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Legal Documents and College Students

Before your student goes off to college, make sure you have all your legal ducks in a row. Once your student becomes 18 years of age, you may not have certain legal abilities, such as medical proxy or power of attorney, without correct documentation. So what legal documents may be a good idea? Many of these suggestions are precautions, and may not be a necessity for your individual situation. However, should an emergency situation arise, you may want to have these documents already in place.

Health Care Power of Attorney (Living Will/Advanced Directive/Appointment of Health Care Agent)

If your child is away at college and finds themselves in a medical emergency situation, a health care proxy would allow their parents or legal guardians the ability to speak on their behalf if they are unable to do so. It isn't an easy conversation to go over health care and medical decisions, regardless of age, but it's better to be safe and prepared. Health care proxy can be established by a medical power of attorney or living will.

In general, a medical power of attorney will allow the named agent to be informed by medical professionals about their student's medical and mental health records, and would include the necessary HIPPA language. [1] For anyone other than the named agent to have access to such records, a signed HIPAA form would be required.

Power of Attorney

Similar to a health care proxy, a power of attorney grants the name agent: most likely the parents or legal guardian, the right to act on the student's behalf with regard to financial decisions. There are two options: a durable power of attorney or an access authorization form. The power of attorney is prepared by a lawyer, while the authorization form is typically prepared by the banking institution where your student's accounts are held.

A Will or Trust

A Will or Trust for your college student may not be required. Unless your student already owns real estate or other property, or is the beneficiary of a trust, then they are unlikely to have enough assets to make a Will necessary. However, a properly drawn Will won't be harmful. If you or your student desires the security of a Will or Trust, then you may want to speak to a lawyer for advice.

If you or your student are unsure about what's needed, a lawyer will be able to give you qualified advice.

[1] U.S. Department of Health and Human Services. https://www.hhs.gov/hipaa/for-professionals/faq/3000/does-having-health-care-power-attorney-allow-access-patients-medical-mental-health-records-under-hipaa/index.html

Estate Planning for the Sandwich Generation

When you're caring for your aging parents as well as young or adult children, what does that mean for your estate planning? This is a question often asked by the baby boomers, of which there were 74 million in the United States as of 2016 [1]. Baby boomers are the current sandwich generation as well-those adults who are "sandwiched" between caring for elderly parents or older relatives as well as caring for their own children, many of which returned home as a result of the financial crisis. So what does this mean for estate planning when this generation has, in essence, two families to plan for? Let's take a look.

Early Planning is Essential

Having some kind of plan in place is crucial. Even if you go back and make changes-and you likely will-having those documents protects you as well as your parents and children. The earlier you make financial and estate plans, the better. Planning for retirement when in this situation can be a challenge, and a financial planner may be required to give boomers a clear idea of what to expect and how to plan.

Along with financial planning for yourselves is planning for your children. If you have younger kids and are saving for college, how does that impact your retirement goals and other expenses? If you are helping your older children buy a house or afford rent, what are the expectations and do you have important agreements in writing? No one particularly likes paperwork, but having even an informal agreement that you and your child sign can be helpful in making sure both of you are clear on what's expected for amounts, repayment schedules, and goals.

How about your parents? Do they have medical expenses that you plan to help them with? What about transportation, food, or other living expenses? How do these added financial items affect your savings?

Talking to a financial planner can help get all of these separate items pulled into one coherent plan and give you a better idea of what to expect when juggling multiple generations.

Remember Medical Documents

In the stress and anxiety of caring for multiple households, it's easy to lose track of important tasks. Don't let medical documents, wills, and powers of attorney fall into that black hole. Ensure that your parents have their wishes for medical care filed correctly and legally so that when the inevitable time comes, no one has to guess at what they would want. You may also want to consider having a designated spot for these important documents so they're easily reached during an emergency and you don't have to go on a search in the middle of a crisis.

The documents you may want to consider are:

  • Medical power of attorney
  • Mental health power of attorney
  • Maryland MOLST
  • Advance directives and DNR wishes

What Happens If Something Happens to You?

