Why So Many People Update Their Estate Plans Every Five Years

A common question from many of our clients involves identifying the right timeframe for updating an estate plan.
 
Generally speaking, there are three reasons whey plans should be updated on an approximate five-year cycle:

1. Changes in law, including tax laws
2. Changes in family situation
3. Changes in financial position

In some cases updates should be made more frequently, such as when changes in family situation occur including births, marriages, deaths, and so on. But generally speaking a five-year updating cycle is a good target.

Elder Law Fundamentals

When it comes to elder law, people are most often concerned about long term care planning for themselves as they age or for their aging parents. 

Many fear losing all their assets to a nursing home, and others need assistance with navigating through the complicated legal waters of Medicaid. 
 
Other fundamental components of elder law include:

• Protecting the at-home spouse’s assets and income
• Representation at elderly services or in court
• Long term care planning
• Addressing concerns about the high cost of nursing home care
• Reviewing long term care insurance plans
• Medicaid planning
• Assistance with the completion of the Medicaid application 
• Helping loved ones stay at home with home care assistance
• Caregiver help
• Planning for disabled individuals

3 Ways to Avoid Probate

There are a number of different ways of holding assets that will avoid probate.

The simplest is probably just joint ownership, such as a piece of real estate held as joint tenants or a bank account held jointly. This type of assets will pass automatically to the other joint owner when the first owner dies – but keep in mind, there will still be a probate at the second death.

Another way to avoid probate is by assets which have 'designated beneficiaries', such as an insurance policy or a retirement plan (such as an IRA). These assets will pass to those beneficiaries when the owner of the asset dies.

Still another way to avoid probate is to hold assets in a revocable trust.

Estate Plan Updates?

People often ask about the frequency with which their estate plans should be reviewed or updated.

It is best to review an estate plan at least every five years so that documents can be updated to incorporate any changes in circumstances as well as the ever-changing law.

There are a number of situations that may indicate a need for new or amended estate planning documents, including:

• Changes in health
• Changes in marital status
• Births and deaths
• Changes of mind with respect to a beneficiary, agent, executor, trustee or guardian
• Property acquisition or relocation to another state
• Changes in business interest or wealth

Addiitional Questions About Your Estate Plan

In our previous post we shared three important questions about estate plans that people often don't consider.

Here are some additional questions, all of which are relevant to estate planning and can be addressed in your estate plan:

• What happens if you all die in plane crash, where will your assets go?
• What can you do to protect assets for your disabled child?
• Can your son who you haven’t spoken to in years contest your Will?
• Who will take care of your dog after you die?
• Where should you keep your estate planning documents?
• When do you want life support to be pulled?

3 Important Estate Planning Questions

When meeting with families to discuss their estate plan, there are certain questions that many had not thought about or that they didn't consider at all. Although the thoughts of the following questions may be a bit unsettling, thinking about them can assist you with the creation of your estate plan:

• Who do you want to be the guardian over your minor children if both parents should die?
• If you have children from a prior marriage, and if your spouse remarries, can he or she change your estate plan, what happens to the inheritance for your kids?
• If your child has a problem with drugs, what can you do to protect his or her share of the inheritance?

New Surrogate Decision Making Law in NH

New Hampshire now has a law that allows surrogate decision making with respect to health care issues.

The purpose of the law is to ensure that health care decisions can be made in a timely manner by a person’s next of kin or loved one without involving court action. 

Basically, the new law establishes a surrogate decision maker for health care decisions when there is no valid advanced directive or guardian in place.

There are some additional things to think about with respect to the legislation as well, which you can review in our recent newsletter.

The Advantages of a Revocable Trust

People often ask about the advantage of a revocable trust for probate avoidance.

There are several advantages. For example, when it is established and properly funded, it ensures a consistent estate plan. Too often, when people rely on designated beneficiaries and joint ownership, the result is a plan that is skewed unintentionally toward one or another beneficiary. The reason for this is that if you have multiple beneficiary designations, and you change one but forgot to change the others, you may create a different distribution than the one you had in mind. 

