estate planning basics - mid sight crisis · 7/8/2019  · of los angeles. today, bet tzedek is a...

EstatePlanningBasicsPalisadesAllianceforSeniors

July8,2019

BetTzedekLegalServices–ElderJusticeUnitFormorethan30years,BetTzedekhasbeentheonlyproviderofelderlawservicesintheCityandCountyofLosAngeles.Today,BetTzedekisanationally-recognizedleaderandcontinuestoservelow-incomeseniors,andthosewhocareforthem.

Ourteamhelpswith:•  Conservatorships•  Elderabuserestrainingorders•  Financialelderabuse•  Realestatefraud•  IHSSandotheradministrativehearings•  Medi-Calestateplanning•  PowerofAttorneyforfinancesandhealth

•  Simple,StatutoryWills

Advance Planning Tools •  AdvanceHealthCareDirectives

•  CompareDNRandPOLST•  PowersofAttorneyforFinances

•  CompareRepresentativePayee,jointtenancy,communityproperty

• Wills•  ComparepropertytransferredbyPOD,jointtenancy,assetswithdesignatedbeneficiaries

•  Trusts•  TransferonDeathDeeds

•  Comparetransferwithlifeestateoroutrighttransfer.

Capacity

Californialawsetsoutajudicialstandardforgeneralcompetencytomakedecisions.ThelawisknownastheDueProcessinCompetencyDeterminationsActorDPCDA.PC§810-813.• AdvancedHealthCareDirective-abilitytounderstandthenatureandconsequencesofadecisionandtomakeandcommunicateadecision.

•  FinancialPowerofAttorney-understandthenature,purpose,andeffectoftheterms.

• Will–understandwhatyouhaveandtowhomyouwanttoleaveitwhenyoupass.

AdvanceHealthCareDirective

Alegaldocumentthatallowsapersontomakedecisionsnowforhealthcaretreatmentinthefutureifandwhenheorsheisunabletomakesuchdecisions.

WhatarethemaincomponentsofanAdvanceDirective?

1)Theappointmentofanagentanduptotwoalternate

agentswhowillmakedecisionsfortheprincipalwhentheprincipalcannolongermakedecisionsforhim/herself.

2)Instructionsforhealthcaretreatmentpreferences.

Whodecideswhenapersonlackscapacity?

Theclient’sprimarycarephysicianwilldeterminewhentheyareunabletomakedecisionsabouttheirhealthcare(unlesstheclientspecifiessomeoneelseontheAdvanceDirective).

AppointingaHealthCareAgentWhoCANbeanagent:

• AnyadultwhoisNOTtheclient’sphysicianoranemployeeofahealthcarefacilitywheretheclientreceivescare.

•  Canbemorethanoneagent.Mustactunanimously.WhoSHOULDbeanagent:

• Apersonthatistrustedbytheclientandwhoknowsoftheclient’spersonalvaluesandbeliefs.

•  Typicalagents:ü Familymembersü Spouseü Partnersü Closefriends

Agent’sAuthority •  Righttoreceivemedicalinformation• Makemedicaldecisionforprincipalifprincipalcannotmakehis/herowndecisions.

•  Noexpressrighttoreceivecompensation.•  Nopowertoplaceprincipalinmentalhealthfacility(unlessprincipalagrees).•  Nopowertoplaceprincipalinlockeddementiafacilityifprincipalrefuses.• Withdrawingorwithholdinglifesustainingtreatment•  DispositionofRemains•  Authorizeautopsy• MakeanatomicalgiftsifspecifiedinDirective.

Musttheagentfollowtheclient’shealthcareinstructions?

•  YES–Theagentmustfollowallinstructionsandwishestothebestofhisorherknowledge.

WhatiftheclientdoesnotwishtoappointanAgent?

•  TheclientcanstillhaveanAdvanceDirective.

•  Insteadofappointinganagent,theclientcanmakespecificwritteninstructionstohisorherhealthcareproviderforfuturehealthcarefollowingthelossofcapacity.

