Logging Out of Your Digital Estate Plan
By now, you’ve undoubtedly heard about the wisdom of incorporating a “digital asset plan” in your estate plan. If you haven’t, feel free to visit my introductory article on the topic. However, if you are familiar with the concept, then this article will shed more light on the subject. Below you’ll find what can happen to a loved one’s digital account (email, Facebook, Twitter, etc.) when he or she passes away. Facebook Facebook has a “family-and-friend-friendly” policy. Surviving loved ones have 2 choices: memorialize the account or have it deleted. If a Facebook account is memorialized, which can be requested by anyone, then the account is somewhat frozen. Confirmed friends can post to the account and view it on their news feeds, but no one can access or change the account. Proven immediate family members or the executor are the only persons who can request the account’s deletion and must provide proof of the relationship through certified vital records or court documents. LinkedIn Ironically, LinkedIn, a professional social media network, has a somewhat more relaxed approach than Facebook. If LinkedIn is notified that a person has died, LinkedIn will close the account and remove the profile. Notification must provide, the member’s name, company where the member worked at most recently, the relationship between the person notifying LinkedIn and the member, a link to the member’s profile, and the member’s email address. Odd is the fact that LinkedIn doesn’t require proof of a relationship or death certificate. It seems that an unresponsive email is sufficient evidence. But to the poor individual who is only on vacation and friends decided to pull a prank, it might not be so sufficient. Hmmm…. Twitter Despite its brevity and awesomeness, Twitter is even more strict than Facebook. The only request observed is one to delete the account. If a loved one’s account is to be deleted, Twitter requires the following information from an immediate family member or executor: username and of the deceased user’s Twitter account, copy of the deceased’s death certificate, copy of the family member or executor’s government-issued identification, AND a signed statement providing the requester’s first and last name, email address, current contact information, relationship to the deceased or their estate, action requested, and brief description detailing how this account belongs to the deceased. Twitter denies access to everyone, regardless of relationship or fiduciary capacity; there is no tweeting after death. Instagram It looks like Instagram does its own investigation into a decedent\’s death. The platform simply asks requesters to email its staff about deceased users and then the folks at Instagram will let the requester know if any further information is available. Does anyone besides me thinks this is a little creepy? Gmail This is Google, so while access may be granted, a process will be required. First, the requester must provide Google with his or her full name, physical mailing address, email address, photocopy of a government-issued ID, the Gmail address of the deceased, and the death certificate of the deceased. Now, going through step 1 doesn’t guarantee access to the deceased’s email. Google may require the requester to take a second step 2: providing a court order or other materials. Hotmail Hotmail considers you dead if your account is inactive for 12 months. It will delete contents after 9 months of inactivity and delete the account after 12 months of inactivity. Plus, it’s unlikely that if you’re alive and want your contents back, that you’ll be able to retrieve them. Hotmail is a Microsoft platform, so it follows Microsoft’s “next of kin” process. To prove that you are the legal next of kin and that the account holder is deceased – or incapacitated – Microsoft requires: an official death certificate of the user; if the user is incapacitated, a certified document signed by a medical professional in charge of caring for the user (oops! HIPAA violation warning for doctors) or a signed court document providing that the requester is an agent with power of attorney or a conservator. Documents for decedents from a court must show that the requester is a trustee or an executor. And still further proof is needed to prove kinship: marriage certificate showing requester is surviving spouse (Query: What if spouse divorced and hates surviving family members?); signed power of attorney documents; copy of a will or trust (read privacy issues); a birth certificate for the user showing parentage of the requester; or guardianship documents; and a photocopy of the requester’s government-issued identification. Once all information is provided, the requester still does not gain access to the account but will instead receive a DVD of all the account\’s contents, including emails, attachments, address book, and Messenger contact list. The requester can ask for the account then to be closed. Lesson: Logging on to the digital world may be easy but permanently logging out isn’t. Hat tip: My intern, Lesley Gwam.
