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The Law Offices Of Cheryl David is a member of the American Academy of Estate Planning Attorneys.

Whether you’re just starting your adult life or you’re approaching retirement age (or beyond), planning your estate is a responsibility you should not neglect – even if you’re single and have no children. Here’s why:

First, a well-thought out estate plan not only controls what happens when you die, it also addresses what happens if you become disabled during your lifetime – an unfortunate possibility for all of us. When you make an incapacity plan, you express your wishes as to how your medical care should be handled if you can’t speak for yourself, and you also name people you know and trust to be in charge of you and your money in case of a disabling illness or injury. Without an incapacity plan, a judge gets to make those decisions, and the process for doing so can be costly to your loved ones in terms of money, time, and energy. An added disadvantage of not having an incapacity plan is the fact that the judge’s decisions regarding how your life should be managed might not mirror your own preferences.

Second, a good estate plan puts you in charge of who inherits your property when you pass away. You might want to leave part or all of your estate to a friend, to a charitable organization, or to a distant family member. If you don’t have a plan in place that complies with state law and clarifies your wishes, then you’ll have no say in what ultimately happens to your property. Instead, your property will be distributed according to a formula that’s been established by the state legislature.

Regardless of age, financial situation, or marital status, each of us owes it to ourselves and our loved ones to have an effective estate plan.

The Law Offices Of Cheryl David is a member of the American Academy of Estate Planning Attorneys.

Just as it’s important to periodically review your Will or Living Trust, and update it to reflect your current circumstances and wishes, it’s also important to keep your incapacity planning documents current.

Let’s say you take a fresh look at your advance directives (such as a Living Will or Durable Power of Attorney for Healthcare), and decide that they no longer reflect your preferences when it comes end-of-life medical procedures. Your first step is to see your estate planning attorney and have new documents drawn up. But, once your new documents are in place, what should you do with your old, out-of-date advance directives?

Although your new advance directives will likely contain language revoking your prior documents, you’ll still want to locate those old documents and destroy them.  If they’re not destroyed, out-of-date incapacity planning documents can crop up at the most inopportune times – and they have the potential to cause trouble.

For instance, what happens if your first Durable Power of Attorney for Healthcare named your sister to act as your agent, but you’ve since replaced that document with a new on naming your adult son as your agent? If you’re in the hospital and too sick to make your own medical decisions, the old document could cause conflict between your sister and your son, as well as confusion for your medical providers. Worst case scenario, the confusion could lead your family straight to court.

If you need to update your advance directives or other estate planning documents, we can help.  Call us today – (336) 547-9999.

The Law Offices Of Cheryl David is a member of the American Academy of Estate Planning Attorneys.

Many spouses designate each other to serve as agents under their Durable Financial Powers of Attorney, an arrangement that makes sense, as long as you stay married. But what’s the status of your Power of Attorney when you get a divorce?

In some states, divorce automatically terminates the authority of your former spouse to serve as your agent under a Power of Attorney that was put in place during your marriage. However, North Carolina is not one of those states.

So if you’re recently divorced, you’ll likely want to meet with your estate planning attorney to make sure you establish a new Power of Attorney naming someone other than your ex as agent. The same goes for your Durable Power of Attorney for Healthcare – if you no longer want your former spouse to make medical decisions on your behalf, you’ll want to name a new agent.

While you’re at it, you’ll also want to review your Will or Living Trust, as well as any beneficiary designations (such as those for life insurance policies, retirement accounts, and bank accounts) to make sure that your entire estate plan reflects your current circumstances and intentions.

The Law Offices Of Cheryl David is a member of the American Academy of Estate Planning Attorneys.

It’s not unusual for estate planning attorneys to get calls from adult children who are in quite a bind:  They have a parent who is incapacitated, often due to Alzheimer’s or another form of dementia, and the parent did not put an incapacity plan in place while they were healthy and lucid. The adult child is not authorized to access the parent’s financial accounts, handle the parent’s bills, or take care of the myriad other day-to-day issues that tend to crop up. What can be done?

Unfortunately, once a person has become mentally incapacitated, it’s too late for them to make a Power of Attorney (or any other legal document, for that matter). One of the requirements for putting in place a Power of Attorney is that the person signing the document must have the mental capacity to understand what they’re doing. No one else, including a spouse or an adult child, can make a Power of Attorney on behalf of a person who is already mentally incapacitated.

Many times, when this situation presents itself, the solution is for the child to petition the probate court for Guardianship or Conservatorship of the incapacitated parent. Under this court proceeding, commonly known as Living Probate, a judge appoints someone to manage the personal and/or financial affairs of the incapacitated person. The person appointed to serve in this capacity (often a family member) then becomes obligated to report to the court the actions taken on behalf of the incapacitated person.

