Friday, January 29, 2016

Postscript to January 7 Post "A Matter of Life and Death"

I recently wrote a long and heartfelt entry about the issues of end-of-life decisions and death with dignity.  Then I discovered that the topic, as often happens, has burst onto the scene, and discussions are everywhere.  

One resource I have recently learned about that I think is interesting is a website called The Conversation Project,   According to their home page, their mission is "dedicated to helping people talk about their wishes for end-of-life-care". The Conversation Project began in 2010, when well-known and prolific writer Ellen Goodman and a group of colleagues, media, clergy and medical professionals realized the importance of initiating conversations about dying and encouraging people to discuss their wishes for what they want to happen when the time comes.  

I am certain there are many other organizations and websites which deal with the same topic, but The Conversation Project was called to my attention, and I thought it was worth sharing.  Let me know what you think.

Big Changes in the Mortgage Industry

The Consumer Finance Protection Bureau has substantially overhauled the compliance and disclosure requirements imposed on mortgage lenders, and established a new and more comprehensive set of requirements designed to better protect the consumer as they go through the mortgage process.  These new regulations went into effect in October, 2015.

There are two important components to the new regulations, known colloquially as “TRID” (TILA-RESPA Integrated Disclosure).  The new rules integrate the former separate disclosure requirements into one complete process.  These rules do not apply to all loan transactions, but generally they will apply to a conventional residential purchase money or refinance loan.

Under TRID, you will find that you will no longer receive a sheath of paper from the lender to wade through once you submit your loan application.  Instead, just two disclosure forms are involved.  The first is the Loan Estimate, which integrates the former Good Faith Estimate and the early Truth in Lending forms given to the borrower following application.  The new Loan Estimate combines the information on all prior forms into one more detailed and complete document, including an accurate disclosure of all closing costs.  The Loan Estimate must be provided to the applicant no later than three business days after a loan application is submitted. 

The second document is the Closing Disclosure (CD). This document integrates the former final Truth In Lending statement and the RESPA-required HUD-1 settlement statement.  The CD, in one comprehensive document, not only itemizes the final closing costs formerly shown on the HUD-1 form, but also states all of the other loan terms, rights and obligations in easy-to-understand language. The CD must also be provided to the applicant three business days before the loan closing.  If the final figures on the CD diverge from those on the Loan Estimate, the lender must explain why, and in some cases the divergence will require the lender to prepare and provide a new CD, also subject to an additional three day rule.  This gives the lender and other parties in the transaction incentive to get it right the first time.  And thankfully, gone are the days when an overworked and understaffed lender is scrambling to provide closing figures to a borrower just hours before a closing is to take place.   The new rule means the lender must be more organized ahead of time in order to meet the three-day rule requirement.

These are big changes, and there is a substantial learning curve still in process.  In my view, however, these rules will result in far better consumer protection, truth and transparency in the mortgage industry. 

And a (somewhat self-serving) P.S.:  TRID clearly states that the borrower may choose the attorney who will close the loan transaction; the lender may no longer refuse to work with the attorney of borrower’s choosing.  This means that if you are working with an attorney you like and trust, you may require that your attorney also close your loan.  I have written previously about the benefit to a buyer of using the same attorney for both the purchase and sale phase and the loan closing phase of the transaction. TRID now ensures that the consumer is entitled to that benefit, so you will be sure the entire transaction is handled by the attentive and competent lawyer you have selected.  Like me.

Thursday, January 7, 2016

A Matter of Life and Death

I have been thinking a lot about death lately.

Being an estate planner, I suppose this might be nothing more than an occupational hazard.  After all, I spend much of my day counseling people about how to get their affairs in order in advance of their demise.   Yet despite my strong commitment to developing a relationship with clients and to providing supportive assistance as they navigate what can be a very emotional process, I confess that the process can become very clinical at times.   Day after day, I confront this topic, and at times I can find myself removed from the true meaning of the subject matter.

Lately, however, I have come to a very different, and very personal, place, which bears thought, and which I want to share.  There is much to think about here.

Last summer, I read the outstanding book, “Being Mortal”, by Dr. Atul Gawande.  Dr. Gawande is a practicing surgeon in Boston, as well as a prolific writer on a variety of topics relating to the practice of medicine.  With great candor and frankness, “Being Mortal” addresses the inevitable condition of aging and death, and advocates strongly that it behooves medical practitioners, as well as loved ones, to assess the quality of life on a personal level for infirm, aged and terminal patients and to ensure that these patients experience a “good death” with dignity to the very end.

