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How to Build Freedom From Court Interference Into Your Life Planning

How to Build Freedom From Court Interference Into Your Life Planning

By deciding not to complete any planning for your life and eventual death, it might be because you are too busy, do not understand the importance of such planning or think that you can do it later. You may think that it is not a big deal to have the court involved in all of your personal affairs. Perhaps you don’t know the disadvantages of court interference or have first-hand experience of what can happen in the event of incapacity or death of a family member without a properly drafted and comprehensive legal life planning “aka estate planning.”

However, if you feel that the matters of your affairs should be kept private, prefer that someone you designated make decisions in the event of your inability without court interference, and that your assets should be distributed according to your wishes privately without court fees, you are in luck. Fortunately, all it takes is a proactive approach and a small investment. By acting now, you will save an enormous amount of stress and money and give you the peace of mind to live the life you desire knowing you have security for the future.

With that said, let’s dive in to the basics of Government Interference in the event of incapacity and at death. The two of the most common situations in which the court becomes involved in your estate are conservatorship/guardianship and probate:

Guardianship and Conservatorship

A person is declared incapacitated if they are unable to effectively handle their property or financial affairs documents. In their estate plan they can direct a trusted person to carry out their wishes during such time of incapacity.   So what happens if no such documents have been drafted? Then their business becomes the government’s business, too. A court proceeding called guardianship or conservatorship (also known as “living probate”) will be held to appoint guardians and conservators to manage the affairs of the incapacitated person. Then, the guardian/conservator may need to post a bond and then comply with all of the demanding court requirements. Most importantly, the decisions of the guardian/conservator may be contrary to what you had ultimately wanted for yourself and your finances.

Probate 

When an estate goes through probate, the court oversees the gathering of the probate assets, payment of any outstanding debts, determining whether a will is valid, and who the deceased’s heirs are. The proceedings ultimately determine who should receive the assets that are left after payment of debts, taxes, and costs. While this may sound straight-forward, it generally is not – to the contrary, it is often time-consuming and expensive. Also, the process of probate of public record and done for the benefit of creditors by ensuring the estate has paid its debts prior to any distributions to beneficiaries, should there be any money left after creditors are paid. If someone had a will, the Executor named may need to post Bond, which requires good credit. If that person does not have a good credit history, the Judge may not allow that person to serve and will appoint a Personal Representative, who could be a stranger to the decedent and could make decisions that are contrary to your wishes.

Staying out of Court

Probate avoidance – In order to avoid guardianship, conservatorship, and probate, you can work with me to keep your affairs out of court entirely.

  1. Powers of attorney

Agents or attorneys-in-fact are the individuals or entities you appoint to make decisions for you if you are unable due to incapacity. You designate agents or attorneys-in-fact in a document known as a Power of Attorney. A Durable Power of Attorney is a document that continues in validity after the incapacity of the maker of the document (i.e. “durable” against incapacity). Since a Durable Power of Attorney continues in validity, a Durable Power of Attorney can help bypass the need for court-appointed guardianship or conservatorship because the Agent has been nominated to make decisions, eliminating the need for a Judge.

  1. Trusts

Trusts are agreements that hold some or all of your assets. An individual or a corporate entity that you designate as your Successor Trustee will manage the assets inside of your Trust if and when you become incapacitated. Unlike wills, Trusts do not go through probate at your death because the agreement has spelled out exactly what will happen upon your death, bypassing the need for a Probate proceeding. There are several ways to structure a Living Trust and I can help you decide exactly how your Trust will be structured and how your estate will be planned.

By setting up and completely funding a Revocable Living Trust, you can accomplish two important things. First, you can rest assured that your assets will be distributed to your chosen beneficiaries and won’t go through probate upon your death. Second, you also retain the ability to change or cancel the arrangement during your lifetime enabling you to adjust your plan as your financial or family circumstances change.

Make sure your estate plan is solid and complete

Deciding on appropriate powers of attorney and drafting a Revocable Living Trust are just two of the many steps we can take together to keep your affairs free from court interference at incapacity and at death. With a solid estate plan put into place with my help, you can take comfort knowing that everything you’ve worked so hard to build and maintain will be passed along to only the people who matter most. Give me a call today to learn more about keeping your estate plan private and out of the Court’s hands.

