Avoiding Elder Law Potholes
Michael H. Marks
Linda Law Carroll412-421-8944
Have you ever fallen into a Pittsburgh pothole?Some common legal problems that hurt seniors can be avoided. These tips may help you to make good choices and prevent an unexpected bad result. Here are some important “do’s and don’ts” to keep in mind. (This information does NOT constitute legal advice. Every situation is different! Get specific legal advice for your individual goals.)
- DON’T SKIMP ON POWERS OF ATTORNEY
DON'T: Skip making good Powers of Attorney. They are just as important as a Will. A Power of Attorney says who you choose and select to help you, if you become unable to act on your own behalf because of an illness or injury.
DO: Get complete, professionally drafted Powers of Attorney that are custom tailored to your situation and needs. TIP: Include a Medicaid-oriented broad “gifting power” in case you need nursing home care, after consulting your attorney about the risks and benefits.
- THIS ISN’T THE TIME FOR “DO IT YOURSELF”
DON’T: Try to make your own Will or Powers of Attorney yourself from a kit or online version. Your whole lifetime’s work and savings are at stake, That’s penny wise and pound foolish. Henry and Hilda tried to do it on their own, and their mistakes cost them a lot of money.
DO: See an estate planning lawyer to help you accomplish your goals. Explain what you want to have happen, for example, who should inherit from you and who you want to be in charge. TIP: Ask in advance what the fee or fee arrangement will be.
- CHOOSE YOUR HELPERS WISELY AND WELL
DON’T: Choose the wrong person to help you as your Executor or your “Agent” under a Power of Attorney. For example, don’t choose the oldest child unless he or she is the best choice to help you. Don’t appoint people together who don’t get along.
DO: Choose the person(s) you trust to do the job for you. Saying WHO you want to make specific decisions for you is just as important as saying WHAT you want them to do. Choose someone with a good head and a good heart to take good care of the money and the people. TIP: Always specify who you want as the backup or substitute if your first choice can’t help you.
- LEAVE A TRAIL OF BREAD CRUMBS
DON’T: Make your affairs a mysterious guessing game that will need a detective to find out about your business. Pete was a very private man, and when the time came no one knew where to begin to help him.
DO: Take the time to organize a complete set of records about your finances, and documents such as birth, marriage and death certificates. Gather up your recent account statements, tax returns, insurance policies, cemetery deeds and the like. TIP: Don’t forget to include your electronic passwords and user names.
- DON’T SAY WHAT YOU DON’T MEAN
DON'T: Leave money to one person that’s really supposed to be for someone else, expecting that they'll use it for the benefit of the other person. Pat and Patty named their trustworthy daughter to get everything and had confidence in her to share with her brothers as they asked. She died unexpectedly though, and her husband and kids kept it all. Don’t rely on an "informal trust" without writing it down in black and white in a legally binding way.
DO: Say exactly who you mean to benefit and ask your lawyer to create a formal written trust arrangement with instructions so that the money will be used for that person (especially for a disabled person). Anyone can use a Trust, not just if you are rich. TIP: The right kind of trust is especially important for a disabled child.
- DON’T MIX UP YOUR MONEY WITH OTHERS’
DON'T: “Co-mingle” or mix together your money in an account with someone else’s (other than your spouse). If either co-depositor needs Medicaid benefits for expensive nursing home care, or if one dies, the wrong owner may be responsible for the money or taxes.
DO: Keep detailed records if you do use a single account together. TIP: Use a Power of Attorney to let someone else access your account during your lifetime, but not leave it to them upon your death; and use an "In Trust For" account to leave your account to someone else later when you die, without giving them access to it now.
- BE CAUTIOUS ABOUT ANNUITIES
DON’T: Let an annuity salesman sell you an inappropriate annuity investment. Most annuities tie up your cash with penalties to take it out if you need it. This can be a big problem for an older person. Audrey was visited by a financial “advisor” who had her sign over almost all her money into complicated, long-term deals that she didn’t understand.
DO: Take your time to carefully evaluate any significant transaction. Get an independent second opinion from someone you can count on, who doesn’t have a sales commission at stake.
- DON’T “SPEND DOWN” BEFORE YOU GET GOOD ADVICE
DON’T: Blindly spend down all your money if you have to go into a nursing home because someone told you that you have to. It’s CRUCIAL to get advice first from a qualified elder law attorney who works for you. No one else will tell you about positive steps that you can take to protect yourself and save more of your hard-earned money.
DO: See a capable elder law lawyer and find out how to legally and honestly protect yourself and your family. You can get the care you need and still keep some of your nest egg. Mary and Mort saved almost all their money for her, even when he needed a nursing home. TIP: You will have to spend some money, in order to protect all the rest of your money!
I hope these tips will help you to make the best plans for a safe and secure tomorrow. Remember, these brief “do’s and don’ts” are not offered as legal advice. Obtain specific legal advice for your unique needs.