Presentation Transcript

1. AVOIDING LEGAL PROBLEMS IN LIFE AND BEYOND: SEMINAR B Professor Dagmar Halamka dmhalamka@gmail.com

   JOY OF LAW

2. Today’s Topics First Overview of Seminar A Three Techniques of Estate Planning (May Utilize Several) Wills Trusts Ancillary Living Documents Pre-post nuptial agreements Separate property Durable power of attorney for financial matters (DPAFM) Durable power of attorney for health care (Power of Attorney and Living Will = Advanced Health Care Directive) Long Term Care Reverse Mortgages (safer now?) Factlets
3. ADVANTAGES OF A REVOCABLE LIVING TRUST Avoid probate Other reason: Lifetime asset management
4. Living Trust Advantages Reduce/Eliminate Estate Taxes – With an A-B Living trust, you and your spouse can each use your $5.34 million federal estate tax exemption. This lets you pass on to your beneficiaries up to $10.68 million estate tax-free and with no probate. The highest estate tax is presently 40%. Provide for Surviving spouse – The surviving spouse has complete control over TRUST A. In addition, he/she can receive the income (and principle, if needed for certain living expenses) from TRUST B.
5. Living Trust Advantages (Cont.) Control For First To Die – After the first spouse dies and the common trust has been divided into Trust A and Trust B, no changes can be made to the provisions of TRUST B giving the first spouse to die complete control over who will eventually receive the assets in TRUST B. Estate Tax-Free Appreciation of Trust B – The assets placed in TRUST B are valued and taxed only when the first spouse dies. There will be no re-valuation or estate taxes paid on any appreciation of these assets later when the surviving spouse dies and the assets in Trust B are distributed to the beneficiaries.
6. Living Trust Advantages (Cont.) Protection Of Assets If Catastrophic Illness Strikes– In the event of catastrophic illness or injury of the surviving spouse, the trust can be written to protect the assets in TRUST B so only the assets in TRUST A will need to be “spent down” to qualify for valuable government assistance Does not affect the way you control or manage your assets Private Revocable (by agent?)
7. Stay in Charge with Powers of Attorney

   Who’s In Charge?

