Thursday, March 27, 2008


Many people think that once they have put together their legal documents these documents will protect them forever. That may not be the case. Estate planning is an ongoing process. You must not only develop and implement a plan that reflects your current financial and family situation; you must also constantly review your current plan to ensure it fits in with any changes in your life and circumstances.

With the extensive changes under the 2001 tax act and the Deficit Reduction Act of 2005, and the probability that more changes will occur in this decade, reviewing your estate plan regularly is now more critical than ever.

Family changes. Marriages, divorces, births, adoptions, and deaths can all lead to the need for estate plan modifications.

Increases or Decreases in your income or net worth. What may have been an appropriate estate plan when your income and net worth were much higher or lower may no longer be effective today.

Geographic moves. Different states have different estate planning regulations. Any time you move from one state to another, you should review your estate plan.

New health-related conditions. A child may develop special needs due to physical or mental limitations, or a surviving spouse's ability to earn a living may change because of a disability.

Your present Estate Plan was implemented more than three years ago. Many financial institutions will not honor your Power of Attorney documents if they were signed a long time ago. They may consider them to be “stale.”

Laws change. The current validity of your documents may have been affected by recent changes in the law; make sure your Estate Plan still complies with the laws of today.

Such circumstances often require an estate plan update.

Saturday, March 22, 2008


The Massachusetts Health Care Proxy is a basic and essential legal document that allows you to name someone you know and trust to make health care decisions for you if, for any reason and at any time, you become unable to make or communicate those decisions for yourself. Under the Health Care Proxy Law, M.G.L. Chapter 201D, a person must be a competent adult 18 years of age or older before he can appoint a Health Care Agent, and that Agent must also be a competent adult who is at least 18 years of age at the time he or she is appointed.

An Agent will make decisions about your health care only when you are, for some reason, unable to do that yourself. This means that your Agent can act for you if you are temporarily unconscious, in a coma, or have some other condition in which you cannot make or communicate health care decisions. Your Agent cannot act for you until your doctor determines in writing, that you lack the ability to make health care decisions for yourself.

Acting under the authority of the Health Care Proxy document, your appointed Agent can make any health care decision for you that you would make if you were able to communicate. If you give your Agent full authority to act for you, he or she can consent to or refuse any medical treatment, including treatment that could keep you alive.

Your Agent will make decisions for you only after talking with your doctor or health care provider, and after fully considering all the options regarding diagnosis, prognosis, and treatment of your illness or condition. If the document is properly constructed and it includes language established in accordance with the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), your Agent will have the legal right to obtain any information, including confidential medical information, necessary to make informed decisions for you. Your Agent will make health care decisions for you in accordance with your wishes or according to his/his assessment of your wishes, including your religious or moral beliefs.

It is recommended that you talk with your doctor(s), religious advisor, and other members of your family before giving instructions to your Agent. It is very important that you talk with your Agent and other members of your family, so that they all know what is important to you. If your Agent does not know what your wishes would be in a particular situation, your Agent will need to decide based on what he or she thinks would be in your best interests. If your family does not know what your wishes would be in a particular situation then they may object to a decision made by your Health Care Agent which could not only trigger a Court intervention but also cause a possible delay in your medical treatment.

Your Agent’s decisions will have the same authority as you would have if you were able to communicate, and he or she will be honored over those of any other person, except for a Court Order specifically overriding the Proxy.

Thursday, March 20, 2008


When people consider estate planning, they often think that preparing a will, or perhaps a trust will cover their needs. Certainly, these documents are very important to guarantee that property passes according to ones wishes upon death. However, when one considers estate planning, it is important to think of managing ones affairs not only after death, but also during ones life.

A “power of attorney” is a grant of legal rights and powers by one person to another. The person granting the powers is know as the "principal," and the person receiving the power is known as the "agent" or "attorney-in-fact." The agent essentially stands in the shoes of the principal and acts for him/her on financial matters. If the documents so states, the agent can do most anything the principal can do in financial transactions -- withdraw funds from bank accounts, trade stock, pay bills, and cash checks. It is important to choose this person carefully because he or she can control your assets.

