Estate Planning

I have been following the developments in this story with fascination and disbelief.
 
Prince passed away in April 2016, leaving an estate valued at over $300 million dollars, and apparently no will or trust. Prince’s sister, Tyka Nelson, recently filed a petition with the probate court in Minnesota, claiming that Prince did not have an estate plan. She asked that special administrator be named to oversee Prince’s business interests and estate. (Prince died without a will, sister says)
 
Today, Prince’s estate received its first official paternity claim from a man named Carlin Williams, who is currently serving time in a federal prison for transporting weapons. Mr. Williams’ mother says that she met Prince in Kansas City in July 1976 and that he was the father of her son, who was born on April 8, 1977. (First official paternity claim filed with court)
 
At the time of his death, Prince was not married, and had no known children. His closest living relatives are his sister, several half-siblings, and some nieces and nephews. It is unclear how his estate will be divided under Minnesota law. However, it is clear that Prince left behind what is guaranteed to be a long and messy estate battle.
 
Not having an estate plan can cause strangers to claim that they are related to you, that they are creditors, or that they are business associates. Contact your estate planning attorney to ensure that your estate plan is up to date to avoid disputes over your estate.
 

In a recent New York Times article entitled When the Patient Won’t Ever Get Better, Dr. Daniela Lamas tells the story of a spry 90-year-old patient.  She had been living an active and independent life until recently, when she had required emergency surgery for a tear on one of vessels carrying blood from her heart.  Without the surgery, her family was told, she would certainly die. 
 
The surgery had gone well, but there were major complications afterward.  The patient had developed pneumonia, then kidney failure, and then delirium and profound weakness.  Now she was ventilator-dependent and required intravenous medications to keep her blood pressure stable.  Her expression was dull and lifeless.  She hadn’t been home for over three months.  Her condition was “critically ill, but stable.”
 
According to Dr. Lamas, there are about 100,000 chronically critically ill patients in the United States at any one time.  Since the population is aging and medical technologies are improving, this number is only expected to grow.  The clinical outcomes of these patients are extremely poor.  Half of the chronically critically ill will die within a year, and only around 10 percent will ever return to independent life at home.
 
Dr. Lamas describes the dilemma of these patients and their families.  In the early stages of critical illness, the choices seem simple.  It is the choice between life and death in an emergency.  However, the chronically critically ill are in a lingering uncertain “in-between” state that often lasts for months and ends poorly.
 
This article reminded me of my own experiences with patients and clients in similar situations.  This is one reason why estate planning focuses on being prepared for medical incapacity.  Review your estate plan to ensure that it reflects your wishes, and discuss your preferences with your family.
 

Choosing a guardian for your children is one of the more challenging parts of the estate planning process. Here are some factors to consider:
 
How old are your children? Older and more mature children should be allowed to have some input in the process.
 
Is the guardian willing and able to serve? Can the guardian meet the demands of raising additional children? More importantly, is the guardian willing to serve? Potential guardians should be consulted to determine the answers to both questions.
 
What is the guardian’s religion? What is guardian’s child-rearing philosophy? Religion is of primary importance for some parents. For other parents, the child-rearing philosophy is more important. Ideally, the guardian will share your values in these areas.
 
Consider the guardian’s family. Should the guardian be single or married? Should the guardian have children or be childless? There are no right or wrong answers to these questions, but you should consider your preferences carefully.
 
Your estate plan should ensure the material well-being of both your children and the guardian you have chosen. Of course, your trustee will need to support your children’s health, living expenses, and education. However, you may also consider providing funding for the guardian’s additional expenses, such as the need for a larger residence or daycare providers.
 
Knowing that you have the best possible guardianship plan in place if the unthinkable ever happens to you or your spouse is one of the many ways that planning in advance provides you with peace of mind. Contact your estate planning attorney to ensure that your plan is up to date.
 

In an interesting study published by The American Journal of Public Health, researchers discovered that life expectancy has increased for older men. The number of years spent active and free of disability has also increased for men.  However, life expectancy for women has not increased as much as it has for men, and neither have the number of years women spend active and free of disability.  Consequently, although women still outlive men, older women no longer have more active years than men do. Women are also more likely to experience disability when they grow older.
 
Although modern medicine has added years to our lives, the disabling conditions and diseases of aging still threaten our quality of life as we grow older.  Unforeseen medical conditions may impair our independence or decision-making ability.   It is more important than ever for women to be prepared with a well-crafted estate plan that addresses the possibility of mental or physical disability.
 
Contact your estate planning attorney to ensure that your estate plan protects you if you ever become disabled or incapacitated.
 

The use of trust protectors is growing more common in living trusts. A trust protector is a person or entity empowered to watch over your trust, and ensure that it is not affected by changes in the law or family circumstances. Having a trust protector in place allows a long-term trust to be more flexible and to adapt to these changes. A trust protector can also be helpful if you anticipate that there may be conflict between your beneficiaries, or if you have concerns about the trustee you selected.
 
You can name a trust protector in your trust document and specify the trust protector’s powers. The more specifically you define the trust protector’s powers, the more likely your estate planning wishes are to be fulfilled. Some of these powers may include removing and replacing a trustee, allowing the trust to be amended due to changes in the law, and resolving disputes between trustees. A trust protector can also be given the power to change distributions from the trust, add new beneficiaries, or make investment decisions. Your estate planning attorney can help you define your trust protector’s powers.
 
When choosing a trust protector, it is a good idea to appoint an independent third party rather than a family member or beneficiary. An accountant or lawyer is often a good choice. Speak to your estate planning attorney to determine if it would be beneficial to use a trust protector to safeguard your trust.
 

Long-term care is often needed due to aging, chronic illness or injury, and with people living longer, most of us will need it for at least some time before we die. But it is not just for the elderly—a good number of younger, working-age adults are currently receiving long-term care due to accidents, illnesses or injuries. It is better to assume you will need long-term care and plan for it than to simply hope it doesn’t happen to you or a family member.
 
Long-term care can be provided in your home, in an assisted living facility or in a nursing home. All can become very expensive over time. Costs for long-term care are hard to estimate. The actual costs will depend on the kind of care you need, how long you require it, and where you live. Expect these costs to increase as the cost of medical care continues to rise.
 
Long-term care expenses are not covered by health insurance, disability income insurance, or Medicare. If you do not plan for these costs, and you or a family member requires long-term care, the results can be financially devastating for your family.
 
Actions to Consider

• Find out what costs are for long-term care in your area. Your financial and/or insurance advisor will be able to give you some parameters. You can also ask friends and neighbors; you probably know someone who has a family member receiving care at home or in a facility.
• Have an honest discussion with your spouse (and possibly other family members) about these costs and your desires about long-term care, should you need it. Most people want to stay in their homes. Find out what it would cost to make that happen. For example, you may need renovations to your home, home health care, or other resources.

If you have questions about planning for long-term care, please do not hesitate to contact my office.