September 2019 | K.T. Williams Law

Choosing Well: Your Trustee, Executor, Attorney-in-Fact, Health Care Surrogate

September 27, 2019/in Estate Planning /by KT Williams

When you plan for your future, one of the questions you consider is “Who will help me AND carry out the plans I’ve created?” Although you can select one person to do it all, there are many roles to be filled, and different people can fill them. These roles include Trustee of any trust you create, Executor of your Last Will and Testament, Attorney-in-Fact under your Power of Attorney, and Health Care Surrogate in your Living Will or Health Care Power of Attorney. Each one is a fiduciary. Fiduciaries can hold a lot of power—they make crucial financial decisions, act as advocates for your wishes, make sure an estate’s debts are settled, and ensure that each beneficiary gets what they were intended to receive. When selecting who will carry out these duties, choosing well can be the difference between a seamless transition and a complete calamity.

Who To Choose?

When it comes to choosing the best individual for the role, you may be inclined to choose a loved one. A loved one may be a fine choice. But, I’ve seen close family members and friends turn out to be poor choices.

Unfortunately, in those instances, the warning signs were ignored. Those who serve in these roles have a great deal of responsibility. So you should carefully consider who would be most appropriate to fill each role. And you must not ignore signals that suggest against choosing someone for an important role of authority and responsibility.

Important Characteristics To Consider.

These are some important characteristics that you should look for when selecting any type of fiduciary. Naturally, many people are tempted to select a close friend or family member to serve in the fiduciary role, but it is crucial to make sure that the candidate has the capacity and capability to carry out the role you have in mind for them. They must be over age 18. Consider if they have any medical conditions or legal concerns that could get in the way of serving you. Also, consider their age, location, and how busy they are. Someone who seems great for a role might me too busy, although I’ve seen that some of the busiest people are also the most effective. Your fiduciaries should have these characteristics:

• Trustworthy
• Responsible and organized
• Accountable
• Independent
• Financially stable and secure

While any fiduciary should have these important characteristics, there are also more things to consider when deciding who is the best choice for specific roles. Your best choice for a trustee, for example might make a poor health care surrogate. Let’s look at some questions to consider for each role.

Agent under a Healthcare Power of Attorney:

Does this person have the ability to make tough, emotionally difficult decisions quickly? Will they be able to effectively advocate for your wishes to medical personnel and to family members? Do you both hold the same values? (For example, don’t pick someone who doesn’t believe in refusing or removing life support if you do!) Are they available to be quickly reached or to quickly arrive at a medical facility in the event of an emergency?

Agent under a Financial Power of Attorney:

Are they responsible and trustworthy? Are they sensible enough to make financial decisions, such as assessing investments and filing taxes? Are they wise enough to know their limits and when to seek guidance and help from professionals such as your CPA, financial advisor, attorney, or insurance agent?

Trustee of a Trust or Executor of a Will:

Is this person organized? Are they accountable? Can they withstand pressures from beneficiaries or third parties over the course of the trust or estate administration? Is the person in good financial standing (with a good credit history, no liens against them, etc.)? Would they likely be available and capable of serving as executor or trustee when the time comes, even if it is years down the road?

Final Thoughts.

If you cannot identify an individual in your family or circle of friends to fulfill any of these roles, or if you realize that a third party would be the best choice, then an institution (like a bank or trust company) should be considered. With a team of professionals dedicated to making sure tasks are completed on time and correctly and with years of experience, a bank or trust company should never be ignored as a viable option. Regardless, as you select your fiduciaries, select ones who can work together to ensure that your wishes are carried out successfully and that you are cared for properly. We are here to help as you try to choose well.

Revocable Living Trusts: The Basics.

September 20, 2019/in Asset Preservation /by KT Williams

The Revocable Living Trust (Living Trust) is the most common trust-based estate planning tool. Compared to other planning options, it provides more flexibility and control for you. But that’s not all. There are other reasons why a Living Trust may be appropriate. We’ll explore some of those reasons in this article.

Misconceptions About Living Trusts.

