Wednesday, June 13, 2018

The Slippery Slope of Multiparty Bank Accounts


Mary had just turned 79 and was recovering from a heart attack and open-heart surgery—a major health event that had made her rethink her life. While Mary still lived alone in the family home, she got a lot of help from her adult children, who lived nearby. Her daughter Alice paid her bills, did her grocery shopping and took her to appointments. Mary decided to add Alice’s name to her checking account. It gave her peace of mind to know that if she became ill or incapacitated and could no longer sign checks, Alice would be able to seamlessly step in to pay bills and manage her affairs.

Alice’s name on her account gives her access to all of Mary’s money

Mary’s assets include her home and a checking account with a significant amount of money. By adding Alice’s name to this account, Mary was giving Alice access to virtually all of her money. Mary was grateful for Alice’s help, but she was also close to her son, Bill, whom she counted on for help with her yard and household repairs. Did Mary realize that this wasn’t just a convenient solution: she was giving all of her money to Alice, exclusive of Bill.

Mary’s son Bill: Concerned that all of the money will go to Alice

Not surprisingly, Mary’s son Bill’s reaction was less than enthusiastic. “Giving anyone access to all of your money, unchecked, sounds unwise. What happens when you die? Will Alice get all the money left in your account? Her name is on the account, and everything will default to her.”
Mary reassured Bill that Alice would share whatever was left in the account with him, that access to her account was only for the purpose of taking care of Mary’s expenses. The reality? She had no way of knowing if Alice would share the remaining account balance with her brother. Bill suggested creating two accounts, one for household expenses and the other for savings, giving Alice access only to the smaller checking account, but Mary liked the simplicity of keeping all of the money in one account.

A mother, a daughter and two bank accounts help jointly

In another case, two bank accounts were held jointly by a mother and daughter, and the decedent’s son disputed their ownership. At the time of the mother’s death, the accounts held nearly $500,000. The daughter saw the mother five-six times a week and was responsible for scheduling and overseeing her mother’s medical care, hospital transportation and other matters. The mother opened the joint accounts so it would be easier for her daughter to help. The daughter testified in a lower court that her mother asked her to meet at a bank to open the accounts and that she signed a signature card that gave her complete access to both accounts. The daughter testified that her mother informed her that the money in the accounts was for her use.

Funds belonged to daughter by Right of Survivorship

The son claimed the funds that remained in those accounts after the decedent’s death were intended to pass to several Trusts established by his parents during their lifetime. However, the court could find no evidence of such intent and ruled that the funds belonged to the daughter by Right of Survivorship.

Right of Survivorship: A joint account passes to the surviving account owner

  • According to the California Court of Appeal, unless there is clear and conclusive evidence to the contrary, ownership of a joint bank account passes—as a matter of law–to the surviving account owner by Right of Survivorship.
  • In both of these case studies, the money defaults to the daughters by Right of Survivorship. Regardless of intent, giving their daughters access to their accounts means that when these women die, their daughters will inherit all of the cash in these accounts.

Joint bank accounts are often used when planning for incapacity

In both of these cases, the families established joint checking accounts to help care for a parent. They provide easy access to money for incidental expenses, healthcare payments and emergencies. But as our case studies demonstrate, when there are other family members and potential inheritances involved, there is room for conflict.
Multiparty accounts may seem like a good solution for incapacity planning, but there are better solutions:
  • Create a smaller joint account linked to a larger account in the name of the Trust. This provides the necessary liquidity, but since it is linked to the Trust account, there is no right of survivorship.
  • Open an account in the name of the Trust, with both parties listed as co-trustees. This ensures that upon the parent’s death, the funds remain in the Trust.
  • Establish a Payable Upon Death (POD) account. The account owners—in our cases, both mothers–designate who should receive any money that remains in the account upon their deaths.
  • Insert “in trust for” to the account title. This would clearly indicate the purpose of the account and the intended beneficiaries.
Contact California Document Preparersat one of our three Bay Area offices today to create a Living Trust. A Trust is a much better way to plan for incapacity of your loved ones. Our dedicated team is helpful, compassionate and affordable.

