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Category: Guardianship

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Can You Amend a Power of Attorney?

The situation facing one family is all too common. An aunt is now incapacitated with severe Alzheimer’s disease. Her brother has been her agent with a durable power of attorney in place for many years. In the course of preparing his own estate plan, he decided it’s time for one of his own children to take on the responsibility for his sister, in addition to naming his son as executor of his estate. The aunt has no spouse or children of her own. So can you amend a power of attorney?

The answers, as explained in a recent article “Changing the agent under a durable power of attorney” from My San Antonio Life, all hinge on the language used in the aunt’s current durable power of attorney. If she used a form from the internet, the document is probably not going to make the transfer of agency easy. If she worked with an experienced estate planning attorney, chances are better the document includes language that addresses this common situation.

If you choose to amend a durable power of attorney, and it includes naming successor agents, then an attorney can prepare a resignation document that is attached to the durable power of attorney. The power of attorney document might read like this: “I appoint my brother Charles as agent. If Charles dies or is incapacitated or resigns, I hereby appoint my nephew, Phillip, to serve as a successor agent.”

If the aunt would make her wishes clear in the actual signed durable power of attorney, the nephew could relatively easily assume authority, when the father resigns the responsibility because the aunt pre-selected him for the role.

If there is a clause that appointed a successor agent, but the successor agent was not the nephew, the nephew does not become the agent and the aunt’s brother can’t transfer the POA. If there is no clause at all, the nephew and the father can’t make any changes.

In September 2017, there was a change to the law that required durable power of attorney documents to specifically grant such power to delegate the role to someone else. The law varies from state to state, so a local estate planning attorney needs to be asked about this issue.

If there is no provision allowing an agent to name a successor agent, the nephew and father cannot make the change.

Another avenue to consider: did the aunt’s estate planning attorney include a provision that allows the durable power of attorney to establish a living trust to benefit the aunt and to transfer assets into the trust? Part of creating a trust is determining who will serve as a trustee, or manager, of the trust. If such a clause exists in the durable power of attorney and the father uses it to establish and fund a trust, he can then name his son, the nephew, as the trustee.

Taking this step would place all of the aunt’s assets under the nephew’s control. He would still not be the aunt’s agent under her power of attorney. Responsibility for certain tasks, like filing the aunt’s income taxes, will still be the responsibility of the durable power of attorney.

If her durable power of attorney does not include establishing a living trust, the most likely course is the father will need to resign as agent and the nephew will need to file in court to become the aunt’s guardian. This is a time-consuming and slow-paced process, where the court will become heavily involved with supervision and regular reporting. It is the worst possible option, but it may also be the only option.

You should take care to amend a power of attorney. If your family is facing this type of situation, begin by speaking with an experienced estate planning attorney to find out what options exist in your state, and it might be resolved.

If you would like to learn more about powers of attorney, please visit our previous posts. 

Reference: My San Antonio Life (Jan. 25, 2021) “Changing the agent under a durable power of attorney”

 

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Understanding the responsibilities of the conservator

If you have been named a conservator, or have been approached by a family member about the role, it is vital that you are understanding the responsibilities of the conservator. A conservator is appointed by a judge. This person handles the estate of an incapacitated adult, as well as their finances, their basic affairs and everyday care. Administrative matters such as Medicare, insurance, pensions, and medical coverage are all also managed by the conservator. The conservator must keep meticulous records that are subject to review by the judge.

The Advocate’s recent article entitled “Alzheimer’s Q&A: What is adult guardianship?” explains that a conservatorship typically lasts as long as the individual lives. The conservator may change because of death, relocation, or an inability to manage the conservator duties and responsibilities. A judge also has the power to replace the conservator, if he or she is repeatedly making poor decisions or neglecting required responsibilities.

A conservator can be wise in some situations because it lets family members know that someone is making the decisions. It also provides clear legal authority to deal with third parties. There is also a process in which a judge will approve any major decisions. However, appointing a conservator can be expensive. An experienced estate planning or elder law attorney must complete court paperwork and attend court hearings. A conservatorship can also be time-consuming due to the required ongoing paperwork.