Charitable Trustees Beware
Cycling to the office this morning, I passed a woman jogging while pushing a 3-wheeler stroller jogger with twins in it. My mind meandered as to how challenging it must be to care for twins and let’s not even talk about triplets! But I couldn’t help it… Hope and Bill had triplets: Gray, Jay, and Faye. Bill couldn’t handle the stress of 3 terrible twosies, 3 tumbling toddlers, 3 precocious pre-teeners, and 3 hormonally tangled teenagers, so he divorced Hope when the triplets were 15 and went on a permanent excursion to chant in the Himalayas. Hope, not one to be deterred, called on her siblings, Charity and Joy. All was going well until Hope suddenly became ill and, at the young age of 44, passed away, leaving 3 teenagers with no parent. Bill had never been heard from since he left with snowshoes in hand. However, Hope left a will and a trust, naming Charity as trustee and Joy as guardian. When Hope passed on, though she didn’t have a taxable estate at $4 million, she left a considerable amount to her children and her sisters: $1 million to each child and $500,000 to each sister. After the trauma of losing their sole parent had waned to a manageable, moving forward, level, May, Faye, and Jay continued planning for college. Faye was especially excited because she had been accepted at her first choice for engineering. Well, 3 years into her engineering program, Faye and a few other classmates decided to start a small technology company. Each classmate pledged $100,000.00 as seed money and each had the means to fulfill the pledge. So Faye phoned Charity, who was vacationing in the Cayman’s, told Charity about the new venture and asked for her pledge money. She knew that her mom had left enough for her in the trust at this stage – Hope had staggered mentoring provisions in each child’s trust – to more than meet the pledge and that Charity was to invest for the purpose of conservation and then growth. What Faye didn’t know, however, was that Charity was very charitable to herself, using not only Faye’s trust, but May’s and Jay’s as a source of charitable giving. Charity told Faye that it would be a little difficult to come up with the $100,000.00 straight from Faye’s trust, but that she would borrow from May and Jay and help Faye meet the pledge. Faye, the oldest by 10 seconds, didn’t like what she heard and a heated argument ensued. It ended with Aunt Charity telling Faye to calm down or else she wouldn’t get anything because she had discretion over the distribution and there was nothing Faye could do. In fact, Charity decided to make the Cayman’s her home and wasn’t sure when she’d be returning to the states to give Faye the distribution. But Charity was wrong; Faye had the law on her side and Charity was eventually extradited to the U.S., where she faced counts of fraud and breach of fiduciary duty. Faye and her classmates’ business boomed; she eventually coupled with a partner and had a child aptly named, Prudence. The Prudent Investor Rule: A trustee administering a trust has a duty to invest and manage the trust as a prudent investor would considering the purposes, terms, distribution requirements, and other circumstances of the trust.
Unraveling the Windsor Knot Part II
In Part I, we covered the U.S. v. Windsor (Windsor) analysis on the first component of standing: Article III requirements. Standing is the term of art used to discuss whether (1) parties have a case or controversy that the courts can hear, i.e., “Article III standing,” and (2) even if the court can hear the case, after considering other factors, the issue becomes should it, i.e., “prudential standing.” Here, in Part II, we continue looking at the issue of standing, specifically, satisfying the prudential principle. HINT: If you don\’t want to fight through the necessary legalese, bullet points are at the end. Having found Article III standing requirements met, the majority in Windsor, continued to prudential considerations. The Opinion used prudential considerations to address the BLAG’s standing. Before discussing and explaining what prudential standing is, Justice Scalia’s reference in his dissent to the majority’s use of prudential considerations is worth noting. Scalia argued that that majority sees the Article III requirements of adverseness as “prudential.” Recognizing how the Court uses the term “adverseness” in the Opinion, one can understand Scalia’s observation that the majority conflates adversity within the meaning of controversy for Article III standing and the adverseness involved with prudential standing. The majority cites Allen v. Wright (Allen) to explain the principle of prudential standing and offers Warth v. Seldin (Warth) as an example of how the limitations considered in the prudential principle can be overcome. And it is with these 2 cases that we’ll continue untying the Windsor knot of standing. Allen is a 1984 case where African-American families challenged the IRS’ standards for tax-exempt status as those standards were applied to private schools that allegedly engaged in racial discrimination. The Court in Allen, stated that the prudential strand of standing called for “judicially self-imposed limits on the exercise of federal jurisdiction, such as (1) the general prohibition on a litigant\’s raising another person\’s legal rights, (2) the rule barring adjudication of generalized grievances more appropriately addressed in the