BUYER BEWARE: DO-IT-YOURSELF ESTATE PLANNING IS RISKY

LegalZoom is a do-it-yourself (DIY) online platform that provides a cheaper alternative to legal tasks than heading to a law firm. Lured by saving money and the thought that forms governing any legal process are all the same, many clients turn to these automated legal services and relinquish all contact with an attorney.

Seems easy enough, right? But if you’re a layperson filling out these forms, it’s also equally easy to miss a step. That omission could interfere with the proper legal process that’s required at the time a form is called into play. What’s more, in the end, you may have to pony up more money than you originally saved when you were preparing the document.

It’s Personal

When you work with one of our Phelan, Frantz, Ohlig, & Wegbreit attorneys, it’s never just about the service or form you need. We create your plan based upon your unique requirements. Estate planning issues are never cookie cutter. For example, the Power of Attorney for a collegebound youngster serves a far different purpose than the language of a 70-year-old who requires a POA.

In the case of the young adult about to go off to college, the primary concern is that their parents have a HIPAA release. This is the ability to get and share medical information with the health care professionals who are caring for their youngster. Without the proper wording of a POA, protections from the Family Educational Rights and Privacy Act (FERPA) could prevent these important conversations from taking place.

Similarly, a younger client who may have digital assets that run the gamut from social media accounts to financial Bitcoin holdings require specific language put into their POA. That language isn’t going to exist on LegalZoom, but it’s language we’ve crafted because we’ve served clients with situations like this.

Beyond the failure to fully address unique situations, downloaded POA forms often neglect to name a successor to serve as POA. They’ll name one person. And if that appointee is not available to act, the form becomes completely useless. When you retain the services of an estate attorney, you’re not just retaining an attorney to create a document and have you sign it. You’re retaining an estate attorney who has experience in these matters and is able to listen to your needs and story and craft a document most appropriate for you.

Variances State to State

Requirements for documents also differ state-to-state, even in bordering states. In New York, for example, the agent must sign the document. In New Jersey, that is not a requirement. New York requires 2 witnesses; New Jersey only 1. Downloading something from LegalZoom does not necessarily take these variances into account. This issue can become even more complicated if you have more than 1 home in different states.

To make matters even more difficult, laws are not static. They constantly change because of new laws and new statutes. To best advise their clients, lawyers keep up with these changes.

It’s Not Better Late Than Never

It’s not uncommon for clients to seek out an attorney to unravel situations that have arisen when an online document is put to the test…and flunks. One family whose dad was sick was rightly focused on getting their dad the palliative care he needed. Understandably, the entire family was emotionally spent both from worry and from developing a care plan. One of the adult children headed to LegalZoom and downloaded a basic Will. The Will dictated that everything would go to the decedent’s wife. If she died first, everything would go to the couple’s four children. The document also appointed the oldest child as Executor.

As it turned out, the dad lived a lot longer than anybody anticipated. The mom actually ended up dying beforehand which meant that everything was passed on to the four children as the LegalZoom Will dictated. Problem was, there were a couple of important things missing:

  1. The family didn’t have the important “What if” conversation about what would happen if one of the children predeceased the father. One of them—the oldest one, no less—did. This brought up the further question about who would be the new Executor and whether the remaining siblings wanted any assets to go to the deceased sibling’s children. There was considerable disagreement among the siblings.
  2. While the Will did appoint the oldest child to be the Executor, it didn’t include a provision to appoint a secondary Executor if the first was not available to serve. It also did not waive the surety bond requirement. In the case of estate administration, the surety bond protects the beneficiaries and creditors of the estate against improper distribution of assets by the Executor. The bond guarantees that the Executor will distribute the estate’s assets according to the Will or a court judgment. In this particular case, the court required the family to get a bond. The new Executor had creditor issues, so the premium for the surety bond ended up being $6000 a year.

Had this family sought legal counsel when they prepared a Will, they would have spent far less money and encountered less, if any, problem resolving the above issues. If they’d come to our firm, we would have had the conversation with them about the possibility of a child predeceasing the father. We would also have included language waiving the bond requirement. We would waive the bond because our clients are typically appointing their children as executors and these are appointees they trust. They’re not concerned that any nefarious action will take place.

If you do decide to use LegalZoom, know the risks you’re taking. Don’t be lulled into a false sense of security. And remember. Your mistakes will not come to light until you become incapacitated or die. The people who are left to deal with these mistakes are your loved ones, the individuals you set out to protect in the first place.

At Phelan, Frantz, Ohlig, & Wegbreit, LLC, you can be assured we will cover all the bases in helping you develop your estate plan. We use the knowledge we’ve acquired in our years of schooling and practice to counsel you on the best ways to protect and take care of your family.

Call us at 908-232-2244 to make sure you craft an estate plan that will fully preserve and distribute your assets in accordance with your wishes and in the manner your loved ones deserve.

 

Pride Month: A Great Time for Same-Sex Couples to Seal Their Wishes With Estate Planning

Proper estate planning is daunting but necessary for anyone who wants to ensure that their wishes for end-of-life care and the disposition of their assets are carried out. It could be even more critical for LGBTQIA+ families. While laws and attitudes continue to evolve, limitations still exist in some areas. Estate planning is one of them. With June being LGBTQIA+ Pride Month, it’s a perfect time for you to turn your attention to estate planning and prevent the creation of important estate planning documents from slipping through the cracks.

Unless you are married or have an estate plan, your assets and any decision-making regarding end-of- life care will likely revert to your family of origin. Love them or not, that is almost certainly not what you want to happen. If you have no estate plan, every state provides default rules about who might be responsible for your care if you are incapacitated or to determine who would receive your assets when you die.

Marriage Key to Health Care Decision-Making

Many things have changed since the 2015 Obergefell v. Hodges Supreme Court decision that legalized same-sex marriage. Even so, many same-sex couples choose not to marry or to legally formalize their relationships. It also is unlikely these couples have taken the time to create a Will, a Durable Financial Power of Attorney, and an Advanced Health Care Directive or Health Care Proxy. This can have negative consequences, both in decision-making for end-of-life care and asset transfer and inheritance tax issues. These omissions can cause a lot of problems for a surviving partner.

An Advanced Health Care Directive is an important component to every individual’s estate planning. It enables you to appoint an individual of your choosing to make important health care decisions if you are ill or incapacitated and cannot advocate for yourself. If a married couple does not have a Health Care Proxy, your physician will likely defer to your spouse to make decisions about your care. That is not always the case with unmarried same-sex couples. While this is not solely a same-sex issue, it tends to come up more with same-sex partners.

Marriage Influences Survivor Asset Transfer

There’s also a secondary monetary issue. You can title a house deed for joint tenancy with rights of survivorship, and you can name anyone to be your beneficiary on a life insurance policy and in both cases facilitate a seamless transition. But that is not the case with other holdings. Laws vary from state-to-state, and New Jersey, for example, has an inheritance tax. While the inheritance tax does not apply to assets that go to a spouse, it does apply to anyone who’s not your spouse. You could be with someone for 50 years and never be legally married or set up a civil union. This means that everything that your partner would inherit from you will be taxed as much as 16 percent. That can end up being a lot of money.

If you’re not married or have legally formalized your relationship as a civil union, there’s no getting around the inheritance tax. Imagine what happens when your surviving partner takes monies out of your 401(k). Getting taxed on your 401(k) withdrawals is standard. But if you and your partner are not married, an extra 15 percent or 16 percent in tax will be tacked onto the withdrawal. Even having a Will won’t circumvent the issue.

The good news is that same-sex couples who marry can enjoy the unlimited marital deduction for federal estate and gift taxes – a privilege many heterosexual married couples have enjoyed for decades. Gay and lesbian spouses who consummate their relationship through marriage can now generally leave an unlimited amount of assets to their surviving spouse without triggering a federal estate tax, providing both are U.S. citizens. A same-sex spouse can also now rollover assets from a deceased spouse’s retirement accounts to their account without a mandatory minimum distribution or lump-sum distribution. By revisiting their financial and estate plan, married same-sex couples can take take advantage of the marital deduction, rollover assets, and free up considerable liquidity.

Some Other Issues for Same-Sex Couples

Same-sex couples also have unique concerns when it comes to children, especially when only one partner is the biological parent – a common occurrence in same-sex marriages. Typically, when parents die, their assets are passed on to their children. If this is an estate planning goal for same-sex couples, it’s important to reach out to a family law attorney to discuss adoption.

One last item that occasionally arises in families. There’s sometimes a stigma attached to same-sex marriages that can also create problems even when Wills and other estate planning documents have been prepared. At the time of death, people start haggling over who’s in charge or who has rights – the same kind of thing that often happens with second marriages. Because such scenarios may find more fertile ground with same-sex or second marriages, it’s wise to have those important conversations about your end-of-life issues before and while you are preparing and/or reviewing your estate plan. Firmly stating your wishes during the planning stage, not when the family is in crisis mode, is the optimal time to raise your family’s awareness and encourage their understanding.

Get Your Ducks in a Row With Essential Estate Documents

Having a comprehensive plan in place can help you circumvent the complexities of estate planning. Review this list to become familiar with the estate planning documents you need:

At Phelan, Frantz, Ohlig & Wegbreit, LLC, we are always prepared to provide you with the estate planning guidance that is most appropriate for your specific situation. We are confident in our knowledge and ability to successfully navigate through any of the complexities involved.

Call us at (908) 232-2244 and be proactive in creating an estate plan that has your family’s best interests at heart.

DON’T HAVE A HEALTH CARE PROXY? THE TIME TO DRAFT ONE IS NOW

During the Pandemic and in More Normal Times a Health Care Proxy Is Essential

COVID-19 has taught us many things. Wash hands. Wear masks. Stay socially distant. One item that doesn’t typically make the cut: Draft your health care proxy. In fact, it’s a serious omission.

Your health care proxy, or a durable power of attorney for health care, is the important legal document that gives another individual the legal power and responsibility to make medical decisions for you if you are incapacitated and cannot make decisions for yourself. That person, your health care proxy or health care power of attorney, advocates for you if you cannot advocate for yourself. Your proxy has access to your medical records, talks to your doctors and guides decision-making on care protocols. The goal is to make certain that the care you receive is in accordance with your pre-stated wishes.

Just listen to the news and hear the stories of serious illness and sudden death wrought by the pandemic. If there is ever a reason to have a health care proxy to face potential end-of-life issues, this is it. As important, though, it’s an essential document for every perfectly healthy over-18 adult during more “normal” times. If you haven’t yet visited your estate attorney to draft and execute this document, the time to do so is definitely now.

Draft Your Health Care Proxy Before a Crisis

Research shows that half of all people over 65 who are admitted to a hospital are unable to make health care decisions for themselves. Therefore, it’s a good idea to draft a health care proxy before a crisis and when you are healthy. This will ensure that your agent is prepared and that a trusted person will be available to interact with doctors to make sure your wishes are carried out. If not, you could end up with burdensome and potentially nonbeneficial therapies that could increase suffering for you and your family.  Unfortunately, research has also shown that this is too often the case, and a disconnect occurs between what a patient wants and what is actually carried out.

The health care proxy addresses many aspects of end-of-life care. In the case of terminal illness or a poor recovery prognosis, an individual may want only palliative care, symptom control and pain relief and may wish to decline other more aggressive measures. These aggressive medical measures may include CPR, mechanical ventilation and intubation, blood transfusions, a nasogastric feeding tube and dialysis to name a few. We recommend that you avoid being overly specific in your document, because it is difficult, if not impossible, to fully anticipate the nature of a medical crisis and the needs that may arise.

But Who to Choose?

This is not necessarily an easy decision. Your first thought may be to choose a member of your immediate family (e.g., your spouse, son or daughter), but that doesn’t have to be the case. Your proxy could be a friend, a more distant relative, or someone from your place of worship—the latter which might be a good choice if there are religious considerations attached to your wishes.

The important point is that your proxy really understands your wants regarding care. He or she must have the emotional conviction to carry them out, even if his or her wishes are different than your own. You must have confidence that your proxy’s emotional connection to you will not prevent him or her from advocating in accordance with your preferences, even if medical professionals and/or other family members think otherwise.

Your proxy’s willingness to speak up includes asking questions of doctors and other health care providers relative to your particular health situation. What’s more, persistence matters. Your proxy must probe fully to understand both the immediate medical situation and the subsequent treatment options.

Important Conversations: The Necessary First Step

Regardless of whom you choose, the important first step is having a serious conversation with your family about end-of-life issues. Once you can determine whom your proxy will be, you should engage that person in further conversations in which you address some medical issues that could conceivably come up. In that conversation, you must also articulate how you feel about those issues. For example, you might say things like: “I want to be at home near family and with private nursing care. I want to be comfortable, yet cognizant enough to recognize my loved ones. I want to be able to say my good-byes.” And one last point: You must ask the person you choose about their comfort level in assuming this responsibility. Even more, you must let that person know that it is okay to say no.

The Yin and Yang of Medical Advances

Today, the many innovations in research and technology have resulted in significant progress in the management of serious disease states and medical conditions and can both work for patients and against them. On the one hand, they have enabled medical professionals to diagnose and determine whether a condition is untreatable or irreversible and enable physicians to prolong life despite these determinations—but at what quality. On the other hand, the ability to diagnose terminal conditions, follow respective treatment protocols and determine how long a patient may live after receiving a terminal prognosis, enables individuals to determine the care they would want to receive under the circumstances.

With full understanding of all available options long before a medical crisis occurs, patients can make care choices, sometimes employing combinations of care alternatives. There is no one answer. There are no set formulas. And thinking about these matters, let alone having an appointed proxy act on them, is never comfortable nor easy. Nonetheless, appointing a health care proxy and executing the document that provides the proxy with legal authorizations to advocate is essential. At Phelan, Frantz, Ohlig & Weigbreit, LLC,we are here to give you guidance and to hold your hand through the process—even as early as the time of your first conversation with your family.

Call us at 908.232.2244 and let us help you address these issues sooner rather than later. While not for the faint of heart, they are important considerations for you and your loved ones.

Standby Guardianship: An Option for Parents Faced With Temporary Illness or Disablement

Peace of Mind for Parents During the Coronavirus Pandemic

It comes as no surprise that the common guardianship anxiety shared by parents of young children has heightened during the Coronavirus (COVID-19) pandemic. The nagging thought of Who will take care of my children if something happens to me is now very pointedly What if I’m exposed to or stricken by COVID-19—particularly if you are a single parent or healthcare worker on the front lines. The quarantine and isolation that result can be extremely traumatic for children who may be transferred to an unfamiliar environment.

Fortunately, Statute 3B:12-72 in New Jersey allows you to appoint a Standby Guardian.  A Standby Guardian is the trusted individual you designate to care for your children if you are temporarily physically or mentally disabled. During the pandemic or in any period of disablement, this option provides you with peace of mind knowing that someone you trust will be immediately available to help care for your children.

Custody during your lifetime

Much like with a Power of Attorney, a Standby Guardian receives custody of your kids during your lifetime. The Standby Guardian Designation allows you to grant temporary guardianship to a family member or friend until you recover. A specific event triggers the start of the standby role. Even then, you are able to maintain authority in your children’s lives but require the day-to-day assistance for their physical and financial care.

The Standby Guardianship Designation has been a helpful tool for any parent who faces a scenario that will temporarily interfere with the daily care of their children. Whether part of a single or two-parent family, Standby Guardianship can come into play for parents encountering a short-term career relocation or an illness. Now, with the pervasive threat of COVID-19, the statute serves as an affordable and easily accessible option that provides you with the security of knowing your children will be protected if you are in any way unpredictably affected.

In New Jersey the statute allows a six-month period. A Standby Guardian is typically needed to provide only limited remedial help with money management or other advice and guidance. It is distinct from a Permanent Guardianship which is typically designated in your will to provide for the care of your child in the event of your death.

Easily completed process

The process for appointing a Standby Guardian is straightforward and easy and does not require court intervention nor medical documentation from your physician. You sign a written document, which is witnessed and notarized. The document identifies the triggering event, your child and/or children and the Standby Guardian who must also consent in writing to serve in the role.

COVID-19 has made all of us painfully aware of the need to have a solid estate plan in place. If you are a parent to minor children, Standby Guardianship is another component to consider to ensure that your children will be cared for should you be quarantined or incapacitated by COVID-19.

At Phelan, Frantz, Ohlig and Wegbreit, LLC, we will always be responsive and intuitive in handling the difficult questions that you have regarding guardianship or your estate planning. We are here to expeditiously and empathetically guide you through the process and ensure that your loved ones will be protected…in the face of Coronavirus and in other situations, no matter what.

