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EstatePlanningBasicsPalisadesAllianceforSeniors
July8,2019
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BetTzedekLegalServices–ElderJusticeUnitFormorethan30years,BetTzedekhasbeentheonlyproviderofelderlawservicesintheCityandCountyofLosAngeles.Today,BetTzedekisanationally-recognizedleaderandcontinuestoservelow-incomeseniors,andthosewhocareforthem.
Ourteamhelpswith:• Conservatorships• Elderabuserestrainingorders• Financialelderabuse• Realestatefraud• IHSSandotheradministrativehearings• Medi-Calestateplanning• PowerofAttorneyforfinancesandhealth
• Simple,StatutoryWills
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Advance Planning Tools • AdvanceHealthCareDirectives
• CompareDNRandPOLST• PowersofAttorneyforFinances
• CompareRepresentativePayee,jointtenancy,communityproperty
• Wills• ComparepropertytransferredbyPOD,jointtenancy,assetswithdesignatedbeneficiaries
• Trusts• TransferonDeathDeeds
• Comparetransferwithlifeestateoroutrighttransfer.
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Capacity
Californialawsetsoutajudicialstandardforgeneralcompetencytomakedecisions.ThelawisknownastheDueProcessinCompetencyDeterminationsActorDPCDA.PC§810-813.• AdvancedHealthCareDirective-abilitytounderstandthenatureandconsequencesofadecisionandtomakeandcommunicateadecision.
• FinancialPowerofAttorney-understandthenature,purpose,andeffectoftheterms.
• Will–understandwhatyouhaveandtowhomyouwanttoleaveitwhenyoupass.
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AdvanceHealthCareDirective
Alegaldocumentthatallowsapersontomakedecisionsnowforhealthcaretreatmentinthefutureifandwhenheorsheisunabletomakesuchdecisions.
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WhatarethemaincomponentsofanAdvanceDirective?
1)Theappointmentofanagentanduptotwoalternate
agentswhowillmakedecisionsfortheprincipalwhentheprincipalcannolongermakedecisionsforhim/herself.
2)Instructionsforhealthcaretreatmentpreferences.
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Whodecideswhenapersonlackscapacity?
Theclient’sprimarycarephysicianwilldeterminewhentheyareunabletomakedecisionsabouttheirhealthcare(unlesstheclientspecifiessomeoneelseontheAdvanceDirective).
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AppointingaHealthCareAgentWhoCANbeanagent:
• AnyadultwhoisNOTtheclient’sphysicianoranemployeeofahealthcarefacilitywheretheclientreceivescare.
• Canbemorethanoneagent.Mustactunanimously.WhoSHOULDbeanagent:
• Apersonthatistrustedbytheclientandwhoknowsoftheclient’spersonalvaluesandbeliefs.
• Typicalagents:ü Familymembersü Spouseü Partnersü Closefriends
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Agent’sAuthority • Righttoreceivemedicalinformation• Makemedicaldecisionforprincipalifprincipalcannotmakehis/herowndecisions.
• Noexpressrighttoreceivecompensation.• Nopowertoplaceprincipalinmentalhealthfacility(unlessprincipalagrees).• Nopowertoplaceprincipalinlockeddementiafacilityifprincipalrefuses.• Withdrawingorwithholdinglifesustainingtreatment• DispositionofRemains• Authorizeautopsy• MakeanatomicalgiftsifspecifiedinDirective.
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Musttheagentfollowtheclient’shealthcareinstructions?
• YES–Theagentmustfollowallinstructionsandwishestothebestofhisorherknowledge.
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WhatiftheclientdoesnotwishtoappointanAgent?
• TheclientcanstillhaveanAdvanceDirective.
• Insteadofappointinganagent,theclientcanmakespecificwritteninstructionstohisorherhealthcareproviderforfuturehealthcarefollowingthelossofcapacity.
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MakinganAdvanceDirectiveVALID1. TheclientmustsignanddatetheAdvanceDirective.AND2. ThedocumentmustbeeithernotarizedORwitnessed
bytwoindividuals.Witnesses:Cannotbetheagentsandcannotbetheclient’shealthcareprovider,employeeofthehealthcareprovider,oremployeeofacommunityorresidentialcarefacility.Theombudsmanmustbeawitnessiftheprincipalisinaskillednursingfacility.
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IstheAdvanceDirectivevalideverywhere?
• TheAdvanceDirectivethatyousigninCaliforniaisvalidinCalifornia.
• OtherstatesmayNOTrecognizealegallyexecutedCaliforniaAdvanceDirective.
• California,however,DOESrecognizelegallyexecutedAdvanceDirectivesfromotherstates.
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HowlongwilltheAdvanceDirectivebevalid?
• TheAdvanceDirectiveisvalidforever,UNLESSØ ItisrevokedORØ Theclientsetsadateforittoexpire.
