Barry Peters Law

Time to Update Living Wills & Powers of Attorney?

Barry Peters — Fri, 11 May 2012 15:35:15 +0000

It’s not uncommon for a client to indicate that they already have a Living Will or a Power of Attorney that they’ve signed. If those documents are suitable for continued usage, there is no need to re-invent the wheel. My practice is to discount my fees for my complete Living Trust Package to reflect the fact that I have fewer documents to prepare.

But before we take that track, I will always take a look at the documents they have to make certain they are suitably up to date. To assess this, there are two things for which I look:

1. Do the Living Will and the Power of Attorney each make explicit reference to the federal HIPPA statute. That is the statute that makes it a federal crime for a health-care provider to give medical information to anyone other than the patient without the patient’s express written authorization. The statute came into its full glory in about 2005, so documents written prior to that date tend to make no mention of the statute. Consequently, they run the risk of precluding the authorized agent of the patient from being able to collect information about the patient’s condition in a situation where the patient is comatose or otherwise unable to communicate effectively. So just when the person authorized by the Power of Attorney needs to be able to have a free discussion with the physician, the physician may be legally prohibited from having that discussion.

2. The state statute that authorized Living Wills was also re-written several years ago. The changes made a substantial difference in the way Living Wills are written. Previously, the “Living Will” consisted of two documents (the “Living Will” and a separate “Durable Power of Attorney for Health Care”). Now the two documents are blended into a single document. As well, where previously a patient had just three options with respect to what medical and other care would be provided in the event of a coma, now there are five. For both of these reasons, Living Wills that are more than a few years old should be redrafted to reflect the recent changes to the state law.

With these recent changes to the law in mind, more often than not, even a client that already has a Living Will or a Power of Attorney will need to have them updated. Fortunately, updated versions of those documents are already included in my complete Living Trust Package at no additional charge.

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Whether you live in Boise, Meridian, Eagle, Star, Nampa, or other nearby communities – in fact, anywhere in Ada County or Canyon County – for additional easy-to-understand information on Idaho Wills, Trusts, probate, and estate taxes, visit the user-friendly website at BarryPeters-Law.com. Then call attorney Barry Peters’ offices at (208) 939-2600 for an expedited appointment to begin the process of setting up your own Living Trust. Or, if you have questions, please call Barry for a FREE OFFICE CONSULTATION or visit his Q & A pages at BarryPeters-Law.com/common-questions. As always, your total satisfaction is guaranteed by Barry Peters, Attorney at Law, where all clients receive individual attention to the details of their unique circumstances.

Barry Peters: Second String Trustees

Barry Peters — Fri, 04 May 2012 14:56:23 +0000

For clients who choose to set up a Living Trust or Family Trust, one of the persistent issues is who to name as the successor trustee – the person who will take over when the client has passed away to make sure that his or her instructions are followed.

My advice is to check first in the family circle. Are there brothers, sisters, parents, or even children who can take that role? Then they should be a good selection, though children should be avoided if naming them might cause tension with younger siblings. More than one good choice in the bunch? Then select a first and second choice.

If no family members seem suitable, I’d next suggest looking among the circle of close friends. As always you should look for someone who will be wise and honest in the handling of the trust assets.

If no good candidates are found in either place, you might consider naming an institutional trustee such as the trust department of a large bank. They will perform the job carefully, though sometimes at greater cost to the trust than a family member or friend might charge.

But the important thing is to provide a depth in the list so that if the first or even second choices are unable or unwilling to serve, you have the reserves available to step up and complete the process. Hence, I typically encourage clients to name at least three successor trustees when their Living Trust or Family Trust is prepared.

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Barry Peters — Probate for Surviving Spouse

Barry Peters — Sat, 28 Apr 2012 15:31:20 +0000

A common misconception is that a surviving spouse in Idaho does not have to go through the probate process. The assumption is that everything automatically becomes owned by the surviving spouse when his or her spouse passes away.

In reality, such an automatic transfer does not occur. This is due to the fact that a deceased spouse is not legally required to leave his or her belongings to the surviving spouse. Instead, a person may leave a Last Will and Testament that directs that the estate be divided between the surviving spouse and children. Or that it is to be transferred just to the children. Or that it passes to his or her favorite charity. It is entirely up to each person to determine who is to inherit his or her property. The probate process then becomes the way to determine and carry out just what the decedent actually wanted to occur.

And in the event that a spouse fails to leave a Last Will and Testament to identify who is to inherit his or her property, the answer to that question is also dictated by statute here in Idaho. Typically, that will involve some allocation between the surviving spouse and the surviving children.

Since that is the case, unless special steps are taken to avoid probate, Idaho statutes and courts require nearly all estates to be probated.

For additional information on some of the ways for a surviving spouse to avoid probate, see the discussion HERE.