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Embrace the Emotional Side of Estate Planning

Embrace the Emotional Side of Estate Planning

When you hear the phrase “estate plan,” you might first think about paperwork. Or you may focus on some of the uncomfortable topics that estate planning entails: 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.

  1. Comprehensive estate plans keep emotional matters private

Detailed, trust-based estate planning with lifetime beneficiary directed trusts keeps your private matters out of the public eye. When your estate plan is incomplete — such as a simple will — you’re running the risk of your estate going through court in a proceeding called Probate. This means that choices become visible to the public. Due to notice requirements, Probate can also invite controversy and conflict, which a private transfer would have avoided.

  1. Estate planning can bring a family together

Everyone has heard of a situation in which siblings argued over what their parents left them as beneficiaries. But the opposite is also quite true. When you get your family and other loved ones involved in your estate planning process, you gain a wonderful opportunity to show them how much you care. Creating your estate plan can strengthen the bonds of love in a family and serve as a reminder of those bonds for years to come.

  1. Your estate is about much more than money

 Estate planning is about a whole lot more than just wealth distribution and taxes. During an estate planning session, we can talk about significant family heirlooms, your hard-won hobby collection, and other matters totally unique to your life. We can even look into the memories and intellectual property you want to make sure your beneficiaries receive, such as photos, art, and even recorded videos or audio files of family stories you’d like to share with future generations.

  1. An estate plan means you’re not going it alone

 You shouldn’t have to face trying times alone. Whether the estate in question is yours or a loved one’s, I, as an Estate Planning Attorney can provide you support. I can help educate your appointed agents about their duties so you can know that your family will be in good hands if anything happens to you. The idea of setting everything straight on your own can be a stressful one, but these emotional decisions are much easier to make with a trusted advisor by your side.

I want you to feel ownership and investment in getting your estate plan to reflect you. Estate planning is an opportunity to look at some of life’s big questions and ultimately make sure your family feels your care for them through the choices you make. Give me a call today to see how I can create custom-made solutions that accomplish that goal.

Not Just Death and Taxes: 4 Essential Legal Documents You Need for Incapacity Planning

Not Just Death and Taxes: 4 Essential Legal Documents You Need for Incapacity Planning

Comprehensive estate planning is more than your legacy after death, avoiding probate, and saving on taxes, it must contain incapacity planning.  A proper estate plan includes a plan in place to manage your affairs if you become incapacitated during your life and can no longer make decisions for yourself.

What happens without an incapacity plan?

Without comprehensive incapacity planning in place, your family will have to go to court to get a judge to appoint a guardian or conservator to take control of your assets and health care decisions. This guardian or conservator will make all personal and medical decisions on your behalf as part of a court-supervised guardianship or conservatorship. Until you regain capacity or die, you and your loved ones will be faced with an expensive and time-consuming guardianship or conservatorship proceeding. There are two dimensions to decision making that need to be considered: financial decisions and healthcare decisions.

  • Finances during incapacity

If you are incapacitated, you are legally unable to make financial, investment, or tax decisions for yourself. Of course, bills still need to be paid, tax returns still need to be filed, and investments still need to be managed.

  • Healthcare during incapacity

If you become legally incapacitated, you won’t be able to make healthcare decisions for yourself. Because of patient privacy laws, your loved ones may even be denied access to medical information during a crisis and end up in court fighting over what medical treatment you should, or should not, receive (like Terri Schiavo’s husband and parents did, for 15 years).

You must have these four essential legal documents in place before becoming incapacitated so that your family is empowered to make decisions for you:

  1. Financial power of attorney: This legal document gives your agent the authority to pay bills, make financial decisions, manage investments, file tax returns, mortgage and sell real estate, and address other financial matters that are described in the document.
    • Financial Powers of Attorney come in two forms: “durable” and “springing.” A durable power of attorney goes into effect as soon as it is signed, while a springing power of attorney only goes into effect after you have been declared mentally incapacitated. There are advantages and disadvantages to each type, and we can help you decide which is best for your situation.
  1. Revocable living trust: This legal document has three parties to it: the person who creates the trust (you might see this written as “trustor,” “grantor,” or “settlor” — they all mean the same thing); the person who legally owns and manages the assets transferred into the trust (the “trustee”); and the person who benefits from the assets transferred into the trust (the “beneficiary”). In the typical situation, you will be the trustor, the trustee, and the beneficiary of your own revocable living trust.
    • If you ever become incapacitated, your designated successor trustee will step in to manage the trust assets for your benefit. Since the trust controls how your property is used, you can specify how your assets are to be used if you become incapacitated (for example, you can authorize the trustee to continue to make gifts or pay tuition for your grandchildren).
  2. Advance Health Care Directive: This legal document, sometimes referred to as a healthcare power of attorney, gives your agent the authority to make healthcare decisions and end of life care if you become incapacitated.
  3. HIPAA authorization: This legal document gives your doctor authority to disclose medical information to an agent selected by you. This is important because health privacy laws may make it very difficult for your agents or family to learn about your condition without this release.

