Adams Miller LLP

How to Avoid a Conservatorship

It can happen because of illness, injury, or dementia. Sometimes a person may no longer be able to handle their financial affairs. Checks bounce, utilities are turned off due to non-payment or, even worse, a scam artist may take savings that took years of hard work to accumulate. Relief is available – a conservatorship – but it’s not always the best solution. With careful planning, families can avoid the hardship and expense of a conservatorship.

How Does a Conservatorship Work?

Once it becomes obvious that a vulnerable person needs assistance, court assistance is required. The potential conservator will file an application with the Court. Before the judge can appoint a conservator, though, proof of incapacity is required. Medical professionals will examine the incapacitated person (the “ward”) and report back to the court. If the court determines that the ward needs help, a conservator will be appointed.

A conservator is authorized to act on a ward’s finances. However, the ward’s day-to-day activities, living arrangements, and health care issues are not handled by a conservator. A ward requiring assistance with these activities may need a guardian in addition to a conservator.

Conservatorships aren’t free, of course. There are court costs, attorney’s fees, medical examinations, and so forth just to have the conservator appointed. Conservators also may have to pay fees related to their duties.

Estate Planning vs. Conservatorship.

Fortunately, there are ways to avoid a conservatorship. It all comes down to a little advance planning.

For example, including a durable power of attorney in an estate plan may eliminate the need for a conservatorship. By appointing an agent, the future ward has addressed the potential future need for assistance. If a time comes that assistance is needed with financial matters, the agent named in the durable power of attorney takes over under the terms of the power of attorney and in a relatively seamless fashion. There’s usually no need to go to court.

Learn More About Avoiding a Conservatorship.

The attorneys at Adams & Miller, P.C. stand ready to assess your needs and develop the right plan to meet those needs. For a free consultation, contact us at 256-251-2137 or use our convenient Contact Form. Our offices are located in Anniston and Birmingham, but we also help clients in the Gadsden, Hoover, Talladega, Vestavia Hills, and surrounding areas.

 

Does Your Loved One Need a Guardian or Conservator?

Have you noticed that one of your loved ones is having trouble remembering when to pay bills or take medications? Maybe you’ve been called by a neighbor because your elderly relative has been acting a little erratically. People often like to remain independent as long as possible, but there may come a time when you have to decide if your loved one needs a guardian or conservator

Guardianships in Alabama

Many people are aware that a guardianship may be ordered for minors, but don’t know guardianships may be appropriate for people who are unable to make decisions for some reason. Alabama law contains a definition of ‘incapacitated person.’ There are several conditions that can lead to a person being deemed incapacitated, including “physical or mental infirmities accompanying advanced age.”

To start the guardianship process, an individual will file a petition in probate court asking for letters of guardianship over an incapacitated person (the ward). Usually a family member or someone close to the potential ward may have noticed that the ward is having a difficult time making decisions and taking care of himself or herself. Among other things, the court will require that a doctor examine the ward. A court representative will investigate the ward’s situation to see if a guardianship is needed. The doctor will examine the ward and report back to the court. Another party, a guardian ad litem, will be appointed to represent the ward in the court proceedings.

After an investigation, a hearing will be held so the court can determine what actions are in the ward’s best interests. If necessary, a guardian will be appointed.

There are two types of guardianship: full and limited. If a full guardianship is ordered, the guardian makes all decisions for the ward. Limited guardianships leave some of the decision making to the ward when possible.

Avoiding Court Action

A guardianship proceeding may take time and run up legal fees. However, there are alternatives. Good estate planning can set up procedures to manage incapacity or disability. For example, before incapacity strikes, an individual can sign a durable power of attorney that designates a personal representative to make decisions. When talking to an attorney about estate planning, individuals can discuss how to avoid guardianships.

Plan for Long-Term Health Care Now.

Schedule a free consultation with the attorneys at Adams Miller, LLP. Long-term health care doesn’t have to break the bank or leave your beneficiaries with nothing. Our attorneys know how to help people like you. Just give us a call at 256-251-2137 or use our Contact Form to set up an appointment. Serving clients in the greater Anniston area, including Birmingham, Talladega, and Gadsden.

Guardianship Laws and Elder Abuse

Guardianship laws are meant to protect people who cannot take care of themselves. However, many people think that the laws do not do enough to protect elderly people from abuse.

The process for what happens when an elderly person can no longer handle his or her own affairs and does not have powers of attorney in place is more or less the same in every state. A guardianship petition is submitted to probate court. If the court agrees that the person is legally incapacitated, then the court will appoint someone as a guardian. This person will then be responsible for the elderly ward's financial and personal affairs.

Many people believe there is an inherent bias in most states' guardianship laws.

Guardians are required to make regular reports about the financial affairs of the ward. Although it does not always work, this helps prevent the guardian from taking financial advantage of the ward. However, most of the time guardians are not required to report on the well-being and care of the elderly person.

