Navigating Healthcare Decisions

If you can’t communicate your own healthcare wishes, either temporarily or permanently, the court may need to get involved. This usually means lawyers (and money!), and you have no control over who will be chosen or how decisions will be made. If you want to be in control over your future healthcare decisions you must take steps today, while you still can!

Most people assume that if you suffer an injury or illness that leaves you unable to communicate your own healthcare wishes, someone in your family will be able to tell the doctors what to do or choose a nursing home for you. This is often not the case, and many families end up going to court to set up a guardianship just to make these basic decisions.

And even if the doctors listen to someone in your family, is it the person who will make the decisions that are best for you? Will they honor your wishes? Will they even know your wishes for the variety of decisions they’ll have to make?

If you can’t communicate your own healthcare wishes, either temporarily or permanently, there are several documents you’ll want to consider having in place to enable someone else to navigate healthcare decisions for you and ensure you get the care you deserve. These include a Healthcare Power of Attorney, Living Will, and Universal HIPAA Release. More information about these documents can be found here.

The healthcare directives can only go so far, and should serve not as the final word on how you want decisions to be made, but simply a starting point. Once you complete your medical directives, the most important thing you can do is have a comprehensive discussion with your loved ones about why you filled out the documents the way that you did. Give them an understanding of how you want decisions to be made and what quality of life really means to you.

When a crisis comes, most family members err toward the side of keeping us alive, sometimes long after we would have wanted our lives to medically continue. Just because your life can technically be prolonged with medical assistance doesn’t mean it should be, and you can be in control of how those decisions are made.

There are a number of resources to help you have these conversations, and one of the best starting places may be The Conversation Project.

For more information about making sure you’re in control of all future healthcare decisions, call our office to schedule a Personal Consultation, or join us for one of our upcoming Estate Planning Workshops!

Probate / Trust Administration

If you’re a Colorado resident and own real estate when you die (or when both you and the joint tenant have died, if you own it in joint tenancy), your family will go through probate. Your Will does not keep your estate out of probate, it simply acts as a guide for the court during the probate process.

Even if you don’t own real estate, if the total of all of your assets without beneficiary designations, combined, is at least $64,000 (bank accounts, investments, a business, vehicles, coin collections, furniture, etc.), your family will still have to go through probate upon your death.

Is probate a bad thing?

In Colorado, probate is not as bad as it is in some other states, and better than it used to be. But people rarely get through probate and talk about how easy it was or how they wouldn’t mind going through it again. Why is that?

Probate takes time. It’s not unusual for it to take a year or two, even if there aren’t any real complications.

Probate also takes money. The executor, the court, and the lawyer are all entitled to payment. The number of assets, level of complexity, and amount of family fighting all help determine how expensive your probate will be (and family conflict is virtually impossible to predict!). We’ve heard many stories of the lawyer getting most (or all) of a loved one’s estate at death. In addition, in probate all of your assets and distributions must be listed and become part of the court record. If you’re at all concerned about privacy, you might want to avoid probate.

There are a couple of ways to avoid probate…

Beneficiary Designations

If you list beneficiaries on every single asset you own, you might be able to avoid probate at death. This includes bank accounts, investments, and even real estate. This does not work for some types of investments, promissory notes, business interests, or personal property, so if you have $64,000 or more in those types of assets this option will not work for you.

How do I list a beneficiary on my real estate? If you live in Colorado, you can execute a Beneficiary Deed, which would give your property directly to the chosen beneficiaries upon your death. There are many drawbacks to a Beneficiary Deed, including loss of some control, ineligibility for Medicaid benefits, and many others. Discuss this option thoroughly with an estate planning attorney before choosing this.

Even if you’re able to name beneficiaries on all of your assets, you still have a potential problem if you become incapacitated. Learn more about the issues and possible solutions…

Revocable Living Trust

A Living Trust is simply an empty, theoretical box that you own and control. It allows you to tuck all of your assets into one nice, neat treasure chest and continue living your life exactly as you had before. It’s simply standing by, waiting for you to need it, which happens if you become incapacitated or when you die (and we know that at least one of these is going to happen to every single one of us, right?).

When you become incapacitated, the Living Trust allows your Co-Trustee to continue managing your affairs without any interference from the lawyers or the government. If you don’t have a Co-Trustee (like a spouse) who was already acting as Trustee, your Successor Trustee would step in and have full authority to take care of things according to your instructions in the Trust.