representative branches (a little ditty known as the “political question doctrine”), and (3) the requirement that a plaintiff\’s complaint fall within the zone of interests protected by the law invoked.” So this means that even if Article III standing is found, an appellate court does not have to hear a case if it is limited by one or more of the 3 factors listed above, i.e, if the Court is limited by prudential considerations. Ultimately, the Court ruled that the plaintiffs in Allen lacked Article III standing. Since the plaintiffs lacked Article III standing, whether the plaintiffs had prudential standing was irrelevant. The Court also made clear that an individual’s mere assertion of a right to have the federal government act in a way that is lawful is not sufficient to have a case heard. Warth, decided in 1975 – before Allen, involved taxpayers, residents, and a non-profit organization of Rochester County, New York that opposed zoning laws preventing low and moderate income families from being able to live in Penfield, NY. Proponents of the zoning laws were Penfield’s town, its Zoning Board, and Penfield’s Planning Commission members. The Court in Warth, first elaborated on Article III standing requirements and found them unmet but still considered prudential limitations, stating that “countervailing considerations … may outweigh concerns underlying the usual reluctance to exert judicial power.” So while Article III standing is required and prudential limits can veto Article III standing, certain factors can also veto prudential standing. In the same analysis structure as Warth and Allen, the Court in Windsor first considered Article III requirements, which the Court found satisfied. Then the Court considered the prudential limitations and found that sufficient “countervailing considerations” outweighed prudential limitations. This, Justice Scalia found, “incomprehensible.” But Scalia failed to mention that if the Court’s discussion in Windsor is viewed en toto, the Court is undoubtedly considering the 2 components of standing as separate components: Article III standing as explained in Lujan v. Defenders of Wildlife and (2) prudential limitations as explained in Warth and Allen. In fact, the majority stated outright, “The Court has kept these 2 strands separate: “Article III standing, which enforces the Constitution’s case-or-controversy requirement [citation omitted]; and prudential standing, which embodies “judicially self-imposed limits on the exercise of federal jurisdiction.” However, using the terminology generally ascribed to one principal as a way to explain how the other principle is applicable is assuredly confusing. And Justice Scalia\’s comments, in typical Scalia form, magnify the confusion. Forgetting Scalia’s commentary, the explanation in Warth clarifies the Windsor Opinion’s take on prudential limitations. Warth explains that if a plaintiff’s claim affects the legal rights of third parties, then prudential limits that might generally apply may be set aside. In other words, protecting the legal rights of persons outside the immediate parties involved might be more important than denying relief to one, as long as Article III requirements were met. In Windsor, Edie’s “win” wasn’t really a win because the IRS still refused to refund her money. So there was Article III controversy. Equally important, DOMA, a congressional statute negatively affected the rights of hundreds of thousands of others. It was this negative effect, which the majority called “adverseness,” that met the Warth test for overweighing the prudential considerations to which the Windsor majority referred in its prudential principle discussion. Justice Scalia chided the majority for calling \”adverseness\” an element of standing, when, in fact, per Chadha v. INS (Chadha) and Baker v. Carr (Baker), the adverseness that the majority refers to is provided to support an argument for prudential standing. Furthermore, Scalia projects the majority’s use of prudential standing in Chadha onto the majority’s use in Windsor, when it is not the use of prudential sanding as it was used in Chadha but the underlying factors of prudential standing that the majority used in Windsor. Again, by stepping back a few paces and analyzing the majority’s discussion as a whole, Baker also illuminates the issue and provides foundation for the Warth explanation. Baker
Essential Estate Administration Steps When You\’re Responsible for Saying Farewell
Some of my readers may know that I recently lost my father. As an estate planner, yes, I made sure a number of items were in order. However, as a daughter to a fiercely independent and private individual, I was compelled to respect certain boundaries. Another good colleague and fellow author, Lisa Lilly, who also lost her father, recently reminded me in her blog that it’s never too early to share important knowledge. So below are several tips on the very beginning activities of “estate administration.” And while I intended to write this article before my father made his transition and a little later in the year when the sky was less blue and Lake Michigan waters were much cooler, there really is no time like the present… Much of this can be applied irrespective of your relationship but for precision, this article makes the following assumptions: “The conversation” took place and there were no unresolved issues; consequently, there’s no family