MakinganAdvanceDirectiveVALID1.  TheclientmustsignanddatetheAdvanceDirective.AND2.  ThedocumentmustbeeithernotarizedORwitnessed

bytwoindividuals.Witnesses:Cannotbetheagentsandcannotbetheclient’shealthcareprovider,employeeofthehealthcareprovider,oremployeeofacommunityorresidentialcarefacility.Theombudsmanmustbeawitnessiftheprincipalisinaskillednursingfacility.

IstheAdvanceDirectivevalideverywhere?

•  TheAdvanceDirectivethatyousigninCaliforniaisvalidinCalifornia.

•  OtherstatesmayNOTrecognizealegallyexecutedCaliforniaAdvanceDirective.

•  California,however,DOESrecognizelegallyexecutedAdvanceDirectivesfromotherstates.

HowlongwilltheAdvanceDirectivebevalid?

•  TheAdvanceDirectiveisvalidforever,UNLESSØ ItisrevokedORØ Theclientsetsadateforittoexpire.

•  IftheclientexecutedanAdvanceDirectivebefore1992,itmaynolongerbevalid.Ø  TheclientshouldexecuteanewAdvanceDirective.

CananAdvanceDirectiveberevokedorchanged?

TheclientmayrevokeanyportionoralloftheAdvanceDirectiveatanytime.

•  Mustcommunicatetheintenttorevoke.•  E.g,tellingthehealthcareprovider,signingarevocation,or

tearinguptheAdvanceDirective.•  Theclientshouldinformallagentsandhealthcareprovidersofanychanges.

•  SigninganewAdvanceDirectiveformwillrevokeanypreviousAdvanceDirective.

WillanAdvanceDirectivestopparamedicsfromgivingtheprincipalCPR?

NO–theAdvanceDirectivedoesnothavelegaleffectonemergencymedicalpersonnel.

DNRandPOLST

• PrehospitalDoNotResuscitate(DNR)–astatedocumentthatinstructsemergencymedicalpersonnelregardingapatient'sdecisiontoforgoresuscitativemeasuresintheeventofcardioplumonaryarrest.Theformdoesnotaffecttheprovisionoflifesustainingmeasures.

• Physician’sOrdersforLife-SustainingTreatment(POLST)-amedicalorderthatgivesseriouslyillpatientsmorecontrolovertheircarebyspecifyingthetypeofmedicaltreatmentapatientwishestoreceiveattheendoflife.ThePOLSTformmustbesignedanddatedbyaphysician,oranursepractitioneroraphysicianassistantactingunderthesupervisionofthephysician,andthepatientorlegallyrecognizedhealthcaredecision-maker.

DurablePowerofAttorneyfor

FinancialMatters

CaliforniaUniformStatutoryFormPowerofAttorney

•  StatutoryFormPowerofAttorney(ProbateCode§4401)allowsyoutograntanagenttheauthoritytomanageyourfinances.•  Thismayincludebankaccounts,real

property,insurance,taxmatters,legalmatters,orotherfinancialtransactions.

FinancialElderAbuse

•  PowersofAttorneyforFinancialMattersareveryimportantplanningtools.•  Payingbills,maintainingproperty•  Preventativetoolstoprotectagainstelder

abuse

•  However,thesedocumentsmustbehandledcautiouslyastheycanalsobetoolsforabuse.

TypesofPowersofAttorneyforFinances

•  Durablev.Non-Durable•  ThispowerofattorneywillcontinuetobeeffectiveeventhoughIbecomeincapacitated.

•  Generalv.Limited(e.g.foronlytransactiononly)•  Immediatev.Springing

•  ThispowerofattorneyiseffectiveimmediatelyandwillcontinueuntilitisrevokedVS.Thispowerofattorneyshalltakeeffectuponmyincapacity.Myincapacityshallbedeterminedbymyprimarycarephysicianinwriting.