When you die, a Living Trust allows your Trustee to take care of wrapping things up, paying your bills, and distributing your assets to your beneficiaries, without any need for probate. So it skips over the lengthy probate process (at least 6 months in Colorado, but typically 1-2 years) as well as the hassle and expense of dealing with probate.

While Trusts are typically more expensive to set up than Wills, the savings on legal bills at disability and death often make it the most cost-effective way to plan.

Important note: We have reviewed hundreds of Living Trusts drafted by other attorneys, and just because a document says “Living Trust” at the top does not mean that it will actually work. A good Trust should be lengthy, to cover every possible contingency, drafted by an attorney with a lot of experience specifically with Trusts, and who helps you actually transfer the assets into your Trust. The single biggest reason we see so many Living Trusts fail to accomplish people’s goals is that they were not properly funded. As with most things in life, you typically get what you pay for.

Medicaid Planning

In order to qualify for Medicaid assistance if you end up needing nursing home care, you need to be completely impoverished. That means you need to spend down to your last $2000 in assets before Medicaid will help pay for your care (note: your spouse can keep a bit more if you’re married and they’re not also needing care, and there are special rules for your home).

It makes sense to evaluate options for protecting at least a portion of what you’ve worked hard for. An attorney who does what we call “Medicaid Planning” can walk you through your options, as well as the pros and cons. We are frequently able to help clients keep at least something in the family, but it typically requires giving up control over your assets to another family member. An irrevocable trust is a common tool for this kind of planning, if you have someone you trust to take over for you and you’re willing to give up control now.

In addition, if you served our country during a wartime period, you may be eligible for some special VA benefits (a category of benefits generally referred to as Aid & Attendance) should you end up needing care that exceeds your monthly income. Similar to Medicaid, these benefits are only for those who have a very limited amount of money and other assets, so planning can be helpful in making use of this hard-earned pension.

To learn more about Medicaid benefits and how to qualify, call our office for a Personal Consultation or join us at one of our upcoming Estate Planning Workshops where we discuss the general principles.

Pet Planning

Many beloved pets are euthanized after the death of their human because of money. Food is expensive, and vet bills can be a deterrent for those who would otherwise give your pets a loving home when you’re gone. Make sure your pets are well-loved by setting things up properly now.

If your dog, cat, horse (or goldfish!) is truly part of your family, it’s important to think through what will happen to your companion in the event of your disability or death.

More than 500,000 pets are orphaned every year when their humans die or become incapacitated. Many of them are simply euthanized because they aren’t the cute little puppies or kittens that are the first to be adopted at the Humane Society. Finding someone to take in an older pet can be more challenging, and part of that challenge is due to the bigger expenses for mature pets.

Leaving behind some money for your furry loved ones can ensure that they won’t be a financial burden to someone else. This way, a good-hearted person can take them in without worrying about the cost of medical conditions (current or future) or how to feed your dog the high-end food you prefer without starving their own children.

To do this, you’ll want the money in a Pet Trust. This is simply a theoretical entity that’s created when you’re gone to hold whatever funds are appropriate for the ongoing care of your pet after you pass away. You can choose how the money will be used, and include any guidelines that are important to you. If there’s any money left over, you can give it to your pet’s caretaker, an animal charity, or back to your family … your choice!

Why not just leave money to the friend or family member who promises to care for your pets? Sometimes this works fine, especially if you have children you can count on who also care about your pets. But leaving money to a friend or even family member means that whatever happens to them also happens to the money you left for the care of your pet. Divorce, bankruptcy, lawsuits, even death can leave your furry loved one without the money you set aside. Putting the money into a trust is just safer.

You’ll also want to name someone to take care of your pets when you’re gone. This makes it so much easier on your loved ones when something happens to you, and ensures that your pets will have a loving home.

It’s also important to make sure you have an emergency plan for your pets, in case you’re injured or in an accident. Many people put basic information about their pets in the same place as other emergency contact information (number of pets, feeding habits, and any other helpful details). Letting emergency personnel know that you have pets at home, and who to call in the event of an emergency to come take care of your pets, can make all the difference in ensuring their well-being if you’re in an accident.

We can help make sure your pets will continue to receive loving care when you’re gone. We’ll walk you through the important decisions and guide you through your options.

Make sure your furry companions aren’t abandoned at your incapacity or death. Register for one of our upcoming workshops to get all the details or schedule a Personal Consultation today!

Charitable Planning

You don’t have to be ultra-wealthy to make a difference in the world when you are gone. There are a variety of ways to make gifts to your favorite charities when you die, while still taking care of your family and loved ones.