feud. Your loved one had a primary care physician, nurse, or hospice caregiver. You will be the one to say the final farewell. The Steps Make sure you have a couple of very close family members or friends on call for “that day,” so you will have support around you. Phone the doctor or the hospice; DO NOT phone 911 or the police. Prepare to spend a few hours waiting for the doctor or nurse to arrive to make the final pronouncement. While waiting, do what you feel you need to do. DO NOT listen to directions from other friends and family unless you want to. Be prepared to answer lots of questions about: your relationship to the departed; who found the departed, when, and how; what funeral home should be notified, even if cremation or anatomical donation are the instructions; your complete contact information. And don\’t take it personally. Be prepared to have your loved one physically removed from you permanently; this is why it’s good to have someone else with you, the emotional effect on you cannot be predicted. Be prepared to emote or manifest emotion somehow. DO NOT access any financial accounts; your loved one wouldn’t want you arrested for fraud. Contact everyone who knew the dearly departed, including church, community, and social groups. Get a couple of family members or close friends to help. Depending on the global reach of your loved one and his or her final wishes, start to think about a memorial service date that is soon or later, to allow for friends and family to make reasonable travel arrangements. Visit the funeral home asap to order several death certificates. You don’t have to start on the arrangements then. DO NOT BE PRESSURED into making decisions like date and time until you’re ready. Make sure you have all keys to everything – the house, apartment, car, safe deposit box, storage, and anything else. And LOCK UP. Complete address forwarding cards and forward the mail to you. If needed to pay for services, contact the insurance company. If not needed, then wait until the services are concluded to handle all financial matters. Write an obituary and send it to the appropriate publications: neighborhood or city newspaper and alumni magazines. Delegate. Delegate. Delegate. Carve out time for yourself. Move forward, genuinely, gently, one day at a time.
4 Key Concerns on Estate Planning for Disabled Children
A number of articles in The Shark Free Zone address the bad idea of designating a minor as a primary beneficiary. Single parents especially struggle with this issue, which is why “it takes a village,” is more than political rhetoric. Another issue parents and family members struggle with is the unfortunate circumstance of managing the car of a disabled child or loved one. Yet, it is even more critical to plan for unfortunate events when you are the caregiver of a disabled person. As usual, examples often help distinguish bad planning from poor planning but this time we’ll just look at a scenario and the resulting considerations. Twenty years ago, Kelly and Sean’s daughter, Carrie was born mentally and physically disabled. As a result, Kelly and Sean decided that Kelly would remain at home to care for Carrie and the family would depend on Sean’s paycheck and Carrie’s Social Security Disability Income (“SSDI”). About a month ago, Kelly and Carrie were involved in a car accident and ended up with a settlement award of $50,000 after medical expenses were paid. Fortunately, neither Kelly nor Carrie was severely injured but the incident shook Kelly considerably. So she and Sean finally had the “what if” discussion about the possibility of something tragic happening to one or both of them. If one or both of them died, who would care for Carrie and what would that look like? Well, Kelly and Sean have several issues to consider, including: Guardianship v. Powers of Attorney. Carrie is an adult and, in Illinois, obtaining guardianship for a disabled adult is a lengthy and costly process. To avoid that process, powers of attorney for Carrie might be useful. The question of usefulness hinges on the severity of Carrie’s mental disability with respect to legal capacity needed to grant authority provided in powers of attorney. Adverse Implications of Government Assistance. Irrespective of who dies, if sufficient means are not available to ensure Carrie’s basic needs – food, shelter, clothing, and medical care – are met during the remainder of her life, she may need additional government assistance, such as Medicaid. However, when someone on Medicaid receives an inheritance, they may become temporarily ineligible for Medicaid. So particular testamentary planning, such as “special needs trusts,” may be needed. Sufficient Life Insurance. If Sean passes away, the question is then, how much of a death benefit is needed. Also, if Kelly predeceased Sean, who would be the contingent beneficiary able to act on Carrie’s behalf. Appropriate Fiduciaries. If both Kelly and Sean die, the question again is who will be able to financially and compassionately manage Carrie’s estate and how would that estate be structured? Caring for a child with mental or physical challenges has at least one commonality with caring for a child with no challenges: the need for a careful, caring, and protective plan in the event the parent is no longer able to provide needed care because the ability or inability of our loved ones doesn\’t change the fact that they are our loved ones.