Finally, if something were to happen to you, would there be documents showing your wishes not only for your own care, but how you want your assets to be divided to appropriately care for your loved ones? The role of caring for so many can result in caregiver stress syndrome, or caregiver burnout, and often leads to the caregivers themselves coming down with serious illnesses as a result. It is better to be proactive and have these plans in place before they're needed rather than wait for something to happen. You can state in your will how much assistance you would like to go to your parents, if needed, how much should go to your children, and what goes to charities or other relatives.

If you expect larger sums of money to be passed to a particular person, or if you expect funds will be stretched over many years, a trust may be the wiser option. A trust can be created to fit almost any need, including educational, medical, special needs, spendthrift, and more. By placing funds into a trust rather than passing them all at once, you ensure that the funds will be used only for what the trust stipulates and also that the money should last as long as it's intended.

Documents you will want to consider for estate planning, including the above medical items, are:

  • A living will
  • Revocable or irrevocable trusts
  • Special needs or educational trusts
  • Durable powers of attorney

[1] "American Generation Fast Facts." August 27, 2017. CNN Library. https://www.cnn.com/2013/11/06/us/baby-boomer-generation-fast-facts/index.html


Spouses and Medical Powers of Attorney

A few months ago, I had a friend say to me, "My spouse will be able to make medical decisions if I'm incapacitated, so I don't need a medical power of attorney yet." This is actually an unfortunate misconception. In most states, spouses do not have an automatic right to or control of your medical care. The only area in which spouses tend to have an automatic right - barring any divorce or custody agreements stating otherwise - is in regard to the care of minor children.

My friend had assumed that her husband would automatically be able to make medical decisions on her behalf should she have an accident or become unconscious in the hospital. However, this is not always the case. In some states, the spouse is the next default decision maker when there is no advance medical directive and medical power of attorney are in place. In other states, there is a process similar to what happens when a person dies without leaving a will - the court will step in and follow state law to name a family member, close friend, or sometimes a neutral third party as the patient's guardian. This process can be stressful, expensive, and emotionally draining, especially when a loved one's health and wellbeing are in question, and no one wants to be put through such an ordeal.

In Maryland, the Health Care Decisions Act [1] states that in the absence of an advanced medical directive, medical power of attorney, an appointed agent, or other such named guardian, the priority for decisions falls in this order: spouse or domestic partner, adult child, parent, adult sibling, and then close friend or relative who has maintained regular contact with the patient. This priority order is only applicable in decisions regarding life-sustaining procedures and only if the patient "has been certified to be in a terminal condition, persistent vegetative state, or end-stage condition". What that means is if there is no power of attorney or named guardian, then the spouse will only be able to step in and make decisions in terminal situations and not regarding the healthcare decisions leading up to that point. [2]

Conversely, if there is a legitimate medical power of attorney document in place, with an appointment of health care agent as well as a backup agent, then those agents are consulted first and given legal authority, while the priority order established in the statue has no legal weight unless all named agents are unavailable. If the patient has named an agent other than their spouse, then that agent is the person doctors will consult and give legal precedence to, rather than the patient's spouse.

If there's a situation in which no surrogate is named or available, and no medical power of attorney or advanced directive, a physician will provide care to the patient according to the guidelines of the hospital or office in which they work. Typically an ethics committee is available to assist with such decisions in a hospital environment. If necessary, a physician may initiate the guardianship process with the court if no guardian, family member, or agent has been found or stepped forward.

It is strongly advised that all adults have a medical power of attorney, advanced medical directive and perhaps a Maryland MOLST in place before it's needed. If you wait too long, or if you never create one, you risk having your medical decisions made by those who may not know what your wishes are.