• IftheclientexecutedanAdvanceDirectivebefore1992,itmaynolongerbevalid.Ø TheclientshouldexecuteanewAdvanceDirective.
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CananAdvanceDirectiveberevokedorchanged?
TheclientmayrevokeanyportionoralloftheAdvanceDirectiveatanytime.
• Mustcommunicatetheintenttorevoke.• E.g,tellingthehealthcareprovider,signingarevocation,or
tearinguptheAdvanceDirective.• Theclientshouldinformallagentsandhealthcareprovidersofanychanges.
• SigninganewAdvanceDirectiveformwillrevokeanypreviousAdvanceDirective.
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WillanAdvanceDirectivestopparamedicsfromgivingtheprincipalCPR?
NO–theAdvanceDirectivedoesnothavelegaleffectonemergencymedicalpersonnel.
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DNRandPOLST
• PrehospitalDoNotResuscitate(DNR)–astatedocumentthatinstructsemergencymedicalpersonnelregardingapatient'sdecisiontoforgoresuscitativemeasuresintheeventofcardioplumonaryarrest.Theformdoesnotaffecttheprovisionoflifesustainingmeasures.
• Physician’sOrdersforLife-SustainingTreatment(POLST)-amedicalorderthatgivesseriouslyillpatientsmorecontrolovertheircarebyspecifyingthetypeofmedicaltreatmentapatientwishestoreceiveattheendoflife.ThePOLSTformmustbesignedanddatedbyaphysician,oranursepractitioneroraphysicianassistantactingunderthesupervisionofthephysician,andthepatientorlegallyrecognizedhealthcaredecision-maker.
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DurablePowerofAttorneyfor
FinancialMatters
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CaliforniaUniformStatutoryFormPowerofAttorney
• StatutoryFormPowerofAttorney(ProbateCode§4401)allowsyoutograntanagenttheauthoritytomanageyourfinances.• Thismayincludebankaccounts,real
property,insurance,taxmatters,legalmatters,orotherfinancialtransactions.
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FinancialElderAbuse
• PowersofAttorneyforFinancialMattersareveryimportantplanningtools.• Payingbills,maintainingproperty• Preventativetoolstoprotectagainstelder
abuse
• However,thesedocumentsmustbehandledcautiouslyastheycanalsobetoolsforabuse.
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TypesofPowersofAttorneyforFinances
• Durablev.Non-Durable• ThispowerofattorneywillcontinuetobeeffectiveeventhoughIbecomeincapacitated.
• Generalv.Limited(e.g.foronlytransactiononly)• Immediatev.Springing
• ThispowerofattorneyiseffectiveimmediatelyandwillcontinueuntilitisrevokedVS.Thispowerofattorneyshalltakeeffectuponmyincapacity.Myincapacityshallbedeterminedbymyprimarycarephysicianinwriting.
• TermsforSpecificAssetsandIssues• Trusts• Gifting• Loanstoagent• Changingbeneficiaries
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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).
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Agent’sStandardofCare
Agentshallobservethestandardofcarethatwouldbeobservedbyaprudentpersondealingwithpropertyofanother.Ifagentbreachesthisstandardofcareoranotherdutyinbadfaith,heorsheischargeableforanylossordepreciationinvalueoftheproperty.
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Agent’sDuties
• Dutyofcare• Dutyofloyalty• Dutytokeepprincipal’spropertyseparatedandidentified• Dutytokeepprincipalinformedandfollowinstructions• Dutytokeeprecordsoftransactionsonbehalfofprincipal• Dutytousespecialskills• Dutytodeliverpropertyonterminationofagent’sauthority.
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Termination
• Revocationbyprincipal• Agentlackscapacitytoact• Dissolutionorannulment• Principalregainscapacity• Principal’sdeath• Bycourtorder(canusecourtactiontocompelaccounting,revokeagent’sauthority,etc.)
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SometimesaConservatorshipCannotbeAvoided!
• Abuseofpowersofattorney.• Multiple,conflictingpowersofattorney.• Thirdpartynon-acceptance.• Principal’srefusaltocooperate,maycontinuetoacttohis/herowndetrimentevenwithPOAinplace.
• Canstillmanageaccounts,givepropertyaway.• Canrefusetoenterintoacarefacility,canrefusehealthcareassistance.
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Wills&Trusts
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WhatisaWill?
• Alegaldocument,draftedorexecutedinaccordancewithstatelaw,thatbecomesirrevocableupondeath.
• InaWill,youmaydesignatewhowillreceiveyourassetsatyourdeath.
• Differenttypesofwills,includingahand-writtenwill,statutorywill,orattorneypreparedwill.
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WhatisaStatutoryWill?
• California“fillintheblanks”willform,governedbyCaliforniaProbateCodeSection6240.
• Providessimpleinstructionsfordistributingyourassetsafterdeath.
