Wednesday, February 25, 2009

Blended family? You need a will

Clem is 90 years old and has been a widower for 20 years. He has six adult children and many grandchildren. On an impulse, he marries one of the other residents of the care center where he has lived for the past ten years who also has children. Within a month of his marriage, he suffers a massive heart attack and dies, unfortunately, without a will. What happens to his extensive estate?

In our society with a divorce rate approaching 50% of all marriages, it is becoming increasingly common for married couples to have "blended" families, children of one spouse who are not the children of the other. It is possible that both spouses have children from previous marriages. In these situations, absent a will, Arizona law is likely similar to that of other states.

Arizona law provides that if all of the children are the children of surviving spouse, then the surviving spouse inherits all of the estate. However, as in the above example, if there are surviving children one or more of whom are not children of the surviving spouse, then one-half of the intestate separate property and no interest in the one-half of the community property that belonged to the decedent.

In short, the newly wed widow could get one-half of the property as her interest in the community and an additional half of the decedent's separate property. Usually, in these situations, the decedents direct descendants are not too happy with this outcome.

All of this can be changed by merely having a will that provides for a proper allocation of the decedent's property.

Tuesday, February 24, 2009

What is mental competency?

The word competency has various common usage meanings but it also has some strict legal meanings as well. In court, the word is used in two completely different ways. In one way, competency refers to the a witnesses characteristics that render the witness legally fit and qualified to give testimony. In another sense, competency refers to the ability of a person to make sound and reasonable decisions and judgment.

In the second of the two legal meanings, a person can only be adjudged incompetent after a hearing in the court. This type of competency hearing may occur in both civil and criminal proceedings. If a person is accused of a crime and found incompetent to cooperate in his or her own defense, the court may rule the person incompetent and commit the person to custodial care, usually in a mental institution until they are found competent enough to stand for trial.

In our aging society, the civil competency hearing is becoming more common. Usually, a person's competency is being questioned by friends or relatives who have observed that the person can no longer care for himself or herself. This court hearing may occur when someone seeks to become the guardian or conservator of the incompetent person. Usually, in that context, the court appoints an attorney to represent the incompetent person and orders a medical evaluation.

Friday, February 20, 2009

What is demetia?

Dementia is a progressive decline in metal function that slowly impairs reasoning ability, memory, judgment and the ability to learn. One of the most common forms of dementia is known as Alzheimer's disease. Alzheimer's accounts for about 65% of all dementias. Some of the various dementias, like Alzheimer's, have unknown causes.

The two other most common forms of dementia are Lewy Body Dementia and Vascular Dementia. Lewy Body dementia differs from Alzheimer's both in the physical manifestations of the disease and in progression. In Lewy Body Dementia, the individual develops abnormal brain cell structures, similar to those in Parkinson's Disease, but occurring throughout the brain. The disease is characterized by complex and detailed visual and auditory hallucinations.

Vascular Dementia is caused by damage to the blood vessels to the brain. It can occur due to strokes, heart attacks, high blood pressure, and diabetes. Smoking also increases the risk of Vascular Dementia.

In all of these diseases, there is a need to help the sufferer make provisions for care and for taking care of his or her estate before the disease progresses to the point where the person becomes unable to make their own decisions.

In future posts, I will discuss the issues that arise as a result of these long term, slow acting diseases.

Tuesday, February 17, 2009

Early warnings of dementia or Alzheimer's

Alzheimer's is a disease that attacks the brain. and is the most common form of dementia. According to the Alzheimer's Association, as many as 5 million Americans are living with Alzheimer’s disease. Alzheimer's causes problems with memory, thinking and behavior severe enough to affect work, lifelong hobbies or social life. The disease gets worse over time, and is fatal. Today it is the sixth-leading cause of death in the United States.

The Alzheimer's Association has 10 warning signs of Alzheimer's disease. They are:

1. Memory loss.
2. Difficulty in performing familiar tasks.
3. Problems with language.
4. Disorientation as to time and place.
5. Poor or decreased judgment.
6. Problems with abstract thinking.
7. Misplaced things.
8. Changes in mood or behavior.
9. Changes in personality.
10. Loss of initiative.

While not all of the these symptoms may be apparent early on in the progress of the disease, the presence of a combination of these factors may indicate that medical treatment is necessary.

One of the most important things to accomplish early on in the progress of the disease is getting your affairs in order. It is inevitable that the afflicted person will lose the ability to make decisions about their business and estate matters. If you have not already done so, you should consult with an attorney about forming an estate plan before the disease becomes too severe to allow the person to make decisions. Please call me with any questions you may have about getting your affairs in order.