Register for one of our upcoming workshops to get all the details or schedule a Personal Consultation today!

Special Needs Planning

If you have a child or other loved one who is disabled and eligible for SSI and/or Medicaid, it is vital to plan properly for their financial security in the event of your death or disability.

When you have a disabled loved one, whether it’s a child, sibling, niece or nephew, one of your most important goals is making sure that your loved one has all of his or her needs met for the rest of their life. Beware, however, of leaving money directly to someone with a disability.

If your loved one is receiving SSI or Medicaid and the money they receive from you puts them over $2000 in total assets, they will lose ALL Medicaid and SSI benefits, have to spend down everything until they are back below $2000, then re-apply for the benefits. In other words, your money didn’t help them at all. In fact, it probably made things more difficult for them.

There is a way to leave money that will actually benefit your loved one. It’s called a Special Needs Trust (also known as a Supplemental Needs Trust). By leaving money in this specialized type of trust, you can set aside dollars that will be protected for your loved one, available for many of their needs, without kicking them off government benefits. There are very specific requirements for what this trust can and cannot say, so it’s important to work with an experienced estate planning attorney.

You get to choose who will manage the money (the Trustee) and we always recommend you write a Letter of Intent, detailing how you would hope the money would be invested and spent. The most important detail is for the Trustee to determine the applicable state regulations at the time the Trust gets created so that money isn’t spent on anything that would make your loved one ineligible for benefits, as there are a number of rules that change over time.

Some people want to make things simpler and just leave extra money to another loved one to care for the person with the disability. We don’t recommend this. Even if that person is completely reliable, if your money is in a bank account under their name, it can disappear in a divorce, lawsuit, bankruptcy, or other unexpected disaster. And what happens if this custodian dies? If anything goes wrong (and let’s face it, things rarely go as predicted in life), your loved one will be left without the inheritance you wanted to leave for their care.

For more information about making sure your disabled loved ones are truly taken care of, call our office for a Personal Consultation or join us at one of our upcoming Estate Planning Workshops.

LGBTQ Planning

With the changing legal landscape and marriage available in all 50 states for both same and opposite gender relationships, it’s important to understand both your rights and the common estate planning issues we see among same-sex couples and other non-traditional situations.

If you’re married, you have all of the same estate planning issues that exist for opposite sex marriages. You may also have children from a previous relationship, and need help planning around the many issues specific to blended families.

It’s vital to ensure that not only do you plan for your death, but also for the possibility of an illness or injury that leaves you unable to care for yourself and communicate your wishes. Having a Universal HIPAA Release in place can be particularly important, to ensure that the right loved ones can access your medical information should you land in the hospital.

For years we’ve frequently been asked whether or not we serve the lesbian, gay, bi-sexual, transgender and queer community, as many firms did not. We are proud to serve everyone regardless of any distinctions, and multiple members of our team have family members in this community. We want you to know that our orientation is LOVE.

 

To learn more about planning for non-traditional families and situations, register for one of our upcoming Estate Planning Workshops or schedule a Personal Consultation today!

Young Families

You don’t have to be “old” to need a plan for what happens when you die. Life and death both happen in unexpected ways, at unexpected times.

Imagine an accident on the way home from date night, the police knock at your door and ask the babysitter who your children will be staying with while things are sorted out. She doesn’t know, and the kids end up in the custody of the state for the next few days. Your kids just can’t understand why mommy and daddy aren’t there, and why can’t they be with grandma? Sadly, that can be just the beginning of the troubles you could leave for your children if you don’t have a plan.

If you have minor children, there are several issues you’ll need to plan for:

Emergencies

In the event of an emergency, will your children go into protective custody with the state? If you get into an accident and don’t have a plan in place, your children could end up in foster care while the government sorts out what to do.

Guardianship

If something should happen to you (and your spouse, if you’re married), who would you want to raise your children? This can be one of the most difficult decisions for parents, but remember it’s much easier for you to choose someone than a court who knows nothing about your family and friends.

Money Management

If you die while your children are still minors, any money they are to receive would be put into a court-established conservatorship, where the court decides who will manage the money for your children and how it will be both invested and spent. Then, on your child’s 21st birthday (in Colorado), they receive the ultimate gift … the rest of their inheritance, to spend however they wish! Most parents prefer to have their children gain control once they’ve gained a little more maturity, so the money can be spent on things that matter.

