My Living Will Covers All My Medical Decision Making

Misconception #11 of “The 12 Biggest Misconceptions of Estate Planning Clients”

A living will, also known as an Advance Directive or a Declaration as to Medical or Surgical Treatment, is a document stating your wishes about end-of-life medical care. Unlike wills, trusts, powers of attorney, and other estate-planning documents, a living will is very limited in scope, as dictated by your state’s laws.

In Colorado, the living will only “speaks” for you if your condition is terminal—not curable or reversible in any way—and is so certified in writing by two licensed physicians. You must also be completely nonresponsive, either unconscious or otherwise unable to communicate decisions about ceasing life-sustaining procedures. In addition, all medical treatment has to have already been withheld or withdrawn from you, leaving only hydration, tube feeding, and pain care. If all of these conditions are met, only then will the document be consulted. Read More >>

Dad’s Doctor Can Declare Him Incompetent

Misconception #10 of “The 12 Biggest Misconceptions of Estate Planning Clients”

I sometimes hear this sentiment from children concerned about the welfare of their parents. Dad just turned 87 and seems to be a bit befuddled these days. Maybe he’s forgetting to take his medications some days, he’s neglected his investment portfolio for the last few months, or he’s bought one too many magazine subscriptions lately. The son hopes he can just get a note from the sympathetic family doctor and go to court for permission to take over Dad’s affairs, for his own personal and financial good.

It doesn’t work that way. Taking over Dad’s affairs, though perhaps well-meaning and lovingly protective, is actually a civil rights matter. The son is asking the government to strip away Dad’s personal liberty and property rights—his rights to life, liberty, and the pursuit of happiness as Dad defines it—and hand over those rights to another. The court will never do this merely because of a few conclusions by a physician. Read More >>

Medicare Will Cover Nursing Home Expenses

Misconception #9 of "The 12 Biggest Misconceptions of Estate Planning Clients"

Unlike the needs-based Medicaid program discussed in the previous blog, the Medicare program is an entitlement program. If you meet all of the eligibility requirements, you will be covered by the program, even if you’re a multimillionaire.

As a general rule, Medicare will not pay for long-term care. This includes both medical and nonmedical care for those who have a chronic disease or disability. Nonmedical care would be help with activities of daily living, such as bathing, eating, dressing, toileting, and getting in and out of bed. This “custodial care” may be needed for years, but, again, isn’t covered by Medicare.

Medicare will pay for skilled nursing care—any care performed by a licensed nurse—but only if all of the following conditions are met: Read More >>

The Government Will Take Everything When Mom Goes into a Nursing Home

Misconception #8 of "The 12 Biggest Misconceptions of Estate Planning Clients"

This statement is untrue, IF you know what you’re doing. All states have Medicaid programs. I emphasize the name only because most of my clients confuse Medicare with Medicaid. They are two completely different government programs—with one exception, which will be covered in my next blog.

Medicaid is a federal- and state-funded program that pays for the costs of more than half of the nation’s nursing home residents. These costs currently average more than $75,000 per year. Positioning yourself to be eligible for this program is a complex endeavor, fraught with pitfalls and “gotchas.” If ever there was a time to hire an attorney, this is it. A competent elder law attorney can advise you on structuring your financial affairs to attain eligibility as fast as possible. Read More >>

I Want All My Property to Go into a Trust So That I Can Avoid Creditors

Misconception #7 of “The 12 Biggest Misconceptions of Estate Planning Clients”

The issue of creditor avoidance is very complicated, with federal law, state statutes, IRS rulings, and court rulings all weighing in about who gets what when there’s not enough to go around. Start reading the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, move on to your state’s statute of frauds, and then the Fraudulent Transfer Act, and you will be peeling only the first few layers of the onion.

You may think that this doesn’t concern you, since you don’t see yourself as a debtor. Maybe you’ve already paid off your mortgage, and you pay off your credit card balance every month, so you think you can stop reading. Not so fast. Read More >>

I Don’t Want the Government to Get My Property

Misconception #6 of “The 12 Biggest Misconceptions of Estate Planning Clients”

Some people fear this will happen if they die without a will. Others have heard rumors about death taxes, and they think this is the “guvmint’s” final money grab as you’re taking your last breath. The latter concern—estate taxation—actually affects only about 1% of us, which is the topic for another blog. The first scenario could affect any of us, however.

If you die without a will, you, the “decedent,” die “intestate.” Every state has intestacy laws. These laws provide for the final distribution of any assets that aren’t otherwise legally disposed of, say, by beneficiary designations or joint ownership rights. Read More >>

My Husband and I Own Everything Together—Why Do I Need a Will?

Misconception #5 of “The 12 Biggest Misconceptions of Estate Planning Clients”

Most spouses do own everything together, 50/50. But the real question is, how? Are they joint tenants with right of survivorship, or tenants in common? (See Misconception #1.)

If they’re joint tenants, then the property passes automatically to the surviving spouse, with no need for a probate. If they’re tenants in common, the property of the first spouse to die will pass to others according to that person’s will. If no will can be found, the property passes to others per state law, the subject for next week’s blog. Read More >>

I’ll Just Leave Everything to My Daughter (She Knows My Wishes and Will Know What to Do)

Misconception #4 of “The 12 Biggest Misconceptions of Estate Planning Clients”

Please don’t do this to your children! I got a call just this week that shows the pitfalls of this approach. Here’s the scenario: Dad died, leaving five adult children. When I drafted his will, he stated that he wanted to benefit all his children equally, so his will reflected that. His life insurance policies had all five children as beneficiaries. But his annuity policy only listed child #3 as the beneficiary.

The law is clear: child #3 gets it all. But was that really Dad’s intent, or did he just forget to review and revise that particular beneficiary designation? What are the other children to think? Read More >>

I Want to Avoid Probate at All Costs

Misconception #3 of “The 12 Biggest Misconceptions of Estate Planning Clients”

This one’s tricky. Some states do have onerous probate procedures that are costly, time-consuming, and require a lot of court involvement. If you live in one of these states, by all means, take whatever steps your attorney recommends to avoid it.

But if you live in a state that has adopted the Uniform Probate Code in one form or another (18 states at last count), the probate procedure can be relatively cheap, quick, and informal, with limited court involvement. Colorado, where I practice, is one of those states. Read More >>