A big question is when it is appropriate to seek conservatorship. If the individual has become mentally or physically incapable of making important decisions for himself or herself, then it would be smart to have a court-appointed guardian. Moreover, if the person does not already have legal documents in place, like a living will or power of attorney, then the conservatorship would benefit in covering decisions about personal and financial matters.

Even if the individual has a power of attorney for both health care and finances, he or she might need a conservator to make decisions about his or her personal life. This can include topics, such as living arrangements and who is allowed to visit. It is not always easy to determine if an individual can make decisions, but a judge understands that a conservator is viable for those with advanced Alzheimer’s or other forms of dementia.

Families that want to set up a conservatorship need to file formal legal papers and participate in a court hearing before a judge. Evidence of the physical and mental condition of the individual requiring conservatorship must be clearly presented. The person who is the subject of the conservatorship has the opportunity to contest it. Ask an experienced estate planning or elder law attorney who specializes in conservatorships to provide you a complete understanding of the responsibilities of the conservator.

If you would like to learn more about conservatorship and guardianship, please visit our previous posts.

Reference: The Advocate (Jan. 25, 2021) “Alzheimer’s Q&A: What is adult guardianship?”

 

steps to take when diagnosed with Alzheimer's?

Ways to Recognize Signs of Dementia

More than 50 million people around the world have dementia, and 10 million more are diagnosed each year, according to the World Health Organization. In fact, one in 10 Americans 65 and older has Alzheimer’s dementia, according to the Alzheimer’s Association. There are ways to recognize signs of dementia.

KSL.com’s recent article titled “11 signs of dementia everyone should know” says that with numbers like these, the odds are good someone you know will be impacted by dementia at some point in your life. Let’s look at 11 signs of dementia you should look for in your aging loved ones:

  1. Memory loss that impacts daily life. The most commonly recognized sign of dementia is memory loss. However, this is more than mere forgetfulness. It is the type of memory loss that makes it hard to learn new information or remember important dates or events. Those with dementia-related memory loss will remember items they’ve previously forgotten, and it will disrupt their daily life in many ways.
  2. Issues with planning or solving problems. Deficits in executive functioning is a recognized sign of dementia. This can include a wide range of things, such as planning and problem-solving. People who have dementia might experience trouble with regular work tasks, trouble problem solving with minor issues, or difficulty planning a schedule. Some memory loss is expected in old age. However, impairment in problem-solving or with planning isn’t.
  3. Difficulty completing familiar tasks. A person may have trouble doing tasks they ordinarily do, like using the computer, making coffee, or following their normal work routine.
  4. New problems with words in speaking or writing. At first, it might be amusing to hear your loved one call a banana a donut or something else, but continued incidents of this behavior is worrisome and may be a symptom of dementia.
  5. Confusion as to time or place. Forgetting their location or how to get to or from familiar places is another common early signal of dementia. These can lead to danger for someone with dementia to run an errand or live on their own.
  6. Trouble with visual images and spatial relationships. Visuospatial abilities are the ability to understand what we see around us and interpret spatial relationships. Dementia can bring on a decline in visuospatial abilities, such as reading, judging distance, or trouble with depth perception.
  7. Misplacing things and losing the ability to retrace steps. People with dementia increasingly put things in strange locations and can’t find them. In fact, they may accuse others of stealing the items.
  8. Changing moods, personality, and judgment. These changes are due to damage in vital areas of the brain which can lead to depression, manic-like behaviors and frequent changes in emotions called emotional lability. Dementia causes damage to the frontal lobe systems, and it can result in a loss in the ability to make sound judgments about insignificant or substantial issues.
  9. Social withdrawal. While we all like some quiet time, with dementia, it’s important to recognize if there’s a change of behavior and withdrawal from social activities they’re enjoyed in the past.
  10. Difficulty concentrating. Background noise and loud environments can make it difficult for a person suffering from dementia to concentrate. It makes them frustrated and makes conversations difficult. There’s not much you can do about the concentration problems, but you can help make their environment less stimulating. Reducing distractions and using the person’s name often as you speak to him or her.
  11. Hallucinations. Finally, hallucinations are a symptom worth discussing with a healthcare provider. If you notice your loved one becoming upset about events that didn’t happen, talk with their doctor.

