Arizona Elder Lawyer

Why Have a Trust?

            Maintaining the financial care of the Trustor, the person who is making and funding the trust, is the first purpose in having a Trust.  The document can clarify how the assets are to be used during the Trustor’s lifetime.  My clients generally clarify how the assets should be used if their medical care becomes so costly that the Trust will deplete its assets.  The Trust document specifies how the Trustee may or may not invest and place desired restrictions on the investment strategy of the assets.  Basically, it is a document that allows the Trustor to control his assets at all times during his life, even if he cannot actively participate in these decisions at any given time.

            Avoiding conservatorship used to be an additional benefit to having a Trust.  With the ongoing medical advancements and lifespan of the population increasing, this purpose is becoming more of a primary reason to hold a person’s assets in a Trust.  Conservatorship proceedings in court can be costly and occur when there is great duress and emotional trauma.  They can also be very contentious.  A person can maintain control over his assets by stating in a Trust who will be his financial surrogates, Successor Trustees, if he cannot control his assets himself.  The transition of serving between the Original Trustee and the Successor Trustee should be seamless and without court involvement.

            Transferring property upon death is a third purpose in establishing a Trust.  Generally speaking, if a Trust is funded properly with all of the assets owned by the Trustor, the Trust distributions after the death of the Trustor are without court supervision.  The Probate Courts can become actively involved if there is a dispute or concern by the survivors.  But, generally, the transfers upon death are clarified with specificity.  An attorney should always be consulted by the Successor Trustee to ensure the proper handling of these distributions. 

            Tax planning is the last major reason for having a Trust as a vehicle for owning property.  The federal tax laws change regularly and the general population does not necessarily keep track of legislation and the practical effects of these laws.  State laws must be incorporated as well as federal legislation.  Trusts can be drafted properly today with provisions that give Trustees the ability to make tax elections based upon the laws in effect years in the future.  This can be a great gift to those who will be affected by tax implications of inadequate planning.

            Trusts truly are a wonderful vehicle to hold your assets.  They are best drawn up by lawyers who will listen to your desires and ask probing questions about your family situation and history, and then implement these into your plan.  Run fast and far away from cookie cutter Trusts drawn up by non-lawyers and off the shelf stationary forms.  These can be quite detrimental because of conflicting provisions and use of phrases that have legal effect but are not understood by the non-lawyer drafter.  Lawyers are regulated and generally have malpractice insurance so that you are protected.  Docs in a box have neither.

The Perfect Place Truly is Perfect

            The stated mission of The Perfect Place is “to offer services to meet the needs for assisted care for older adults and their families and respite for the caregiver.”  The location of the site is on the campus of Risen Savior Lutheran Church at 23914 S. Alma School Road, Chandler Arizona.  The hours of operation are subject to change, but are currently Monday, Wednesday, and Friday between 1pm – 4pm.  The cost is $15 per hour or $40 for a 3 hour day.  The phone number is 480-895-2892.

            The Perfect Place offers a small group setting which makes the experience more individualized and personal to the participant.  The ratio of volunteers to participants is generally 1:2 or 1:3.  The environment is joyful, happy, friendly, and intimate.  It is a private pay program and adjustments are made as needed.  Participants truly enjoy this time of fellowship and get great emotional benefits from their experiences.

The participant’s program is personalized and adaptable.  Any progress or change is monitored, charted, and discussed with the caregiver.  All of the activities are somehow related to therapeutic activities.  But they are in such a way that the participants do not realize there is therapy involved. They think they are just having fun!

The Perfect Place offers a safe, faith-based respite care center that is crucial for caregivers.  Caregivers often times do not take care of their own needs and a few hours a week can make all the difference in the world. 

            Neighbors Who Care, a non-profit organization serving South Chandler and Sun Lakes, can provide the necessary transportation to those who need it to get to and from the center.  They can be contacted at 480-895-7133.

Mental Health Care Power of Attorney

            If you are over the age of 18 and have mental capacity, you may designate another adult to act on your behalf with regard to making mental health care decisions if you are later unable to make them for yourself.  This designation is distinct from a durable health care power of attorney.

            A legally effective document of this nature requires 1) a written document, 2) you have capacity at the time you sign it, 3) you date and sign it, and 4) at least one witness or one notary are present at the time you sign the document and they attest to the fact that you appear to be of sound mind, and free from duress, fraud or undue influence.  When my clients execute these, there are always two signing witnesses and concurrent notary service.  It doesn’t hurt to be careful with these matters.