Understandably, most people would prefer to avoid the time, expense, and court oversight that accompany Living Probate. This is why it’s essential to put an incapacity plan in place while you’re healthy and able to act for yourself. And, if you have a mom or dad who’s getting older – or even who has been recently diagnosed with an illness – you’ll want to encourage them to see us as soon as possible.  Our Elder Law Attorney, Beverly Eckard, has helped many families in this situation and would be happy to help you as well.

The Law Offices Of Cheryl David is a member of the American Academy of Estate Planning Attorneys.

We tell people all the time how important advance directives are. These are the documents, including living wills and durable powers of attorney for healthcare, which let your doctors know what medical treatments you want – and don’t want – in the event you’re incapacitated and can’t make those decisions for yourself.

And, although more and more people are making the very wise decisions to put advance directives in place as part of their estate planning, sometimes there are lingering questions about whether the wishes expressed in these documents will actually be honored.

Last spring, an LA Times article chronicled a study that contained some encouraging findings:

• Almost all of these patients received the treatments requested in their advance directives.
• Of the patients who requested limited care, meaning care only in certain situations, nearly 83% received it.
• Of those who requested comfort care, described as being kept comfortable and pain-free and opting out of extensive life-prolonging measures, 97% received it.

It was only patients who requested aggressive care that did not fare as well, with only about 50% receiving the treatment requested.  One of the reasons for this seems to be that aggressive care was not available in every situation.

The overall message of the study seems to be that advance directives work.  When it comes to healthcare decisions, there are two basic documents you’ll need:

• A Living Will allows you to specify which medical interventions you want, and which you don’t want, in the event that you’re not physically or mentally capable of communicating your wishes.
• A Durable Healthcare Power of Attorney lets you appoint an agent to communicate with your doctors and make treatment decisions on your behalf in the event of your incapacity.

If you don’t have advance directives in place, now is the time to talk to us.  Call today – (336) 547-9999.

The Law Offices Of Cheryl David is a member of the American Academy of Estate Planning Attorneys.

Have you heard the term “negative inheritance”?  It sounds like what might happen if you die with too much debt, and your kids have to pay it off.  But, of course, you can’t pass on your debt in the same way that you pass on your assets. So, unless they’ve signed for a debt along with you, your debts won’t be  passed down to your children.

What is a Negative Inheritance?

If you can’t pass your debt on to your children, how can you leave them a negative inheritance? You can fail to plan for your own long-term care costs, and the other needs you’ll face as you age.   A negative inheritance is what happens when the total resources your children spend on caring for you during your final years outweighs any financial inheritance you pass on to them after your death.

What’s a typical “negative inheritance” situation? It’s when a parent has the absolute best of intentions, and may even have a high net worth – on paper.  Unfortunately, a lot of that net worth is tied up in the house, and the parent hasn’t bought long term care insurance or otherwise planned for needing help during their final years.

The responsibility for providing that help, or helping pay for long term care, falls to one or more of the children, who often have to dip into their retirement savings.  Assuming the role of caregiver may very well mean that an adult child has to cut back on their own time at work, causing a loss of income.  And then there’s the non-financial toll that can happen even in the most loving and supportive families – things like loss of sleep, increased stress, and strained family relationships.

Estate Planning Can Help You Avoid Leaving a Negative Inheritance

How do you avoid leaving your children a negative inheritance?  Through careful advance planning.  We invite you to meet with us to talk about putting an incapacity plan in place, exploring options for funding long-term care expenses, and coordinating your estate plan with your financial plan so that your children are not the victims of unintended consequences.  Schedule your time with us today – (336) 547-9999.

The Law Offices Of Cheryl David is a member of the American Academy of Estate Planning Attorneys.

If you’re part of a same-sex couple in North Carolina, you need to be extra-vigilant about estate planning.  Why? Because, as you know, the state does not recognize any form of same-sex unions.  So, even if you and your partner spend a lifetime together as a family, if one of you passes away without an estate plan, the law treats you as though you had no ties to each other.

Your Estate Plan

If you pass away without an estate plan, your property will pass by state law to your nearest blood relatives, effectively disinheriting your partner.  So, if you want your assets to go to your partner – or to friends, or to charity – then you’ll need to have a solid estate plan.  This includes:

1. A Will.  A Last Will and Testament is a foundational part of your estate plan.  With it, you can distribute your property to your intended beneficiaries, and you can name a guardian for your children, plus a trustee to manage their property. 
2. A Revocable Living Trust.  Your estate planning attorney can help you decide whether you need a Revocable Living Trust.  This estate planning tool allows for the management of your assets during your lifetime, both while you’re well and if you become incapacitated, and it provides for the distribution of your property once you pass away.  A properly funded Revocable Living Trust allows you to avoid probate, often saving your loved ones time and money.  Plus, it affords privacy that’s not available with the probate process.