Consequently, courts do not know if the ward is being abused or neglected unless a third-party makes a report.

Some states are attempting to change this bias by updating their laws to add new reporting requirements.

As the Jackson Free Press reports in "State Eyes Changes to Guardianship Laws," Mississippi has appointed a task force to consider changing its requirements.

Changing guardianship laws to make elder abuse less likely is good and important work. No elderly person should have to suffer from financial or personal abuse.

However, it is also important not to rely on guardianship laws as the only way to take care of incapacitated elderly people. Everyone should get the necessary powers of attorney in place before they become incapacitated to make it less likely that a court will see the need to appoint a guardian in the first place.

Reference: Jackson Free Press (Dec. 22, 2015) "State Eyes Changes to Guardianship Laws"

 

 

If you have an aging parent or loved one, click the link to get a free copy of our Caregivers Guide which lays out the questions to ask and steps to take if you will become a caregiver.

How to Get Disinherited

If you do not want to be disinherited by your relatives, it might be helpful to know what actions often lead to disinheritances so that you can avoid them.

Normally when someone is disinherited it comes with anger and surprise. This is because often people do not think that they have done anything so wrong that a family member would take such a drastic measure.

Even people who do not get along well with their relatives tend to not think it will result in being disinherited. However, estate planning attorneys can often predict what types of behaviors might lead a person to be disinherited because the same patterns occur over and over again.

Recently Financial Advisor published a list of common actions that lead to being disinherited in "Ten Tips To Avoid Losing An Inheritance."

The list includes:

• Do not visit or call – If you neglect to spend time with or talk to a relative, he or she is likely to think you do not care for him or her.
• Only visit if the relative does something for you – Threatening not to visit unless you get something in return is likely to lead to resentment.
• Judging how they spend their money – If you argue with relatives about how they spend their own money, they might think you care more about the money than them.
• Argue over trivial matters – Arguments over little things can lead to arguments over much bigger things.
• Clean out their home – Even if your parents are in a nursing home, they might not appreciate you clearing things out of their home without permission.
• Filing for guardianship too soon – Do not rush to file for guardianship if your relatives can still handle things on their own.
• Act obsessed with their estate plan – It is good to know and discuss what a relative's estate plan is, but if you talk about it all the time, it will seem like you have ulterior motives.

Reference: Financial Advisor (Nov. 19, 2015) "Ten Tips To Avoid Losing An Inheritance."

Fighting Against Abusive Probate Guardianship

For decades, states have granted courts the power to appoint guardians or conservators for elderly or disabled people unable to tend to their basic needs. Most appointed guardians are family members, but judges can turn to a growing industry of professional, unrelated guardians. Often the guardians are granted broad authority over a ward's finances, medical care and living conditions.

However, the Wall Street Journal's recent article,"Abuses Plague Guardianship Systems Across the Country," says that guardianship systems nationwide are rife with allegations of financial exploitation and abuse despite reform efforts. As a result, some say that many elderly people with significant assets are just becoming ensnared in a system that seems mainly to succeed at generating billings.

"These laws which were designed to protect the vulnerable are being used against them to exploit them," Dr. Sam Sugar is quoted as saying. Sugar is the founder of Americans Against Abusive Probate Guardianship, an advocacy group.

Because guardianship systems vary by state and county and record-keeping systems are inconsistent, exact national data is unavailable. Nevertheless, the report notes that the roughly 1.5 million adult guardianships in the U.S. deal with about $273 billion in assets.

These issues are getting more urgent as aging baby boomers will cause the population of seniors to just about double by 2050, according to Census estimates. For example, in New Jersey, the number of adult guardianships added annually increased 21% from 2009 to 2014, to 2,689 cases.

Guardians who have proper judicial oversight generally do a good job protecting elderly people from exploitation by acquaintances and others. But the worst cases are those where there is no guardian.

The expenses that are part of a guardianship—including legal representation for both guardians and wards—typically get paid from the ward's assets. Some jurisdictions have a public guardian's office that handles cases for indigent clients. But this financial arrangement, critics say, encourages lawyers and guardians to perpetuate guardianships indefinitely.

Talk with an experienced elder law attorney about guardianships and make sure that your loved one is being cared for in the best possible way.

Reference: Wall Street Journal (October 30, 2015) "Abuses Plague Guardianship Systems Across the Country"

For more information about estate planning issues, register for one of our upcoming workshops by clicking here or order a free copy of our estate planning book by visiting www.AlabamaEstatePlanningGuide.com.

 

Come on, Kids! Start Estate Planning!

If you think estate planning is for only the elderly or wealthy individuals, think again. Everyone has collected some stuff, what professionals like to call assets, possessions, investments — and don’t forget the liabilities (debt), like student loans, car or credit card balances. Even if you do not think you have much, it’s important to have a plan for what you do have, and what you want to do with the stuff after you pass away. There are some basic documents everyone should consider having. If you do not complete the appropriate documents, the state you reside in has its own statutory regulations and procedures to dispose of your property. If you do not plan right, you not only surrender your control over your things, but your things may not go to the party you want — such as a partner, life partner, friend or charity. So what can you do?