If You Have a Facebook, LinkedIn, Twitter Account …
A recent case, Ajemian v. Yahoo!, Inc., came to my attention because it involved access to a dearly departed brother’s Yahoo! email account. A recent change to Yahoo!’s terms of service includes the following: You agree that your Yahoo! account is non-transferable and any rights to your Yahoo! ID or contents within your account terminate upon your death. Upon receipt of a copy of a death certificate, your account may be terminated and all contents therein permanently deleted. (Emphasis added by The Shark Free Zone.) Therefore, siblings, who were administrators of the brother’s estate and despite providing a death certificate, could not even access the content of their brother’s Yahoo! account. This case highlights the fact that, if any information that is useful to an estate’s executor or administrator, e.g., a username change, bank or utility online statements, or the names of online accounts that the user had were provided, upon proof of a loved one’s death, the Yahoo! account may be frozen and the information not transferred but destroyed. That means that the executor or administrator will have to go through the departed’s mail, papers, or even underwear drawers, to contact the institution and perhaps wait days or weeks for final account information to be provided. Ouch! The above is also another reason why I’ve said it before and will keep on saying it: Property powers of attorney should authorize access and control of digital accounts and assets. Equally important, a list of user names and passwords, at least for email and financial accounts, should be provided to your designated executor or one or two loved ones. If you bank and enter into other financial transactions online, such as paying a utility bill, without usernames and passwords your power of attorney agent can\’t properly manage your affairs. Arguably, providing the agent under a power of attorney could be construed as “transferring” the rights, but your agent is acting on your behalf, so the transfer is actually what we call a “legal fiction.” But death is death; no fiction that can undo that. So even if you didn\’t take care of the matter while you were on Twitter, if you didn\’t at least authorize your executor to obtain and use this information, then your family will experience even more emotional angst than necessary after your final tweet. What was the ruling on the case? It was remanded back down to the court from which it came to make the decision from a state law perspective, since the deceased was a Massachusetts resident. The Court decided that the selection of law that Yahoo! tried to impose – California was improper given the decedent user lived in Massachusetts and that state would have a decided interest in the case. Maybe this is also another reason for us to be more careful about what we post; it could end up in the hands of a stranger or a loved one who we unduly and harshly criticized. Double ouch!
Women & Obamacare: It Hurts Not to Know
Recently, I attended a great program on women’s healthcare. The discussion included how the Affordable Care Act would affect our healthcare and the decisions we made. So please read this article and share it with all the women you know. Thank you, Affinity Community Services for hosting, Kathy Waligora of the Illinois Maternal and Child Health Coalition, the Chicago Women’s Health Center (CWHC), and Dr. Theresa Jones for sharing such valuable information. Resources to the topics are at the end of this article. Because estate planning and financial planning are closely related, health insurance is a key component to successful estate planning. Without appropriate health insurance, everything you own is at risk of loss … to a hospital bill or to long-term care. So no estate planning involving asset distribution will matter because the hospital bill or caregiving expenses will have created a gaping doughnut of an estate for you. The exponential increase of healthcare costs over the last couple of decades is one reason why fewer and fewer individuals and families considered estate planning: with little or no insurance, planning for the transfer of assets would be an exercise in futility. However, that risk for millions has been and is being mitigated by the Affordable Care Act (“ACA” or “Obamacare”). Before the ACA, 40 million Americans had no health insurance and millions of children would never be able to obtain it because of pre-existing conditions. In 2010, when the ACA passed, the number of uninsured Americans were reduced by 10%. And though the ACA has come under intense fire, by 2014, millions more of Americans and small businesses will receive 50% of credits to help offset the cost of coverage. Additionally, the cost of coverage for women will be fair. Until the ACA was passed, women were made to pay more for healthcare insurance than men and, unlike what most individuals thought, it was not because most women could become pregnant. So why were women paying more for health insurance? That’s a good question that insurance companies have yet to provide an answer for. But they won’t have to because on January 1, 2014, gender will be eliminated as a criteria