“What would happen to my children if something happened to me and my spouse? How do I protect my children as a new parent?” With simple estate planning, you can easily ensure that your children would be raised by the person you choose and that your children would not inherit everything at age 18, but at the ages and stages you want them to inherit. 

San Diego’s “The Parent Connection,” a non-profit sponsored by Scripps Hospitals, is hosting a seminar with guidance for new parents.

Estate planning and early financial decisions are  important for every new parent.  Making plans for your possible death or incapacity is an important part of your new responsibilities.  It may not be an pleasant task, but that doesn’t mean that you can just cross your fingers and hope that the worst won’t happen to you.  A well-versed estate planning lawyer can walk you through the maze of choices you need to make as a responsible parent.

Daniel K. Printz, Esq., an estate planning attorney and adjunct faculty member at the University of San Diego, and Kristin Barron, a financial planner,  will discuss how to avoid probate, how to be prepared to cover the issues of incapacity, how to secure your financial future as well as your child’s college education. You’ll have the opportunity to learn about 529 plans, education and Roth IRAs, UTMA accounts and alternative investments.

Date: Saturday, January 22, 2011          **** Activities will be available for children ****

Time: 9:30 am to 11:30 am

Location: Scripps Coastal Medical Center, Eastlake — 971 Lane Avenue, Chula Vista, 91914 

This event is free for Parent Connection members, $10 for nonmembers. Registration for nonmembers will be reimbursed; provide receipt at the event.  Register by calling the Law Office of Daniel K. Printz at (858) 720-8250 OR online at http://www.sandiegoparent.com/TPC/event/signup.html.

The Registration form can be found on-line at the California Secretary of State’s office. You need to find the forms and fees section and then click on the Registration form under the Registry Section. You can either attach the original Advance Health Care Directive with the filing, or, indicate where the AHCD is located.

All this for a low $10 filing fee. The form contains mailing information, or you can fill it out online.

The hope is that if enough people register, it will become common practice for doctors and hospitals to locate these forms and follow your desires.  However, at least in the near-term this will not be helpful in life-threatening emergencies.  It can take up to 24 hours for the information to return to the requesting doctor or institution.

1. Revocable Living Trust

A living trust, also known as a Revocable Living Trust or a Family Trust, is a legal document that holds title or ownership to your real property and assets. In the event of your death or incapacity, a successor trustee is named to immediately step in and handle the assets in accordance with your instructions.

2. Pour-Over Will(s)

A pour-over will (1) is where you nominate Guardians for your minor children and (2) will direct any property left out of the trust to go into the trust for disbursement. This must go through probate if over $100,000!

3.  Assignment of Personal Property

This one-page document transfers your personal property into the trust – this is an optional document especially useful for single people who don’t anticipate transferring property to a spouse on their death.

4.  Quitclaim Deed

This document, recorded in the County Recorder where the property is, transfers your real property from you to you as trustee of the trust. Most attorneys will handle the primary residence without additional charge.

5.  Advance Health Care Directive

This document names an agent (also called an attorney-in-fact) to make your health care and living decisions should you be incapable of making them yourself. This document replaces the previous “living will” and “durable power of attorney for health care” documents.

6.  Durable Power of Attorney for Property Management

This Power of Attorney names an agent to make your property decisions and handle property matters should you become incapable of handling them yourself. This includes such powers as: filing lawsuits on your behalf; filing your taxes; and, applying for government benefits.

7.  Certificate of Trust

This is like an ‘abstract’ of your revocable living trust. It specifies the trustees and their powers without including all of the private provisions of the trust. You can use this Certificate of Trust to show account holders like banks and portfolio managers that you have the power to deal on behalf of the trust, without revealing the personal details of your estate plan.

Additional Resources:  If you’d like more information, call the Law Office of Daniel K. Printz right now at (858) 740-4370.

1. Minor Children

Parents of minor children want to make sure that responsible parties are prepared to step in and raise their children if they cannot. They will want to appoint a Guardian of the Person and a Guardian of the Estate, who may or may not be the same persons.

2. Incapacity

Clients want to make sure that if they are temporarily or permanently incapacitated, a person they trust is nominated to handle their health care and property decisions. At the same time, the client can give instructions, such as end-of-life guidelines or property desires.

3. Distributions

Clients want to make sure that their assets go to certain persons on their death. The creation of a will, or a will and trust, is necessary to accomplish this goal. There are four types of beneficiaries; specific/direct; contingent; alternative; and, residuary.

4. Probate

Clients want their estates to avoid probate, which will eat away at their beneficiaries estate and cause significant delay in the transfer of assets. The only way to do this is to place all assets in probate avoiding devices, such as life insurance, pay-on-death accounts, and living trusts.