You can find more information on the Health Care Decisions Act at the Maryland Attorney General's website, including PowerPoints and charts which explain the decision-making tree for health care professionals: http://www.marylandattorneygeneral.gov/Pages/HealthPolicy/hcda.aspx

[1] Maryland Statue §5-601. General Assembly of Maryland. http://mgaleg.maryland.gov/webmga/frmStatutesText.aspx?article=ghg&section=5-601&ext=html&session=2017RS&tab=subject5

[2] "Default Surrogate Consent Statutes." January 1, 2018. Page 7. American Bar Association. https://www.americanbar.org/content/dam/aba/administrative/law_aging/2014_default_surrogate_consent_statutes.authcheckdam.pdf

Plan for Your Future Now

In 2016, adults over the age of 55 comprised 28% of the country's total population [1]. That may not seem like a large number, but take a look at the demographic one step down: adults between the ages of 35 and 54 made up 26% of the population. That is a lot of people who are currently or will soon be facing challenges related to aging, such as where to live, access to health care, access to transportation, and so on. In Maryland, our state's population is 15% over the age of 65, 13% between 55 and 64, and 26% between 35 and 54 [1].

An Aging Population
As most of us are aware, an aging population presents unique challenges. In the past, the traditional trajectory for mature adults was to downsize and buy a smaller home or move to a managed care facility. However, this trajectory has been disrupted by a volatile market, a lack of affordable new housing, and higher costs for medical care. This has led to newer trends replacing the traditional model, such as aging in place, in which mature adults make their current homes more accessible, or moving in with family to save on costs, with family or children more often becoming caretakers for their parents [2]. Given that the traditional model has been upended, how can you plan for an uncertain future?

Planning for Retirement
There are a few things you can do. The first is to be certain you have medical documents in place stating your wishes. This cannot be stressed enough! All adults, regardless of whether they have children or not, should consider having an Advanced Medical Directive (living will) and Appointment of Health Care Agent (medical power of attorney) stating their wishes on life support, organ donation, burial or cremation, etc. This helps to protect you and your wishes as well as give guidance to not only your loved ones, but the medical teams who may be taking care of you.

The second thing to do is begin estate and retirement planning as early as possible. Ask yourself a couple of key questions:

  • Is my house safe and livable for the long term if I choose to stay into my old age?
  • Can I afford to stay in my home for the next 15-20 years?
  • In my current location, do I have reliable access to transportation, medical care, social activities, and food centers?
  • Do I have a social support network or family nearby?
  • Do I anticipate a need for children or grandchildren to need a safety net and need to live in my home for a while?

If the answer to any of those questions is not to your liking, the next question then becomes "What needs to happen to change this so my wants and needs are met?" Does that mean moving to a different town so you have easier access to activities you enjoy, like hiking or boating, or are closer to family? Does that mean saving more money while you are still working in order to anticipate future medical or transportation costs? [3]By beginning the planning as early as possible, you may be able to make changes to your home to make it more accessible for wheelchairs, walkers, and caregivers. You may be able to plan financially for maintenance of the home to ensure you can stay in place. You may be able to account for affording assistance with driving, or social activities, or even affording travel and other fun activities so you can enjoy your retirement.Estate planning doesn't have to solely mean planning for what happens after you're gone; it can also mean planning for your golden years and ensuring you have what you need to be happy later in life.

[1] "Population Distribution by Age." 2017. Kaiser Family Foundation.

https://www.kff.org/other/state-indicator/distribution-by-age/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D

[2] "Family Support in Graying Societies." May 21, 2015. Pew Research Center.

http://www.pewsocialtrends.org/2015/05/21/family-support-in-graying-societies/

[3] "Aging in the Right Place: Plan Now for a Happier Tomorrow." 2018. Wage, Grimes, Friedman, Meinken, Leischner.

http://www.oldtownlawyers.com/aging-in-the-right-place-plan-now-for-a-happier-tomorrow/

Children and Inheritance

Parents disagree as to when children can handle an inheritance. In 2015, the U.S. Trust conducted a survey of wealthy Americans (with assets of $3 million or more) and asked them at which age they thought their children or grandchildren could handle an inheritance. The issue is important because many parents leave assets in a trust for heirs until they reach a certain age, so the parents have to choose an age at which to release the funds. A common setup for inheritance is to receive a portion when the child becomes of legal age, when they turn 25, and then the remainder when they turn 35.