Friday, February 13, 2009

Durable Health Care Power of Attorney

A power of attorney is a document in which one person (the principal) names another person (the agent or attorney-in-fact) to legally act. Often, powers of attorney are used to sell property or to transact business when the principal is unavailable i.e. out of the country. Normally, a power of attorney is an at-will document, that means that the principal can revoke the power of attorney at any time, either with or without notice. Additionally, a power of attorney is automatically revoked if the principal becomes incapacitated.

The law recognizes an exception to the revocation upon incapacity, when the power of attorney is designated a durable power of attorney. The durable power of attorney is valid even if the principal becomes incapacitated and therefore can be used, in some instances, improperly. Most states have specific statutes imposing personal liability on anyone who misuses a power of attorney. One narrow use of the durable power of attorney, is a durable power of attorney for health care. In this limited case, the agent is given authority to make health care decisions on the part of an incapacitated person, and nothing else.

If a person is already incapacitated, it is too late to get a durable health care power of attorney. The time to plan for incapacity is when you or your loved one has all their faculties and not wait until it is too late to do anything. It may be too late when your loved one is lying unconscious and medical treatment is delayed while the issue of who has authority to act is decided.

Please call me if you have any questions or if I may assist you with a durable health care power of attorney.

Wednesday, February 11, 2009

Living Wills -- Do I need one?

Living wills are sometimes called advance directives to doctors. They are called living wills because the document is in effect during the person's life. Living wills are a formal document expressing person's desires regarding future medical treatment and intervention at a time when the person can no longer communicate. Because state laws differ significantly, it is always important to seek competent legal advice especially with something as important as future health care.

One dramatically important issue confronting those who undergo health care is not just whether or not life can be extended, but the quality of that life. Several high profile cases have been in the media, where a terminally ill patient, in a vegetative state, is kept alive for years by extraordinary medical intervention, when the person, if given the chance, would prefer to die. In Arizona, anyone who has the capacity, can make a living will. However, in other states, only terminally ill people can do so. In either case, it is the individual not relatives or the doctors who make the care decisions.

The options in a living will extend from requiring that heroic measures and technology be used to keep a person alive, to specific directives to do not resuscitate. A living will allows an individual to make these decisions when their mind is clear and they have considered all the possibilities. The person making the living will can choose any preference from heroic measures to no intervention at all, depending the person's feelings and sensitivities.

If you are at all concerned about your future care, please give me a call and set an appointment to come in and make a living will.

Tuesday, February 10, 2009

Wills are not just for old people

Tragedy occurs, a young family is involved in a serious automobile accident and the parents of three young children are killed. The three children survive but what will happen to them? Arizona, like many other states, if the deceased parents did not have a Will, the Court can appoint anyone, even an unrelated person, if the Court finds that the appointment is in the "best interests of the minor." (See A.R.S. 14-5206). The Court can also appoint a conservator to administer the estate inherited by the minors.

But, if the parents had Wills, they could appoint their own choice for guardian and conservator of the estate. Absent a will, the choice is left to the judge.

This scenario is only one of many that could occur to a young couple if they fail to plan adequately and each have a Will. This situation could become even more difficult if the children were from a prior marriage and the previous spouse sought custody of the children. Things could get really interesting if one of the parents, the non-biological parent, is the one to survive such an accident.

Wills cannot solve all of the problems that occur by reason of untimely death, but failure to properly provide for your family can have serious consequences. You may wish to give me a call and discuss the need for a Will.

Monday, February 9, 2009

What is Probate?

One of the most common promotional schemes for "estate planners" is to tell people that they must avoid probate. A Google search on the term "avoid probate" comes up with 179,000 hits. To understand why this phrase is used so often it is necessary to understand what is a probate and also some history.

In the early 1960s, Norman F. Dacey wrote a book entitled, "How to Avoid Probate." The book was an instant best seller and rose to No. 1 on the New York Times best-selling nonfiction book list where it stayed for 47 weeks. Since that time, numerous so-called estate planners have copied the title of the book to sell their products, to a mostly unsuspecting and unknowledgeable public. The idea of Mr. Dacey's book was that people could put their money in a trust and avoid the abuses and fees associated with the probate practice in the United States. The reason the book was such a success is that most probates, at that time, were handled on a percentage basis. Even if the probate was relatively simple and uninvolved, the heirs could end up paying a sizable percentage of the entire estate just to have a few formal papers signed and filed with the Court.

Those days are mostly, but not entirely, gone. In 1972, Arizona, along with many other states, adopted the Uniform Probate Code. The UPC, as it is sometimes called, simplified the process of transferring property upon death. Since that time the abusive probate practices and the outrageous attorneys' fees have been greatly reduced and partly eliminated.