Barry Peters: Idaho Living Will Trends

Barry Peters — Fri, 20 Apr 2012 15:53:59 +0000

After watching clients for twenty years, several patterns are becoming evident.

First, almost all clients who go to the trouble of having a Will or Living Trust prepared opt to also have a Living Will prepared. This allows them to tell their family and friends what sort of medical care they want in the event they end up in a coma with no chance of recovery. It allows them to indicate whether they want medical care, food, and water continued in the event they end up in that condition.

Second, people are evidently growing more comfortable with the “pull all the plugs” option. Fifteen years ago, only about 15% of clients chose the “stop all medical care and do not supply food or water” option. Now about half of all clients typically select this option. Almost all of the rest elect to terminate all of the medical care, but still elect to continue the administration of hydration via intravenous tube or a feeding tube to the stomach.

Should everyone have a Living Will? In my view, “Yes, but . . .”

I believe that everyone should express their wishes regarding the care they are to receive in the event they end up in a coma.

“But,” in my opinion a desire not to be a “burden” to the family is not a good reason to have a Living Will. When an elderly person in my office indicates that he or she wants a Living Will because they don’t want to be a burden, I push back pretty emphatically. Typically my response is to point out that, “they were a burden to you for 18 years, so it’s OK for you to be a burden on them for a few years.”

On the other hand, when a client expresses a strong confidence in their eternal destiny and no fear of death, then I’m happy to see them carry through on a desire for a Living Will that may hasten that transition. After all, “sunset here is sunrise there!”

For more information on the subject, contact your attorney or lawyer today.

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Barry Peters: Storage of Wills & Trusts?

Barry Peters — Fri, 06 Apr 2012 18:28:29 +0000

On completion of a client’s Living Trust, Family Trust, or Last Will & Testament, one of the final points to discuss is the storage of the documents. Though other attorneys handle things differently, my practice is to send the original documents home with the client, rather than storing them in my office safe.

My advice to my clients is simple: Keep these documents in a safe place other than a safe deposit box.

Why not a safe deposit box? Because some banks have a policy that if anyone listed on a safe deposit box passes away, the box will be sealed and no one will be allowed into the box without a court order. This creates a Catch-22 situation where the document that is needed to obtain a court order to open the box is stored in the box that is sealed. So, please, do not store your estate planning documents in your safe deposit box.

What does that leave? I suggest the use of either (1) a fireproof file cabinet, (2) a fireproof safe, or (3) a fireproof lock box stored at home. Any will do fine. If you have none of these available, you can purchase a fireproof lockbox for about $50 or a small fireproof safe for around $100 at a Staples or an Office Depot near you.

The use of a fireproof container is important to avoid the double tragedy of a house fire in which the client is killed and which, simultaneously, destroys the documents that direct what is to happen in the event of the death of the client.

After you’ve decided where to store your important documents, be sure to let your trustees, executors, and agents know both 1) where they are stored and (2) where the key is stored or the lock’s combination that will be needed to get into the safe, file, or lock box.

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Barry Peters: Will a Trust Protect from Creditors?

Barry Peters — Sat, 31 Mar 2012 00:39:46 +0000

The short answer is “No.”

Justice demands that legitimate debts be paid if the person who owes the debt has assets from which the debt may be satisfied. As this principle is brought to bear within the context of Living Trusts, there is no effective way in Idaho to place ones assets into a trust over which one retains control.

Either a person must give his or her assets away with no strings attached or courts will be able to retrieve the assets to use them to satisfy creditor claims. And even if assets are given away with no strings attached, for up to four years afterwards courts may still take them back under the Fraudulent Transfers Act applicable under either Idaho or federal law.

Any claim to the contrary should be met with great skepticism.

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Barry Peters: Update Living Will? Power of Attorney?

Barry Peters — Fri, 23 Mar 2012 17:07:40 +0000

As clients visit with me to take advantage of their free initial consultation, I normally take a few minutes to review any existing documents they have including their Living Wills and their Powers of Attorney.

One issue that comes up with some regularity here in Idaho has to do with whether those documents need to be updated.

In the past ten years, changes have been made to both federal statutes and state law that have changed the playing field for these documents.

Congress’ enactment of the HIPPA statutes now makes it a federal crime for hospitals, physicians, and other health care providers to give someone other than the patient information about the condition and recommended treatment of that patient unless an express, written authorization under that statute has been signed by the patient.

So Medical Powers of Attorney and Living Wills that were created prior to the statute will lack that needed authorization. Consequently, there is a risk that, even with an otherwise valid Power of Attorney in hand, a physician will still decline to discuss the medical condition of a patient with the authorized agent for that patient. Same with Living Wills that do not make a specific reference to the HIPPA statute.