Recently I had an epiphany.  When I work with clients on an estate plan, one component is a Health Care Proxy.  This document appoints an agent with the legal authority to make health care decisions on behalf of incapacitated and terminal patients who are unable to make such decisions themselves.  The form asks the client to “check the box” with respect to various types of medical procedures they want provided or withheld if they are unable to express those wishes themselves at the time decisions have to be made.  But in thinking about it,  I realized that this document is a limited, clinical document.  It addresses only the narrow issues of actual scientific medical procedures, but it does not allow the person to address not only the strictly medical matters, but also what else they may want as they near the end of their life, even before they are at the point of incapacity.  It is just as important, maybe more important, to take the time to understand that the patient is a person, with fears, and hopes, and preferences for how they wish to live out the rest of their days.  How do we address the common issues of loneliness, helplessness and fear?  How do we offer these patients opportunities that will create a better quality of life from day to day?  How do we determine what constitutes “quality of life “for each patient, which may be very different from person to person?  And how do we make life worth living at the end, when we are weak and frail and unable to fend for ourselves any more?  We should be paying attention to those feelings.  Regardless of the patient’s condition, they have the right to express what constitutes a life, and more importantly, a death, with dignity, and we have an obligation to honor those wishes. 

So what is the message here?  When a senior client signs a Health Care Proxy, I always tell them how important it is to have a discussion with the agent, and with their family, about the medical interventions they may or may not want at the end of life.  These are very difficult but very necessary conversations.  I have come to understand, however, that this discussion should not be limited only to the strictly medical matters.  The discussion must also include a conversation about other, non-medical aspects of the end of life.  We should also know what they consider “quality of life” as they near the end, what they fear, what they hope for, and how they want to die.  To me, it’s all about death with dignity.  And we are all entitled to that. 

[With reference and thanks to the following sources:
 “Being Mortal” by Atul Gawande
“Happier Endings: A Meditation on Life and Death” by Erica Brown
“Lets Have a Conversation”, a sermon by Rabbi Carl Perkins, September 23, 2015]

Monday, January 4, 2016

Durable Power of Attorney: Get Yours Today!

Have you executed a Durable Power of Attorney?  If not, call me right away to help you do so immediately.  Some would consider a Durable Power of Attorney (DPOA) to be the most important component of a complete estate plan.  A DPOA is a written document in which the principal appoints another person to act as agent (sometimes referred to as “attorney-in-fact”) who is vested with the legal authority to perform a variety of financial and business actions on behalf of the principal during the period when the principal is incapacitated and unable to manage those affairs.   DPOAs are desirable because they enable the principal to have his or her affairs managed privately and efficiently during a period of incapacity by a trusted family member or other individual.  The document may be general or limited.  A limited POA gives the agent the authority to act only in certain capacities, which the document must describe in detail.  A general power of attorney grants broader powers to the agent, authorizing him or her to act in a wide variety of financial, administrative and other such matters.

In the absence of a DPOA, it would be necessary for someone to petition Probate Court to be appointed as Guardian of the incapacitated individual.  This is a costly and time consuming process and easily avoided by the creation of a DPOA. 

There are two types of DPOAs.  One is known as a “springing” power, because it takes effect only when the incapacity of the principal is determined.  The other, less common form in this context, is an “immediate” power, which takes effect as soon as the document is executed.   Whichever type of DPOA is used, the powers granted vest in the agent at the moment specified in the document, without any judicial proceedings.  Generally, the agent’s authority to act on behalf of the principal pursuant to a “springing” DPOA remains in effect only during the period of the incapacity of the principal.  If the principal regains capacity, the agent’s authority ceases.  Further, the principal, if competent, may amend or revoke the DPOA at any time.  DPOAs are valid only so long as the principal is alive, regardless of capacity or condition.  The document automatically terminates upon the death of the principal, at which time the named fiduciaries under the will or any trust will assume responsibility.

A DPOA is crucial to the orderly management of your affairs if incapacitated.  If you have not executed a Durable Power of Attorney, I invite you to contact me to implement this most important document.