Before we get too far in this article, I want to address some misconceptions about Living Trusts. Whether a Living Trust is right for you has little to do with your wealth, the size of your estate, or the type of assets you own. Anyone who says that you don’t need a Living Trust unless you are wealthy doesn’t know what they’re talking about. And they probably aren’t a dedicated Estate Planning/Elder Law attorney. We must be careful about where we get our legal advice, the same as we must be careful about where we get our health care advice. The truth about Living Trusts is very simple: whether a Living Trust is right for you is based on your goals and whether the Living Trust is the best way to achieve them. So a thorough evaluation of your goals and the ways to achieve them must occur before anyone can say whether a Living Trust is right for you.

What Is A Living Trust?

A Living Trust is a trust that is created during your lifetime outside of your Will. A trust created in your Will is called a Testamentary Trust. A Testamentary Trust doesn’t come into existence until after your death and your Will is probated in Court. A Living Trust comes into existence the moment you sign it and transfer an asset into it. The Living Trust can hold just about any asset you might want to transfer to it including bank accounts, investment accounts, personal property, and real estate. The Trustee of the Living Trust will hold and manage those assets according to the instructions contained in the Living Trust agreement. And the Trustee will distribute those assets according to the instructions, too. For example, the Living Trust might say that some of the assets in the Living Trust should be distributed to certain beneficiaries shortly after your death. The Trustee will follow those instructions and make the distribution. In this way, the Living Trust functions like a Will in that it directs distributions of your assets to beneficiaries. But unlike a Will, the Living Trust comes without the extra time and expense of court involvement and estate administration. Another advantage to the Living Trust explained in more detail below is the ability to distribute the assets over time rather than all at once.

Does A Living Trust Avoid Probate (Estate Administration)?

Probate, or estate administration, is the court-based process by which a person’s assets are collected, managed, then distributed after death by the Estate’s Executor or Administrator to the person’s beneficiaries or heirs. Probate can be time consuming, costly, and open to the public. If you want privacy, convenience, and lower costs, probate is not where you’ll find it. A Living Trust can avoid probate for you. To achieve this, you place your assets in the Living Trust so that they are in the trust that you control at your death rather than in your sole name which would require court involvement as part of your estate.

When Is A Living Trust Helpful?

People find Living Trusts helpful in many instances, but some instances are more common than others. For example, if the person you would want to be your estate’s executor has a busy life, isn’t local, or might find being in court stressful, the Living Trust is a simple way to allow them to handle your assets without the stress and extra time commitments of court involvement.

A Living Trust is also helpful when you want to benefit people over time rather than give your assets to them all at once. Many people want their assets to flow to the beneficiaries at intervals. With the Living Trust, you can structure the distribution so that the assets are distributed at whatever intervals you think will be best for your beneficiary. Also, a Living Trust is helpful when you want to protect your assets.

How Does a Living Trust Protect Assets?

Assets we pass all at once to our children or other beneficiaries through inheritance are immediately available to them to use in whatever fashion they desire. Perhaps, that is what you want. But problems can arise from such distributions. For example, if the beneficiary divorces after receiving the inheritance, the assets you passed to them could be lost to the divorcing spouse. Also, if your beneficiary dies after receiving all of the assets, the surviving spouse is likely to receive all of the assets and make them available to their new significant other who might not be favorable to your family. Most of us want our assets to benefit our family – that is, our children, grandchildren, and so on. We don’t want our assets lost to people outside our family. A Living Trust, with careful tailoring of its instructions and terms, can protect the assets you place in the trust from these scenarios while allowing your beneficiaries to reap the benefit of the assets you allocate to them.

Also, if you want to leave an inheritance for someone with special needs or who is receiving government benefits, the inheritance could cause them to be ineligible for future benefits or to lose their current benefits. You don’t want that to happen. Or they may be required to spend the inheritance within a very short time, perhaps a single month or less, to retain their government benefits. And you don’t want that to happen either. Fortunately, you can leave their inheritance in the Living Trust with terms crafted to address this unique situation so that the inheritance in the Living Trust could serve to provide important supplemental benefits to them without affecting the program benefits which may be vital to them.

Is A Living Trust Right For You?

A Living Trust could be right for you. But it depends. It depends on your goals. It depends on what matters to you. It depends on what you want to achieve with your assets. It depends on how you want your assets to affect the people who matter to you. Simply put, the only way to know if a Living Trust is right for you is for us to look at it together. We’ll explore the answers to the questions, then we’ll look at the different estate planning options that are available to you. Often this process occurs with input from your financial advisor, your CPA, and your insurance agent so that we can each continue to serve you best. Contact me to learn more about a Living Trust and other options to achieve your Estate Planning/Elder Law goals.