Probate is nothing more or less than a way to determine a deceased person's heirs and transfer the decedent's property to them. Absent a contest by one or more of the heirs, the process, though somewhat complicated, now takes a reasonable time, about six months or more, and can often cost less than the expense involved in setting up an estate plan. (More about the costs of probate in future posts).

If you have a real reason for avoiding the probate process, I can certainly help you formulate an estate plan, either simple or complex, to assist you. But before spending a lot of money on a complicated estate plan be sure and have your needs evaluated by a professional and not a salesman. Please call with any questions.

Friday, February 6, 2009

Competency vs. Incompetency

We often casually refer to someone as "incompetent" meaning that they are not doing what we expected them to do. However, in a legal context, the word "incompetent" has a specific meaning and definition. Legally speaking, incompetency is the inability to manage one's own affairs because of injury or disability and does not understand his or her legal rights or liabilities. Sometimes, depending on the type of legal proceeding incompetency is defined as an inability to understand the nature and object of the proceedings or to assist in the defense of a claim.

In Arizona, the task of determining competency is left to the courts. Obviously, if a person is incompetent they will need assistance in managing their affairs both financial and physical. The law provides for the appointment of a person to take care of the incompetent's physical well being, called a guardian, and to take care of their financial affairs, called a conservator. The action in court is called a guardianship/conservatorship. A guardianship/conservatorship may proceed either with or without the permission of the incapacitated individual. You may also obtain a guardianship of the person without a conservatorship and conservatorship without a guardianship.

In all cases where a person is in need of a guardianship and/or conservatorship, the court will always appoint an attorney to represent the incapacitated person, and will order a medical and psychological review of the person's mental state before granting the guardianship/conservatorship order.

If you are caring for someone who you feel has challenges and may be incapacitated, you should seek competent legal advice about being appointed the guardian and/or the conservator for that person.

At Jackson White, we can assist you with both guardianships and conservatorships. Please give me a call if you have any questions.

Thursday, February 5, 2009

How Do I Know if I Need a Will?

A will is a formal document, recognized by the state where it is made, that disposes of a person's property upon his or her death. In future posts I will discuss the legal formal requirements for a will, but right now, I will answer the question of how to know if you need a will at all?

If you can answer yes to any of the following five question, you definitely need a will:

1. Do you or your spouse have any children that are not children of the present marriage or partnership? This question applies even if one of the spouses is already deceased. The question also includes the situation where you have children but were not legally married.

2. Do you have any items of sentimental or monetary value that you wish to give to a specific person or organization?

3. Do you own more than one parcel of real estate? This especially applies if the real estate is located in more than one state.

4. Do you wish to give more than a proportionate share of your estate to one of your children or other heirs? This applies also if you do not wish to give someone less than their proportionate share or nothing.

5. Do you have a very large estate worth more than the current Federal Tax Lifetime Exemption amount? In 2009 this amount will be $3,500,000. In 2008 it is presently $2,000,000. If the U.S. Congress does nothing, the exemption will drop to $1,000,000 in 2011. Come back to see more about this subject. A will doesn't solve all of your estate tax issues, but it is a necessary part of an estate plan.

If you answered yes to any of those questions, you most certainly need a will. If you have minor children an wish to designate a guardian in event of your death, you may also need a will.

I would be happy to assist you in preparing a will. Please visit our Website at JacksonWhite.

Wednesday, February 4, 2009

An Old Will is Worse Than No Will

Years ago you may have gone to an attorney and paid for an "estate plan" that contained, among other things, a will and perhaps a trust. If time has passed and you have not updated or reviewed these documents, you and your heirs may be in serious trouble. As time passes, people change - some die, some are born and others have life changing experiences like divorce, remarriage and disability.

An old will or trust may end up doing more harm than good. Especially if the document fails to reflect all of the changes that have occurred in the family. What if the person named as personal representative of the estate or trustee of the will is no longer living? Or what if that person is unable to serve or has moved to a distant state? A will or trust is not a static document. It cannot be left unattended for years without severe consequences. There is nothing that makes a probate attorney cringe more than having the heirs haul out an outdated will.

Under the probate law, outdated or not, the Court must take into account the wishes of the decedent, even if it means leaving money to a former daughter-in-law or even a former spouse. There are few things more calculated to cause disharmony in a family.

If you find yourself without a will or trust or one that is woefully outdated, please call me at Jackson White. I would be glad to review your documents and make appropriate suggestions. I am sure that you will find that the cost of our services is more than reasonable.

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