by Dan McCarthy | Nov 24, 2021 | Estate Planning, Trusts and Wills
You would hope your living will is properly prepared and your resuscitation instructions or DNR (do not resuscitate) are in order. While your wishes in a living will may be appropriately documented, that does not guarantee the instructions will be carried out as you stated. The frightening truth is that mistakes about your end-of-life instructions are made while you are at your most vulnerable. Dr. Monica Williams-Murphy, medical director of advance-care planning and end-of-life education for Huntsville Hospital Health System in Alabama has said, “Unfortunately, misunderstandings involving documents meant to guide end-of-life decision-making are surprisingly common.”
The underlying problem is that doctors and nurses have little if any training at all in understanding and interpreting living wills, DNR orders, and Physician Orders for Life-Sustaining Treatment (POLST) forms. Couple the medical professionals’ lack of training with communication breakdowns in high-stress environments like a hospital emergency ward where life and death decisions are often made within minutes, and you have scenarios that can lead to disastrous consequences.
In some instances, mix-ups in end-of-life document interpretation have seen doctors resuscitate patients that do not wish to be. In other cases, medical personnel may not revive a patient when there is the instruction to do so resulting in their death. Still other cases of “near misses” occur where problems were identified and corrected before there was a chance to cause permanent harm.
There are some frightening worst-case scenarios, yet you are still better off with legal end-of-life documents than without them. It is imperative to understand the differences between them and at what point in your life you may change your choices based on your age or overall health. To understand all of the options available it’s important to meet with trusted counsel for document preparation and to review your documented decisions often as you age. In particular, have discussions with your physician and your appointed medical decision-maker about your end-of-life documents and reiterate what your expectations are. These discussions bring about an understanding of your choices before you may have an unforeseen adverse health event, and provides you with the best advocates while you are unable to speak for yourself.
There are several documents that may be appropriate as part of your overall plan. Each of those is discussed below, and we are available to answer any questions you may have about them.
A living will is a document that allows you to express your wishes about your end-of-life care. For example, you can document whether you want to be given food and hydration to be kept comfortable, or whether you want to be kept alive by artificial means.
A living will is not a binding medical order and thus will allow medical staff to interpret the document based on the situation at hand. Input from your family and your designated living will appointee are also taken into account in your best decision-making strategy while you are incapacitated. A living will become activated when a person is terminally ill and unconscious or in a permanent vegetative state. Terminal illness is defined as an illness from which a person is not expected to recover even though they are receiving treatment. If your illness can be treated this would be regarded as a critical but not terminal illness and would not activate the terms of your living will.
Do not resuscitate orders (DNRs) are binding medical orders that are signed by a physician. This order has a specific application to cardiopulmonary resuscitation (CPR) and directs medical professionals to either administer chest compression techniques or not in the event you stop breathing or your heart stops beating. While your living will may express a preference regarding CPR it is not the same thing as a DNR order. A DNR order is specifically for a person who has gone into cardiac arrest and has no application to other medical assistance such as mechanical ventilation, defibrillation, intubation, medical testing, intravenous antibiotic, or other medical treatments. Unfortunately, many DNR orders are wrongly interpreted by medical professionals to mean not to treat at all.
Physician orders for life-sustaining treatment forms (POLST forms) are specific sets of medical orders for a seriously ill or frail patient who may not survive a year. This form must be signed by a physician, physician assistant, or nurse practitioner to be legally binding. The form will vary from state to state and of the three instructive documents the POLST is the most detailed about a patient’s prognosis, goals, and values, as well as the potential benefits and risks various treatment options may bring about.
A power of attorney for a health care decision, sometimes referred to as a health care directive, allows you to name an agent to make decisions for you if you are unable to. Unlike a living will which only covers end-of-life decisions, a power of attorney for health care decisions allows the agent to act at any time that you cannot make decisions for yourself.
