At the end of each month, we take stock of elder law news and developments and share them. For December, we review 2021, looking less to outside news and commentary and instead think about what we (or others) have learned or wish we (or others) had learned before something unfortunate happened. Here are some lessons from the past year we hope to apply in 2022, inspired by our own practice, cases we’ve read about, and rumors we’ve heard. Here are the top 10 (plus a bonus):
Tops for Review 2021
1. Don’t Panic, Part 1. If Congress threatens to do something, don’t panic. This year, Joe Biden’s initial Build Back Better plan included upending estate planning. One proposal not only reduced the estate tax exemption, but it also eliminated many of the strategies used to avoid the tax. Then it didn’t happen. Those who panicked and made changes may now have regrets.
2. Don’t Panic, Part 2. If you panicked and made changes, don’t fret. The exemption comes down in 2026 anyway, so you’re ahead of schedule. Plus, you likely can adjust your plan, even if it’s “irrevocable,” especially if circumstances change and all of those involved agree. Reversals may take time, cost money, and require court approval, but it can be done.
3. Keep Planning, Part 1. If you heard about the estate planning changes and shrugged them off because your plan was done decades ago, reconsider. It’s important to review your plan from time to time, even if nothing much has happened.
4. Keep Planning, Part 2. It’s even more important to revisit your plan if significant relationships have changed. Did a child’s marriage fall apart? Make sure your child’s former spouse isn’t getting anything from you (unless of course you want them to). You may know that Arizona has a statute that revokes gifts to an ex, but that’s only from the ex-spouse. Designations by in-laws or other family members are not automatically revoked. You must re-do.
5. Really Think. When you review your plan, make sure you understand both the plan and how those you have named will carry it out. Consider whether it’s workable. Are you confident those to whom you’ve given power will handle it well? Are you confident those who were not chosen will handle that well? (Reality check: stepparents and stepchildren, and siblings often don’t get along after the person holding them together is gone.) Remember that your choices are not limited to family members. Especially in Arizona, where we have licensed fiduciaries (like Fleming & Curti) trained to serve.
6. Confused? If you read your plan and don’t understand how it works or your financial advisor tells you it’s too complicated, enlist your estate planning attorney for help. He or she probably will be happy to run through the reasoning with you and even your advisor, if you wish. Even if you review with your attorney, consider a second opinion from another attorney whose practice focuses on estate planning for additional peace of mind.
7. Give Thoughtfully. Your will or trust probably came with a list to give your tangible personal property (jewelry, collectibles, art, furniture, etc.) to specific people. Seriously consider using it. Gifting a specific item to someone you care about shows them you cared. In particular, think about gifting to those who are not primary beneficiaries — grandchildren, nieces and nephews, friends, colleagues. A little something can mean a lot.
8. Think About Incapacity. If you (or your spouse) are unable to handle your affairs, are you prepared? Powers of attorney for health care and finances are crucial. A trust can help, too. Don’t wait till someone’s incapacity is questionable to act.
9. Think About Incapacity Again. It’s common for people to overlook incapacity provisions in their documents. Everyone dies, not everyone becomes incapacitated. But many people do, and it’s crucial to evaluate those provisions before it’s too late. Look for: How to activate health-care and financial powers of attorney, and how to remove a trustee for incapacity. Are doctors’ notes needed? What must a medical professional do or attest? If so, how difficult would it be to obtain such notes in a crisis? Is there a procedure? Walk through it — is difficult to carry out? Want something different? Contact your attorney for both ideas and revisions.
10. Consider Visitation. A law new in 2021 prohibits your loved ones and even your health-care agent from regulating visitation if you are unable to decide or to communicate who you want to spend time with. Unless you specifically grant visitation powers under your health care power of attorney, they would need a court order. Consider whether those who care about you will get along if you are unable to run interference. Maybe you want your agent to have the power to say, “No visits.” Or maybe you want the court to decide.
The 2021 Review Bonus
Know your stuff. We tell clients (over and over) and every year in our annual review, “Check your beneficiary designations.” This year, we’re going further. Frist, review beneficiary designations each financial institution has on file to ensure each is consistent with your estate plan. But also: Check the titling of real estate, bank accounts (and their “pay on death” designations), vehicles, and other assets. For instance, check annuities, business interests, and time shares. Consider what happens to each asset when you die. Do you know? If not, find out and consider whether it’s what you want.
Like all estate planning, these lessons help articulate what an individual wants so everyone knows and can abide by his or her wishes. Do it your way.
That’s the 2021 review. Welcome, 2022. Happy New Year!