for determining health insurance costs. Moreover, preventive and wellness services, especially for women, that were not available in many insurance plans will be available to women at no cost through the ACA. The critical need for these services is highlighted by the recent news about celebrity Angelina Jolie’s healthcare decisions. Included in the free preventive and wellness services mandated by the ACA are: BRCA counseling about genetic testing for women who at high risk, Anemia screening for pregnant women, Cervical cancer screening, Domestic and interpersonal violence screening and counselling, Folic acid supplements for women who could become pregnant, Osteoporosis screening for women over 60, and Well-woman visits. The ACA mandates these services included in 22 preventive services because legislators and the current administration recognizes that preventive maintenance and reformed and regulated healthcare for all Americans ultimately reduces healthcare costs across the board for our country, community, and loved ones. Another important feature of the ACA is Medicaid reform. However, states must agree to take advantage of the new Medicaid rules. If Illinois agreed to embrace the rules, it could man billions of dollars and thousands of jobs. However, the 3.8% surtax on families with household incomes of $200,000 or more has fueled the uproar mentioned earlier. This could result in these households being taxed at a marginal rate of near 45-50% and nobody likes to pay taxes. Still, Illinois Senate Bill 26 (SB 26) is pending with regard to this question. As of 5/21 the bill was passed, after several notes, to the House Committee. As I said at the top, information about our healthcare and how to use that information is too important – not just to us but also to our families – not to share, so please pay this forward and let women (and men) know that \”affordable healthcare is available to you.\” Helpful Resources Illinois Congressional Representatives, http://www.ilga.gov/house/ Health Insurance 101, http://101.communitycatalyst.org/aca_provisions/ Illinois Maternal and Child Health Coalition, http://www.ilmaternal.org/
3 Lessons about Grapes and Taxes
As Baby Boomers start retiring, thoughts of mortality and legacy planning begin to dance in their heads. While most boomers don’t have taxable estates…for now…the future is still a question mark for many. While enjoying retirement – golf course, cruises, mountain climbing, museum walks, wine tasting, and theatre galas – plans should be made for a time when the retirement funds must be transferred to someone else. It is critical to know how to transfer retirement proceeds properly so the distributions won\’t be literally and figuratively taxing: Claire and Cliff are in their mid 60’s. They’ve a modest estate – home valued at about $250K with most of its equity remaining, life insurance, and retirement benefits at about $2 million. Half of the retirement proceeds is in a 401(k), 25% is in an IRA, and 25% is in an annuity. They also have 2 kids: Lenny and Lisa. Lisa’s a starving artist, who is barely in the 15% tax bracket but who also has a vivacious and smart teenager. Lenny is 10 years older than Lisa and a savvy professional about to move into the highest tax bracket and has no intention of marrying or ever having children. Claire and Cliff want to distribute their estate to Lisa and Lenny equally and have been told to give the retirement proceeds to Lenny and Lisa outright. Before doing that, however, I would ask them to consider the following in a simultaneous death situation, where Claire and Cliff went down with the Titanic III: An outright gift from a 401(k) or a traditional IRA will be taxed and if the beneficiary is over 59 ½, the 10% penalty may also apply. For Lenny, who’s Mr. Money Bags, that doesn’t present too much of a problem, though no one wants to pay taxes. For Lisa, that would be a boon indeed. But an outright distribution to Lisa would yield less than what she would receive were the proceeds titled to a trust because of income tax consequences. Pick the fruit too young and the wine will be bitter; too old and you may taste too much oak. Claire and Cliff could have the proceeds placed in a trust for Lenny and Lisa. Here, part of Lisa’s benefit would be driven by Lenny’s life expectancy because he is the oldest, which would provide her with fewer years of income. Additionally, Lenny and Lisa must be sure to withdraw at least as much as the minimum required distribution annually or face a hefty penalty. Different varietals require different soils. In a qualified (retirement) annuity, the entire amount of the contract must be withdrawn over the 5-year period following Claire and Cliff’s death. Again, okay for Lenny, but not so okay for Lisa. Tax consequences also apply to this issue. Cabernets are as good as zinfandels; it\’s the consumer\’s tolerance that is key. Just like no 2 families are alike, no 2 children are alike. So make sure that your children know how to make decisions about the different types of distributions they can choose, after you enjoy your fruits. That way, the remaining fruit will, in fact, go to your children and not the community jelly jar.