Please call us at 908.232.2244 to safeguard your family’s future.

ESTATE PLANNING DURING COVID-19: ADAPTING TO THE TIMES

More People Get Onboard With Estate Planning During COVID-19

The corona virus (COVID-19) has changed lives in ways we’ve never experienced or even imagined before. In short order, we’ve been required to stay home, practice social distancing and take diligent safety and health precautions as recommended by the Centers for Disease Control and Prevention to flatten the curve and prevent the spread of this highly contagious disease.

Heightened awareness regarding the importance of estate planning during this time is one silver lining that may result from the dark cloud of this devastating pandemic. In response to the critical need for conversations about existing estate plans or the creation of a concrete plan, trust and estate attorneys have been forced to recreate the way in which they consult with clients. Attorneys have been finding creative and safe ways to confront the logistical obstacles posed by the legal formality that accompanies the execution of estate planning documents.

An abundance of calls and inquiries

We have been struck by an increase in calls from individuals inquiring about estate planning. Understandably, these calls are taking on a much different tone. In the past, when people came to the office to discuss their estate plan, it was clear the conversations were theoretical—a talk about something hopefully very far off. Now, whether a caller is young, old or middle-aged, the tone is heavier. Rather than checking another item off their to-do lists, the indiscriminate nature of COVID-19 has forced us all to focus more on our own mortality. Offering a safe and open space for clients to have these conversations and provide some peace of mind is important to the lawyers at Phelan, Frantz, Ohlig & Wegbreit.

Business, but not as usual: Technology is key

In most instances, the key estate planning documents are the Will, which controls the proper disposition of assets at death, and the Durable Power of Attorney and Advance Directive/Health Care Proxy, both of which enable others to make financial and medical decisions for us if we are not able to do so. Technology has become a powerful force in how attorneys and clients get the planning process under way and, sometimes, in facilitating the execution of final documents.

For the planning piece, most lawyers are using video conferencing technology to facilitate conversations between clients and counsel so that the appropriate documents may be crafted. More ingenuity is required when it comes to signing the documents. This is so because under New Jersey law, Wills are only valid if executed in the presence of two witnesses. Further, they are only “self-proving” if a notary (third-party) notarizes the signatures of the person making the Will and the witnesses. POAs and Health Care Proxies similarly must be witnessed (only one) and notarized.

New places to execute documents

Under normal circumstances, witnesses preferably are not “interested parties” – beneficiaries or fiduciaries – of the estate for which a document is being executed. Conditions caused by the pandemic, however, may limit the options available to those signing documents.

Face-to-face signings may still occur – most typically in law office parking lots with gloves and masks intact, each participant using separate pens and exercising proper distancing but within sight and sound range of the person (the testator) signing their Will and for whom it is being prepared. Once signed, documents can be witnessed, notarized and collated by staff who have remained at a safe distance. Porches or window-separated settings provide alternate and acceptable locations.

Earlier this month, Governor Phil Murphy signed into law a bill that permits remote notarization effective immediately. This provision eases the need for face-to-face meetings for document execution and allows estate planning attorneys a greater degree of flexibility to accommodate the health and safety concerns of their clients.

It’s fair to say that both clients and attorneys are finding that these alternate ways of doing things are cumbersome, if only because they are so different and, right now, feel unnatural. But it’s the best clients and attorneys can do to avoid delays at this time.

Not easy but necessary

Important as it is, estate planning is always a delicate subject. These days the discomfort associated with the topic is ten-fold. The anxiety being experienced by everyone is legitimate and as professionals, spouses, parents, and sons and daughters, we have these same worries.

Regardless of whether legal interactions by Zoom or in parking lots becomes the new norm, we will continue, as always, to make our clients’ needs a priority. We remain focused on our clients’ safety during this difficult time and are committed to being a partner who will listen and assist.

At Phelan, Frantz, Ohlig & Weqbreit, LLC, we will carefully listen to your unique family circumstances and, as always be responsive, and intuitive in handling the difficult questions that you have regarding your estate planning during COVID-19 or anytime. Please call us at 908.232.2244 to learn how we can assist you in crafting your Will and important accompanying documents that best fit your wishes and needs.

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