We can help you determine which documents best suit your current needs, and help you clearly state your wishes in those documents. Please contact our Cincinnati office at (513) 815-7006, we look forward to hearing from you and helping you with these important planning steps.
by Dan McCarthy | Nov 17, 2021 | Estate Planning, Trusts and Wills
This article will help you decide if a trust fits your particular circumstances. For example, maybe you have a disabled child and you want a trust to permit that child to inherit without losing government benefits. Maybe your own or your spouse’s health is heading into difficulties, and you can foresee eventually needing long-term care benefits. Trusts can avoid an expensive, public, and lengthy probate process before your beneficiaries can inherit after you pass. Or, you might be in the classic “trust fund” situation, where you’re concerned that your children won’t be able to manage money wisely.
All these are excellent reasons to consider a trust. But what kind of trust? A quick count shows there are at least thirteen different varieties. Which one is best suited to your needs? Call us.
Here’s the basic idea behind trusts, to help you understand why you might or might not need one.
What is a Trust?
Think of a trust like a treasure chest. You originally bought property or earned money in your own name. You then transfer those assets into the trust’s name – into your treasure chest, in other words. The trust treasure chest becomes a legal entity separate from you, which now holds your property in its, and no longer in your, name.
Then you identify people who will occupy the three roles involved in managing trust property. First, you are the grantor, or settlor, or trustmaker – all those words mean the same thing, the “you” in this case. Second, you appoint a trustee. That person or entity is responsible for managing trust assets and following directions contained in the trust document. Third, you decide whom you want to receive trust assets – your beneficiary or beneficiaries, in other words.
In legal terms, a trust is a fiduciary agreement among you the original property owner, your trustee, and your beneficiary. The trust document contains instructions for what you want to be done with trust property, both for how you want it invested and, also, for how you want trust assets to be distributed when you pass. Trusts are, thus, a highly efficient hybrid between a power of attorney, an asset-management vehicle, and a last will and testament, all rolled into one legal entity and document.
There are two basic kinds of trusts to understand before they split off into their thirteen-or-more different flavors: revocable or irrevocable trusts.
The Revocable Trust
A revocable trust can be thought of like a treasure chest with an open lid. As grantor/settlor/trustmaker of a revocable trust, you can get at trust assets freely.
You yourself can also occupy all three roles in a revocable trust – grantor, trustee, and beneficiary. If need be, you can also tinker with trust terms, by freely amending them to change the directions, beneficiaries, or trustees. Or, you can revoke the whole thing. Before that point, though, the trust document will be there to take care of everything you want it to.
If you should meet with an accident and lose capacity, the terms of your trust will designate a person to step in on your behalf and, thus, avoid the need to go to court to get a guardian for you. The trust will also direct who inherits, thus keeping your affairs private and out of probate court. This feature is especially important if you (formerly) and then the trust (after you created it) own real property in various states. The savings in court costs in that situation could be significant.
The Irrevocable Trust
This is the trust for you if you’re seeing the need for Medicaid long-term care benefits in your future, or you work in a field where suits are common, such as owning a small business or in the construction industry.
The disadvantage to an irrevocable trust, however, is that you will be sacrificing all or almost all control over trust assets, unlike in the revocable-trust situation. Once an irrevocable trust is established, you as grantor/settlor/trustmaker cannot directly alter the terms and, generally speaking, your access to trust money is restricted or entirely precluded – as is required in order to enjoy the potent benefits of this kind of trust.
Think of an irrevocable trust as being like the treasure chest with the locked lid. Your trustee – who generally cannot be you – is the one with the key. You yourself can no longer reach your assets. This relinquishment of control is necessary to shelter your assets from creditors or to protect your assets when entitlement to government benefits would otherwise require you to spend almost all you own first.
There are ways to draft an irrevocable trust carefully, so you can still exert your will over how assets are to be used. Just as in the revocable situation, you can impose conditions that must be met before a beneficiary can receive funds. You can designate how trust income is to be used for specific purposes like college tuition, business start-up, or travel. You can also authorize a person or entity as a “trust protector,” who can alter trust language, correct drafting errors, or create a new similar trust if the law changes.
And there you have the basics. Now you’re ready to decide whether you need a credit shelter trust, or a charitable trust, or a qualified terminable interest trust, or a blind trust, or – just come see us to figure out all the rest!
Trust Caveats
Some sophisticated trusts do convey tax benefits, but, for the most part, IRS considers revocable trusts to be invisible. You as grantor/settlor/trustmaker will still pay tax on the revocable-trust income, albeit at your individual rate and not at the prohibitive trust rate.
