At the end of each month, we like to take stock of elder law news and share new or interesting developments. For the December round-up, we’ve decided to do something a little different: round up the lessons we’ve learned over the past year, inspired by our own practice, cases we’ve read about, and even rumors we’ve heard. We’ve polled our team, and here are our top 10 (plus a couple of bonuses):
1) Expect change
Just as we’ve more or less gotten used to the sky-high $11.4 million estate tax exemption, along come plans from presidential hopefuls seeking to bring the exemption down as low as $3 million and add a “wealth tax,” too. Then there’s the just-passed Secure Act, which will have a dramatic effect on retirement accounts and related estate planning. Yes, taxes are a certainty, but how long any tax regime will remain is anyone’s guess.
2) Ask one more question
Communication is at the heart of any planning, and it’s especially important for crafting estate plans. Both attorneys and clients should take the time to clarify a client’s position. For instance, if someone says, “I don’t want to end up like Terri Schiavo,” that can mean either, “If I’m in a vegetative state, I don’t want anyone to end life-sustaining measures,” or, “If I’m in a vegetative state, I don’t want life-sustaining measures at all.”
3) Ask questions
If a beneficiary or heir thinks a trust or estate administration might not be going quite right, he or she should raise questions—even if it’s uncomfortable. If there’s one thing they’re entitled to, it’s access to information, so long as the request is reasonable. The beneficiary or heir should document the requests and the responses. If questions go unanswered or are inadequate, consider hiring counsel to explore what’s going on.
4) Question aging estate plans
Estate planning is a process; clients should review plans every few years to ensure they do not need adjusting due to changes in 1) wishes and desires; 2) family dynamics; or 3) changes in tax or estate planning law. An estate planning attorney can be useful to evaluate the law or just talk through the issues.
5) Question choice of fiduciary
Carefully consider the best person to serve as agent under power of attorney, trustee, and personal representative (aka “executor”). A spouse might not be the best trustee for her stepchildren. A well-educated, successful child might tend to lord over his or her siblings, not treat them with kindness. Remember that, in Arizona, we have licensed fiduciaries (including Fleming & Curti) who can serve in such roles for a fee. It can be worth it.
6) Question whether to say yes
If you are named to serve as agent, trustee, or personal representative, or are considering serving as guardian or conservator, consider saying no. Whether you are a lay person or a professional, evaluate whether you have the time, energy (both physical and emotional), commitment, and skill to do the job that is required. If you don’t understand what is expected, don’t say yes until you do.
7) If you do say yes, question aging trust plans
A trustee should review (or have an attorney review) the document to see if it can or should be changed to adjust to tax laws (obtain step-up in basis for income tax, perhaps), beneficiary circumstances (maybe add a continuing or special needs trust or ability to contribute to an ABLE Account), or add flexibility (consider a trust protector, or more levels of successor trustees).
8) Complete the process
If you create an estate plan, properly execute the documents.
9) Test the documents
After your documents are signed, witnessed, and notarized, you are not done. Provide your health care and financial powers of attorney to your doctors and all financial institutions to ensure the documents will be accepted before you need them. (There’s no law in Arizona that requires institutions to honor them.) If they find something unacceptable, you can fix it.
10) Provide for pets
Many people know Fleming & Curti is a very dog-friendly office. Don’t forget to include dogs, cats, and other animals in your plan: Who can take them? Will they need money? Does a trust make sense? Or maybe a donation to a charity who will see to their care?
Check beneficiary designations. Ordinarily, we’d say simply, “Make sure beneficiaries are named on all retirement accounts.” Now we have the Secure Act, which means you should consider how the Act changes your plan. You’ll be hearing much more about the Secure Act’s effects in the coming months, so don’t panic yet. But you may want to plan a meeting with your financial advisor and/or estate planning attorney. Start by printing out all of your current beneficiary designations — don’t assume that your memory is correct or complete.
Be kind and say thanks. OK, this isn’t a lesson specific to elder law, it’s for everyone, all the time. “Be kind” is a bit of a motto in Tucson, thanks to the work of Ben’s Bells. But when life gets busy and stressful, it can be hard to remember to let someone know they’re appreciated. Your client, your lawyer, your trustee (especially a step-parent or sibling doing a good job!), your friend, spouse, parent, child, co-worker, friend, etc., etc.
That’s the December round-up. Happy New Year!