These are just a few ways to recognize signs of dementia in a loved one. It is vitally important to stay in close contact with your primary care physician. Take the time to consult with your family and an elder law attorney to ensure you have provided for your loved one as they decline.

If you would like to learn more about dementia and other forms of mental decline, please visit our previous posts.

Reference: KSL.com (Dec. 29, 2020) “11 signs of dementia everyone should know”

 

charitable contribution deductions from an estate

Naming a Guardian for Your Children

Many young couples with children and bills to pay may look at you askance, when asked about estate planning and say, “what estate?” However, a critical part of having a will—one frequently overlooked—is naming a guardian for your children. If you don’t name a guardian, it could result in issues for your children after your death. Your child might even be placed in a foster home.

For a young family, naming a guardian for their children is another good reason to draft a will. If you and your spouse die together with no guardian specified in a will, the guardian will be chosen by the court.

In a worst-case scenario, if you have no close family or no one in your family who can take your child, the court will send them to foster care, until a permanent guardian can be named.

The judge will collect as much information as possible about your children and family circumstances to make a good decision.

However, the judge won’t have any intimate knowledge of who you know or which of your relatives would be good guardians. This could result in a choice of one of the last people you might pick to take care of your child.

Try to find common ground when naming a guardian for your children, by agreeing to a set of criteria you want in that person. This could include the following:

  • The potential guardian’s willingness to be a guardian
  • The potential guardian’s financial situation
  • Where the child might live with that person
  • The potential guardian’s values, religion, or political beliefs
  • The potential guardian’s parenting skills; and
  • The potential guardian’s age and health.

Next, make a decision, get the chosen guardian’s consent, write it all down, and then set out to create a will.

Naming a guardian for your children need not be a difficult event. Ask an experienced estate planning attorney to help you do it correctly.

If you would like to learn more about guardianship and other needs for young families, please visit our previous posts. 

Reference: Lifehacker (Oct. 27, 2020) “Why You Should Name a Guardian for Your Kids Right Away”

 

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How Does Guardianship Work?

For the most part, we are free to make our own decisions regarding how we live, where we live, how we spend our money and even with whom we socialize. However, when we are no longer capable of caring for ourselves, most commonly due to advancing age or dementia, or if an accident or illness occurs and we can’t manage our affairs, it may be necessary to seek a guardianship, as explained in the recent article “Legal Corner: A guardian can be a helpful tool in cases of incapacity” from The Westerly Sun. A guardianship is also necessary for the care of a child or adult with special needs. So how does guardianship work?

If no proper estate planning has been done and no one has been given power of attorney or health care power of attorney, a guardianship may be necessary. This is a legal relationship where one person, ideally a responsible, capable and caring person known as a guardian, is given the legal power to manage the needs of a ward, the person who cannot manage their own affairs. This is usually supported through a court process, requires a medical assessment and comes before the probate court for a hearing.

Once the guardian is qualified and appointed by the court, they have the authority to oversee everything about the ward’s life. They have power over the ward’s money and how it is spent, health care decisions, residential issues and even with whom the ward spends time. At its essence, a guardianship is akin to a parent-child relationship.

Guardianships can be tailored by the court to meet the specific needs of the ward in each case, with the guardian’s powers either limited or expanded, as needed and as appropriate.

The guardian must report to the court on a yearly basis about the ward’s health and health care and file an annual accounting of what has been done with the ward’s money and how much money remains. The court supervision is intended to protect the ward from mismanagement of their finances and ensure that the guardianship is still needed and maintained on an annual basis.

The relationship between the ward and the guardian is often a close one and can continue for many years. The guardianship ends upon the death of the ward, the resignation or removal of the guardian, or in cases of temporary illness or incapacity, when the ward recovers and is once again able to handle their own affairs and make health care decisions on their own.

