Many people are familiar with this common horror story: a parent remarries later in life to a person with a family of his or her own; when the parent passes away, their estate goes entirely to their new spouse through the laws of intestacy.
When the new spouse then dies, the cumulative estate goes to his or her children, leaving the original parent’s children without their rightful inheritance. This happens all too often, and usually leads to nasty court battles and hard feelings all around. However, estate planning lawyers in Marietta want people to know that with proper planning, these issues can be avoided.
While it may not always be pleasant to think about what happens if you pass away, Marietta estate planning attorneys strongly advise those who are entering into a blended family situation to consider the following:
- Truly think about who you want to provide for and in what manner. You may want to leave everything to your children, you may want to provide for your new spouse, or you may even want to leave a legacy for each member of your blended family. The decision is up to you, so think carefully about it.
- Speak to your family about any heirlooms or items they may have a personal connection with and may want after your passing. If possible, make it known in your estate plan that certain family members should receive certain items.
- Consider the possibility that you may pass first, but also consider that your spouse may pass before you. While you may be preoccupied with protecting your own legacy, consider what may happen if the roles are reversed and your family ends up with your spouse’s family’s inheritance – then make plans with your spouse to ensure each side will achieve a satisfying outcome.
- Review your insurance policies, estate planning documents, and beneficiary forms for financial accounts to ensure they are all up to date – and more importantly, that you are not leaving funds for an ex-husband or wife. There are many, many cases of insurance payouts going to an ex-spouse who has had nothing to do with the deceased for years instead of going to the current spouse, all because the policies were forgotten and never updated.
- When consulting with a Marietta estate planning lawyer, make sure they have experience in helping blended families in these matters. There are many techniques that can be used, such as the use of certain Trusts, to ensure all members of the family are adequately taken care of and all of your wishes are met, but it takes an attorney practiced in such matters to make sure these things are done correctly.
If you have questions about estate planning for your blended family or you wish to update your estate plan to account for your blended family, please contact us at 770-425-6060 to set up a consultation.
A Health Care Power of Attorney, also called a Health Care Proxy or Durable Power of Attorney for Health Care, lets you give legal authority to another person (a proxy or agent) to make decisions about your health care if you are unable to make them yourself. This prevents the courts from getting involved if there is disagreement between family members and/or the medical community as to what actions you would want taken.
Keep in mind that you will continue to make decisions about your care for as long as you are able. You are only naming someone as a successor, to step in and act for you when you cannot. This document can be valuable even for short periods of time, such as if you are recovering from surgery.
But it is more associated with end-of-life decisions. The person you name as your agent or proxy may make decisions that will extend your life for as long as possible or bring your earthly life to an end. These decisions may include whether or not you should have surgery, if life support should be initiated, and/or if nutrition should be stopped. The legal document includes your wishes on these and other end-of-life issues.
This is a difficult subject for some people to even think about, but it is important that you do, and that you discuss these matters with your physician, family members and friends. The more people who know about your preferences, the easier it will be for your agent/proxy to carry out your instructions. Of course, you might change your mind over time, so let others (especially your agent/proxy) know what you are thinking.
Whom should you name as your agent/proxy? Here are some considerations:
- Most people name a family member, but you can also name a trusted friend.
- It should be someone who knows you well, respects your wishes and will follow your instructions.
- It might bring you some comfort if this person shares your values about faith, life and death.
- You should name more than one person in case your first choice is unable to act. But list them in the order you want them to serve. This would give your agent/proxy others with whom to consult and discuss options, but you want one person (not a committee) making the final decisions.
- Consider your candidates’ personalities and emotional make up, and whether they would be able to handle the responsibility.
If you have been asked to be someone’s agent/proxy, consider carefully if you would be able to follow his/her wishes when that time comes. Most people consider it an honor to be asked, knowing this person has chosen you to have his or her life in your hands.
Over recent years, many people have purchased long term care (LTC) insurance to protect themselves against the rising costs of care in their final years. But lately, policy holders have seen their premiums rise and/or benefits decrease. Two of the largest LTC insurance companies, MetLife and Unum, recently appeared before the Florida insurance commissioner to explain why they asked some of their policy holders to pay double what they paid in premiums the previous year.
Unum explained that when it entered this market in the late 1980s, they determined their prices using the best data available about how future experience would develop. But, over the next decades, they discovered their assumptions were very wrong. For example:
- They did not plan on people living so much longer.S. life expectancy increased two full years between 2000 and 2014, from age 77 to 79. According to the U.S. Centers for Disease Control and Prevention (CDC), life expectancy is still on the rise.
- They did not plan on such low interest rates. They had planned on investing the premiums they collected at high interest rates to generate healthy returns, but interest rates have been extremely low since the 2008 recession.
- They did not expect people to hold onto their policies. Insurers expected people would forget about their policies and let them lapse, in which case the premiums they had paid would be forfeited and go into the insurance company’s pockets to pay other claims. But seniors held onto their policies, causing the insurers to pay more claims than planned.
- They did not expect to have to pay claims so long. Diseases like Alzheimer’s and other forms of dementia can last for years, and seniors stayed longer in nursing homes than the insurers had expected.
As a result, some insurers (Allianz, Guardian, MetLife, Prudential and Unum) have stopped offering LTC insurance completely. But they still have to service the people who bought policies and will use them. Insurers plan to reduce the coverage whenever they can, by adjusting the amounts policyholders receive, making them wait longer to receive care and decreasing benefits when they do go into care—and, of course, by increasing premiums. Most of the insurers still have large company-wide surpluses, but seek to make their LTC divisions self-sufficient.
This is not good news for seniors. Those who cannot afford the higher premiums often have to cancel their policies, forfeiting the premiums they have already paid and losing coverage around the time they need it—and then find other ways (bank accounts, home equity) to pay for their care.
Younger seniors will have a difficult time finding acceptable and affordable LTC coverage. Many policies now include a life insurance rider—the money you pay in can be used (for as long as it lasts) to pay for nursing home or other care, or paid as a death benefit to your beneficiary(ies). If you are considering purchasing LTC insurance, be sure to seek sound financial advice first.
If for any reason, you become unhappy with the person you have appointed to make decisions for you under a durable power of attorney, you may revoke the power of attorney at any time. Here are a few steps From your neighborhood East Cobb estate planning lawyer that you should take to ensure the document is properly revoked.
While any new power of attorney should state that old powers of attorney are revoked, you should also put the revocation in writing. The revocation should include your name, a statement that you are of sound mind, and your wish to revoke the power of attorney. You should also specify the date the original power of attorney was executed and the person selected as your agent. Sign the document and send it to your old agent as well as any institutions or agencies that have a copy of the power of attorney. Attach your new power of attorney if you have one.
You will also need to get the old power of attorney back from your agent. If you can’t get it back, send the agent a certified letter, stating that the power of attorney has been revoked.
Because a durable power of attorney is the most important estate planning instrument available, if you revoke a power of attorney, it is important to have a new one in place. Your East Cobb estate planning lawyer can assist you in revoking an old power of attorney or drafting a new one.