Why a power of attorney is not enough: Do you have this critical document in your estate plan?

If you created your estate plan more than a couple years ago, you may be missing a crucial piece to the puzzle.  In the past, a power of attorney for health care decisions, which in California includes your advance directive (or living will), was sufficient to name another person (your “agent”) to make health care decisions on your behalf.  But the enactment of HIPAA (Health Insurance Portability and Accountability Act), which was designed to limit the access to your medical records – and was focused on insurance companies – actually resulted in limiting the access to your medical records for everyone, including your agent on your health care power of attorney.

Worse, if you don’t have a health care power of attorney, you may think that your “next of kin” – your spouse, your children, or your parents – will have access to your medical information and to be able to make decisions on your behalf.  Unfortunately, with HIPAA and the stricter privacy regulations on doctors and hospitals, this is not often the case.  While you may be looked to for decision-making, if you want to see the medical records or tests results themselves, for example to get a second opinion, you won’t be able to, not even with a power of attorney.

What’s necessary now is called a “HIPAA Authorization,” which I have been using for a couple years now.  It allows the individuals you designate to have access to your medical records and can save your loved ones from hassle and hardship should you be incapacitated.  I use a separate form document, though my older health care powers of attorney included the HIPAA authorization in the body of the power of attorney.

I’ve talked already about the importance of everyone having a power of attorney once they turn 18, but what is also critically important is that you have all the correct documents in your estate plan as well, and a complete estate plan includes a HIPAA authorization.

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Post-divorce stability for children: creating new traditions

One of the things that the family court in California considers at every turn in a divorce case is the “best interests of the children.”  One aspect of the best interests analysis by the court that is not always considered by parents is the issue of stability.  In a divorce, there is necessarily instability for everyone: moving homes, changing routines, and new parental roles and relationships.  One of the ways parents can help children through divorce is by creating new traditions, and routines, such as the one this parent has created: a weekly “welcoming home” ritual dinner.

Many parents complain of the adjustment period when their children come back from their ex’s house, commenting that it can take a day or so for things to return to “normal” for their children.  A way to speed this adjustment process is to have a ritual or tradition that brings the children back into your home, routine and rules more quickly.  Do you have such a routine in your home?

Celebrities and estate planning

There are frequent examples of famous names and faces that pass away, leaving us with reminders of the importance of estate planning at all ages.  In recent weeks:

1. The importance of planning young: Sarah Burke.  We all think that we’re going to live forever.  I think this is part of human nature.  We also think that, if we’re healthy, then we will be healthy forever.  Unfortunately, accidents and illnesses happen to the young and to the healthy, as the death of 29-year old Olympic skier Sarah Burke tells us. If you don’t have a medical power of attorney in place, you don’t choose who will be making the decisions on your behalf.  If you don’t have a living will (part of the power of attorney for medical decisions in California), then your family doesn’t know what your wishes are.
2. The importance of a power of attorney: Etta James.  When Etta James died, her family was in the midst of a conservatorship battle.  A conservatorship is the formal title of the person given legal rights to make decisions on behalf of your estate/assets and of your medical decisions.  If you have a power of attorney, in most cases a conservatorship is not necessary.  Etta James’ husband had conservatorship over the singer, and in just late December, asked the court to release $500,000 for her monthly medical care, the cost of which was $30,000.  The court released $350,000.  Because of concern over her medical care and the cost, her two sons petitioned the court to change the conservatorship over to them.  The last thing you want your family to have to contend with when you are gravely ill is an issue such as this.  If you make plans ahead of time, you and your family will both be protected.
3. The importance of planning, period: Steig Larsson. The author of the widely successful “The Girl with the Dragon Tattoo” trilogy died suddenly of a heart attack at age 50. He had no will.  While his estate went to his family members, his girlfriend of 32 years has possession of a fourth unpublished manuscript, and the legal battle rages on.

Whatever you age, size of estate, or health status, you need an estate plan to protect yourself and your loved ones.  Why wait?  Make a FREE appointment online now.

Your 2012 estate plan guide: when, how and why to update your existing plan

One of the most common estate planning questions I get is when and why you would need to update your estate plan. For 2012, here is your custom guide to ensuring that your estate plan is current:

1. Has the value of your estate increased substantially since your last update?  Do you have more than $5 million if you’re single, or $10 million if you’re married?  Is this a change from before?  If so, then you may want to consider a review of your estate plan.
2. Did you complete your powers of attorney before 2003?  In California the forms changed at that time, so now would be a good time to take another look.
3. Are your beneficiaries on your retirement and life insurance accounts updated?
4. Does your estate plan reflect your current family and desires for distribution to them?  Or has there been a birth, death, marriage or divorce since your last estate check up?  If so, you may need a review.
5. Are you protected for a time (the time) when you are unable to think or care for yourself? Do you have your powers of attorney? Long-term care?  Advances in medical care mean we will live longer, but at the same time we will more likely experience a diminishing of capacity before we pass on.  Without these basic planning tools, we leave our family with these burdens.  Are you approaching 50?  If you don’t have long-term care yet, now is the time to get it.  You can’t wait until you need it or you won’t qualify.
6. Have you chosen a guardian for your minor children?  If you don’t, then your children could become the subject of a custody battle if something happens to you, or they could be place in foster care while the decision is being made.  Don’t take this risk!

If it has been a while since you created your estate plan, or you don’t have one at all, now is the time to put the tools in place to protect your family and your assets.  Schedule a FREE appointment online, or call us at 925.307.6543.