Elder Law: What Is It and Why Do I Do It?

September 13, 2019/in Asset Preservation /by KT Williams

You may regularly hear about Elder Law and think you need it. And you would probably be right. But you may wonder what it is. Elder Law is many things, but here is some of what it is:

• Protecting your assets and income from nursing home and other age-related costs;
• Navigating the maze of rules and laws that govern how nursing home care is paid, including Medicaid, so you don’t have to navigate it alone;
• Protecting your friends and family from abuse or substandard care by caregivers;
• Helping you or your family understand and qualify for Medicaid;
• Working with you and your financial advisor, CPA, and insurer to coordinate an asset and income structure that will keep you and your family comfortable for your lifetime;
• Helping you stay at home and avoid the nursing home if staying home is important to you;
• Many more….

You can see that Elder Law is about more than nursing homes and applying for Medicaid. It is also about more than protecting your assets. While Elder Law often includes these things, it also includes much more, such as the quality of your golden years.

Elder Law Is More Than Applying For Medicaid.

Many people think Elder Law is simply applying for Medicaid. And Elder Law often includes applying for Medicaid. We’re here to help when Medicaid is needed and to apply for the Medicaid benefits to which our clients are entitled. But Elder Law also involves more than the application. It involves understanding Medicaid and other programs to which senior citizens and the elderly are entitled so that, long before Medicaid benefits are needed, we can prepare our clients to maximize those benefits and get what they are entitled to receive.

Elder Law is More Than Estate Planning.

Estate Planning is traditionally aimed at helping you pass assets to the beneficiaries that matter to you. If those beneficiaries need help managing the assets or if you want to protect the assets for them, trusts are often involved. Elder Law is that and more. Elder Law prepares us for the future we are likely to face before we pass. But it’s a future we sometimes don’t want to consider: in-home and nursing home care when we aren’t able to care for ourselves. Elder Law considers the rest of your life and how you want to pass your assets after your death.

Elder Law Considers Our Future Needs.

You want to be comfortable with the amount of assets and income you saved. Also, you want to be comfortable that your assets will pass to the beneficiaries who matter to you. But there are other important questions to consider: are you certain you will have enough assets and income to cover your needs before you pass? And are you certain there will be assets left over to pass to those who matter to you? In other words, are you sure your assets and income won’t be lost to pay for nursing home care as you age? If you go to a nursing home without proper planning, your hope to pass your assets to loved ones may be misplaced. Nursing home costs quickly consume assets and income, leaving nothing.

While we may think we won’t go to a nursing home, nursing home care for us is almost inevitable. Studies show that at least 70% of us are likely to require nursing home care. And with costs nearing $8,000 per month and higher in some areas, few can afford it. Elder Law guides you toward an asset and income structure that will help make sure you remain comfortable, well taken care of, and in the place you want to live.

Elder Law Helps Us Live Where We Want.

You want to be comfortable where you live as you age. Perhaps, that is your home. You want the comfort of your own home as you age. Or maybe assisted living appeals to you. You know it can be costly, but you realize the benefits of assisted living can’t be overstated. Either way, you don’t want to be forced into a nursing home because you lack the funds to get care in your home or to cover assisted living costs. Through Elder Law planning, we work to make that happen if it’s possible.

Why Do I Do Elder Law?

I want my client’s wishes to be carried out. If they want to pass assets to their family, I want to help them make sure they preserve those assets to pass. Also, I want them to get the benefits to which they are entitled. Unfortunately, many programs designed to benefit the elderly and their family aren’t user friendly. And the customer service aspect of some of the programs has been lost. Rather than helping people understand the programs and the available benefits, the culture in these programs seems aimed at blocking people from the benefits they should receive. That’s not acceptable. And it means people need an advocate, someone who will listen to them, care for them, and help them. They deserve to receive what they’re entitled to receive without being mistreated, ignored, or abused. And their family is entitled to be heard, too. So I do Elder Law to make sure voices are heard, to make sure people get the benefits to which they are entitled, and to make sure their wishes are carried out. I enjoy what I do. Contact us to see how I can help you or your family.