Consequently, if your Power or Attorney or your Living Will is more than a few years old, you should check it carefully to make sure that it includes an express reference to the HIPPA statute. If it doesn’t, it’s time to have that document brought up to date.

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Barry Peters: IRA’s & 401K’s in your Living Trust?

Barry Peters — Fri, 16 Mar 2012 17:48:16 +0000

How are IRA’s and 401K retirement plans handled in a Living Trust or a Family Trust?

An important part of the process of setting up a trust is moving all of your assets into that trust. So everything from your home, to your cars and bank accounts will be re-titled in the name of the trust.

The potential problem arises from the fact that your IRA and your 401K plans cannot be legally be placed in the name of the trust. As long as you are living, those accounts can only be held in your individual name as the employee/business owner who created the account. While this potentially can create a problem, it is one that can be easily remedied in one of two ways.

First, you can simply name the persons whom you wish to inherit the remaining funds in your IRA or 401K as your “Payable on Death” or “Transfer on Death” beneficiaries of your account. By doing this, at your death, these persons can contact the plan administrators and receive the funds remaining in your account in the proportions that you have designated. PLEASE NOTE, however, that you should never designate a charitable or other organization as the beneficiary of your IRA or 401K. Significant taxation of the remaining funds may result if you do so.

Second, the better arrangement is to name your Living Trust or your Family Trust as the death beneficiary of your IRA or 401K account. At your death, the funds remaining in your account will then automatically be transferred to the trust where your wishes with respect to the distribution of your assets will be followed by your successor trustee. And with a little ingenuity in the trust agreement, you can still use trust assets to make gifts to your favorite charitable organization upon your death.

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Attorney Barry Peters: Protect Blended Families in Idaho

Barry Peters — Sun, 11 Mar 2012 23:19:52 +0000

Blended families present their own challenges here in Idaho. Making them work takes remarkable patience and grace.

One of those challenges is protecting both sides of the family after one of the spouses has passed away. In that situation, it is common for everything that that the deceased spouse owns to pass to the surviving spouse with no strings attached, either by Will or under state laws.

But what happens when that spouse passes away? What assurances does the first spouse have that his or her children will share in the final inheritance as the spouses had discussed or agreed while both were living? The answer is: None.

Unless the spouses had set up a Living Trust or Family Trust that spelled out the sharing of inheritance between the children of both spouses after both have passed away. Without such a plan in place, after the death of the first spouse, the surviving spouse legally can redirect all inheritance to his or her own children, or even to a new spouse if the surviving spouse remarries.

To make these arrangements binding under a Living Trust or Family Trust, the trust agreement needs to spell out that, upon the death of the first spouse, the trust agreement cannot be modified or amended by the surviving spouse. With that in place, the children of both spouses have legally enforceable rights to benefit under the terms agreed to by both spouses.

This will not interfere with the surviving spouse’s use of the trust assets to take care of that spouse’s financial needs. But it will preclude the rerouting of assets away from the children of the other spouse.

So, aside from probate avoidance and the other good reasons to implement a Living Trust, for blended families, the use of a Living Trust has this additional benefit, as well.

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Power of Attorney: How to Prevent Abuse

Barry Peters — Thu, 01 Mar 2012 16:32:30 +0000

Lawyers are famous for looking at situations through the lens of worst-case-scenarios. It forces us to think about what might go wrong and then take steps to head off the resulting disasters.

With respect to Powers of Attorney, we occasionally hear accounts of abuse by the agent named in the Power of Attorney. Typically this involves a friend or relative — sometimes even a spouse — cleaning out bank accounts and transferring other assets out of the name of the person who signed the Power of Attorney and into the name of the person holding the power. Especially where the spouse holding the power is contemplating filing for divorce, this can be a tempting path to consider.

Though it is impossible to totally prevent such misconduct, there are provisions that can and should be included in a General Power of Attorney here in Idaho that will cut down on the possibility of such abuse. And where such abuse takes place, these provisions will increase the likelihood that the damage can be undone by a judge at a later date.

To cut down on the chances of such abuse, the Power of Attorney should explicitly prevent the holder of the power from making any gift of the property over which he or she has control. That would include:

Transfers into the name of the person holding the power
Gift transfers into the name of third parties
Making a Will under the power of attorney for the person who gave the power
Making or changing a Trust under the power of attorney for the person who gave the power
Changing life insurance beneficiary designations
Making or changing “Payable on Death Beneficiary” designations on financial accounts

If the Power of Attorney explicitly prohibits the use of the Power of Attorney for these purposes, that should provide better protections for the person giving the power here in Idaho. It will effectively limit the use of the Power of Attorney solely for the benefit of the person granting the power.

While this won’t eliminate the risk altogether, it will minimize it to the extent necessary to allow a person to receive the benefit of a Power of Attorney without undue risk.