As for estate taxes, trusts have no effect – but, at least regarding federal estate taxes, those are currently moot for most people. They are not incurred until the value of the estate exceeds $11.4 million as of 2019.
Also, keep in mind that revocable trusts provide no protection against creditors. If you lose a legal action, a judge can force you to change the beneficiary of your trust to the winner. Irrevocable trusts are free from that kind of interference.
Still, irrevocable trusts must be established long before you run into that kind of trouble. If you create such a trust while credit problems are looming or have already arrived, you risk that your trust will be undone as a fraudulent conveyance.
Trust Your Attorney
Consult lawyers like us, who have experience and expertise in the trusts and estates area. Custom-constructing a treasure chest to fit your specific needs is a job for our specific skills. If you need assistance or would like to talk about your specific situation, contact our Cincinnati office at (513) 815-7006.
by Dan McCarthy | Nov 10, 2021 | Estate Planning, Trusts and Wills
It is critical to have iron-clad “power of attorney” documents for when you are no longer able to manage your financial or healthcare matters. Beware if you rely only on POAs that hospitals provide, or that you have pulled off the Internet, or that you have got from other attorneys who do not focus their practice specifically on elder law. When an emergency arises, the bank or health-care provider may refuse to allow your agent to act – and then the only recourse is to go to court and get a guardianship.
This is definitely not what you want to hear in an emergency. Guardianship proceedings cost time and money, they expose your private affairs to the public, and you or your elder can lose control of your autonomy. Worst case, unfriendly family members can try to take advantage of a helpless elder, and it can cost tremendous anxiety and expense to defend against that threat.
This is why our POAs for financial and health-care matters total around fifty pages. We want to help to anticipate as many nuances as possible, to ensure that when you need assistance, your documents will be there to avoid guardianships and to help you get the responsible financial coverage and health-care treatment you need.
A client came in recently with a healthcare POA from another state. She wanted to know whether it would do the job for her father. We said emphatically “no.”
– The document failed to specify the kind of health care the father would want; and
– It failed to comply with our state law, meaning that it likely wouldn’t work here; and
– It failed to protect the father’s agent from liability for a bad decision; and
– It failed to provide the agent with access to essential medical records; and
– It even failed to designate who should serve as an agent!
Our health-care documents do much, much more than that. Check your POAs to see whether they do all of the above – and if not, come see us. If you need assistance or would like to talk about your specific situation, contact our Cincinnati office at (513) 815-7006.
by Dan McCarthy | Oct 13, 2021 | Trusts and Wills
57% of American adults have not prepared a Last Will & Testament (a “Will”) according to Care.com’s estate planning survey. The survey found that participants were more likely or less likely to have a Will depending on issues such as age, race, and education. For example, when broken down generationally, 66% of people aged 65 and older, comprising the Baby Boomer generation and The Greatest Generation, have a Will, better than the overall average. Only 39% of the participants that fell into Generation X and 18% of the Millennial participants have a Will, well below the overall average.
The survey participants that did not have a Will gave many reasons why. The overwhelming answer was that they just had not gotten around to it. This answer was given 52% of the time. The next most common reason, given 22% of the time, was that they did not think they had enough assets to need a Will. The cost of making a Will was given as a reason 6% of the time, which was one of the least given answers.
Understanding the Power of a Will
The survey points out a major flaw in understanding the power of a Will. Most people have a basic understanding that a Will transfers assets you own when you die to the people outlined in your Will. Based on this oversimplified explanation of a reason to have a Will, it is easy to understand why younger people and people who have not yet amassed many assets misbelieve they do not need a Will. Never mind that anyone can die at any time, or that you own more than you realize and you want to have someone named to deal with all your stuff.
More importantly, anyone with a minor child should use a Will to name a Guardian for that child. Whether you are married to or divorced from the child’s other parent, naming a Guardian in case of your death is paramount. If the child’s other parent or adoptive parent is alive and still has parental rights when you die, the child stays with that parent. However, if the child’s other parent is dead or does not have parental rights, then the person nominated as Guardian in your Will is the only person that can stand up in guardianship court and definitively say that you believed your minor child’s custody should transfer to them. Then, since you are making a Will, you might as well also state who should inherit any assets you might own.