8. Two Questions You Need to Answer Who will speak for you? How do you get decisions you want?
9. Staying in Charge of Your Finances Durable Power of Attorney for Financial Matters (DPAFM)
10. Durability Called a Durable Power of Attorney for Financial Matters Must be durable to last beyond loss of capacity Must include required language
11. Required Language “This power of attorney shall not be affected by subsequent incapacity of the principal.” Or similar language
12. DPAFM Powers Need to be spelled out – Read carefully Create, amend or revoke trust Make gifts Gifts to agent Loans to agent Change survivorship interests Change beneficiaries
13. DPAFM Powers (Cont.) Still need DPAFM if you have Living Trust Living Trust applies only to trust assets Agent under DPAFM can be given power to amend/revoke Living Trust Avoids conservatorship ($3,000)
14. Many Duties, One Purpose Agent’s Purpose Protect Principal’s interests Agent’s Duties Acts only in Principal’s interest Keeps assets separate “Prudent person” test Keep records More… should have financial savvy Agent right to reasonable compensation
15. Durable Power of Attorney for Health Care Provides for the appointment ofan agent/attorney-in-fact Principal must be of sound mind and 18 years of age Allows for a statement of medical treatment preferences Effective upon the Principal's mental incapacitation Properly witnessed, dated and signed Usually does not require services of an attorney As of January 1', 1992' effective indefinitely
16. Durable Power of Attorney For Health Care (PAHC) Health Care Directive (Living Will) = Advanced Health Care Directive (in CA) ADVANCE HEALTH CARE DIRECTIVE: CALIFORNIA POWER OF ATTORNEY FOR HEALTH CARE (Appointing an Agent to Make Health Care Decisions)
17. Choosing Your Agent Will this person Communicate well with you? Ask questions and get answers? Make choices you would make? Stand up for You? Be available? Agent must be at least age 18 and have legal capacity Co-agents?
18. What Does Your Agent (or successor agent) Do? Duties Makes decisions for you Follows your instructions and wishes Cannot make decisions you disagree in
19. Changing Your Mind Can revoke part or all Principal must have capacity Divorce or annulment
20. Handout – Statement of Desires Statement of Desires, Special Provisions and Limitations for Durable Power of Attorney for Health Care Discuss with physician or social worker for hospital “If I develop any incurable, progressive, or degenerative disease stated to be terminal with respect to outcome (not with respect to time) and no cure is available and treatment only prolongs dying, I request that my physician follow my guide regarding life support and life sustaining intervention listed below. If my desires are not known and life sustaining or life support procedures are utilized in an emergency situation, I request that my desires be respected and followed once they are known to my professional care team. I do not want to be kept alive in a vegetative state.”
21. Handout – 25 Suggested Topics to Discuss With Your Health Care Agent “Before having your health care agent sign any forms, you should discuss your beliefs and wishes with him or her. When instructing your health care agent about your wishes in the event you become incapacitated and he/she needs to make health care decisions, we suggest you consider the following questions. We suggest no particular answers. Each person should answer these questions based on his/her own beliefs and convey those beliefs and wishes to his/her health care agent. Any other wishes or desires that you feel your health care agent should know should also be given to him/her so that they can carry out his/her responsibilities as you would wish.”
22. Factlets Pensions earned in California are taxable in state of residence at time of receipt of pension Internal Revenue Code Section 529 A plan operated by state or educational institution to promote saving for college (ex: child or grandchild or anyone) Earnings are NOT subject to Federal Tax and usually NO STATE TAX Withdrawals now include the cost of the purchase of any computer technology and internet access for beneficiary of account while in school No 3 day rule
23. Factlets (Cont.) Implied warranty of merchantability Home deliveries Landlord-Tenant Law Take wine home from restaurant Written estimate for auto repairs signed by YOU
24. Factlets (Cont.) Joint and several liability vs. joint liability Renters insurance Paid in full Employee or independent contractor? Extended warranty – buy or not?
25. Handout: Statement of DesiresLife Support For each procedure, choose ‘Yes,’ ‘No,’ or ‘Uncertain’ Pacemaker – Any device that substitutes for the normal heart beat Peritoneal Dialysis/Kidney Dialysis – alternative means of filtering poisons from the body when the kidneys fail Respirator – A breathing machine attached to a tube inserted into the lungs through the nose or mouth Cardiopulmonary Resuscitation (CPR)– Intervention given by man, machine, or drugs when the heart and/or lungs stop working
26. Handout: Statement of DesiresLife Prolonging or Life Sustaining Procedures Feeding Tube for Food or Fluid Hypodermoclysis for Nutrition or Food Intravenous (IV) Antibiotics Cancer Therapy – Radiation and Chemotherapy Transfusion Medical Treatment Surgery Paramedic Uniform Gift Act – Organ Transplant Autopsy, complete or selective Participate in research
27. Handout: Statement of DesiresLife Prolonging or Life Sustaining Procedures Feeding Tube for Food or Fluid – A tube placed into the stomach or bowel to give fluid and/or nutrition Hyperdermoclysis for Nutrition or Food – Placing fluid under the skin outside a vein with a needle. The body will absorb this fluid Intravenous (IV) – tubes for feeding and hydration Antibiotics – to treat pneumonia or any other infections Cancer Therapy Radiation – X-ray treatments given for tumors or cancer Chemotherapy – cancer medicine given by mouth or intravenously Transfusion – blood or blood products given into the vein
28. Handout: Statement of DesiresLife Prolonging or Life Sustaining Procedures Medical Treatment – Diagnostic Procedures and Tests – Further tests and procedures to monitor my failing condition Surgery – An operation only if it provides for my comfort and dignity Paramedic – For transport to an acute hospital with CPR in progress Uniform Gift Act – Organ Transplant – Donating body parts – specify parts, if usable Autopsy, complete or selective – To confirm my diagnosis (circle one) I consent to Participate in research; i.e., chemical studies, drug studies and procedures approved by a Research and Human Subjects Review Committee, before or after death. Consent may be given by my Attorney-In-Fact.
29. Handout: Statement of DesiresOther Concerns I wish: Caring and supportive nursing and medical care to relieve pain and suffering including narcotics to relieve pain even if respiration is depressed. Food and fluids to be offered as long as I am conscious to take them by mouth and then moist sponges to moisten my lips to relieve the sensation of dehydration
30. 25 Suggested Topics (Cont.) Do you think it is a good idea to sign a legal document that says what medical treatments you want and do not want when you are dying? (This is called a “living will” Do you think you would want to have any of the following medical treatmentsperformed on you? kidney dialysis (used if your kidneys stop working) cardiopulmonary resuscitation, also called CPR (used if your heart stops beating) respirator (used if you are unable to breathe on your own) artificial nutrition (used if you are unable to eat food) artificial hydration (used if you are unable to drink fluids) Do you want to donate parts of your body to someone else at the time ofyour death? (This is called organ donation.) How would you describe your current health status? lf you currently haveany medical problems, how would you describe them? If you have current medical problems, in what ways, if any, do they affectyour ability to function?
31. 25 Suggested Topics (Cont.) How do you feel about your current health status? lf you have a doctor, do you like him or her? Why? Do you think your doctor should make the final decision about any medical treatments you might need? How important is independence and self-sufficiency in your life? If your physical and mental abilities were decreased, how would that affect your attitude toward independence and self-sufficiency? Do you wish to make any general comments about the value of independence and control in your life? Do you expect that your friends, family, and/or others will support your decisions regarding medical treatment you may need now or in the future? What will be important to you when you are dying (e.g., physical comfort, no pain, family members present, etc.)? Where would you prefer to die? What is your attitude toward death? How do you feel about the use of life-sustaining measures in the face of terminal illness?
32. 25 Suggested Topics (Cont.) How do you feel about the use of life-sustaining measures in the face of permanent coma? How do you feel about the use of life-sustaining measures in the face of irreversible chronic illness (e.g., Alzheimer's disease)? Do you wish to make any general comments about your attitude toward illness, dying, and death? What is your religious background? How do your religious beliefs affect your attitude toward serious or terminal illness? Does your attitude toward death find support in your religion? How does your faith community, church, or synagogue view the role ofprayer or religious sacraments in an illness? Do you wish to make any general comments about your religious background and beliefs? What else do you feel is important for your agent to know?
33. 25 Suggested Topics (Cont.) If, over time, your beliefs in any area change, you should inform your healthcare agent. It is also wise to inform your health care agent of the status of your health when there are changes such as new diagnoses. In the event you are informed of a terminal illness, this, as well as the ramifications of it,should be discussed with him or her. How well your health care agent performs depends on how well you have prepared him/her. Professor Dagmar Halamka dmhalamka@gmail.com