If and when an elderly family member can no longer manage their own lives, guardianship is a way to step in and care for them, if no prior estate planning has been done. It is preferable for an estate plan to be created and for powers of attorney be created, but in its absence, this is an option.

If you would like to learn more about guardianships, please visit our previous posts.

Reference: The Westerly Sun (Sep. 19, 2020) “Legal Corner: A guardian can be a helpful tool in cases of incapacity”

 

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Can I Revoke a Power of Attorney?

Can I revoke a power of attorney? The simple answer is yes. Here is a cautionary tale. The story takes an unpleasant twist, after Cindy’s stepsister Charlotte suggests that she be given power of attorney to help Cindy with her business matters. When Cindy agrees, Charlotte’s attorney creates a Statutory Durable Power of Attorney that names Charlotte as her agent. What happened next, according to the Glen Rose Reporter in the article “Guarding against the evil stepsister,” was a nightmare.

A few weeks later, Cindy’s brother Prince found that Charlotte had moved money from Cindy’s personal bank accounts into a completely different bank, setting up joint accounts in Cindy and Charlotte’s names and granting Charlotte right of survivorship (ROS). This made Charlotte the legal owner of the account at the time of Cindy’s passing. Charlotte had also contacted Cindy’s former employer and was attempting to wrest control of Cindy’s pension. It wasn’t clear whether she was attempting to obtain the entire amount in a lump sum, but she was attempting to gain control.

Cindy realized that Charlotte was not to be trusted. However, Charlotte had the power of attorney, and all of these actions were legal. Could the power of attorney that she had signed be revoked? The answer is yes, which is important to know.

There were two paths available to Cindy: she could immediately revoke the Statutory Durable Power of Attorney that had been used to give Charlotte authority, or have her attorney create a new power of attorney granting power of agency to another person. Either way, Charlotte would be stripped of the legal authority to act on Cindy’s behalf.

Cindy had a new POA created, naming her brother Prince as her agent. The new POA had to immediately be presented to all of the financial institutions she deals with. She contacted her former employer and gave them proper notice that Charlotte no longer had authority to represent her. The new joint accounts that Charlotte had opened were then closed and individual accounts in her name only were open, which also ended the ROS. She could have returned her accounts back to the old bank or stayed with the new bank where Charlotte had opened new accounts. Cindy decided to stay with the new bank.

Cindy had to anticipate another challenge—that Charlotte might attempt to have Cindy declared incompetent and have herself named as Cindy’s legal guardian. To protect herself, Cindy’s estate planning attorney drew up documents stating that in the event Cindy ever needed someone to be her guardian, she did not want Charlotte to be named. In addition, she named the person she would want to be her guardian, if that is necessary in the future. While a judge ultimately has final discretion, the courts generally prefer naming a guardian as requested by an individual.

Your estate planning attorney can revoke a power of attorney, if it becomes clear that the person you’ve named is not acting in your best interests. Having an estate plan in place in advance of any medical or mental challenges is always better, so that you are less vulnerable to anyone trying to take advantage of you during a difficult time.

If you would like to learn more about powers of attorney, and other estate planning documents, please visit our previous posts. 

Reference: Glen Rose Reporter (Sep. 10, 2020) “Guarding against the evil stepsister”

 

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Estate Planning Needs for Every Stage

Many people decide they need an estate plan when they reach a certain age, but when an estate plan is needed is less about age than it is about stages in life, explains a recent article “Life stages dictate estate planning needs” from The News-Enterprise. There are estate planning needs for every stage of life. These stages can be broken into four groups, young with limited assets, young parents, getting close to retirement and post-retirement life.

Every adult should have an estate plan. Without one, we can’t determine who will take care of our financial and legal matters, if we are incapacitated or die unexpectedly. We also don’t have a voice in how any property we own will be distributed after death.

The first stage—a young individual with limited assets—includes college students, people in the early years of their careers and young couples, married or not. They may not own real estate or substantial assets, but they need a fiduciary and beneficiary. Distribution of assets is less of a priority than provisions for life emergencies.