Why and when you need an estate planning/elder law attorney

Top reasons why you may need an estate planning or elder law attorney:

1. To keep more of your assets and money for your family than for the government/attorneys
2. To have peace of mind that your family and all you have worked for is protected
3. To avoid the state’s plan for the passing of your estate (probate) because it is complex, difficult, expensive, and time-consuming, and you want to make sure you don’t put your family through it
4. To acknowledge that your needs will change as you age, and it takes critical planning to ensure that you and your family are cared for as you grow older
5. Because the government (through Medicare/Medical/Medicaid) will not be sufficient for your long-term care, and you know that an attorney can help you to evaluate your options to make sure you are protected

Top reasons when you may need an estate planning or elder law attorney:

1. Your estate becomes worth $150,000 or more (not including debt)
2. Your loved one has been diagnosed with dementia or Alzheimer’s
3. You are worried that you do not have a plan in place for your estate and family after you’re gone – everyone needs a plan, regardless of age, estate size, or family composition
4. You are concerned about your or your loved one’s ability to cope with rising costs, continue to pay bills, or provide for ongoing medical care

Do you have any of these concerns?

Finding the good in divorce

I recommend to many of my divorce clients to get therapy to help them through the emotional aspects of divorce.  In the best of circumstances, divorce is hard.  It’s hard even before you get into court and start fighting, before you spend too much on attorneys and wonder how you’ll make the bills next month. It’s hard before you start living a single life either in a house that seems to big or an apartment that seems like a closet.  Here is a great article on how divorce can be a “cue to wake up.”

Need more help?  Click here for our FREE Divorce e-Course.

The practical aspects of divorce: what has separation taught you that you didn’t expect?

My job is to help my clients with the legal aspects of divorce.  I am not counselor or therapist, pastor or even friend, though I do become quite friendly with most of my clients.  At the same time, I know that there are lots of issues in divorce that are not strictly legal that my clients need to deal with and become accustomed to.  Things like being on their own, or having separate holiday celebrations or living in a smaller space.  But even though I can’t necessarily advise my clients on many of these issues, I like to pass along great information when I receive it, such as this article about what this mother learned after nine years of separation.

What has your separation taught you that you didn’t expect?

Need more help?  Click here for our FREE Divorce e-Course.

What is conservatorship in California? Part Two: The process

So, you have a loved one who is no longer capable of taking care of themselves.  Last time, we talked about what a conservatorship is and why you may need one.  Now, we’ll look at the process. Unfortunately, the process is long and can be expensive.  Which is why it is so critical to get a power of attorney ahead of time for your loved ones.  Did you know that your children should have a power of attorney once they reach 18?  If your child is injured, you may not get automatic access to medical records and to make decisions on your adult teen’s behalf.  There’s more information in my article, Have a child heading to college? A few legal documents they need before they leave the house.

The bottom line is that every adult – every adult – needs to have a Power of Attorney in place to protect them should they become injured or otherwise incapacitated.  To be able to make decisions on another’s behalf, a power of attorney is required.  In addition, the health information privacy laws (HIPAA) will restrict who can see medical records unless you have a HIPAA-specific waiver.  If you’re concerned about your loved one not having a power of attorney, and their unwillingness to get one, then get one yourself so you can speak to the process and experience.

If you don’t have one and your loved one becomes incapacitated, then you will need to go to court to apply for a consevatorship.  Once the conservatorship is filed, which in California can cost $400 or more just for the court filing, the paperwork needs to be send to all first-degree relatives (children, parents, siblings, etc.).  A hearing is set to grant or deny the temporary conservatorship, and then a hearing is set for the permanent conservatorship, generally a couple months out.  In the meantime, any other relatives can file their own objections to your petition.  In addition, a court-appointed investigator talks with you, the family member who you think needs a conservatorship, doctors, caregivers, and everyone around in order to do a report for the court, either recommending the conservatorship or not recommending it.

In cases where the family is all on the same page, the process generally goes smoothly.  But this doesn’t change the fact that it can take six months or more, and cost several thousand dollars to accomplish.

Holiday trip planned? Put your mind at rest with an estate plan

Frequently I have clients who come to me for an estate plan in the weeks and months before going on a trip.  Because they are going into unfamiliar territory, they want all of their affairs in order prior to their departure.  While I will be pleased with any reason that gets someone in to prepare their estate plan, it seems to me that the dangers of every day life are high enough that we don’t have to wait until we go on a trip to be worried about our affairs.

I used to hear that most accidents occur close to home, and I would guess that this is still the norm.  With car accidents (please stop texting and driving!) as well as holiday mishaps, there is plenty of reason to be nervous about accidents at home.  So why wait?

One of the reasons I hear about why folks wait to do their estate plan is that they think it’s going to be difficult and time-consuming.  They don’t know what decisions to make or who to turn to.  With my clients, just about everyone says, without prompting from me, that the process is extremely easy, far simpler than they expected, and that I helped them throughout the process.  What many of my clients don’t understand is that it is part of my job to walk you through the process, ensure you understand all the options available to you, and help you to make the right decisions for your family.  Now, I don’t make your decisions – of course not! – but I can go over the advantages and disadvantages of the various options, or help give you things to think about in making critical decisions.

And because of those things, it’s far easier than you may think it is.  So don’t wait until you have to go on a trip.  Do something to put your mind at ease this holiday season – get an estate plan and put your affairs in order.

What happens when you die without an estate plan?

Often, we think that we don’t care or it doesn’t/won’t matter what happens to our estate once we’re gone because, well, we’ll be gone.  But this is an attitude that can cost your estate tens or hundreds of thousands of dollars as well as cost your family a lot more grief than they already will be experiencing.  Don’t do this to your family: make a comprehensive estate plan so your family doesn’t go through what I describe below: