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New Probate Laws – Ins and Outs, Ups and Downs

(This article was originally published in the Wakefield Daily Item)

By LUCY J. BUDMAN, ESQ.

Q.   Does the new Uniform Probate Code make the probate process easier? 

A.   The new probate law was meant to simplify probate for families with simple situations, but in practice it is anything but simple.   

On April 2, 2012, after years of delays, the Massachusetts Uniform Probate Code (MUPC) finally came into effect for probates of wills and intestacies. One of the major goals of the new law was to simplify probates, shorten the process and make them cheaper and easier for most families.

Unfortunately, we have found that the more things change, the more they remain the same.   For many probate estates, probate remains a lengthy, stressful, and expensive process.  As a result, we still advise that our clients take steps to avoid probate by using Trusts.

What is probate? Probate is the court process of transferring assets from the name of the decedent to their heirs. Probate happens whether or not you have a valid Will in place when you die. A valid Will simply gives direction to the probate court in terms of who is in charge of managing your assets and who will receive your property when you die. Without a valid Will, intestacy laws determine who is in charge and who inherits what you own and in what percentages (even if you have left oral instructions on how to distribute assets or a written note that fails to meet the requirements to qualify as a valid Will). In either case, your family must follow the elaborate rules of the probate court to get their inheritances.

The ideal of the MUPC is to remove some of the complexity from the probate process, but let’s review how it actually works for many people in the real world.

The Ideal: Probate is made simpler through the use of an “in and out” court process. Families with simple situations and no serious conflicts can take advantage of a limited “informal” probate. Wills or even intestate probates can be allowed right away by a court magistrate without ever seeing a judge. Once allowed, the Personal Representative (formerly called an Executor or Administrator) can pay the debts of the estate and distribute the property without having to seek court permission.

For complex or conflict heavy situations, a formal probate process, much like probate under the old law, can still take place. In addition to obvious problems such as feuding heirs or creditors at the door, many of our clients who have real estate in other states, minors in the family or incapacitated relatives find their situation is more complex than they had hoped.

The Reality:

  • The informal process is just not as fast as anyone would like it to be. Far from in and out, the Probate Courts are backlogged and have been hit especially hard by the State budget crisis. The Courts simply do not have the personnel to review probate filings, and we have found that for many of our clients, informal probates take weeks or months to be approved rather than days. Without the budget to hire more personnel at the Probate Courts, this may not change any time soon.
  • Informal probate is not good enough if your estate will include any real estate, even just your home!

The major real estate Title Insurance Companies, the companies responsible for Title standards, have all ruled that an informally appointed Personal Representative has no power to sell real estate unless at least three years have passed since date of death. Even if you have a valid Will giving your Personal Representative the power to sell real estate, it does them no good unless they have gone through the full, formal Probate Court process (in other words, something very like the old process). An informally appointed Personal Representative has to go back to court for a special extra power called a license to sell, a process that can costs thousands of dollars just by itself, especially if there is the time pressure of an imminent real estate closing.

  • Complex family situations are more common than you may imagine. If your family includes minor children or incapacitated seniors, a full, formal probate might still be necessary. If some of your family members are in conflict, they may request additional probate court supervision.  If your family tree is complex, probate can require genealogy efforts just to identify your heirs at law.
  • If you own property out of state (or out of the country!), your heirs are likely to need to open two probates, one here in Massachusetts and another in the place the property is located.
  • Going through formal probate can be more expensive than it was a few months ago, not less. With the recent change of the probate process to “in and out” the probate court can collect additional fees at each stage of the process, including transactions that did not have associated fees under the old process, such as closing probate after a final account has been filed.

The good news is that going through the probate process is a choice each person makes. We all have the option to plan in advance to avoid the court process entirely.  After meeting with us, the large majority of our clients decide they would prefer to save their families the time, stress and expense of probate by pursuing other planning, such as Living Trusts. A well drafted Trust can protect you and your family, not just from probate, but from taxes, creditors and long term care costs, depending on your planning goals.

Without planning, you are guaranteed a probate. Be sure that your attorney understands the ins and outs of the new Uniform Probate Code and can advise you about whether avoiding probate is the right move for you and your family.

 

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Power of Attorney – What you Need to Know

(This article was originally published in the Wakefield Daily Item)

By LUCY J. BUDMAN, ESQ.

Q.   Should I sign a Power of Attorney? 

A.   Yes, you should have a POA but make sure it contains all the powers necessary to achieve your goals.   

 A Power of Attorney (POA) is a critical Estate Planning tool.  By signing a POA, you authorize an Agent (aka attorney-in-fact or POA), to make certain legal and financial decisions for you. Your Agent’s powers are spelled out in the POA.  When you hear the term “durable POA”, it is “durable” because it continues to be effective even if you become incapacitated.

If you do not have a valid POA and you become incapacitated (e.g. stroke, dementia, or car accident), no person is automatically authorized to make decisions for you. Your spouse and children have no rights over your assets.  For example, if your name is on a real estate deed, your family cannot simply sign your name to convey the property even if it is jointly owned by a spouse or child.  If you have an IRA or 401k, your family cannot manage it, even to take out required minimum distributions.

But bear in mind that just because you signed a document that has POA written on the top does not mean you are protected. Your POA is only as effective as the specific powers it contains.  In other words, just because you might have signed a POA in the past does not mean that your POA gives your agent the authority to achieve all of your goals.

What should your POA accomplish?  It should authorize all the basics like paying your bills, managing your bank accounts, and handling retirement accounts.  But if you are like most of our clients, you want to be certain the POA grants the authority necessary to protect your assets to the maximum extent allowed under the law if you become incapacitated and require long term care at home or in a nursing home.  Without these long term asset protection powers, your POA puts your home and savings at serious risk.

Unfortunately, nine out of ten POAs we review at our initial consultations fail to achieve those asset protection goals.  This always comes as a complete shock to clients.  Sure, their existing POA may authorize their agent to pay their bills, but it squarely fails to authorize the actions necessary to prevent MassHealth from recording a lien on their house or taking all their savings if they require nursing home care.

I explain that the drafting attorney was not acting maliciously by omitting that authority.  Unfortunately, their prior attorney was not a specialist in asset protection and long term care planning so he or she did not realize what precise authority must be listed in the POA.  Sometimes the client says they found the POA on the internet or printed it off some software they bought.  The problem is that those run-of-the-mill POAs are not designed for clients who want to protect assets in the event they require long term care.

If the client is fortunate, they have come to us with full decisional capacity so we can prepare a new POA that does in fact achieve their long term asset protection goals.  We call this an Asset Protection POA.  In contrast to the two or three page POAs that we often see in our practice, our POAs will often exceed 20 pages to ensure that we have covered all possible authority to protect our clients’ assets and to avoid a Conservatorship in Court.

But if the client never took action while they had capacity, often their family comes to us in crisis, the elder is incapacitated already, and the elder has either an inadequate POA or no POA at all.  Now the family must file a Conservatorship Petition at the Probate Court and seek special authority to preserve the elder’s assets.  This Court process is time-consuming, stressful and expensive and the appointed Conservator must file annual accountings with the Probate Court.  Worse still, there are no guarantees that the judge will allow the agent to protect the elder’s assets against MassHealth and the nursing home.

While part of our practice is successfully protecting assets in Conservatorship proceedings when it is too late to plan ahead, the process is exponentially more expensive to families than the cost of a well-drafted POA signed in advance of any incapacity.

Be sure that your attorney has extensive experience with MassHealth planning and applications, as well as tax planning, so you can feel confident that the POA will contain the necessary authority in the event it is ever needed.

When do I need Health Care Directives?

(This article was originally published in the Wakefield Daily Item)

By PATRICK G. CURLEY, ESQ.

Q.   My wife has been in and out of the hospital over the last year and now she is scheduled for major surgery.  What kind of health care legal planning do we need? 

A.  You need carefully drafted health care directives.

You have asked about your wife but the reality is that both of you need planning.  In fact, all people age 18 and over should sign the health care directives outlined below.  Because accident or illness can strike people of all ages, it is vitally important to plan for that possibility.

You need to sign a Health Care Proxy.   In this document you can appoint a health care agent to make decisions for you if you become incapacitated.    Without a valid Proxy, if you become incapacitated, no person is authorized to make decisions for you, not even your spouse or your child.

You have to sign this Proxy while you have capacity – that means you should have this in place today rather than waiting for a crisis.