            The agent is authorized to make mental health care decisions when you cannot make them for yourself.  The document can place restrictions on this authority.  The authority may be revoked either by you or by court order.  Your agent may receive health information and related records in order to make appropriate decisions for you.  Your agent must act in accordance with the directive and in good faith.  Your agent is not personally liable for decisions made in good faith and under the direction of the document. 

            With the population aging and more people being diagnosed with mental health issues, it is critical for people to have these documents executed.  Who do you want making decisions for you?  A loved one, a friend, a pastor, or some stranger or politician who does not necessarily have your best interest in mind?  And don’t forget to re-execute this document at a minimum of once every five years.

Is There a Need to Open a Probate in Arizona?

            A probate is opened in Arizona when a person is domiciled within the state at his death or the decedent owned property in the state at his death.  There are formal and informal proceedings available.  The goal of the legislation related to probates is for minimal court involvement.  However, if the courts are needed to resolve disputes or provide oversight, they will get involved.

            Look to the assets themselves and determine what kinds of assets they are and how they are held.  For instance, were the bank accounts owned jointly with another person?  If so, the bank accounts pass to the joint owner without probate.  If real property was held with another as joint tenancy with right of survivorship, the property passes without probate.  If life insurance was payable to a named beneficiary, not to the estate of the decedent, then the proceeds are passed to the beneficiary without probate.  Assets held in the name of a Trust created during the lifetime of the decedent pass as directed in the Trust instrument, without the need for probate.

            Small estates do not require probate.  Rather, small estates can be administered by the use of affidavits.  Small estates include personal property with a value of up to $50,000 and real property valued up to $50,000.  Community property issues must be taken into account if the deceased was married.  Generally, it is a good idea to consult with an attorney when there are any doubts or questions related to the necessity of opening a probate and the type required.  Further, if there are foreseeable disputes related to an estate, the sooner an attorney is consulted, the quicker the issues can be resolved. 

Elder Suicide and Arizona Law

    

            I am not a proponent of suicide.  I do not condone it.  I accept that it is out there and believe that suicide amongst the more seasoned population is more problematic than society realizes. 

            The other day started with a phone call from someone I did not know.  I was asked to explain the Living Will of the spouse of the caller.  The document named the caller as the decision-maker for the spouse who was currently in the ICU wing of a hospital.  This patient took a handful of painkillers the day before because the physical pain was so great that the person could no longer take it.  Obviously the attempted suicide failed.  Both persons were now in great emotional turmoil.

            The two legal issues that stood out in my mind were 1) this Living Will is ten (10) years old and if the doctor does not like the spouse, the doctor may ignore this document.  There are two estranged adult children from a previous marriage who would make things difficult during this time simply because they could.  If they knew the patient was in the hospital.  Living Wills MUST be re-executed at least once every five years or they are considered stale and invalid. 

And, 2) this should never have happened.  Doctors should be allowed to treat their patients for their medical needs without the threat of going to jail.  Arizona Legislators are supposed to do the will of Arizonans.  The majority of Arizona residents believe that physicians should be allowed to legally prescribe a lethal dose prescription.  Yet the Arizona Legislative branch will not allow a bill of this nature to have a hearing and the bill dies every year.  Currently HB2313, which requires two doctors to confirm that death to the patient is expected within six months before a prescription of this sort is written, has been given its own lethal prescription.  Republican Representative Doug Quelland, Phoenix, will not allow a hearing for this bill.

            The Arizona Legislative Branch is supposed to be serving the people of the State of Arizona.  They instead force their morals upon the residents.  Funny thing is that two of the most “powerful” lawmakers in the Arizona Legislation have their own moral issues.  One has been accused of quieting down the victim of a sexual predator and another has a son who has been accused of physically harming / hazing others at camp.  Strange.  And reprehensible. 

            Please contact your legislators and urge them to allow a hearing on this bill.  Our parents and grandparents should not be forced to live with pain that they can no longer tolerate.  They should have the right to make medical decisions with dignity, comfort and their doctors’ counsel and care.

