Some time ago we had an education program about Alzheimer’s Disease. Over 200 people attended and I made a free offer to the attendees: I would review their current “estate planning” documents for free. Many folks took me up on my offer. The results? I was shocked. They were all inadequate. Let me explain.
I was not surprised that their documents would fail at some point since, by and large, they were prepared for “estate planning.” That means “death and taxes.” The lifetime, long term care needs caused by aging conditions such as Alzheimer’s, Parkinson’s, stroke, etc. require a different approach. That is one of “take over for me and do what I would.” The death and taxes approach is “if I am not able to take care of business due to sickness, then I’m giving limited authority to continue, but not change, my business.” Long term care requires more than “just keep things going.” It often calls for major changes to be made in lifetime arrangements as well as, at times, changing the “estate plan.” For example, it is very common for a family member, usually a daughter, to step up and be a caregiver in the final years of an elder’s life. That can require significant changes to the elder’s matters to qualify for government benefits. A trust or a power of attorney must have flexibility to handle unpredictable life changes built in. Otherwise, it is off to the probate court you go.
Back to the main story: Here are some of the nine common short comings I found in attorney prepared documents:
no successor agent named;
no ability to open and close accounts;
no currently effective healthcare power;
no pension plan powers;
no ability to create, amend or revoke a trust;
no authority to employ family members;
no authority to compensate a full-time family caregiver;
gifting power inadequate to qualify for benefits;
no provision to deal with Michigan’s self-dealing limitations on trusts and powers of attorney.
There were other less common problems as well. Any one of these shortcomings can lead to lifetime probate. So, take a tip from me. If you are at all concerned about long term care – in home, assisted living, you name it – run, don’t walk to your certified elder law attorney and have your “estate planning” documents turned into elder law based “life planning” documents.”
Jim
