Oct 23

Estate Planning: “Last Best” Advice

by Randall A. Snyder

I read last month’s estate planning article, recommending you visit with your family about your plan. I disagree. Depending upon your age, wealth, health and circumstances, they may need to be involved. But probably not. Money, power, control, sibling rivalry don’t go away because we’re now over 65 or our children are. Most elder abuse is from family. Some is emotional, but much of it’s financial. I advise many seniors or I probate their estates after death, where a substantial portion has already been given to or taken by children unwisely or unfairly. Talk to your professional first. Then decide the extent to which to involve your children.

Here are some thoughts we should all consider:

You avoid seeing an attorney because of:

  • Fear of cost (unjustified, it’s one of the least expensive legal services around)
  • You not certain of your estate, or you fear you’ll have to have organized records, titles and account numbers. (Wrong, you don’t need this information, especially not for a first meeting)
  • You haven’t made decisions (surprise, most seniors visiting lawyers aren’t certain what they should do. Many of them outright ask me how to leave their estate)
  • You’re conflicted over tough decisions, because of “that child” with the ____problem, or whom you have no contact with. Or you don’t trust their spouse. Or you’ve already given them ______. Or a special needs child or grandchild. Or because of your own or your spouse’s health or money issues. (Wrong again. This is the perfect time to see an attorney)
  • You’ve been to legal zoom and it looks pretty simple and pretty inexpensive. (Just say “no.” They can’t answer questions, give advice or help you with alternatives or goals. Anyone can type documents. What you need is a sounding board and objective, experienced advice.)
  • You don’t know who to call; the internet gives a million hits, banner ads and tell you nothing. (Like finding a contractor or auto-repair, referrals work best. Call someone you know. Ask your pastor or doctor, call the local bar association or State Bar of Montana. Ask ANYONE and make the call. If it’s not the right lawyer, have that attorney give you several more names. I frequently find attorneys for folks when I’m not the right guy. Trust me, I know my colleagues much better than the internet or yellow pages. I can also likely make the appointment for you. Most attorneys will.

Like planting a tree, there are two best times to see an attorney for estate planning: 30 years ago and today.

What will the attorney ask you:

  • A general inventory and value of your estate; your present income and needs; again, you don’t need titles, deeds or bank statements.
  • Yours and your spouse’s health, the health of any who may still be dependent upon you. (Some have disabled children). Your attorney can present better options if they know your health status. Be honest, none of us are as smart, as fast or remember like we used to. It’s pretty normal to eventually need help with the checkbook, medication and care. Remember, your planning for your future, not just the present. You need to be honest and realistic.
  • Your marriage and family. Don’t worry; few of us bring a simple husband-wife, home, 3 kids and two cars to the interview. Many homes are blended. We can still help you; and advance planning in your case is even more important.
  • Your goals. Both current, in the next five years and ultimately upon demise. This is the single, biggest fear of my clients. They don’t know what to do. Many ask me outright, “What should I do” or “Is that fair?” I can’t decide your plan for you. But I can ask you questions, help you to talk and think out loud and help you with options you may not have considered. Trust me, when you talk about it privately, outside your family, you’ll come to the right decision. And remember, you’ll have more time to think it over between an interview and signing. After you sign, you can go back and change it very easily

What will you need to decide as part of your estate plan?

  • Who will you trust to give a power of attorney to? That should be your spouse first, then perhaps a child, relative or trusted friend. Ask your attorney about how these work and about how to change them. Never hesitate to change your power of attorney if you have any reason to mistrust the agent who will have your signature authority in your absence or disability. If your durable power of attorney is more than five years old, get a new one with the current, statutory form. It’s different and title companies now insist on current powers of attorney.
  • Same with a health care power of attorney. That’s different than a durable power of attorney over your money and property. Health care is only for health care. Your spouse can admit you to care and get records, but no one else can. You’ll need a current health care power of attorney. Ask and make certain your attorney is using the most current forms. They were updated in 2011.
  • Who will be in charge of your estate? That’s your executor or Personal Representative. Probably your spouse, but who next? Try to avoid naming ALL of your children – it makes for excessive work and signatures on even the smallest of tasks. The executor only needs to (1) have the time and interest and (2) be trustworthy. They don’t have to live in Montana, though that helps. The probate attorney will counsel your PR on what to do.
  • How to distribute your estate
    • It’s helpful to write a list to dispose of personal property – those items: the guns, jewelry, art, tools, all the household items. They don’t need to be listed in your will. Make a list, change it, sell it, give it away or whatever. You don’t need to call your lawyer after your will is written and signed.
    • Specific amounts and percentages work best. “Equally to children” works very well. $10,000 to my church.
    • Decide what to do if a beneficiary predeceases you. Montana law says such gifts “pass by representation”, meaning a gift to a child goes to that child’s children – your grandchildren. Ask your lawyer about this.
    • Contrary to popular myth, Montana does not take your estate if you have no will. You might think they want your home, but they really don’t. State law provides that your estate still goes to your heirs. Perhaps not as you would distribute it – so get your will done.
    • Most of us can forget about death taxes – they’re all but gone. No more state inheritance tax; and for most of us, no more federal estate tax.

Be cautious about living trusts.
At least once per month I’m updating a trust — a 30-60 page document the client can’t read or understand, to update distributions or the successor trustee. These plans – extraordinarily expensive to set up and frequently not maintained, are seldom advisable. Most families need a simple will and estate plan for $300.00 or less. Trusts run into the thousands and usually don’t do much more than a simple will. Ok, they can be helpful if you own property in multiple states or have federal estate tax exposure. Few of us do. And yes, they can avoid probate. Probate in Montana is very clean, very straightforward and (if you shop for a lawyer), not a lot more money than some living trusts. Trusts don’t shield property from Medicaid or the expenses of long term care.

Ask your lawyer about costs.
We want you to. We don’t want misunderstandings about fees either. The lawyer should send you a confirming “engagement letter” outline what he or she will do, when and for what cost.

Keep your own documents.
If you have six months to live and your attorney will shortly be probating your estate, then leave your will at the law office. Otherwise, take the original, keep it in a sealed envelope (the attorney should do this for you) and keep it in a lock box, preferably a safety deposit box. It’s your will and your property. Your heirs can decide whom to hire if a probate is required.

Consider filling out an Advanced Care Directive.
You can find that online at http://www.caringinfo.org/files/public/ad/Montana.pdf. This will help you make decisions about end of life care.

Randall A. Snyder has practiced real estate, estate planning and probate in Bigfork for 30 years. He is a frequent instructor in ethics and elder law issues and is president of the State Bar of Montana for 2013-2014.

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