5. Estate Taxes

As of 1/1/2011, all estates over $1M will be taxed at 55% on transfer to non-spousal beneficiares. Clients who are married can easily save $550,000 on said transfer with the creation of a trust! Other strategies, such as inter-vivos transfers, can also significantly reduce taxation.

SAFE DEPOSIT BOX CHECKLIST

• keep these documents in a safe deposit box or fireproof safe
• check off each item as you include it
• include the date and location of your safe deposit box
• keep list at home in a file labeled “safe deposit box”
• if you remove something permanently, change your list

• copies of drivers licenses
• copies of other items in your wallet (in case stolen)
• list of credit card account numbers
• insurance policies
• last will and testament
• living wills
• powers of attorney (durable and medical)
• also give copies to executor in a sealed and labeled envelope

• social security cards
• birth or adoption certificates
• death certificates
• marriage licenses
• divorce decrees
• military records
• passports

• vehicle titles
• household inventory (video, photos, appraisals, etc.)
• real estate warranty deeds

• jewelry
• coins
• collectibles
• other expensive or hard-to-replace items
• may need additional insurance when items not locked away

• cemetery deeds, burial instructions, and estate documents
• box may be sealed upon your death
• need to make sure family has your last wishes and instructions
• tax records
• copies of education records, diplomas, and transcripts
• appliance and equipment instructions and warranties with serial numbers
• bank statements and cancelled checks
• credit card statements
• medical and health records
• investment account statements
• passports or passport numbers

Lynn Plait is a Professional Organizer who specializes in personal finance. Visit her website at http://www.finorder.com/ or contact her at lynn@finorder.com.  Content provided by OnlineOrganizing.com – offering “a world of organizing solutions!” Visit www.onlineorganizing.com for organizing products, free tips, a speakers bureau, get a referral for a Professional Organizer near you, or get some help starting and running your own organizing business.

Often, a person or couple will delay buying life insurance until they feel they can better afford it. However, that’s not wise. The older you get, the more expensive new life insurance policies become and the less insurable you become. At some point, life insurance will become unavailable to you, either due to age or to a medical condition. The best time to buy life insurance is while you are relatively young and healthy.

Why to buy life insurance? As a tool in estate planning, life insurance can:

1. Create an estate for your spouse or children.
2. Provide cash needed to settle your estate.
3. Allow you to give to charity without depleting your estate.
4. Cover estate tax expenses.

1.  List your Assets:  Make a list of everything you own, including all bank accounts, investments, real estate, insurance policies, and any other valuable items of personal property.  Split the list into assets with named beneficiaries (such as insurance policies and retirement plans), jointly held assets, and assets you own personally that do not have named beneficiaries (such as cars, boats, collections, etc.).

2.  Assign beneficiaries:  Determine who you would like to receive each asset when you pass away.

3.  Write a Will:  Working with a qualified attorney, write a will that specifies where your assets should go and who should serve as guardians for your minor children, if necessary.

4.  Write Incapacity Documents:  Prepare an Advance Health Care Directive and a Durable Power of Attorney for Property Management, each of which “springs” into effect if you become incapacitated and can’t make your own health care or financial decisions.

5.  Consider Probate:  Work with an attorney to understand the Probate process, how it would affect your loved ones, and what can be done to avoid it.

6.  Consider a Living Trust:  If you think a trust might be right for you, consult and attorney and/or a financial advisor.

7.  Update your Insurance Policies:  If you have dependents, consider increasing your Life Insurance to the point where your spouse and child could live without income for two years – start by multiplying your annual income by five and see how that works.  If you’re in your 50′s or older, consider long-term-care insurance.

8.  Review your Advance Estate Planning needs:  If you have $3.5M or more, consider transferring assets out of your estate: charitable trusts and giving; advance gifts to children; grantor retained annuity trusts; etc.

9.  Plan for Business Succession:  If you own a business, consider which children (if any) you would like to inherit the ownership.   Otherwise, plan for the sale or transfer of your business or equity on your death.

“What about going to www.SuzeOrman.com and clicking “will and trust kit” on the left side of the screen. She said on a recent show to use the password “peoplefirst” to get the documents for free.  I bought this package at a KPBS fundraiser a few years ago and it’s the one my family is using. ”

After a certain knee-jerk emotional reaction, I decided that I’d better check out the Suze Orman package before I criticized it.  After all, she’s strongly in favor of estate planning (a position I certainly agree with), and I’ve quoted her admonitions for years to clients.  I certainly would select Suze Orman over, say, legalzoom.

So I went online to check out her program.  I spent about 20 minutes on her site, enough to complete her Advance Directive and Durable Power of Attorney for Health Care (part of any attorney’s basic estate planning package).  I used it as any person would, filling in the form with my personal information and printing out the final document at the end.