Choosing a Personal Representative (aka Executor / Administrator)

            A personal representative (“PR”) is one who administrates an estate.  If you execute a will, as you should, you will designate a PR and usually one or two alternates.  If you die without a will, a court will appoint a PR to your estate for you.

            If you have a Living Trust, you will also have a will.  These are referred to as “pour-over wills.”  Assets which are not considered to be owned by your Living Trust will be assets the PR handles.

            A PR is the person who gathers assets, gives notice to creditors, pays estate expenses, determines the family’s living allowance during administration, and makes sure appropriate tax returns are timely and properly filed.  If you have an unincorporated business, your PR continues to run it, but only for four months. 

            Your PR has vast powers unless she is restricted by court order.  She can borrow funds and enter into contracts.  She has the power to sell your home and distribute or sell your personal property as she sees fit.  She deals with Social Security, the ADOT Motor Vehicle Division and the IRS.  This, of course, is not an all inclusive list. 

            Your PR has strict duties to many people and organizations.  She must prepare an inventory of assets within ninety days after appointment.  She must get appraisals for certain assets from qualified appraisers.  She must determine if the surviving spouse or any dependent children should receive an allowance in lieu of homestead and how to satisfy this.  These may not be difficult duties, but they are not necessarily intuitive.

Because of the nature of the powers and duties of a PR, you should choose someone who can make decisions and is capable of consulting with and hiring a lawyer.  Even in the simplest or smallest estates, a lawyer should be consulted.  A single misstep can be detrimental to the PR personally, as well as the estate and beneficiaries, under Arizona laws.

            The decision of who to appoint can be very difficult.  It should not be based on birth order, gender, or education.  It should be based on whether the person is responsible, respectful to others and the law, and capable of knowing when to ask for help.  Furthermore, a person who generally cuts corners or is irresponsible with her own affairs is not a good choice.  A person with general personal integrity is a great choice.

            Your PR does not need to be a family member.  It could be a friend of the family who is trustworthy and knows your family’s history and your desires.  She does not have to be someone who lives in Arizona.  But she should be able to travel to Arizona occasionally until the estate is wrapped up.

            Generally, you should only have one PR.  A corporate PR can be quite costly.  I rarely recommend a corporate PR.  They used to be used exclusively, but not anymore.  However, this is your decision.

            If you are unsure who you should choose, talk to someone you trust for advice.  Your choice affects everyone you leave behind.

Various Estate and Gift Tax Issues for 2006

Anyone who dies in 2006 with an estate valued at $2,000,000 or more will die with their estate being subject to the federal estate tax.  There is no such thing as a federal inheritance tax.  A person’s estate includes life insurance proceeds as long as the deceased had any control over the account at the time of their death.  It also includes retirement account values.  Many people forget to include these assets when determining their estate’s approximate value during their life. 

The amount of a tax-free gift a person may make in 2006 is $12,000.  So, if you wish to give your best friend a gift, you can give her $12,000 without any tax consequences.  If you and your husband want to give your best friend a gift, each one of you can give her $12,000 for a total gift of $24,000.  If you and your husband want to give your best friend and her husband a gift, then the two of you can give the two of them $48,000 in 2006 with no tax consequences. You should file a gift tax return and make the proper elections.  A gift is not taxable income to the recipient.

A smart gift that has no limits is for one to pay another’s medical or education bills directly to the institution.  This only works if the person making the gift pays the institution directly.  It does not have tax-free status if the funds are paid to the person who is being benefited, even if that person turns around and pays the institution right away.

Don’t forget gifts to charities, either in life or at your death.  During life, not only do you get to see the use of your gift, you generally are able to deduct the value of the gift on your personal income tax return.  At death, it is a way of letting that charity know that you really hope it continues their good work and you cared so much that you left that legacy.

Understanding Elder Law

Elder Law is the professional focus on issues which seniors (generally defined as age 50 and over) are faced with regularly.  This area of practice is a unique niche because a lawyer must have a broad range of legal knowledge coupled with compassion and a desire to improving the lives of seniors.  The focus is not just on legal issues, but, rather, it is holistic by addressing legal, medical, financial, social, and family dynamics issues.

Legal planning includes executing or updating wills, trusts, living wills, medical power of attorneys, mental health power of attorneys, and tax planning.  It can also include conservatorship, guardianship, and probate needs.  People have unique histories, circumstances, and goals, so planning must be individualized rather than implemented on a cookie-cutter approach. 

