What (and How) To Ask Your Parents About Their Estate Planning


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Discussion on estate planning for aging parents, including three fundamental documents every parent must have, why proper titling of assets is so important, benefits of having a trust and more.

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What (and How) To Ask Your Parents About Their Estate Planning

  1. 1. What (and How) To Ask Your Parents About Their Estate Planning June 19, 2014 Ronald F. Wayne, Esquire 1375 East Ninth Street, Suite 1700 Cleveland, Ohio 44114 P: 216-615-7349 rwayne@bdblaw.com www.bdblaw.com
  2. 2. Estate Planning Pyramid Focus on the Fundamentals Other Documents And Charitable Planning Health Care Documents Powers of Attorney Wills Proper Titling of Assets Trusts
  3. 3. Do You Have… These Three Critical Documents?  Financial Durable Power of Attorney  Health Care Documents  Last Will and Testament
  4. 4. Do You Have a… Financial Power of Attorney?  Prevents Probate Court Guardianship Problems  Little or no Flexibility for Estate Planning • All activity and filings generally public record Assets must be appraised and inventoried Nosy neighbors, business competitors No expenditures without Court approval  Court generally will not allow Medicaid Planning  Expensive, administratively difficult, slow
  5. 5. Do You Have a… Valid Power of Attorney?  Current or Springing  Limited or General  Compliant with 2012 Ohio Law  Specific Reference to “Hot Powers”  Signed, Dated and Notarized.  Should also be witnessed for recording purposes if necessary in other states.
  6. 6. Do You Have… Health Care Documents  Health Care Power of Attorney  Springing Document  Appoint someone to make decisions on your behalf  Living Will  Declare your intention not to be artificially sustained if no recovery is possible  Donor Registry  Make known your binding wishes regarding organ and tissue donations
  7. 7. Do You Have a Valid… Last Will and Testament?  Must have this document as a safety net but we want to using it by avoiding probate  Deals only with Probate Assets.  Those assets without “embedded instructions”  Does not control disposition of non- probate assets such as:
  8. 8. Probate Avoidance Devices  Joint and Survivorship  Transfer on Death  Payable on Death  Beneficiary Designations
  9. 9. Necessity of Last Will  A “clean up hitter”  Designate guardian for minor or disabled children  Appoint an executor  Insert a Will Contest Clause  Pour over remaining assets to a revocable Trust or outright distribution to estate beneficiaries
  10. 10. Have You Reviewed… How Your Assets Are Titled?  Takes precedence over dispositive provisions of Wills and Trusts  Simple  Extremely important  Must be reviewed periodically especially after death or divorce  Special Issues with ERISA Plans
  11. 11. Do You Need a Trust? Certainly if:  Estate is large enough to have Federal or State estate tax consequence  Beneficiaries with disabilities, addictions, bad marriages, debt, spending issues, creditors, physical or mental issues
  12. 12. Probably if:  Second Marriage  Blended Family Probably not if:  Estates are very small and none of above concerns are present Do You Need a Trust?
  13. 13. Caution: Second Marriages With Blended Family  Dangers of outright bequest to surviving spouse or joint and survivorship, transfer on death or designation of surviving spouse as sole beneficiary  Famous Last Words: “I promise to divide it equally between all of the kids”  Multiple spousal election rights regardless of what Will says  ERISA rights
  14. 14. Long Term Care Concerns  Long Term Care Insurance  Affordability?  Necessity?  Self Insurance
  15. 15. Long Term Care Concerns  Medicaid Planning = Self Impoverishment  Five year look back period  Gifting • Outright • In Trust  Post Institutionalization Possibilities  Remedying situation where there is no planning  Requires quality and specific Durable General Power of Attorney
  16. 16. Medicaid Criteria  Single individual  $1,500; prepaid burial contract, one modest automobile, HHG&F, limited insurance cash value  Married Persons • Personal residence of community spouse • One half of assets but not to exceed $117,000
  17. 17. How to ask:  “I’m doing my own estate planning and wonder if yours is done?”  “My friend’s parent had an incident and I don’t want that to happen to our family”  I went to a presentation and…  “I’d feel better knowing, in generalities, where assets are and who is your attorney, accountant, financial planner, long term care and life insurance agent  Where do you keep your documents and passwords?  What responsibilities might I have under your documents?
  18. 18. Conclusion  Better to ask than not ask  Live with the response  Assist with finding competent counsel  Stay outside of the process once commenced, unless invited back in  Urge review upon change in circumstance, life changing event, deaths of beneficiaries or fiduciaries and tax law changes
  19. 19. Thank You