Once a person becomes a parent, he or she needs to protect minor children or special needs dependents. Lifetime planning is still a concern, but protecting dependents is the priority. Estate planning is used in this stage to name guardians, set up trusts for children and name a trustee to oversee the child’s inheritance, regardless of size.

Many people use revocable living trusts as a means of protecting assets for minor dependents. The revocable trust directs property to pass to the minor beneficiary in whatever way the parents deem appropriate. This is typically done so the child can receive ongoing care, until the age when parents decide the child should receive his or her inheritance. The revocable trust also maintains privacy for the family, since the trust and its contents are not part of the probated estate.

The third estate planning stage of life includes people whose children are adults, who have no children or who are near retirement age and addresses different concerns, such as passing along assets to beneficiaries as smoothly as possible while minimizing taxes. The best planning strategy for this stage is often dictated by the primary type of asset.

For people with special situations, such as a beneficiary with substance abuse problems, or a person who owns multiple properties in multiple states or someone who is concerned about the public nature of probate, trusts are a critical part of protecting assets and privacy.

For people who own a primary residence and retirement assets, an estate plan that includes a will, a power of attorney and medical power of attorney may suffice. An estate planning attorney guides each family to make recommendations that will best suit their needs.

If you would like to learn more about what type of estate planning stage you are in and what is right for you, please view our previous posts. 

Reference: The News-Enterprise (Aug. 25, 2020) “Life stages dictate estate planning needs”

 

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Adult Guardianship and Autistic Children

For parents of autistic children, the coming of an 18th birthday is the time when hard decisions need to be made regarding adult guardianship. It allows parents to continue to make important decisions for their child, but it does severely limit the child’s rights and freedoms. State laws often require that less restrictive alternatives be considered before a guardianship is ordered, says the article “Adulthood And Autism: A Crossroads In Life” from Autism Key.com.

An adult guardianship is a court proceeding that appoints another person to make decisions about a person’s health, safety, support, care and residence. The procedure varies from state to state.  However, the process generally starts with an interested party filing a petition, with the court stating why guardianship for the person, known as the “ward,” is necessary. The person who has filed for guardianship and others, including parents, spouses, or relatives, all receive a copy of the petition. An independent evaluator assesses the ward and reports on their capacity. There is a hearing and the court determines whether guardianship is needed. The ward has the right to hire counsel, or the court can provide counsel.

Once the guardian is appointed, the court may limit or completely terminate the ward’s ability to make decisions regarding medical treatment, where they live and other important decisions. The guardian is required to make decisions that are always in the best interest of their ward and to encourage the ward to participate in decisions. A report must be filed with the court every year to advise of the ward’s status.

Most states have a law known as the Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act, which makes it easier for states to transfer guardianship from one state to another, if the person moves. Florida, Kansas, Texas and Michigan do not have this law.

Adult Guardianship is an emotional decision for parents to make. They want their autistic child to be protected, at the same time they hope their child can reach a certain level of independence, within the limits of their capacity.

An individual facing a guardianship petition has the right to an attorney and in some states, that attorney must advocate for the best interest of the person, which may be to have more independence.

A case involving a young woman with Down’s Syndrome named Jenny Hatch in 2013 led to changes in guardianship proceedings. Jenny was a high school graduate, worked at a thrift shop and volunteered in local political campaigns. At her parent’s request, a court put her into temporary guardianship and placed her in a group home, where her cell phone and laptop were taken away. She was not permitted to socialize with friends or go to work. After a year of litigation, she won the right to make her own decisions through Supported Decision-Making, a process in which a team of allies help the disabled to make key decisions about their life. Jenny became a national hero for the rights of the disabled and speaks publicly about her experience. A number of states now have Supported Decision-Making laws to give the disabled freedom, while providing them with a network of support.

There is a lot of information to consider as a parent facing the prospect of an ASD child becoming a legal adult. Each person has his or her own strengths and challenges. Review the laws of your state to consider what options there may be, in addition to guardianship.