Tuesday, June 5, 2018

Judge Overturns Doctor-Assisted Suicide Law and Reopens the Debate


On May 15, Riverside Superior Court Judge Daniel A. Ottolia declared that the California legislature violated the law by passing the End of Life Option Act (EOLOA) in 2015 during a special session dedicated to healthcare issues, according to the plaintiffs in the case as well as advocates for the law. "We're very happy with the decision today," said Alexandra Snyder, head of the Life Legal Defense Foundation, one of the groups that filed the lawsuit. "We will now wait and see what the attorney general does."

The response from California Attorney Gen. Xavier Becerra

Becerra’s response: "We strongly disagree with this ruling, and the state is seeking expedited review in the Court of Appeal." Becerra has filed an appeal.

Ruling reopens an emotionally charged issue

Judge Ottolia’s ruling reopens an emotional debate on Californians’ ability to make decisions on how they will spend their final days. John C. Kappos, an attorney representing Compassion and Choices, which advocated for the law, said he believes the passage of the law was constitutional because aid in dying is a healthcare issue. "Ultimately, we are confident an appeals court will rule the Legislature duly passed the End of Life Option Act and reinstate this perfectly valid law, which the strong majority of Californians support."
Even if the appeals court upholds Ottolia’s decision, the state legislature could pass a similar law, perhaps with additional safeguards. The law has strong support in the legislature and among the public.

One view: A short-term victory for those who object

Harry Nelson, a Los Angeles healthcare attorney thinks it's unlikely the law will be overturned permanently. He said that even if the court's decision stands, the Legislature would probably be able to reinstate the law with whatever changes the court deems necessary. "I think this is a short-term victory for people who object on religious principles to the availability of this option," said Nelson, who represents several doctors who have written prescriptions under the law. Nelson believes that Ottolia's decision to give Becerra five days to file an emergency appeal was "aggressive, leaving the attorney general's office with a really narrow window to do everything they need to do to get the court of appeals to intervene and uphold and continue the law," he said.

An opposing view: Assisted suicide advocates circumvented legislative process

"This ruling affirms that assisted suicide advocates circumvented the legislative process," Matt Valliere, executive director of the New York-based Patients Rights Action Fund, which opposes legalizing physician-assisted suicide, said in a statement. "It represents a tremendous blow to the assisted suicide legalization movement and puts state legislatures on notice regarding the political trickery of groups like Compassion and Choices."

EOLOA: A look back and a look forward

  • California’s End of Life Option Act was signed into law in 2015, and the law went into effect on June 9, 2016.
  • In the first six months, more than 100 people used the law to end their lives.
  • California's data from the law's first six months show that 173 physicians wrote 191 prescriptions statewide.
  • The law allows patients with fewer than six months to live to request end-of-life drugs from their doctors.
  • The law’s passage was controversial and it has remained a divisive issue. Conservatives argue that the limits on euthanasia gradually erode, and that the law endangers the weak and marginalized. In the years since the law went into effect, groups opposing assisted suicide have continued to lobby for its repeal.
  • Writing the lethal prescriptions is voluntary for doctors and medical facilities in California; some, including all Catholic and church-affiliated hospitals, have not allowed their physicians to prescribe such medicines.
For those who want to use the EOLOA, checks and balances are carefully built into the law. A patient must make two oral requests, at least 15 days apart. There must be witnesses and second opinions about their conditions. The process is spread over time to avoid someone’s making an impulsive decision.
Becerra is expected to file an appeal to a higher court, but he is yet to do so. Experts believe it is unlikely that the decision will affect assisted suicide in California in the long term. Even if the appeals court upholds Ottolia’s decision, the state legislature could pass a similar law, perhaps with additional safeguards. The law has strong support in the legislature and among the public.

Creating an Advanced Healthcare Directive

End-of-life care options can be detailed in an Advanced Healthcare Directive that is part of our comprehensive Living Trust package. Contact California Document Preparersat one of our three Bay Area offices to get started today. Our dedicated team is helpful, compassionate and affordable.

Wednesday, May 23, 2018

Have You Been Named Probate Executor? Brush Up Your Bookkeeping Skills


Elise sat in her kitchen staring at a huge, meaningless pile of bills, bank statements, outstanding invoices and cancelled checks. She had always been close to her dad, but right now she was furious at him for dying and making her the Executor of his estate in his Will. Elise was a musician with an MFA, not an accountant. She was nearly 50 and had never so much as balanced her own checkbook. She was not irresponsible, just not equipped to deal with this kind of challenge.
She finally called her friend Joe, a bookkeeper. Joe arrived, looked at the sea of bills and quickly agreed that her dad’s records were a mess. He’d never recorded checks, and some of the invoices were three years old.

