- Who will make financial decisions for me if I can’t make them for myself?
Financial decision-making is an important part of our daily life. If you are unable to make these decisions yourself, you will need someone to pay your bills, file your income tax returns, manage your investments, sell or mortgage real estate, take distributions from your retirement accounts, and a variety of other things that arise on a daily basis. A Power of Attorney designates a person to handle financial matters on your behalf. The designee is called your attorney-in-fact. Many people name their spouse or an adult child as their attorney-in-fact. A so-called “durable” Power of Attorney permits action even after the person who created the document becomes incapacitated.
The law requires that the Power of Attorney specifically authorize the actions your attorney-in-fact may undertake on your behalf. For this reason, Powers of Attorney are typically drafted by an estate planning attorney who will tailor the powers granted to address your particular situation.
If you do not have a Power of Attorney and you become incapacitated, your family may petition the court to appoint a Conservator for you. A court-appointed conservator will have the legal authority to manage your financial affairs under court supervision.
- If I die and do not have a Will, what will happen to my assets?
If you pass away and have not signed a Will, the distribution of your assets depends on how your assets are owned, or whether a beneficiary has been designated to receive that asset at your death.
Assets that are jointly owned with another person (for example, your home that is owned jointly by you and your spouse) will (usually) pass automatically to the surviving joint owner.
Assets for which a beneficiary is designated (for example, your life insurance policies and retirement accounts) will be paid to the beneficiary you have designated to receive that asset at your death.
While joint ownership can seem like an easy way to ensure a person receives an asset at your death, keep in mind that adding a joint owner to an asset carries with it tax, ownership, liability and other implications, and should not be done before consulting with an attorney. Beneficiary designations are also best made in consultation with your estate planning attorney to ensure the designations do not disrupt the other provisions of your estate plan.
If you do not have a Will, for assets owned in your individual name without a joint owner or beneficiary, those assets will be distributed at your death according to the Massachusetts intestate laws.
If you are married, all of your assets will pass to your spouse if (a) you have no children or parents living, or (b) all of your children are also your spouse’s children, and your spouse has no children that are not your children.
If you are married and have no children, but you have parents living, your spouse will receive $200,000, plus three-quarters of the remaining assets, and your parents (or your surviving parent) will receive the rest.
If you are married and you have children who are also your spouse’s children, and either you or your spouse has a child who is not your spouse’s child, your spouse will receive $100,000, plus one-half of the remaining assets, and your children will receive the rest.
Without a Will, if you are not married, all of your assets will go to your descendants. If you have no descendants, all of your assets will go equally to your parents, or to your surviving parent. If you have no descendants or surviving parents, your assets will go to your siblings.
If a person is under the age of 18, any assets they inherit cannot be legally owned by them. The court will appoint a Conservator to manage those assets for the minor’s benefit until the minor reaches age 18, at which time the minor will receive ownership of the assets.
- What will happen to my minor children if I pass away?
If you don’t have a Will appointing a Guardian for your minor children, the court will appoint a Guardian who will have physical custody of your children, make decisions about where your children will live and go to school, their religious upbringing, and also make health care decisions for them.
If you have a Will, your Will will name the people you wish to be appointed as Guardian of your children. In all cases, the Court will determine who to appoint as Guardian based on what the Court determines is in the best interests of the child at the time.
Parents of minor children should also have a document that appoints a temporary guardian who will have authority to take temporary physical custody of a child until the permanent Guardian can be appointed by the Court.
If you have young children, consider creating a letter of instruction that provides important information about each child – the name and contact information for the child’s physician, allergies, other important medical information, food preferences, schedule, friends, activities, and other things you think someone should know if they had to care for your child unexpectedly.
- Where will my family begin if something happens to me?
One of the most important things you can do is get organized. Take the time to identify a place in your house where you keep important information and documents and let trusted family members know where that is. Consider a well-organized filing cabinet with clearly labeled folders and treat that as your estate planning repository. Include copies of your legal documents such as Wills, Trusts, Powers of Attorney and Health Care Proxies, as well as the contact information for your estate planning attorney, accountant and financial advisors. Also included should be recent account statements, life insurance and homeowner’s insurance policies, retirement account information, etc.
Compile and include a list of your assets (bank accounts, investment accounts, annuities, life insurance, retirement accounts, etc.) that includes the institution where each account is located, the account number, your contact person at that institution (if any) and their contact information. Also include a list of usernames and passwords for any important online accounts – financial, photo storage, email, social media, document storage accounts. Keep these lists updated and in the place where you keep other important papers so that they can be found.
If you have a safe deposit box, make sure at least one other trusted family member’s name is on the box so that they will have access after your death. This is especially important if your original Will or other estate plan documents are in the box.