Your Incapacity Plan

With an incapacity plan, you can help ensure that your partner has access to and control over your finances and has a say in your medical care in case of your disability.  An incapacity plan includes:

1. A Durable Financial Power of Attorney. This document allows you to appoint an agent to manage your finances for you in the event of your disability.
2. A Living Will. This document lets you tell your doctors what medical treatment you want, in case you’re terminally ill or severely injured, and unable to communicate your own medical wishes.
3. A Durable Power of Attorney for Healthcare.  If you reach a point where you can’t make healthcare decisions yourself, you use this document to appoint an agent to make these decisions on your behalf.

Depending on your family’s specific needs, you might opt for a more advanced set of estate planning tools to take care of tax planning, asset protection, and other concerns. 

We can guide you in making the best planning choices for protecting yourself, your partner, and your family.  Call us to set a time to review your needs and how we can help – (336) 547-9999.

The Law Offices Of Cheryl David is a member of the American Academy of Estate Planning Attorneys.

A Power of Attorney is a legal document that lets you designate someone called an “attorney-in-fact” or an “agent” to manage your financial and legal affairs on your behalf.  Our office can help you tailor your Power of Attorney to give your agent exactly the powers you want him or her to have.  For example, you might choose to allow your agent to do the following things on your behalf:

• Manage bank accounts and write checks;
• Manage investment and retirement accounts;
• Pay bills;
• Buy, rent or sell property;
• Enter into contracts;
• Hire an attorney to file or defend a lawsuit

You might also request that your estate planning lawyer word your Power of Attorney so that your agent can handle certain tax issues on your behalf, or even engage in Medicaid planning for you if you become disabled.

Why Is a Power of Attorney Important?

A Power of Attorney is an essential part of your incapacity plan, because it allows someone you know and trust to take over your finances and legal affairs if the time ever comes when you can’t manage these things on your own.  A Power of Attorney that gives your agent power to act even after you’re incapacitated is known as a “Durable” Power of Attorney. It takes effect when you sign it and, in most cases, doesn’t terminate until your death.

What About My Revocable Living Trust?

If you have a Revocable Living Trust, you may wonder if you need a Power of Attorney, too – and the answer is yes.  Even though you’ve appointed a Disability Trustee to manage your trust assets in case of your incapacity, he or she only has authority to access property that’s been funded into your trust.  Any property not held by your trust is outside your trustee’s reach. 

With a Power of Attorney, you can allow your agent to manage your non-trust assets, and transfer the appropriate assets into your trust so that your property can be administered in a smooth, orderly manner.

You’ll want to make sure that your Power of Attorney is tailored to your specific needs, and that it’s properly signed.  We can help you put an effective Power of Attorney in place.  Set your appointment today – (336) 547-9999.

The Law Offices Of Cheryl David is a member of the American Academy of Estate Planning Attorneys.

There are certain things that every estate plan – even the most basic – should do.  If you only have a Will, your estate plan won’t be as effective as it needs to be.  So, what are some of  the basic functions an estate plan should perform?

• Your Estate Plan Should Keep You Out of Living Probate.  If you’re ever too sick or injured to care for yourself or manage your own finances, you’ll need to have a formal plan in place allowing someone of your choosing to take over and handle these things on your behalf.  Without a legally effective incapacity plan, you’ll be subject to Living Probate – the process by which a court appoints a guardian or conservator to take care of your physical and financial needs.  Living Probate is time consuming, expensive, and it takes control of your life away from you and your loved ones and puts control in the hands of a judge whom you’ve never met.
• Your Estate Plan Should Ensure Your Property Transfers Smoothly and Effectively Upon Your Death.  This is where a carefully drafted will or trust comes into play, as does working with an experienced attorney.  Not only do you need a plan that specifies where you want your property to go, you need a plan that anticipates potential problems and solves them before they become a reality.  For example, your estate planning attorney can suggest strategies to help head off potential will contests and can help you review all of your assets to make sure that your beneficiary designations are up-to-date so that all of your property passes to the appropriate recipients.
• Your Estate Plan Should Make Sure Your Beneficiaries Get As Much of Your Estate As Possible.  With a carefully crafted estate plan, you can minimize the costs associated with settling your estate, reduce your estate tax burden, and make sure that as much of your property as possible goes to your loved ones.

A will only becomes effective after you’ve passed away, and even then, it might not be the most effective method for transferring your assets.  The right estate planning tools can help you accomplish these basic goals, and more.

Our office can help equip you with the right tools.  Call us today – (336) 547-9999.

The Law Offices Of Cheryl David is a member of the American Academy of Estate Planning Attorneys.