• DesignedonlyforCaliforniaresidentsage18orolderandofsoundmind.
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WhatcanIdowithaStatutoryWill?
Ø Designatebeneficiariesofpersonalresidence.
Ø Designatebeneficiariesofallpersonaleffects.
Ø Providespecificgiftsofcash.
Ø Designatebeneficiariesofremainingassets.
Ø Designateguardian(s)forminorchildren.
Ø Designateexecutor(s).
Ø DONOTuseastatutorywillifyouwanttoleavespecificitemstospecificpeopleorifyouwanttosplityourestateunequally.
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DoesaWillgiveawayallmyassets?
• Lifeinsurance• Retirementplans,suchasa401(k)oranIRA
• Assetsownedasjointtenants• “Transferondeath”or“payondeath”
NO.Some“nonprobate”assetsarenotcoveredbyaWill,suchas:
• “Communitypropertywithrightofsurvivorship”
• Livingtrusts• Yourspouse’sorregistereddomesticpartner’shalfofcommunityproperty
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AdvantagesofStatutoryWill
• Simpleandcheap• Mostcommonandreadilyunderstood• Onlytakeseffectaftertestator’sdeath• Easytoamend
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DisadvantagesofStatutoryWill
• Mustbeadministeredthroughthecourt,sothewillbecomesapublicrecordandthecourtfeescanbecostly.
• Generallyneedtopayanattorneytofileforaprobate,notmanyfreeservices.
• DoesnotavoidMedi-Calestateclaims
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Trusts
• Intervivosrevocabletrust=allowsformanagementduringaperson’slifetimeandservesasatestamentaryinstrumentafterperson’sdeath.
• Settlor=personwhocreatesthetrust• Trustee=personwhomanagesthetrust• Successortrustee=personwhotakesovermanagementofthetrustoncethesettlorlosescapacityordies.
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TrustAdvantages
• Supposedtoavoidneedforprobate/courtintervention.• Private.Noneedtolodgetrustanywhereorgivetocourt.• AvoidsMedi-Calestateclaims.• Goodwaytomanagealotofpropertyduringlifeandafterdeathformultiplebeneficiaries(minors,adultswithdevelopmentaldisabilities)andavoidconservatorshipandguardianship.
• Maybetaxplanningopportunities.
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TrustDisadvantages
• Canbeexpensivetocreate.• Veryeasyfortrusteetoabusepowerbecausenocourtoversight.• Trusteesdon’toftenunderstandtheirdutiesandinadvertentlycreateproblems.
• Peopleforgettoputpropertyinthetrust.
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TransferonDeathDeeds(TODD)
AlawthatbecameeffectiveJanuary1,2016createsaRevocableTransferonDeathDeed(“TODDeed”)asawayforCaliforniaresidentstotransferresidentialpropertytonamedbeneficiaries,effectiveupondeath.Thenewlawrequiresuseofaspecificformwithspecificprovisions,andincludesa“frequentlyaskedquestions”provision.ThestatutorydeedformandrevocationformareintheCaliforniaProbateCode,Sections5642and5644.
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TODDAdvantages• AvoidsMedi-Calrecoveryclaims.• Maybesimpletouse,willbelessexpensivethancreatingalivingtrust,andmayeliminatethewaitingandexpenseofaprobate.
• CanberevokedatanytimeduringthelifetimeoftheGrantor.• Shouldsimplifythetransferprocessatdeath,aslongasthedeedisnotvoidedbyadraftingerrorinthepartoftheGrantor.
• Retainsthetaxadvantagesofatransferviatrustorinheritanceunderawill.
• Lesspotentialforabusethansimplytransferringpropertytoanotherfamilymember(eitherwithorwithoutalifeestate)toavoidMedi-Calclaimsandprobate.
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TODDDisadvantages• OffersnoprotectionfromtheGrantor’screditors(exceptfromMedi-Cal),sothebeneficiarymayendupwithnothingifthedebtsoftheGrantorarelargerthantheworthoftheproperty.
• Canonlybeusedtotransferonetofourresidentialdwellingunitsorcondominiumunits,orasingle-familyresidencewith<40acresofland.
• CannotbeusedtotransferresidentialpropertyheldasJointTenancyorasCommunityPropertywithRightofSurvivorship,andcannotbeusedtocreatesplitinterestssuchasalifeestate.
• Doesnotpermitthedesignationofbeneficiariesbyclassdescription(e.g.,“mychildren”);thebeneficiaryorbeneficiarieshavetobespecificallynamed.
• Cannotdesignate“contingentbeneficiaries”:ifabeneficiarydiesbeforetheGrantor,thepropertygoestotheothersurvivingbeneficiariesinequalsharesor,ifnootherbeneficiaries,thenitrevertstotheGrantorestateandmaythenrequireaprobate.