A comprehensive estate plan drafted by an estate planning lawyer will address all of these issues – name guardians for your children, specify how your assets will be distributed at your death, designate decision-makers for financial and health care decisions if needed, and so much more. If you are concerned about not having legal documents in place, contact an estate planning attorney. Resist the urge to create these documents yourself. Whether on the back of a napkin or online at Legal Zoom, there is no substitute for the advice of an experienced attorney who will provide advice tailored to your particular family situation, your assets, and the tax and probate laws of your state of residence. If you are feeling concerned about the state of your estate plan, or lack thereof, give your local estate planning attorney, including our office, a call – we are here to help.
Maria Baler, Esq. is an estate planning lawyer and elder law attorney and partner at Samuel, Sayward & Baler LLC, a law firm based in Dedham. She is also a former director of the Massachusetts Chapter of the National Academy of Elder Law Attorneys (MassNAELA), and currently serves on the Board of Directors of the Massachusetts Forum of Estate Planning Attorneys. For more information, please visit www.ssbllc.com or call (781) 461-1020. This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney.
© 2020 Samuel, Sayward & Baler LLC
In late December, I slipped on some ice and broke my right ankle. I had surgery on the ankle in mid-January, and I am still in the process of recovering and working toward “getting back to normal.” As they say, “hindsight is 20/20”, and I have thought about what may have made the entire experience easier for both myself and my family members, friends, and work colleagues who have assisted me during this time. Below I share a few things that may help you be more prepared in case you encounter a similar situation.
- Health Care Proxy – Confirm your primary care physician has a copy of your most recent Health Care Proxy naming individuals to make health care decisions for you when you cannot (your “health care agent”). If you go to an unfamiliar hospital emergency room due to the injury, you cannot get your hands on a copy of your current Health Care Proxy, and you are cognizant, you may wish to request a Health Care Proxy from the nurse and complete it. While it will revoke your current Health Care Proxy, at least you will have given authority to your agent to make health care decisions if surgery is immediately required, and you will have provided the hospital with your agent’s contact information.
- Power of Attorney – Confirm your Power of Attorney is up-to-date and appoints the individuals you want to be responsible to pay your bills and make financial decisions on your behalf if you cannot (your “attorney-in-fact”). To assist your attorney-in-fact, create a list of the expenses you pay monthly. Include the company, account information, and when payments are typically due. A list of bank accounts from which bill payments could be made may also be helpful to your attorney-in-fact. Tell your attorney-in-fact and one or more trusted family members and/or friends where in your home this documentation can be found in the event of an emergency.
- Emergency Contact – If you carry a mobile phone, program in the contact information of an “In Case of Emergency (ICE)” person. Smart phones permit you to enter medical identification information, such as allergies, in addition to an ICE person which can be accessed without your password.
- Online Ordering – Consider online options to get daily and other necessities. There are several companies online that will deliver items to you at your home. I have ordered everything from medical supplies to groceries online these last few months and it has been incredibly helpful.
- Gratitude – Have gratitude for the kindness, compassion, and support you receive from family members, friends, and work colleagues while you navigate through the injury and recovery process.
In the meantime, if you visit the office and hear faint clangs and thumps, please do not be alarmed – that is probably me navigating the office on my crutches while I work toward getting back on my two feet again!
A couple of weeks ago I took my car in for a service appointment because the car was all stutter-y and the ‘Service Engine Soon’ light had come on. The service folks told me that the ‘ignition coils’ needed to be replaced and that the ‘valve cover gasket’ was leaking and also needed to be replaced. When I picked up the car, the service light was off and the car drove fine – no more stuttering – so clearly the analysis of the problem and the solution were correct. However, I left the service department a bit lighter in the wallet than when I went in and with no real understanding of what had happened other than my car had been broken and now it was fixed.
This started me thinking about the fact that everybody speaks a secret language. If I knew how a car engine works, what the parts are, or how they all fit together, my experience may have made perfect sense. But I don’t. Terms like ‘ignition coils’ and ‘leaky valve cover gaskets’ are as foreign to me as ‘je suis confus’ (that’s French for, ‘I’m confused’). The same holds true for other professions – think doctors, dentists and even hairdressers (what the heck is balayage?)!
Estate planning attorneys also speak a secret language that can leave clients puzzled about the advice they receive. While you may not need feel the need to know exactly what your mechanic means when he tells you that you to replace the evaporative emissions purge control valve on your car, it is important to understand what your estate planning attorney means when she tells you that you need to name a successor attorney-in-fact in your durable Power of Attorney.
Estate planning is about the most important thing to most people – their family. Understanding how the decisions you make in your Will, Trust, Power of Attorney, etc. (or that you fail to make if you do not have an estate plan) will affect the people you love is vital. So the next time you are meeting with your estate planning attorney and she advises you to “convey your real estate to a nominee Realty Trust so that it can be used to fund your credit shelter trusts,” make sure she explains ‘the why’ of this to you and that you understand that explanation. In the meantime, if your mechanic tells you that your car needs a new flux capacitor, you might want to look for a new mechanic!
© 2018 Samuel, Sayward & Baler LLC