If you would like to learn more about adult guardianship and other issues related to autism, please read our previous posts. 

Reference: Autism Key.com (July 28, 2020) “Guardianship And Autism: A Crossroads In Life”

 

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Planning An Estate After A Divorce

Planning an estate after a divorce involves adopting a different type of arithmetic. Without a spouse to anchor an estate plan, the executors, trustees, guardians or agents under a power of attorney and health care proxies will have to be chosen from a more diverse pool of those that are connected to you.

Wealth Advisor’s recent article entitled “How to Revise Your Estate Plan After Divorce” explains that beneficiary forms tied to an IRA, 401(k), 403(b) and life insurance will need to be updated to show the dissolution of the marriage.

There are usually estate planning terms that are included in agreements created during the separation and divorce. These may call for the removal of both spouses from each other’s estate planning documents and retirement accounts. For example, in New York, bequests to an ex-spouse in a will prepared during the marriage are voided after the divorce. Even though the old will is still valid, a new will has the benefit of realigning the estate assets with the intended recipients.

However, any trust created while married is treated differently. Revocable trusts can be revoked, and the assets held by those trusts can be part of the divorce. Irrevocable trusts involving marital property are less likely to be dissolved, and after the death of the grantor, distributions may be made to an ex-spouse as directed by the trust.

A big task in the post-divorce estate planning process is changing beneficiaries. Ask for a change of beneficiary forms for all retirement accounts. Without a stipulation in the divorce decree ending their interest, an ex-spouse still listed as beneficiary of an IRA or life insurance policy may still receive the proceeds at your death.

Divorce makes children assume responsibility at an earlier age. Adult children in their 20s or early 30s typically assume the place of the ex-spouse as fiduciaries and health care proxies, as well as agents under powers of attorney, executors and trustees.

If the divorcing parents have minor children, they must choose a guardian in their wills to care for the children, in the event that both parents pass away.

Ask an experienced estate planning attorney to help you with the issues that are involved in planning an estate after a divorce. There are other important times in your life when you should review your planning.  To learn more, please read our previous posts.

Reference: Wealth Advisor (July 7, 2020) “How to Revise Your Estate Plan After Divorce”

 

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Who Will Care for the Children?

One of the biggest nightmares for parents is who will care for the children if they both pass. To make certain that parents’ wishes are followed, they should create a will that designates a guardian and a conservator in case both parents die, counsels The Choteau (MT) Acantha article entitled “Plan for children’s future when making out a will.”

A guardianship provides for the care of the children, until they reach adulthood (usually age 18) and gives the guardian the authority and responsibility of a parent. A guardian makes decisions about a child’s well-being, education and health. A conservatorship is designed to manage and distribute funds and assets left to children, until they’re age 18. A single individual can be appointed to do both roles, or separate people can be designated as guardian and conservator.

Frequently, the toughest decisions parents have is agreeing who they want to have the responsibility of raising their children and managing their money. Usually they select a person with similar values, lifestyle and child rearing beliefs.

It can be important to talk about the issue with older children, because some states (like Montana) permit children ages 14 and older to ask a court to appoint a guardian, other than the person named in parents’ wills.

You should also name a backup guardian and conservator, in case their first choices aren’t up to the task and review your choices periodically.

In many states, the law stipulates that when children attain the age of 18, they are able to get the property that was in the care of a conservator, no matter what their capability to manage it. Another option is to leave the assets in a trust, rather than a conservatorship.

Parents can provide in their wills the property that they want to pass directly to the trust, which is also called a testamentary trust. These assets can include life insurance payments, funds from checking accounts, stocks, bonds, or other funds. Parents can create a trust agreement with an experienced estate planning attorney that provides their named trustee with the power to manage the trust assets and use the income for their children’s benefit.

The trust agreement goes into effect at the death of both parents. It says the way in which the parents want the money to be spent, who the trustee should be and when the trust ends. The trustee must follow the parents’ instructions for the children.

Reference: Choteau (MT) Acantha (May 13, 2020) “Plan for children’s future when making out a will”