Financial planning not only covers charitable giving and succession planning, but also determining long term health and dental care coverage and the best way to fund these needs.  It is a myth that planning for these costs is somehow unethical or illegal.  Medicare Cost Sharing, Medicare Savings Programs, and the Medicaid program in general are not known for their ease in understanding the requirements or applications.  An Elder Law attorney can help with these decisions by either guiding one through them or referring one to good resources.  At a minimum, they will help one understand the benefits and detriments of these tools and other programs.

Social Security is an area that can be complicated.  Timing and knowledge of one’s rights and duties are everything.  For instance, benefits are generally automatically deposited directly to one’s bank account.  Survivor benefits change immediately upon the death of a spouse.  For example, benefits received the month after the death of a recipient must be returned to Social Security.  In fact, Social Security will retrieve the funds by reaching back into the account in which the funds were deposited.  They will do this without warning and a stern reprimand.  This could lead to confusion and unintentional bounced checks.  Elder Law attorneys can help by reminding the surviving spouse or personal representative gently and at the right time what steps to take.

Occasionally, a person is faced with financial scams by unsavory businesses or financial abuses by those who are supposed to protect them. An Elder Law attorney generally will help remedy and rectify these situations and get procedures in place so that these occurrences are not repeated.

Social needs of the elderly and their caregivers are often not addressed.  These situations can be more dangerous and unanswered when family members do not live nearby.  If left alone and out of touch, the elderly may face depression and other silent ailments.  There are many wonderful low cost and free programs that address these needs.  A great Elder Law attorney will be able to help with these issues as well.

If you have Elder Law questions or needs, check in with an Elder Law attorney.  It can give you and your family peace of mind.

Planning for your health

You have the right to control your health care decisions.  If you do not want a certain treatment, then no-one should be able to force it on you as long as you are able to communicate.  If you do want certain treatments, then you need to work with your doctor to make sure it is the right course of action.  A doctor should treat you according to your wishes as long as she determines that it will be more helpful than harmful to you. 

What happens if you are in an accident or suddenly unable to communicate your needs?  In an emergency situation, a medical provider will treat you to the best of her abilities.  She will presume that you will want life-prolonging and life-sustaining measures to be used until you are able to confirm or deny this for yourself. 

When you can not speak for yourself, someone you know and trust should speak for you. You should decide who this person is and put it in writing so that there is no confusion.  This person should be someone you trust to abide by your wishes.  It will not always be a family member. In order to do this, you need to properly execute a Health Care Power of Attorney and it must be accessible. 

Many people already have these, but they may be outdated.  For instance, many of these forms do not include language that allows your stated agent access to your medical information.  This is referred to as a HIPAA clause.  This must be included in order for your agent to make proper decisions for you.  A Health Care Power of Attorney is revocable by you at any time.

One recent revelation with Health Care Power of Attorney documents is that they are not valid with respect to mental health facilities.  So, now we have a Mental Health Care Power of Attorney as well.  These are critical in the case of dementia or Alzheimer’s.  They are revocable as well. 

A Living Will is also known as an Advanced Health Care Directive.  This document instructs those around you what your wishes are in certain circumstances.  It is important that everyone has one of these, regardless of age or health.  It gives loved ones peace of mind because they do not have to guess what you would want.  This document can be revoked at any time.

If you do not have these documents in place and the need arises, there is a good chance that a court proceeding will be necessary to name someone as your guardian.  This is costly and time consuming.  These proceedings can cause unnecessary stress and heartache for everyone involved.

Please take the time, as a family if possible, to make these decisions now so that they do not have to be made later.  You have the right in this country to determine your health matters.  Make sure you exercise this right. 

Finally, these forms should be updated at a minimum of once every five years.  Get yours out now and make sure they are current.

Upcoming Senior Festival in Chandler

The City of Chandler will once again host a Senior Festival this year.  This is presented by the Mayor's Committee for the Aging.  The event is March 8, 2006 from 9am to noon at the Chandler Community Center, 125 E. Commonwealth Avenue.  The Committee expects more than 70 informational booths this year, all of whom cater to the needs and interests of active, seasoned adults.  Please contact the Chandler Senior Center directly for more specific information at 480-782-2720.  There will be refreshments and door prizes.  In 2005 over 1,000 folks attended this lively event.