Joe helped Elise create a plan that started with getting methodical and organized

  • Create a pile of all the bills and invoices.
  • Look for receipts, cancelled checks or other verification that a bill has been paid, such as bank statements, and create another pile.
  • Keep a separate pile for anything that’s going to affect a credit balance–checks that might have been received or automatic deposits that were made to an account.
  • Create a spreadsheet. List all of the bills found; match them with cancelled checks and receipts.
  • If you can’t find something, first check bank statements. If nothing is there, call the company that sent the invoice and ask if the bill has been paid.
  • If it has been paid, request a receipt. If it hasn’t, create a separate spreadsheet category for unpaid bills or outstanding debt and note the amount.

Key responsibility of the Executor: Accounting for assets and liabilities

To those who are not used to keeping careful financial records, this may seem like a lot of work, and it is. But until the assets and liabilities have been accounted for, Probate cannot move forward. It is important to document every step taken to verify liabilities and assets. It is also important to document the liquidation of assets to either pay bills or divide the estate among the heirs. This will include the cost of an appraiser who will estimate the value of any property that needs to be sold, then recording the sale.
  • Invest in financial software. A spreadsheet is fine; Excel will do the math for you.
  • Focus on the numbers. Check and recheck the numbers—they need to balance.
  • Match every number to a source document. It is much easier to locate an error if every entry is matched to a source document–a receipt, account statement, correspondence, bills paid or pending, and photocopies of checks and deposit slips. Note the source on the spreadsheet, file the documents and keep on hand.
  • Document everything. Keep comprehensive notes on all expenses and transactions made on behalf of the estate, including dates, purpose and the exact amount. Keep receipts.

Don’t take questions or challenges personally

If the estate closes and a mistake is later discovered, those who received disbursements may be required to reimburse the court to correct a deficiency. Discovering errors before an estate closes protects the heirs and the estate. Conducting an accounting of an estate during Probate is a technical process that requires attention to detail and accuracy. When done well, Probate proceeds smoothly.

Probate is a growing service for us

If your Probate is uncontested, you don’t need an attorney, and we can assist you—all for one flat fee of $4,500. Contact California Document Preparersat one of our three Bay Area offices today to schedule an appointment. Our dedicated team is helpful, compassionate and affordable.

Wednesday, May 16, 2018

Why Don’t More Families Have Living Trusts? Read These 4 Excuses!



Why don’t more East Bay families have Living Trusts? Good question. But here are some of the excuses:


1. I don’t have an estate–why do I need an estate plan?

This is, of course, the classic excuse. Certainly those with a lot of assets have more to protect and more to lose by not making plans for the distribution of their estates. Yet many people are surprised at the cumulative value of their assets. Here in the Bay Area, with our inflated real estate market, anyone who owns a home has a significant investment. Cars, antiques, artwork, jewelry, brokerage accounts and life insurance policies—collectively, all of these can contribute to a significant total net worth.

2. Won’t my spouse automatically inherit my estate?

Some families assume that if something happens to one spouse, everything will, by default, go to the surviving spouse. In general, this may be true, but what if something happens to both spouses? A tragedy, but it happens. And sooner or later, that remaining spouse will die. So far, no one has figured out a way to beat the odds. Without a Will or Trust, along with their grief, their heirs will be dealing with Probate. Depending on the complexity of the estate, Probate can take several years, and it is entirely preventable by creating a Living Trust.

Or here’s another scenario that will affect spousal inheritance

Let’s say someone refinanced his/her mortgage, and one spouse’s name was taken off the house? Then imagine that spouse dies. That estate will not “automatically” pass to the surviving spouse. In fact, it will potentially make the surviving spouse’s life very difficult indeed.

3. I don’t want to inherit my parents’ credit-card debt

This was a new excuse we heard a few weeks ago. One son had discouraged his parents from creating estate-planning documents because he didn’t want to be responsible for his parents’ credit card debt when they died. In general, children aren’t responsible for a deceased parent’s debts, and in some cases, a spouse may be exempt as well. In general, the estate is responsible for paying debts. Once assets are liquidized and if there isn’t enough money in the estate to cover the amount owed, the debts generally go unpaid. It’s those who are owed money—not the heirs–who are left holding the bag.