1 Question to Ask Before Saying You Will
A cardinal rule of estate planning is that the “intent of the testator” governs terms of the will or trust. The testator is the person who initially “writes” the will; the name for the person who writes the trust is a “grantor” or “settlor.” Lawyers draw the documents up but testators or grantors are the original writer – our clients. The terms of a will or trust are carried out by a fiduciary – an executor or a trustee. Fiduciaries are held to a higher legal standard of integrity because their roles are considered so important. So they can be sued if they do not follow the “intent of the writer,” so to speak. Yet, though I try to remind them, folks tend to forget about the other fiduciary roles that also carry a kind of “intent of the writer” rule. Let’s consider a brother-best friend story. Carrie was a single 35 year-old woman who, as a young teenager, witnessed her father die an agonizing death when he was stricken with a slowly debilitating and malignant brain tumor. So when Carrie got the bad news about her condition, she got her affairs in order and instead of designating her brother Don as the agent under her healthcare power of attorney, she named her best buddy, Tim. Carrie and Tim were just as close as Carrie and Don but they talked more openly about end-of-life issues ever since Carrie’s father passed. Carrie told Tim that she would never want to die in a hospital like her father and said she knew that she could count on him to fulfill her wishes. Well, Carrie’s days started dwindling and Don pleaded with Carrie to go into the hospital or into a hospice facility. Carrie refused. From her spacious apartment, she could hear birds chirp and children laugh outside. The pain was tolerable and she could move around a little with a cane. Daily care was difficult and speaking was getting even more difficult, but she was staying put. Then one day, Carrie couldn’t talk. Don pleaded with Tim now. Tim looked at his dear friend who had no appetite, occasionally winced at the pain, but smiled at the children\’s laughter underneath her bedroom window. Don wanted Carrie in a facility to be watched 24/7 because he couldn’t do it and Tim could only be with her a few hours a day. Tim agonized because he understood Don’s concerns and really wanted the same thing. But Tim saw Carrie’s smile at the sound of the birds, recalled her horrific struggles with her father’s death, and when Carrie passed on, in her home wearing a slight grin, Tim was also at peace. Healthcare decisions under a power of attorney include end-of-life decisions, and it\’s not just about medicine. But the agent’s role, as a fiduciary, is to step inside the shoes of the principal and make the decisions the principal would make. Doing anything less, even if it means what we would perceive as more and a better quality at the end of life is going against one’s fiduciary duty, ignoring the cardinal rule. So when you’re asked to be a fiduciary, think long and hard and then think again. How well do you know the principal’s shoes and can you stand to completely take yours off to walk in someone else’s?
5 Mentoring Tips from the Grave
As a wills and trusts attorney, frequently, clients or friends ask me how they or their parents can prevent young, adult beneficiaries from wasting their “hard-earned” inheritance. I explain that this can be managed in at least 5 ways: Use hard cold facts and an iron club. Tell them that the money was hard-earned by you and don’t leave them anything but a videotape of the family history. Leave all the money and possessions to charity. Bribe the youngsters and hope for the best. Of course, these are 2 actions that make most lawyers’ skin crawl. Educate the little people from the time they get their first piggy bank from Grandpa. Use conditional provisions that don’t “offend public policy.” This means that, while you can’t disinherit your child from marrying outside his ethnicity and can’t tell him he won’t get a dime unless he divorces his current spouse, you can cut the cord if he becomes a lifetime criminal. You can shorten the cord if she becomes a lifetime substance abuser. And you can make the cord’s length dependent on grades and gainful employment. “Staggered mentoring,” which I’ve mentioned before, is another tool. With a “staggered mentoring” provision, Grandpa leaves Hermoine 30% of her pot of gold when she turns 25, another 30% when she turns 30, and the balance at the age of 35. My favorite is a combination of 3 through 5, but as my favorite contracts professor said, “If it walks like a duck and squawks like a duck, it ain’t a beagle.” So, if Hermoine’s been in and out of jail since the age of 16 and she’s 25 now, education, at least of the financial planning kind, isn’t probably going to work.