Is your incapacity planning up to date?

Once you get all of these legal documents for your incapacity plan in place, you cannot simply stick them in a drawer and forget about them. Instead, your incapacity plan must be reviewed and updated periodically and when certain life events occur such as moving to a new state or going through a divorce. If you keep your incapacity plan up to date and make the documents available to your loved ones and trusted helpers, it should work the way you expect it to if needed.

Should you have any questions or concerns about your incapacity plan, click here. I look forward to hearing from you!

Common Estate Planning Myths . . . Debunked

Common Estate Planning Myths . . . Debunked

Estate planning.  You’ve heard the phrase, but do you know what it is?  You probably have it on your list of things you should do, but you may not think it’s a priority. . . perhaps because of some of the following common estate planning myths and misconceptions.

Myth #1 – Estate planning is only for the wealthy.  There are many levels of estate planning, beginning at its most basic and continuing upward with more advanced planning as you move through different financial stages.  Regardless of whether you have a multi-million dollar estate or something more modest, you need to take steps to ensure your assets are distributed to your heirs according to your wishes.  Everyone should have a basic estate plan, which consists of a Will, Trust, Advance Health Care Directive and Durable
Power of Attorney.

Myth #2 – Only the elderly need to consider planning.  You can’t know what your future holds, so it’s important to have an estate plan in place before your “golden years,” in the event you become incapacitated or die prematurely.  If you’re unable to see to your own affairs, due to a serious accident or other health condition, a Durable Power of Attorney provides a trusted advocate with the authority to carry out your stated wishes.  Similarly, having an Advance Health Care Directive allows you to specify your wishes with respect to healthcare and life-saving treatment.  These circumstances aren’t limited to the elderly—and neither is passing away—so it makes sense for everyone to have a plan in place to provide direction to their heirs.

Myth #3 – You only need a will.  While having a will is important, it’s just one of the four corners of a basic estate plan.  If you lack the other three, your estate will have to go through probate upon your death (no trust), and your heirs won’t know what you want them to do in the event that you’re incapacitated (no Durable Power of Attorney) or facing a decision regarding life-saving treatment (no Advance Health Care Directive).  Your will needs to be supplemented with these other important vehicles.

Myth #4 – Estate planning is a one-time event.  Putting an estate plan in place is an important first step, but it must be examined and possibly changed as time passes.  You may experience life changes that cause you to revisit earlier decisions, e.g., divorce, financial windfalls or a death in the family, and your plan may also need modification based on new legislation.  It’s a good idea to review your estate plan on a regular basis to ensure it reflects your current wishes and situation.

Myth #5 – It doesn’t matter who I name as a fiduciary/successor trustee.  Au contraire, the person who fills this role has vital responsibilities with respect to your estate, so the decision on who’s best suited for it shouldn’t be made lightly.  Many people make arbitrary choices (often a spouse or child), without stopping to think about whether that person has the time and expertise required to do the job.  Your fiduciary/successor trustee should be someone you trust who has experience dealing with estate issues. . .and it doesn’t have to be a family member.  In many cases, you may be better served having a professional fiduciary.

I hope this information has debunked some of the myths and misconceptions that surround the estate planning profession.  If you don’t have a plan in place, what are you waiting for?  If you do, when’s the last time you reviewed it?

Top 10 Reasons for Estate Planning

Top 10 Reasons for Estate Planning

There are many reasons why estate planning is important for everyone, regardless of age. With the proper plan in place, you can:

1.   Protect your Loved Ones. 
Only with proper planning can you be assured that your loved ones will not be subjected to unexpected disasters due to your failure to plan.