4. I have a Will, so my estate won’t be subject to Probate

In fact, all Wills are subject to Probate. It’s the process in which a court determines whether the document is valid and ensures that relatives and creditors are notified. This process can take several months and drain thousands of dollars from the value of the estate. A Living Trust is the legal document that holds your property; when you die or become incapacitated, the property in your Living Trust is smoothly transferred to your beneficiaries.

Something else to think about:

  • If you own property in more than one state—even if it’s a timeshare–you DO want a Living Trust. Going through Probate in multiple states is an experience that you will never forget.
  • If you value privacy, you want a Living Trust. A Will is a public document, and anyone can come to a Probate
  • Keep your Trust updated with life events.What’s a life event? Think about anything that will affect the inheritance of your heirs—births, deaths, divorce, important investments.

We encourage everyone to create a Living Trust

Creating a Living Trust is one of the most thoughtful things you can do for your family. If you need to create or update your Trust, contact California Document Preparers at one of our three Bay Area offices today to schedule an appointment. Our dedicated team is helpful, compassionate and affordable.

Tuesday, May 8, 2018

New ‘Instructions’ Could Let Dementia Patients Refuse Spoon-Feeding



June marks the two-year anniversary of California’s End of Life Options Act (EOLA). Between June 9 and December 31, 2016, 111 patients were reported to have died following ingestion of aid-in-dying drugs prescribed under EOLA.

While controversial, the law has stringent controls

The law has been extremely controversial, opposed by many groups who argue that it creates too many opportunities for abuse. Yet the law, as it is structured, has stringent controls. Those with fatal, debilitating diseases who wish to take their own lives must get their doctor’s order and an opinion from a second doctor about the severity of their conditions. The act must be carried out within a certain time frame. The fact that there have been relatively few assisted suicides in California since the law was passed indicates to many that the law is fair and is working.

AHD: The legal document that allows people to detail how they want to die

At California Document Preparers, our Living Trust package includes an Advance Healthcare Directive (AHD). It is this document in which people can detail their final wishes about how they will die—if they want nursing care or prefer to die at home. If they want to be surrounded by their families or if they prefer to enlist the care of hospice and refuse artificial efforts to be kept alive. AHDs are the legal documents that record the ability to halt interventions, treat the patient’s pain and allow them to die as peacefully as possible. An AHD includes patients diagnosed with progressive dementia who can make end-of-life decisions before the disease robs them of their ability to sign legal documents. This practice has not included provisions to refuse food and fluids offered by hand—until now.

Washington state has new end-of-life guidelines for dementia patients

A Washington state agency, End of Life Washington (EOLWA), advocates for medical aid in dying and has created guidelines for dementia patients who don’t want to be spoon-fed at the end of life. The group helps people using the state’s 2009 Death with Dignity Act, recently posted new Instructions for Oral Feeding and Drinkingon its website.
The guidelines are directed at those with Alzheimer’s diseaseand other progressive forms of dementia. It instructs caregivers not to provide oral food or fluids under certain circumstances. “These instructions are groundbreaking for patients who fear losing control not only of their faculties but of their free will to live and die on their terms”, said Sally McLaughlin, executive director of EOLWA. “We get calls from people with concerns about their loved ones with dementia feeling like they’re being force-fed. Those with dementia understand that as they stop eating, they would like no one else to feed them.”

The new guidelines have both their critics and proponents

As with the death with dying law before it, these new guidelines have their share of critics who have concerns about potential mistreatment of vulnerable patients. They fear that these guidelines could be used essentially to starve the elderly or incapacitated. Proponents welcome the new guidelines, believing that they help define the uncertainties surrounding assisted feeding at the end of life.

Guidelines target those who show signs of not wanting food

The guidelines do not apply to people with dementia who still get hungry and thirsty and want to eat and drink, the authors note. “If I accept food and drink when they’re offered to me, I want them,” the document states. But if the person appears indifferent to eating, or shows other signs of not wanting food, turning away, spitting food out, coughing or choking, according to the guidelines, this is when attempts to feed should be stopped, and it’s at this point that caregivers should respect those actions.

