Every once in a while, Congress gets things right, as they did in 2008 by declaring National Estate Planning Awareness Week, October 19– 25, 2015. This is another great way to honor my father, who would be celebrating his 94th birthday on October 19th. It is estimated that 56% of Americans do not have any form of estate plan or critical decision-making documents in place, such as a Durable Power of Attorney, Medical Power of Attorney, HIPAA Authorization, Directive to Physicians, or Guardian for Minor Children. BE AWARE – BE INFORMED.
September 27, 2008.
Whereas it is estimated that over 120,000,000 Americans do not have up-to-date estate plans to protect themselves or their families in the event of sickness, accidents, or untimely death;
Whereas a 2004 Roper poll commissioned by the American Institute for Certified Public Accountants found that two-thirds of Americans over age 65 believe they lack the knowledge necessary to adequately plan for retirement, and nearly one half of all Americans are unfamiliar with basic retirement tools, such as a 401(k) plan;
Whereas careful estate planning can greatly assist Americans in preserving assets built over a lifetime for the benefit of family, heirs, or charities;
Whereas estate planning involves many considerations, including safekeeping of important documents, documentation of assets, operation of law in the various States, preparation of legal instruments, insurance, availability of trust arrangements, charitable giving, inter vivos care of the benefactor, and other important factors;
Whereas estate planning encourages timely decisions about the method of holding title to certain assets, the designation of beneficiaries, and the possible transfer of assets during the life of the benefactor;
Whereas many Americans are unaware that lack of estate planning and `financial illiteracy' may cause their assets to be disposed of to unintended parties by default through the complex process of probate;
Whereas alternatives to disposition of assets after death, such as planned gift-giving, may accomplish a benefactor's goal of providing for his or her family and favorite charities;
Whereas careful planning can prevent family members or other beneficiaries from being subjected to complex legal and administrative processes requiring significant expenditure of time, and greatly reduce confusion or even animosity among family members or other heirs upon the death of a loved one;
Whereas important considerations as to donation of organs and use of life support functions may be made through the estate planning process;
Whereas the implementation of an estate plan starts with sound education and planning, and then may require the proper drafting and execution of appropriate legal documents, including wills, trusts, and durable powers of attorney for health care;
Whereas the third week of October should be designated as `National Estate Planning Awareness Week'; and
Whereas the National Association of Estate Planners and Councils, representing over 28,000 estate planning professionals, together with the Universal Press Syndicate, the largest independent newspaper syndicate in the world, are prepared to provide such educational information to the public in a focused manner during National Estate Planning Awareness Week:
Now, therefore be it Resolved, That the House of Representatives —
Historically, most people think of an estate plan as a “Simple Will” which turns into a dusty old document tucked away in a safe deposit box, safe, or desk drawer, creating a false sense of comfort. As a document without force or effect until after death, it risks becoming a dead and incomplete expression of intent: never changing despite a succession of life events such as marriage or remarriage, birth of children and grandchildren, changes in wealth or inheritance, divorce, loss of a spouse, or dramatic change in health or disability. A lonely Will, without an accompanying system, just lays there waiting for you to die and hoping that your executor and heirs can locate and identify all of your assets.
However, the following statistics suggest that writing a Will is only part of the process. A provision that your spouse or children will receive “all of your estate” is meaningless if they don’t know what you own or where to find it. It is also confers no benefit if you become incapacitated and all of that information stored in your head cannot be recovered.
A record of online accounts is crucial to a system, (Online Accounts – Where is Your Cheese? March 1, 2013) but I find that a significant number of clients just don’t do the computer thing. And of course some assets are not necessarily managed online - an old life insurance policy, real estate owned in Hawaii, family burial plot in Arkansas, gold coins or savings bonds in a safe deposit box, stock certificates in a passive business venture, or mineral leases in Wyoming.
Granted, a “Simple Will” may be simple on the front end, but it won’t resolve calamitous complications and failed expectations on the back end. Sometimes the old cliché “you get what you pay for” becomes a haunting reality. You need to finish the job, set some time aside and incorporate the following items into your planning system. I suggest storing the information all in one place, preferably on a thumb drive.
The goal of a system is to plan a smooth transition of responsibility and management and distribution of assets in the event of illness, disability, or death. If it seems like a lot of work to you, just imagine how overwhelming it would be for a spouse or children after you are gone. It is clearly easier for you to make decisions and create your system now, without any acute time pressures, than it will be for your family, who may have only hours or days to figure it out.
Make a system part of your legacy.
© Will Morris, JD, LLM 2014
It is high school graduation season and the transition plans for the fall college experience have begun. Commencement speakers and valedictorians will talk about “taking the next step into adulthood” as they pursue their dreams. Parents and the new graduates will make endless “to do” lists with the guidance of their own experience and expectations (and the new student handbook).
Parents will soon learn that although you pay the tuition and provide their support, they are already ADULTS and strict privacy rules apply. You will not be able to access their grades, tuition account, or financial aid information without their express authorization. You may provide “dependent” health insurance and claim them as a “dependent” on your tax returns for the next few years, but do not be misled - for privacy rules, they are an “ADULT”. You can no longer access information just by saying, “I’m their mother”.
What are your plans in the event of an emergency? Would you be surprised if you called the hospital and were told that they could not share any information about your son or daughter’s condition “due to HIPAA privacy rules?” Would you be surprised that you could not access their banking information or take care of other business affairs in the event of an extended illness or incapacity?
Because so many unknown contingencies have become realities for many parents, I strongly suggest that you encourage your recent graduate (or any adult son or daughter) to sign three important documents.
HIPAA Authorization - The Standards for Privacy of Individually Identifiable Health Information (“Privacy Rule”) establishes a set of national standards for the protection of certain health care information. The U.S. Department of Health and Human Services (“HHS”) issued the Privacy Rule to implement the requirement of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”). Because of severe civil and criminal penalties health care providers may not share health care information regarding your son or daughter without their written authorization.
Medical Power of Attorney A Medical Power of Attorney will authorize you to make important medical decisions for your son or daughter if they cannot express their wishes or make the decisions on their own due to a temporary or extended incapacity. In addition, the Medical Power of Attorney authorizes you to obtain copies of their medical records.
Durable Power of Attorney-A Durable Power of Attorney will authorize you to manage your son or daughter’s business and financial affairs either as a matter of simple convenience or the result of a temporary or extended incapacity. You may need to act on their behalf in dealing with the school, financial aid, employers, Social Security, filing tax returns, or accessing or closing accounts.
The purpose of these documents is not to invade or compromise their privacy, but rather to facilitate your ability to make important decisions if they are unable to do so.
© Will Morris, JD, LLM 2014