•  TermsforSpecificAssetsandIssues•  Trusts•  Gifting•  Loanstoagent•  Changingbeneficiaries

POWER OF ATTORNEY FOR FINANCES

I, appoint _______________________, as my agent (attorney-in-fact) to act for me in any lawful way with respect to the following initialed subjects:

INITIAL

(A) Real property transactions.

(B) Tangible personal property transactions.

(C) Stock and bond transactions.

(D) Commodity and option transactions.

(E) Banking and other financial institution transactions.

(F) Business operating transactions.

(G) Insurance and annuity transactions.

(H) Estate, trust and other beneficiary transactions.

(I) Claims and litigation.

(J) Personal and family maintenance.

(K) Benefits from social security, medicare, medicaid, or other governmental programs, or civil or military service.

(L) Retirement plan transactions.

(M) Tax matters.

(N) ALL OF THE POWERS LISTED ABOVE.

YOU DO NOT NEED TO INITIAL ANY OTHER LINES IF YOU INITIAL LINE (N).

Agent’sStandardofCare

Agentshallobservethestandardofcarethatwouldbeobservedbyaprudentpersondealingwithpropertyofanother.Ifagentbreachesthisstandardofcareoranotherdutyinbadfaith,heorsheischargeableforanylossordepreciationinvalueoftheproperty.

Agent’sDuties

• Dutyofcare• Dutyofloyalty• Dutytokeepprincipal’spropertyseparatedandidentified• Dutytokeepprincipalinformedandfollowinstructions• Dutytokeeprecordsoftransactionsonbehalfofprincipal• Dutytousespecialskills• Dutytodeliverpropertyonterminationofagent’sauthority.

Termination

• Revocationbyprincipal• Agentlackscapacitytoact• Dissolutionorannulment• Principalregainscapacity• Principal’sdeath• Bycourtorder(canusecourtactiontocompelaccounting,revokeagent’sauthority,etc.)

SometimesaConservatorshipCannotbeAvoided!

• Abuseofpowersofattorney.• Multiple,conflictingpowersofattorney.•  Thirdpartynon-acceptance.• Principal’srefusaltocooperate,maycontinuetoacttohis/herowndetrimentevenwithPOAinplace.

•  Canstillmanageaccounts,givepropertyaway.•  Canrefusetoenterintoacarefacility,canrefusehealthcareassistance.

Wills&Trusts

WhatisaWill?

•  Alegaldocument,draftedorexecutedinaccordancewithstatelaw,thatbecomesirrevocableupondeath.

•  InaWill,youmaydesignatewhowillreceiveyourassetsatyourdeath.

•  Differenttypesofwills,includingahand-writtenwill,statutorywill,orattorneypreparedwill.

WhatisaStatutoryWill?

•  California“fillintheblanks”willform,governedbyCaliforniaProbateCodeSection6240.

•  Providessimpleinstructionsfordistributingyourassetsafterdeath.

•  DesignedonlyforCaliforniaresidentsage18orolderandofsoundmind.

WhatcanIdowithaStatutoryWill?

Ø  Designatebeneficiariesofpersonalresidence.

Ø  Designatebeneficiariesofallpersonaleffects.

Ø  Providespecificgiftsofcash.

Ø  Designatebeneficiariesofremainingassets.

Ø  Designateguardian(s)forminorchildren.

Ø  Designateexecutor(s).

Ø  DONOTuseastatutorywillifyouwanttoleavespecificitemstospecificpeopleorifyouwanttosplityourestateunequally.

DoesaWillgiveawayallmyassets?

•  Lifeinsurance• Retirementplans,suchasa401(k)oranIRA

• Assetsownedasjointtenants•  “Transferondeath”or“payondeath”

NO.Some“nonprobate”assetsarenotcoveredbyaWill,suchas:

•  “Communitypropertywithrightofsurvivorship”

•  Livingtrusts•  Yourspouse’sorregistereddomesticpartner’shalfofcommunityproperty

AdvantagesofStatutoryWill

•  Simpleandcheap• Mostcommonandreadilyunderstood• Onlytakeseffectaftertestator’sdeath•  Easytoamend

DisadvantagesofStatutoryWill

• Mustbeadministeredthroughthecourt,sothewillbecomesapublicrecordandthecourtfeescanbecostly.