How To: Prepare for your Estate Planning meeting

September 6, 2019/in Asset Preservation, Estate Planning /by KT Williams

Important appointments like those for our annual physical with our physician or for going over our tax returns with our accountant can be intimidating and stressful. You might feel that way about your upcoming estate planning meeting, too. But you shouldn’t feel that way. Instead, realize that the meeting is a great step toward securing and controlling your future. And to make the most of the meeting, here are a few tips to help you prepare for it.

What Do You Want To Accomplish? What Are Your Goals?

One of the first things I plan to ask you is what you want to accomplish through our working together. Is it to make sure your assets pass to certain beneficiaries? Is it to limit taxes? Is it to protect your assets from nursing home costs? Is it to make sure your children or spouse are protected in the event you die young or otherwise unexpectedly? Is it a combination of several of these goals? Give it some thought before the meeting. It’s not necessary that you are certain of your goal. But it’s helpful if you have given it some thought. We will explore it more deeply in the meeting and help focus our attention on achieving your goal.

Consider Your Family’s Unique Dynamic.

All of us are unique, and our families are unique. So, you and your family should be treated uniquely. You deserve it. You shouldn’t be treated as if you were no different than everyone else who wants to plan their future. When we meet, I’ll ask you about your family. And it’s important for you to be honest. If you have someone who isn’t good with money, you should say so. If you have someone with substance abuse problems, you should say so. If you have someone, perhaps a child, whose spouse is overbearing, untrustworthy, or deceitful, you should say so. This will help us form a structure for your estate plan that will provide benefits without the risk that their uniqueness will cause problems.

Know Your Assets.

Identify your assets, their value, and how they are titled. In other words, have a good idea about what you have and in whose name it is owned. That will help us determine the best way for your assets to be protected and passed to your preferred beneficiary.

Think About Who You Trust and Want In Important Roles.

Who do you trust to do what is in your best interest? Will they take care of your family members, too? The executor of your estate identified in your Last Will and Testament should have good organization skills, be able to handle finances, and not give in to undue pressure that might come from someone who doesn’t have the estate or its beneficiaries’ interests as a priority. Your Attorney-in-Fact under your Power of Attorney should possess the same qualities as your executor, and they can be the same person. The authority of the Attorney-in-Fact will end when the person who gave the authority dies. If you have a trust, your trustee should possess these qualities, too. The trustee will manage the trust assets, handle them for the trust beneficiaries, and follow the directions contained in your trust. Obviously, the trustee must be someone who is trustworthy. You should be confident the trustee will do what you want and will follow the instructions in your trust for the trust’s beneficiaries.

It will help us with your planning if you have the contact information for your family members and any non-family members who you want to serve in an authority position like those identified here. Having that information at the planning meeting isn’t necessary, but it will be needed before the planning is completed.

Keep An Open Mind.

The planning that was done for your friends or family might be similar to what is appropriate for you. But don’t count on it. You are unique. Your assets are unique. Your goals may be unique. So, your planning should be appropriate for your unique circumstances. That means you need to keep an open mind about what planning may be most appropriate for you and strongly consider the recommendation that is made by the expert who is evaluating your situation and recommending the best way to handle it.

Ask Questions.

Ask questions if you don’t understand something about your estate planning or that is discussed in the estate planning meeting. I always try to fully explain the topics we cover in the meeting, but some of the topics are more complex than others and more difficult to explain and understand. Your questions may be the only way for me to know you don’t understand. I want you to be confident about what you’re doing and why you’re doing it. But it is hard to be confident if you don’t understand what is being done and why it is being done. Always feel free to ask questions until you have a solid understanding.

Make An Appointment.

Getting ready for your estate planning meeting starts with making an appointment. The goals that matter to you will not be achieved if you don’t begin the planning process. So, schedule your estate planning appointment. We’ll take you through the process and make it painless and enlightening. When we’re finished, you will have taken care of an important and necessary task for you and your family, and you will have relief and confidence that you’ve done it well. Contact us to get started.

Choosing Well: Your Trustee, Executor, Attorney-in-Fact, Health Care Surrogate

Revocable Living Trusts: The Basics.

Elder Law: What Is It and Why Do I Do It?

How To: Prepare for your Estate Planning meeting

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