A power of attorney can be very handy in the event that one is unable to take care of his/her own financial affairs, for reasons such as extended travel or illness. This type of document becomes even more important, however, in the event of mental incapacity. A standard power of attorney will terminate upon the principal’s mental disability. However, a durable power of attorney will continue beyond mental incapacity or disability to provide the principal with a safety net of financial management. Massachusetts Uniform Durable Power of Attorney Act was enacted to allow a standard power of attorney document to stay in effect in the event the principal became mentally incapacitated; hence the term “durable power of attorney.” When one does not grant a “durable” power of attorney, family members of a person stricken with a mentally incapacitating illness most often must resort to probate court proceedings to obtain the legal authority to handle their loved one’s financial affairs. The probate process can be time-consuming and an expensive procedure which could be avoided if there was a valid durable power of attorney in place.

Third parties that may become involved in transactions with the named agent by presentation of the power of attorney should also be considered. This third party could be a real estate purchaser or seller, a retirement plan administrator, or the principal’s business associates. More frequently the third party is a financial institution, such as a bank, broker, or IRA custodian, that is presented with a power of attorney document by an attorney-in-fact along with a request that such power be recognized. When preparing the document the principal should consider particular types of transactions or accounts, which financial institutions are likely to be relying on the document, and the nature of the accounts owned by the principal, to aid document acceptance. Verifying the authority of the attorney-in-fact to act for the account owner, therefore, is the first priority of every financial institution, and each principal and his/her agent should set this expectation. Although, the typical power of attorney may grant the agent very broad powers, it does not give the agent full authority to take the principal’s money and run away with it. The agent must use all of the finances for the benefit of the principal. In other words, it is a management tool. The principal can give his/her appointed attorney-in-fact broad or limited financial management. For example, you may want to limit the duration of the instrument to a period of time or limit what powers you give to the agent. Before you grant and sign a power of attorney, be sure you understand exactly what you want your attorney-in-fact to do in your place.

Your changing needs may necessitate the revision of an existing power of attorney, ensuring it accomplishes exactly what you need done and nothing else. Therefore, it is a good habit to periodically review ALL of your legal instruments (power of attorney, will, etc.) A little time spent reviewing and revising may save you a great deal of trouble later.

It is important to note that a power of attorney does NOT take away the rights of the principal. It is similar to handing the keys to ones car to someone else. Just as the keys can be taken back, so can a power of attorney be revoked. Both a standard and a durable power of attorney will terminate upon the principal’s death.

Thursday, March 13, 2008


It is very important to discuss estate planning with parents and other members of the family while they are all mentally healthy, if families wait to make arrangements until after one parent is incapacitated in some way, it limits their choices. Talking with parents and other family members about your financial and estate plans could be the catalyst for the others in the family to start thinking about and discussing their own estate plans. Remember that the discussion may reveal estate plans that you may not like but it is each person’s prerogative to make their own individual plan. Estate plans do not always result in people being treated equally, it's very important—to avoid conflict later—that family members know and understand what plans are in place.
Here are a few tips to help you, your parents and other members in your family start talking:

Focus on life, not death. While the topics of estate planning and death are intertwined, it doesn't mean that death has to be the focus of the discussion, rather focus the discussion on planning to live well, instead of planning to die well.

Encourage your parents and other family members to discuss their wishes. It is important that your family discuss what they want to have done and who they want to do it. Ask your family what it is they would like you and/or others in the family to do in the event of an emergency. Ask them what documents are needed to assist them properly and where are they located. If your family member is not able to communicate it is important to know where their important documents are kept as well as the name, address and phone numbers of those who can assist in management of their affairs for example: Accountant; Lawyer; Primary Care Physician; Clergy; and Funeral Director. Also, ask your family who they want to make their health care and/or financial decisions, if they are unable to articulate or make them for themselves. To ensure that each family member’s individual goals are met, all members of the family should be absolutely clear about their wishes and that they want.

The need for protection for the entire family should be emphasized. A formal estate plan helps to protect the entire family from creditors and possible predators.

Encourage parents and all family members to seek expert legal and financial advice. By YOU doing so, you are setting an example while at the same time sending a message that you trust everyone else to handle their own affairs, this will more than likely help them breathe easier by knowing you don't want to control the situation. Offer to help them with their search for a qualified attorney.

Be patient and understanding. Be realistic, the initial conversation with parents and other members of the family about estate planning will not be easy and it will not be, nor should it be, the last one. It may take several discussions before even a little bit of headway is made, and even after estate plans are in place, it does not mean that these plans will always remain relevant in the future, it is an ongoing dialogue and process.