• Generallyneedtopayanattorneytofileforaprobate,notmanyfreeservices.

• DoesnotavoidMedi-Calestateclaims

Trusts

•  Intervivosrevocabletrust=allowsformanagementduringaperson’slifetimeandservesasatestamentaryinstrumentafterperson’sdeath.

•  Settlor=personwhocreatesthetrust•  Trustee=personwhomanagesthetrust•  Successortrustee=personwhotakesovermanagementofthetrustoncethesettlorlosescapacityordies.

TrustAdvantages

•  Supposedtoavoidneedforprobate/courtintervention.• Private.Noneedtolodgetrustanywhereorgivetocourt.• AvoidsMedi-Calestateclaims.• Goodwaytomanagealotofpropertyduringlifeandafterdeathformultiplebeneficiaries(minors,adultswithdevelopmentaldisabilities)andavoidconservatorshipandguardianship.

• Maybetaxplanningopportunities.

TrustDisadvantages

• Canbeexpensivetocreate.• Veryeasyfortrusteetoabusepowerbecausenocourtoversight.•  Trusteesdon’toftenunderstandtheirdutiesandinadvertentlycreateproblems.

• Peopleforgettoputpropertyinthetrust.

TransferonDeathDeeds(TODD)

AlawthatbecameeffectiveJanuary1,2016createsaRevocableTransferonDeathDeed(“TODDeed”)asawayforCaliforniaresidentstotransferresidentialpropertytonamedbeneficiaries,effectiveupondeath.Thenewlawrequiresuseofaspecificformwithspecificprovisions,andincludesa“frequentlyaskedquestions”provision.ThestatutorydeedformandrevocationformareintheCaliforniaProbateCode,Sections5642and5644.

TODDAdvantages• AvoidsMedi-Calrecoveryclaims.• Maybesimpletouse,willbelessexpensivethancreatingalivingtrust,andmayeliminatethewaitingandexpenseofaprobate.

• CanberevokedatanytimeduringthelifetimeoftheGrantor.•  Shouldsimplifythetransferprocessatdeath,aslongasthedeedisnotvoidedbyadraftingerrorinthepartoftheGrantor.

• Retainsthetaxadvantagesofatransferviatrustorinheritanceunderawill.

•  Lesspotentialforabusethansimplytransferringpropertytoanotherfamilymember(eitherwithorwithoutalifeestate)toavoidMedi-Calclaimsandprobate.

TODDDisadvantages• OffersnoprotectionfromtheGrantor’screditors(exceptfromMedi-Cal),sothebeneficiarymayendupwithnothingifthedebtsoftheGrantorarelargerthantheworthoftheproperty.

• Canonlybeusedtotransferonetofourresidentialdwellingunitsorcondominiumunits,orasingle-familyresidencewith<40acresofland.

• CannotbeusedtotransferresidentialpropertyheldasJointTenancyorasCommunityPropertywithRightofSurvivorship,andcannotbeusedtocreatesplitinterestssuchasalifeestate.

• Doesnotpermitthedesignationofbeneficiariesbyclassdescription(e.g.,“mychildren”);thebeneficiaryorbeneficiarieshavetobespecificallynamed.

• Cannotdesignate“contingentbeneficiaries”:ifabeneficiarydiesbeforetheGrantor,thepropertygoestotheothersurvivingbeneficiariesinequalsharesor,ifnootherbeneficiaries,thenitrevertstotheGrantorestateandmaythenrequireaprobate.

ContactInfo

DaniKaiserman

BetTzedekLegalServices323-549-5837

dkaiserman@bettzedek.org