If someone becomes incapacitated and has no valid Health Care Proxy, a loved one must petition to be appointed Guardian in the Probate Court. The Court process is lengthy, costly (often thousands of dollars!) and burdensome, especially in an emergency.  And when all is said and done, there is no certainty that the judge will appoint the person that you would want to make your health care decisions.

I remember observing a contested Guardianship Court hearing involving a young man who had been in a motor cycle accident and left brain damaged.  His immediate family had split into two camps with the patient’s brother and his mom squared off against the patient’s sister and the dad.  It was tragic watching them fight about who should serve as health care agent.  All of that could have been avoided had the young man signed a Proxy while he was healthy.

Unfortunately, not all Health Care Proxies are created equally and many we see are too simple to fully achieve most peoples’ goals.  Many hospitals hand out form documents to every patient they admit. This form is generic and limited and may not address all your concerns, such as who makes end of life decisions and which other family members you wish for your health care providers to share information with. We recommend that you consult a Qualified Elder Law Attorney to make sure that your Health Care Proxy covers all the important decision making authority you need.

In a Living Will you can detail your end of life decision making wishes.  Most of my clients do not want their moment of death artificially prolonged.  I warn them that with today’s technology, we have machines and computers that can keep essentially dead people alive for months or years.  A Living Will can help avoid this result by giving clear direction to your Health Care Agent.

The infamous Terri Schiavo case in Florida shows what can go wrong when a patient has no Living Will.  Mrs. Schiavo was kept alive by artificial means from 1990 to 2005. Her case ended in a battle between her husband and her parents and finally involved everyone from the Florida Courts and Governor to the United States Congress and the President, all trying to determine her end of life wishes.  If Mrs. Schiavo had signed a Living Will expressing her wishes one way or another, it all could have been avoided.

A ‘Do Not Resuscitate’ Order is a special form signed by your physician telling your health care providers NOT to perform CPR if your heart or lungs stop. CPR can range from basic mouth to mouth to advanced techniques such as breathing tubes and a machine to move air through your lungs. Without a valid DNR signed by your physician, even if you have a Health Care Proxy or a Living Will, in an emergency situation your health care providers are required by law to give you CPR.

While CPR can be a life saving technique for younger, healthier people in some circumstances, studies show that for others, especially seniors and the terminally ill, CPR is extremely unlikely to be successful.  Even a ‘success’ can mean brain damage severe enough to keep a patient on a machine for the rest of their lives. Talk to your physician about a DNR order.

Once you sign your health care directives, please be sure to provide a copy to your physicians so they have them on file.  We provide clients with a plastic wallet card entitled “Emergency Medical Information” that is linked online to their health care directives.  This gives our clients (and their families) the peace of mind of knowing that emergency responders and medical institutions can quickly access their Health Care Proxy and Living Will and contact their health care agent in an emergency.

 


Contact Us!

Do you have an Elder Law or Estate Planning question? E-mail questions to Info@CurleyLawFirm.com or call 781.245.2222 x10 to be considered for future columns).

About Curley Law Firm LLP

Serving clients throughout Massachusetts, Curley Law Firm LLP draws upon more than four decades of combined Estate Planning and Elder Law experience to ensure that you can achieve your planning goals.

Attorneys Patrick Curley and Lucy Budman are two of fewer than two dozen Certified Elder Law Attorneys (CELA) in Massachusetts. Attorney Mark Curley has practiced in the areas of Estate Planning and Elder Law for over three decades.

The value of working with a firm with CELAs on the team is the peace of mind you receive - knowing that you will get the very best advice available to protect yourself, your family and your assets. A CELA is a recognized expert in legal matters dealing with Estate Planning and Elder Law including Trusts, Wills, Asset Protection against Medicaid and nursing home costs, Medicaid (MassHealth) benefits planning and applications, Probate and Trust administration, Guardianship and Conservatorship, and VA benefits planning.

At a time when many lawyers claim to practice "elder law", having a CELA-led team working on your planning means having one of the very few experts in the Commonwealth on YOUR team.

For experienced representation and quality service from attorneys who will help you achieve your planning goals, please schedule a confidential Initial Consultation by calling us at (866) 406-8582 or visit our website at www.CurleyLawfirm.com

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