By contrast, with a revocable trust, the change can be made once (by means of an amendment to the trust) and this will affect all assets.

Read more: http://www.curtinlawoffice.com/typical-questions.htm

New Surrogate Decision Making Law in NH Part 2: Be Proactive

In our previous post we summarized the details associated with a new surrogate decision-making law in NH.

This new law is helpful because it does provide for an alternative, other than court, to family members and friends of a loved one who has not executed his or her health care power of attorney.

Nonetheless, the best option is being proactive. 

Being proactive means executing a health care power of attorney when you are competent, in which you choose the agent (s), you want to act on your behalf when you are no longer able to make health care decisions for yourself. 

New Surrogate Decision Making Law in NH

New Hampshire now has a law that allows surrogate decision making with respect to health care issues.

The purpose of the law is to ensure that health care decisions can be made in a timely manner by a person’s next of kin or loved one without involving court action. Basically, the new law establishes a surrogate decision maker for health care decisions when there is no valid advanced directive or guardian in place.

There are some things to think about with respect to the legislation.

• When choosing a surrogate decision maker, the physician or APRN must follow a certain priority list. Your choice for a health care agent to make health care decisions for you may be different than the person on top of the priority list.
• It should also be noted that if your children are the surrogate decision makers and they can’t agree, then the majority of them who do agree rule. However, if one of them initiates a guardianship, then none of your children will be recognized as a decision maker for you.
• Also, the authority of the surrogate decision maker terminates after 90 days. The law doesn’t say what happens after that…

Elder Law Summary

People often ask about the various aspects of "elder law" and the types of services that are involved. 

Generally speaking, elder law involves helping individuals and families deal with a wide variety of issues including:

• long term care
• medical directives
• incompetency
• guardianship
• disabilities
• asset protection
• Medicaid 

Care Planning Resources

Here are some websites that may help you get the conversation about advance care planning going:

• The Conversation Starter Kit (www.theconversationproject.org)
• Consumer Toolkit for Health Care Advance Planning (www.ambar.org/healthdecisions) This website helps individuals discover what is truly important to them in the face of a serious illness. It even has a smartphone app you can download.
  
• PREPARE web site (www.prepareforyourcare.org)

Guardianships & Stress

Clients with updated powers of attorney always makes us cheer because having these documents when someone has a stroke or gets in a car accident avoids the unnecessary stress of a guardianship proceeding.

Why are guardianships stressful?

Guardianships involve the court and can be costly and burdensome to family and friends who are already experiencing a stressful situation.

Also, with any nursing home issues, having the correct gifting provisions in your financial power of attorney can be essential to long term care planning and to the protection of the healthy spouse.

Please note that if your documents haven’t been updated in the last 5 years, they should be reviewed by your estate planning attorney to determine whether updating them is necessary. It should also be noted that some financial institutions are not accepting old documents.

Estate Planning FAQ's

Here are two of the most common questions we receive about estate planning:

QUESTION: WHAT IS PLANNING?

ANSWER: Planning occurs when you proactively state your wishes about who you want to receive your assets when you pass away. This can be done through joint ownership, beneficiary designations, wills and/or trusts.

QUESTION: WHAT HAPPENS WHEN YOU DON’T PLAN FOR YOUR ESTATE AFTER YOU DIE?

ANSWER: The State of NH plans for you.

Read the full article for examples of the State's planning...

Some Good News to Cheer About

As the new year unfolds, we find that despite the challenges that many people are facing that there are always things to cheer about and to be thankful for. Once such "good news" item that happened in 2014 is the increase in estate tax exemptions to $5.3+ million. This increase means that most people no longer need to worry about the possibility of incurring an estate tax when they pass away. Instead, we can simplify our trusts and focus more on minimizing income taxes for our beneficiaries. If you have any concerns regarding the estate tax exemption, please feel free to contact our office.