The website credit.com addresses important tasks that everyone needs to address, in “Why Everyone Needs a Will (I'm Talking to You, Millennials).”

Designate Your Beneficiaries. You can list your beneficiaries on your retirement accounts (401(k), 403(b), IRA, etc.) when you complete the application. Likewise, you can designate your beneficiaries on bank and investment accounts by setting up a TOD (Transfer on Death) designation. It’s easy to do and costs nothing. Remember that beneficiary designations supersede any wish you make in a will.

Draft Your Will. A will is a legal document and is a written statement of your intentions, including where you want your possessions to go and how you want the orderly disposition to happen. See an attorney, as each state has different laws.

State Your Health Care Wishes. Use a Health Care Proxy to let someone you trust make health care decisions and carry out your health care wishes in the event that you are incapacitated.

Sign a Durable Power of Attorney. This form allows someone you trust to make financial decisions in the event you are unable to do so. There is a huge difference between a limited power and durable power of attorney. Talk to your estate planning attorney about these documents.

An experienced estate planning attorney can spend time with you and review your estate issues, complete a will, health care proxy, durable power of attorney, and check beneficiaries, as well as any tax issues. Use an attorney who specializes in this area to ensure your wishes are properly documented and you achieve what you are trying to accomplish, now and in the future.

Reference:  credit.com (September 11, 2015) “Why Everyone Needs a Will (I'm Talking to You, Millennials)”

Estate Planning After your First Child Arrives

When young couples expect their first child, the to-do list never seems to end. From lining up in-home help to managing hectic daily schedules, the process can prove daunting. Then there's financial planning. Financial advisors often urge parents-to-be to prepare by budgeting for the future. They might need well over $250,000 to fund a child's upbringing until age 17. The best financial advisors also raise clients' awareness about the ultimate grim question: What would happen to your child if you die?

Young couples are advised to see an estate planning attorney in “When Couples Have Their First Baby, Advisors Deliver,”from Investor's Business Daily. The estate-planning attorney will help them address guardianship issues, draft a living will, and other related matters. Some people are reluctant to meet with an attorney. But ask yourself, "Do you want your in-laws to raise your child?" That question should make you want to designate a preferred guardian.

Life insurance and long-term disability coverage become very important. Some folks believe they are covered because they have disability insurance at work. This may not be enough.

Don't let financial stress add to the stress of raising a child. Sit down with a qualified estate planning attorney and go over some of the important issues that now must be addressed as you start your family.

Reference: Investor's Business Daily (September 12, 2015) “When Couples Have Their First Baby, Advisors Deliver”

The Executor’s Cheat Sheet

One of the most important things someone can do to best ensure their estate is handled without a hitch is to appoint the right person as the estate’s executor, sometimes called a representative. So what do you need to do if you’ve been appointed an executor of someone’s estate? Being selected as an executor is not only an honor, but a responsibility to the person who named you, as well as to his or her heirs. It’s also a complex job, requiring working with many types of professionals. And the duties can last for a considerable amount of time, even years, depending on the complexity of the estate. All executors receive a stipend or “commission” paid from estate assets for their services.

A recent Forbes article, titled“What an Executor of an Estate Needs to Do,” says that if you’re appointed to be an executor, you should work with an experienced estate planning attorney to help you through the steps in settling the estate.

When settling an estate, an executor is in charge of these basic functions:

• Locating, collecting, and being responsible for the estate’s assets until they are distributed to the beneficiaries.
• Paying the decedent’s debts and estate administration expenses.
• Handling tax matters, including filing the decedent’s and the estate’s income tax returns and paying the income taxes, if any.
• Distributing the remaining assets in accordance with the terms of the will.

The financial responsibilities of an executor mean that he or she must make an investment analysis of all assets in the estate to determine which to sell and how the estate’s cash needs will be met. The majority of the administrative work in handling an estate is recordkeeping.

The executor must first arrange for his or her court appointment in probate court to obtain “Letters Testamentary,” which permits the executor to represent the estate to third parties such as banks and financial companies to collect, liquidate and distribute assets and other tasks. The executor must compile information about the decedent’s finances and then sell or divide certain assets among those named to receive them in the will or to pay taxes.

In addition, the executor must cancel the decedent’s credit cards, have utilities turned off and pay expenses such as rent, taxes and insurance premiums. Home repairs or maintenance may also be needed. The executor will also need to open an estate bank account to hold the collected assets. These funds are used to pay the bills.

An estate planning attorney can be a huge help with this process to ensure that everything is done right and that the decedent’s estate is settled in an efficient manner.

Reference: Forbes (August 26, 2015) “What an Executor of an Estate Needs To Do”