“No matter what my condition appears to be, I do not want to be cajoled, harassed or forced to eat or drink,” the document states.

The new guidelines are not legally or ethically binding. It’s important to keep in mind that these are guidelines; they are neither legally nor ethically binding. They do, however, bring increased visibility to an issue that we likely will hear more about as the baby boomer population ages. Nearly two dozen states have laws that address assisted feeding, including many that prohibit withdrawing oral food and fluids from dying people.

An Advance Healthcare Directive is part of our Living Trust package

An AHDis part of our Living Trust package. If you need to create or update your Trust, contact California Document Preparersat one of our three Bay Area offices todayto schedule an appointment.Our dedicated team is helpful, compassionate and affordable.

Wednesday, April 25, 2018

Power of Attorney to Curtail Dad’s Spending


We’ve all read disturbing stories about elder abuse, and it may be these stories that contribute to a reluctance by many seniors to create a Power of Attorney. The Agent you name as your Power of Attorney will be responsible for determining where and how you live out your life. It should be someone with integrity, someone you trust to make good decisions about your healthcare and finances. The following story an example of how one daughter’s getting Power of Attorney was absolutely in the best interests of her father.

Meet Christine and her father, Dick

Christine and her husband, Bill, weary of long, rainy Seattle winters, retired in sunny Florida. Within two years, Christine’s parents, in their early 80s, moved to a nearby community. A pragmatic RN, Christine knew that she had just become her parents’ caretaker. She also knew she would get no help from her only sibling, a sister who lived in Chicago and hated Florida.
Within five years of their move, Christine’s mother died. Her father, Dick, stayed in their home, but his health was declining. He wasn’t taking his medications or eating properly, and the house was more than he could manage. Christine helped him sell his home and move into a very nice retirement community where he had his own unit, was surrounded by friendly people with numerous activities to keep him busy. Dick, however, remained in his unit, didn’t socialize or participate in any events and became increasingly isolated.

He began buying new cars, including a sexy convertible

Dick became obsessed with buying cars. Once he drove the car home, he’d find a reason to sell it. It was too big, too small, too expensive, guzzled too much gas, etc. Within a single year, he would easily have three-four car transactions, always with a different dealer. The irony was that he drove to WalMart once/week; Dick had no need for a car. He also began investing heavily in coupon sweepstakes, convinced that Publisher’s Clearinghouse was going to make him a millionaire.

The problem: Her father was running out of money

Between the car and the coupon fetishes, Dick was depleting his resources. Christine wanted to get a Power of Attorney to control her father’s spending, but he refused. It took Dick’s totaling his latest car, a sexy convertible, and ending up in the hospital, for him to finally relent.

As her father’s Power of Attorney, Christine was able to manage her father’s life

Christine:
  • Paid his bills, giving her father a weekly allowance and putting an end to his car purchases and restricting the number of sweepstakes he could enter.
  • Arranged for a healthcare aide to visit three times/week to monitor his health and make sure he was taking his medications.
  • Helped Dick update his Living Trust and Advanced Healthcare Directive while he was still mentally competent.

Power of Attorney makes decisions in the best interests of the Principal

The Agent under a Power of Attorney has a fiduciary obligation to make decisions that are in the best interests of the Principal. In most cases, the Agent is an adult child who has been named by a parent, but a Power of Attorney can be a trusted friend, financial adviser or a professional fiduciary. In this case, Christine was acting in the best interests of her father. Becoming legally empowered to manage his money meant that Dick would not have to move in with her and Bill. Call it enlightened self-interest, but Bill and Dick hated each other, so avoiding this situation was clearly in everyone’s best interest.

Powers of Attorney all terminate on death or incapacity

  • The Agent can engage in legal business on behalf of the Principal until that person dies or is mentally incompetent to act on his/her own behalf. Once either of those events happens, the power of attorney is no longer valid.
  • A Durable Power of Attorney can survive mental incapacity, but not death. A durable power of attorney allows the agent to continue to act on the Principal’s behalf even if the Principal is mentally incompetent.