Creating a Will is a simple process when you engage experienced attorneys like us. Sometimes you know the best person to care for your child. Sometimes you need help picking between family members, or you do not have family members to choose from. We are not here to just fill out a Will form for you. We are here to help you and guide you through whatever issue is preventing you from making a Will. If you need assistance or would like to talk about your specific situation, contact our Cincinnati office at (513) 815-7006.
by Dan McCarthy | Sep 29, 2021 | Trusts and Wills
Parents need to instill family values at an early age to ensure the adoption of these family values. Undoubtedly the best time to teach and empower your children as eventual inheritors of your family legacy is during childhood, then continuing throughout adulthood. Waiting until your later stages in life to discuss family values as a guide to handling inherited worth is often ill-received as grown adult children prefer not to feel parented anymore, particularly when they are raising children of their own.
There is value in the spiritual, intellectual, and human capital of rising generations, and it is incumbent upon older generations to embrace this notion and work with their heirs rather than dictating to them their ideas about how to facilitate better outcomes. While the directions taken by newer generations will likely differ and can sometimes be downright frightening than that of their elders, there can still be a deep sense of service and responsibility to family values and stewardship of inherited wealth. Allow your children to exert their influence over the family enterprise early on in life and make adjustments that create synergy, connection, and like-mindedness.
If this description of a somewhat ideal family system does not resemble yours, take heart. Most families do not conform to perfect standards of interaction. The more affluent a family is, the higher the failure rate to disperse assets without severe fallout. The Williams Group conducted a 20-year study and determined there is a 70 percent failure rate that includes rapid asset depletion and disintegration of family relationships during and after inheritance. Establishing inheritable trusts can provide real benefits. Benefits include avoiding probate, reducing time to handle estate matters, privacy protection, the elimination or reduction of the estate tax, and can be effective pre-nuptial planning. A parent who wants to control outcomes should focus on these benefits of the trust instead of trying to legislate their future adult children’s behavior.
It is imperative not to allow your values and legacy to become weaponized within the family system. A sure-fire way to inspire conflict is via “dead hand control,” meaning trying to control lives from the grave. Most often, if you put excessive trust restraints on adult children, they will act accordingly to your perception that they are not adult enough to handle wealth. Instead, consider enrolling them in a few classes about managing wealth. Spark an interest in them to learn how you have created wealth, the mechanisms you used, and what their future endeavors may look like long after you are gone. Formally educate your children about finances, the earlier the better, and instead of talking about who gets what the conversation can shift to the mechanics of managing wealth. This tactic resets the context of the issue and aligns purpose and intended long-term outcomes.
Estate planners try to encourage trust choices that lead to flexibility. If a beneficiary is genuinely incapable of making the right decisions, a trustee can be appointed to make distributions in the beneficiary’s best interest. This trustee discretionary power of money management can help a well-funded trust survive for generations.
You can also write a letter of wishes or provide a statement of intent to your children. Though these are not legally binding, it gives you a platform to remind them of family values and your desire for these values to be maintained for future family generations. This type of letter is an opportunity for you to convey your vision for how your wealth can bring growth and a chance for fulfillment to beneficiaries.
Prosperity should positively shape lives. Family trust beneficiaries hopefully already have a self-driven life that includes purpose, responsible behavior, and a basic understanding of personal finance. If you worry your children may squander inheritable assets, create the opportunity for them to succeed through classes that teach them about managing legacy family values and wealth. Address your concerns legally and directly through a detailed trust that can help but not overly constrain them to achieve what you envision they can become. Start an honest conversation early on, but remember it is never too late to make good choices and create positive family value influences for the coming generations. A well-known Ann Landers quote sums it up neatly, “In the final analysis it is not what you do for your children but what you have taught them to do for themselves that will make them successful human beings” – a worthy goal of any family value system.
If you are interested in establishing a trust to pass wealth on to your children, we can help. We can also guide families on how to pass on family values in a meaningful way. We look forward to the opportunity to work with you. If you need assistance or would like to talk about your specific situation, contact our Cincinnati office at (513) 815-7006.