To ensure your children are taken care of the way you want if the unthinkable were to happen, register for one of our upcoming Workshops to get all the details (we offer both general estate planning workshops and some specifically for young families), or schedule a Personal Consultation today!

Wills, Trusts And Estate Planning

Many people start the estate planning discussion by telling their lawyer what kind of documents they want, typically either a Will or a Revocable Living Trust along with a few other important documents. We believe this approach is backwards. It’s like going to the doctor with a broken foot and telling her how you’d like to treat it, whether you want surgery or maybe just a cast.

The right documents to plan your estate can only be determined by taking a look at your circumstances – the specifics of your assets, your goals, your loved ones and family circumstances. Once we explore your situation and goals, only then can an attorney make recommendations on how to meet your specific goals, given your specific circumstances.

There are some general guidelines that are helpful to understand regarding Wills and Revocable Living Trusts.

Last Will and Testament

A Will gives directions about how you want your assets divided upon your death. If you have minor children, it also nominates guardians for your children if you pass away before they turn 18. The Will does not prevent your estate from going through the probate process, it simply acts as a guide which the court will use if your estate goes through the probate process, or for your Personal Representative to carry out less formally if no probate is necessary. For more information about probate, see How to Avoid Probate.

A Will is not activated until you die. If you become incapacitated through an injury, illness or disease, the Will does not offer any help. In that case, there are other documents you might need and they may or may not be effective. For a full explanation of those documents and the pros and cons, see Incapacity Planning.

Revocable Living Trust

A Living Trust is usually more expensive to set up than a simple Will-based plan, but typically saves a lot of money if you become incapacitated and when you die.

Ready to learn more? Don’t leave your legacy to chance.
Join us to learn about how your current plan, or lack thereof, will affect your family for years to come. This educational workshop will provide a wealth of information about your own personal Estate Planning situation. If you own a home or have combined assets worth at least $100,000, you owe it to yourself and your family to get the facts on proper estate planning. (If you think you’re protected with a simple Will, think again… a Will goes through probate, which means your family may not be able to take possession of your estate for many months or even years!

The workshop also covers powers of attorney and health care directives and why they are a crucial part of your estate plan. If you are married, we recommend that you both attend as we’ll be covering lots of information that will pertain to both of you.

Your attendance entitles you to a complimentary one-hour estate planning meeting with a Hammond Law Group Attorney within two weeks of attending a workshop ($400 value).

Incapacity Planning

For most of our lives, it’s even more likely that we’ll become disabled than die. If you suffer an illness or injury that leaves you unable to care for yourself, it’s vital to have a plan in place to enable someone else to care for you.

There are two general categories of care that you might need.

Healthcare Decisions

If you can’t communicate your own healthcare wishes, either temporarily or permanently, there are several documents you’ll want to have in place to enable someone else to navigate healthcare decisions for you and ensure you get the care you deserve.

Healthcare Power of Attorney – Names someone to make medical decisions for you.

Living Will – Expresses your wishes regarding end-of-life decisions in the event you have a non-reversible, terminal condition, two doctors are willing two certify in writing that there is no hope of recovery, and you’ve been unconscious or in a coma for at least 7 days.

Universal HIPAA Release – Authorizes any and all medical providers to share your medical information with the individuals you name in the document. Without this, even your spouse may not be able to call the hospital to find out if you are there, or what room number you’re in.

Financial Decisions

If you’re disabled, either physically or mentally, you’ll need to have a plan in place to enable someone else to pay your bills and, if it’s permanent, be able to do things like sell or refinance your house, access retirement funds, take care of the family business, or other important matters.

There are two ways that you can plan for someone to take care of your financial affairs if you’re disabled.

Financial Power of Attorney (POA) – Authorizes someone else to take care of your banking, real estate, investment and other financial affairs on your behalf. There are a growing number of financial institutions that will only accept a POA for a short time after you sign it, or require that you sign their specific form, so a POA may not always work when you need it. Consult with an attorney to ensure you sign the right POA (there are several different kinds) and discuss the pros and cons of relying on a POA.

Revocable Living Trust – Because there are a variety of situations where a POA may not work to take care of your financial affairs, you may want to consider a Living Trust to plan for your possible incapacity. Unlike a POA, a properly drafted Living Trust actually changes ownership of your house, bank accounts and other assets in a way keeps you in complete control now, and gives your chosen successor the right to handle things for you if you’re incapacitated, without possibility of being rejected by a picky financial institution.