Survey respondents replied with the following: 4% said ages 18-24, 23% said ages 25-29, 37% replied ages 30-34, and 17% each to ages 35-39 and 40 or older. The majority of parents seem to feel that heirs should receive an inheritance in their 30s.

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Make a Resolution for the New Year

Resolve to start off the new year on the right foot! It's a good time to take stock of your financial and legal documents and determine what needs to be updated, added, removed, or created. Here are some documents you may want to take a look at in 2018:

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Many First-Time Homebuyers Get Help from Family

Contrary to popular opinion, younger homebuyers under the age of 35, generally considered part of the Millennial generation, are interested in buying homes and are now entering the real estate market in greater numbers. Many of these younger buyers receive help from parents or other family in order to bolster their finances for the purchase. In 2015, 75% of young buyers received financial help from family for the down payment, closing costs, or other expenses, according to TIME Magazine.

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Charitable Gifts in Your Will or Trust

It’s common for individuals to want to give to specific charities in a will or trust. However, there are some items you should consider when creating your bequest.

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No-Contest Clauses

There are many stories, articles, and news blurbs that have covered cases in which inheritors have decided to contest a will and the argument has entered the public sphere. These high-profile cases generally have to do with celebrities or multi-millionaires, but they also provide valuable lessons for those of us who are not in the public eye.

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Advance Directives and Dementia

A standard practice in most estate plans is to include advance directives which state your wishes for health care, end-of-life situations, do-not-resuscitate (DNR) orders, life support, and mental health. These advance directives and medical powers of attorney have come under scrutiny in the last few years for a number of reasons. Some argue that the directives are not specific enough. In other cases, court battles have arisen in attempts to settle disputes about whether a directive should be enforced.

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Mental Health Advance Directives

Just as you might make an advance directive for your physical health and physical care, you can now make an advance directive for mental health. Only 25 states have passed legislation establishing authority for psychiatric advance directives, but there is a growing awareness and interest in obtaining such documents as awareness grows of the importance of mental health. Even in those states that do not currently have legislation specifically recognizing the authority of a mental health directive, similar care is available under healthcare power of attorney statues.

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2017 Legislative Updates to Probate Administration

The Maryland General Assembly passed two bills this year that have significant effects on probate administration. Here is a breakdown of the bills and how they could affect you.

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2017 Maryland Legislative Updates to Estate Planning

The Maryland General Assembly passed a handful of bills this year that have significant effects on estate planning. Here is a breakdown of the bills and how they could affect you.

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What Does it Mean to be Intestate in Maryland?

I recently found out about a show by the BBC called "Heir Hunters" and it caught my attention. The premise of the show is that probate firms in England receive cases and have to track down potential heirs to receive the contents of the estate. In this case, the heirs are siblings, cousins, or more distant relations. If there are no heirs, the assets are given to the Treasury.

The estates wound up in that state because the owners never made a legitimate will, or any will at all. Thus it was up to the government, via the probate firms, to decide who would inherit what remained of the estates.

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3 Reasons You Shouldn’t Put off Estate Planning

Too many people put off estate planning, including creating a will, until it’s too late. It’s a too-common scenario: A loved one has passed on suddenly or is unable to make decisions on his/her own anymore, and the family doesn’t know where to find important information. The family doesn’t know what their loved one’s preferences are regarding medical decisions, end-of-life issues, or division of assets. Meanwhile, simple day-to-day items still need to be tackled, such as paying bills, and a representative hasn’t been identified who could help handle those items. There are many reasons why you shouldn’t put off estate planning, regardless of age. Here are only a few:

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How to Choose a Personal Representative, Trustee and Agent

Choosing a personal representative, an agent for your financial and medical power of attorney, and the successor trustee of your revocable living trust is one of the more difficult parts of estate planning. Often you end up choosing the same person for each role, depending on the dynamics of your family and your particular circumstances. An agent under a durable power of attorney, appointment of health care agent, or a successor trustee, is the person who will handle specific decisions and issues on your behalf should you become incapacitated. A personal representative, or successor trustee, will handle your affairs upon your death. It’s a vital role, and choosing this special person should be handled with care and deliberation. In addition, it’s typically required for a second person to be named as an alternate in case the first person you name can’t serve in the role.