Creating a Power of Attorney is part of our Living Trust package

We encourage everyone to think carefully about whom they appoint as their Agent. Being a Power of Attorney can become time-consuming, and it may require dealing with financial accounts, so your Power of Attorney should be comfortable managing financials and dealing with attorneys, accountants and government agencies such as social security. If you need to create or update your Trust, contact California Document Preparers at one of our three Bay Area offices today to schedule an appointment. Our dedicated team is helpful, compassionate and affordable.

Wednesday, April 18, 2018

Creating a Living Trust? Don’t Forget Your Pets



I don’t know what it’s like in your neighborhood, but where I live, everyone seems to have a dog. On my morning walk I routinely greet a wide variety of scruffy mutts of dubious lineage, sheepdogs, the biggest Great Dane I’ve ever seen, an obese Bulldog and a yellow Lab who has simply stolen my heart. For many people, especially the elderly, a pet is a loyal companion. It shouldn’t be surprising that people want to make provisions for their pets in their Living Trusts, just as they do for the rest of their families. In California, as in 39 states, there are Pet Trusts.

One woman loses her best friend and a dog

Clare Jackson’s eyes fill up when she thinks about the death of her best friend, Sylvia. Not only did Clare lose her friend of 40 years, but she also lost Sylvia’s beloved Labrador, Dolly. Sylvia had a stroke and died, and her caregiver immediately euthanized Dolly. “There was nothing I could do–Sylvia had revised her Will, and there was no mention of Dolly.”
This experience was a bitter lesson for Clare, who also loved Dolly and would have gladly provided a loving home for her. (Note that Clare and her husband have made provisions in their Trust for their own dog, Oliver.)

Animals who outlive their owners face uncertain futures

People who die before their pets leave stranded animals. In a best-case scenario, a neighbor, family member or friend cares for the pet for the rest of its life. The alternatives? The Humane Society estimates that six to eight million dogs and cats enter shelters annually. An estimated half are adopted, and the rest are euthanized. In some sad cases, after the death of its owner a pet is simply let out the front door to get lost, run over or any of the other horrible fates that befall abused animals.

Thinking of leaving a chunk of change to Spot or Fluffy?

So what are your options for your pets? A Will is a transfer of assets. An animal can’t own property–someone has to be in charge.

The solution: A Pet Trust

This legal document outlines the continued care and maintenance of domestic animals; it also names new caregivers or directs Trustees to find new homes for pets. A Trustee has a legal duty to carry out your wishes.
While owners may simply include their pets as provisions in their Wills, Michael Markarian of the Humane Society believes a Trust is a better option in case of disability. “Wills may take weeks to be executed and could be contested, but a Living Trustcan be written to take effect immediately.”

Creating a Pet Trust: Think about the economics of caring for your pet

When naming a Trustee, think about the expense of caring for a pet. Food and visits to the vet can add up. Some owners make outright gifts of cash for their animals’ care.
  • One woman set aside $5,000 to offset costs for the person who ends up with her dogs.
  • Another pet owner reveals that she has a list of ten people who are potential Trustees care for her cat, Sadie. What the new caregiver won’t know at first is that the estate is instructed to award the person $10,000 if the feline is still with him/her after six months. “I want someone to care for Sadie out of love and kindness and be rewarded if they keep her and fall in love with her like I did.”
  • Others leave money to be distributed over time—monthly, annually, or as reimbursement for expenses.
  • For even more security for a beloved pet, name someone other than the caregiver as Trustee. This person will dole out the cash on some kind of predetermined schedule, reducing the risk of someone’s taking the money and getting rid of the pet.
  • One man created a Living Trust for his three Rottweilers. If his ex-wife couldn’t take care of the dogs, two Trustees were given explicit instructions to use their best judgment to find good homes for his pets. There were dependencies: The dogs should be kept together, and the new caregiver would receive $150 per month, plus money for veterinary bills and other expenses.

Choose your Pet Trustee carefully, just as you would choose a guardian for your child

Talk to potential caregivers for your pets until you find someone you trust. In the same way that you would be choosing someone to take care of your children, what you really want is a person who will love your pet as you have.

We encourage everyone to create a Living Trust


A Living Trust is an important part of life planning and is one of the most thoughtful things you can do for your family. Our dedicated Living Trust team is helpful, compassionate and affordable, available by phone and email throughout the process. Contact California Document Preparers at one of our three Bay Area offices today to schedule an appointment.