2.  Avoid Probate. 
Without a trust, your estate will be supervised by the Probate Court and there are high legal fees associated with court control.  A Trust avoids the expensive, lengthy, emotionally draining and public probate process.

3.  Guardians for Minor Children.  
Who do you choose to raise your children if you pass prematurely? It is crucial that you name a legal guardian in your will so YOU make the decision about who will care for your children.

4.  Manage Affairs in the Event of Incapacity.
In the event that you are unable to make decisions for yourself, who will make those decisions on your behalf?  By creating a durable power of attorney and an advanced healthcare directive can you be sure that your financial and personal affairs will be handled according to your instruction.

5.  Business Planning.  
If you own a business, proper planning can ensure that the business survives and continues on in accordance with your plan.

6.  Minimize or Eliminate Estate Taxes. 
You can prevent your assets from being subject to estate tax, which will allow more of your estate to be enjoyed by your loved ones.

7.  Charitable Giving. 
You can make gifts to your favorite charity or other worthwhile causes, while potentially getting income and estate tax benefits.

8.  Provide for Spouse.  
Without a proper plan, your spouse or partner may not receive the property you intended to provide.  For example, unknowingly holding property in joint ownership with someone other than your designated recipient may have undesired results down the road.

9.  Establishing Trusts for Minor Children. 
A good plan can preserve your assets for your children’s use and prevent those inherited assets from being wasted or lost by careless habits and harmful addictions.

10.  Designate Beneficiaries. 
By creating an estate plan you have wide latitude to choose who will receive your estate, what they will receive and when they will receive it.  You may distribute among your children equally or you may choose to eliminate one or all of them.  You have complete control over your estate, rather than allowing the legal system to do it for you.

8 Estate Planning Things to Do before you Travel

8 Estate Planning Things to Do before you Travel

Before any trip, most of us create a “to-do list” of things we have put off and want to take care of before we leave. Here is a checklist of estate planning things to do before you take your next trip. Taking care of these will help you travel with peace of mind, knowing that if you don’t return due to serious illness or death, you have made things much easier for those you love.

1. Have your estate planning done. If you have been procrastinating about your estate planning, use your next trip as your deadline to finally get this done. Be sure to allow adequate time to get your estate plan completed in advance of your trip.

2. Review and update your existing estate plan. Revisions should be made any time there are changes in family (birth, death, marriage, divorce, remarriage), finances, tax laws, or if a trustee or executor can no longer serve. Again, be sure to allow enough time to have the changes made.

3. Review titles and beneficiary designations. If you have a living trust and did not finish changing titles and/or beneficiary designations, now is the time to do so. If a beneficiary has died or if you are divorced, change these immediately. If a beneficiary is incapacitated or a minor, set up a trust for this person and name the trust as beneficiary to prevent the court from taking control of the proceeds.

4. Review your plan for minor children. If you haven’t named a guardian who is able and willing to serve and something happens to you, the court will decide who will raise your kids without your input. If you have named a guardian, consider if this person is still the best choice. Name a back-up in case your first choice cannot serve. Select someone responsible to manage the inheritance.

5. Secure or review incapacity documents. Everyone over the age of 18 needs to have these: 1) Durable Power of Attorney for Heath Care, which gives another person legal authority to make health care decisions (including life and death decisions) for you if you are unable to make them for yourself; and 2) HIPPA Authorizations, which give written consent for doctors to discuss your medical situation with others, including family members.

6. Review your insurance. Check the amount of your life insurance coverage and see if it still meets your family’s needs. Consider getting long-term care insurance to help pay for the costs of long-term care (and preserve your assets for your family) in the event you and/or your spouse should need it due to illness or injury.

7. Organize your accounts and documents. It used to be that we could just point to a file cabinet and say everything was “in there.” But now so much is done online that there may not even be a paper trail. Make a list of ALL of your accounts, where they are located, and the user names and passwords, then review and update it before each trip. Print a hard copy in case your computer is stolen or crashes and let someone you trust know where to find it. Clean up your computer desktop and put your financial and other important files where they can be easily found. Make a back-up copy in case your computer is stolen or crashes, and let someone know where to find it. Be sure to include on your master list any passwords that might be needed to access your computer and files.

8. Talk to your children about your plan. You don’t have to show them financial statements, but you can discuss in general terms what you are planning and why, especially when any changes are made. The more they understand your plan, the more likely they are to accept it—and that will help to avoid discord after you are gone.