Continue Reading...

Four Ways to Help Elderly Family Members Ensure Care

Far too often, elders do not have their affairs in order in time, leaving heirs or caregivers to try to sort out what should happen with accounts, property, or medical decisions. Or elders outlive their heirs or friends and have no one to turn to in a time of need. Here are just a few tips for helping your elderly friends or family members make sure they are taken care of in terms of legal items during their most vulnerable times.

Continue Reading...

Just In Time For Tax Season

Just in time for tax season! What are the various taxes that may affect an estate? Here’s a very brief overview of two of the taxes that could affect you. Make sure you talk to a lawyer or accountant prior to taking any action based on your thoughts from reading this general summary.

Continue Reading...

Ensure Your Estate Planning Documents Are Updated

If you experience a major life change, one of your top priorities should be ensuring your estate planning documents are kept up to date.

Continue Reading...

3 Reasons For Young People to Have a Will

In 2014, Forbes reported that 51% of Americans between the ages of 55 and 64 did not have wills1. The percentage is higher for those below that age range, as 62% of people between 45 and 54 don’t have wills, and it gets worse from there.

Continue Reading...

Options For Pets After Your Death: What would happen to your pets if they outlive you?

You're an animal lover. You have one or more beloved pets. You give them the best care you can and you know your animals are happy. But do you have a plan for what would happen to your pets if they should outlive you?

Continue Reading...

3 Reasons You Shouldn’t Put off Estate Planning

Too many people put off estate planning, including creating a will, until it’s too late. It’s a too-common scenario: A loved one has passed on suddenly or is unable to make decisions on his/her own anymore, and the family doesn’t know where to find important information. The family doesn’t know what their loved one’s preferences are regarding medical decisions, end-of-life issues, or division of assets. Meanwhile, simple day-to-day items still need to be tackled, such as paying bills, and a representative hasn’t been identified who could help handle those items. There are many reasons why you shouldn’t put off estate planning, regardless of age. Here are only a few:

Continue Reading...

How to Choose a Personal Representative, Trustee and Agent

Choosing a personal representative, an agent for your financial and medical power of attorney, and the successor trustee of your revocable living trust is one of the more difficult parts of estate planning. Often you end up choosing the same person for each role, depending on the dynamics of your family and your particular circumstances. An agent under a durable power of attorney, appointment of health care agent, or a successor trustee, is the person who will handle specific decisions and issues on your behalf should you become incapacitated. A personal representative, or successor trustee, will handle your affairs upon your death. It’s a vital role, and choosing this special person should be handled with care and deliberation. In addition, it’s typically required for a second person to be named as an alternate in case the first person you name can’t serve in the role.

Continue Reading...

Four Ways to Help Elderly Family Members Ensure Care

Far too often, elders do not have their affairs in order in time, leaving heirs or caregivers to try to sort out what should happen with accounts, property, or medical decisions. Or elders outlive their heirs or friends and have no one to turn to in a time of need. Here are just a few tips for helping your elderly friends or family members make sure they are taken care of in terms of legal items during their most vulnerable times.

Continue Reading...

Just In Time For Tax Season

Just in time for tax season! What are the various taxes that may affect an estate? Here’s a very brief overview of two of the taxes that could affect you. Make sure you talk to a lawyer or accountant prior to taking any action based on your thoughts from reading this general summary.

Continue Reading...

Ensure Your Estate Planning Documents Are Updated

If you experience a major life change, one of your top priorities should be ensuring your estate planning documents are kept up to date.

Continue Reading...

3 Reasons For Young People to Have a Will

In 2014, Forbes reported that 51% of Americans between the ages of 55 and 64 did not have wills1. The percentage is higher for those below that age range, as 62% of people between 45 and 54 don’t have wills, and it gets worse from there.

Continue Reading...

Options For Pets After Your Death: What would happen to your pets if they outlive you?

You're an animal lover. You have one or more beloved pets. You give them the best care you can and you know your animals are happy. But do you have a plan for what would happen to your pets if they should outlive you?

Continue Reading...