 Aside from inputting personal information (address, phone, etc), the program only asked me to make a single decision: (1) to forbid organ donation or (2) to let my agent decide whether or not to donate organs.

 Here are my issues with the document I printed out: 

 1.  Organ Donation – the only choices were ‘no’ or ‘let my agent decide’.  The majority of my clients want to permit donation, but restrict donation to live transplants – otherwise you could end up used for scientific research or education.  Don’t you want a say as to whether you end up as an object for UCSD med students?

2.  No ability to input social instructions.

3.  No instructions regarding nursing care.

4.  No religious instructions.

5.  No burial/cremation instructions.

6.  No specific authority for your agent to select a primary care physician (and what will happen when your health coverage changes?)

7.  Most importantly, only two possible texts for end-of-life decisions (the ‘keep me alive at all costs’ text and the ‘let me die if the burdens of treatment outweigh the benefits of treatment’ text).  I provide my clients with an initial range of five choices, and then modify the texts to personally suit their wishes.

 Someday I’ll go back and do the living trust portion of the kit.  But if there are such large holes in a relatively simple document like a health care directive, what exists in a revocable living trust?  How about distribution to the children?  Do you want them to inherit at age 18?  Can you insert a Spendthrift Provision so they can’t pledge their inheritance as collateral against a loan?  What if you want to treat the children differently from each other?  Can you make sure your brother Egbert with the marijuana plantation isn’t named as the children’s guardian?

 I’ll leave you with Ms. Orman’s own words on the subject, from her disclaimers:

 ”NOTHING HEREIN IS OR SHOULD BE DEEMED TO BE LEGAL ADVICE, TAX ADVICE, ESTATE PLANNING ADVICE, OR ADVICE OF ANY TYPE REQUIRING LICENSING OR AUTHORIZATION UNDER ANY STATE OR FEDERAL LAW OR REGULATION.”  (Capital letters by Suze Orman)

… and …

“No book or form of other published material is a substitute for personalized advice from a knowledgeable lawyer licensed to practice law in your state. THEREFORE, CONSULT YOUR ATTORNEY.” (Capital letters by Suze Orman)

Among the topics covered in this year’s guide:

• Social Security Benefits
• Age Discrimination
• Senior Housing restrictions
• Medi-Cal v. Medicare
• Planning for Incapacity
• Drivers Licenses
• Elder Abuse
• Divorce and Remarriage
• Grand-parental Rights
• Finding a Caregiver or Nursing Home

For concerns about any of these issues, contact a qualified attorney.

Which brings me to today’s subject:  As a senior, what documents do I need to prepare in case I become incapacitated and can’t make my own financial or health care decisions?  Of course, everyone should have these documents, not just seniors – incapacity can strike at any age for a multitude of reasons: accident; illness, etc.

DURABLE POWER OF ATTORNEY

The Durable Power of Attorney (Probate Code §4022) is a document you can sign while you still have capacity, which will grant powers to another person (your agent) to handle your financial affairs.  We call it “Durable” because it can still be used if you become incapacitated (Probate Code §4124).  It “survives” the incapacity of the grantor of the powers.  A normal power of attorney will cease acting if you become incapacitated – that’s a built-in safeguard, since you wouldn’t be able to revoke the power yourself. 

So with a Durable Power of Attorney, someone you trust (someone you really  trust) can handle your affairs for you: pay your mortgage; file your taxes; re-finance your home; apply for disability benefits; etc.  Your agent won’t be able to take anything of yours as a gift with your your specific written authorization (Probate Code §4128).  If you pass away, the powers cease – at that time your Executor (under a Will) or Successor Trustee (under a Trust) would handle financial affairs of your estate.

Be absolutely certain that your named agent is both competent and trustworthy!  Seniors have lost their savings to unscrupulous agents – even to agents who are family members.

ADVANCE HEALTH CARE DIRECTIVE

With an Advance Health Care Directive, you name someone to make medical decisions for you if your primary care physician certifies that you can no longer make decisions for yourself.  Why would that happen?  It could be due to an injury or dementia (whether due to a chronic condition like Alzheimer’s or a temporary condition such as the result of medications).

Additionally, you can provide detailed instructions regarding medical care, including: life support treatment; convalescent care; organ donation; etc. 

Either of these documents can be revoked at any time, as long as you are still competent.   Give copies to your designated agents, doctor, nursing home, and family.  And if you’re admitted to a hospital, bring a copy of your advance health care directive with you.

If you don’t complete these documents, it may be necessary to appoint a Conservator to care for you in the future.  Consult an experienced attorney with any questions!