Property Owners Beware

I have posted about this in the past, but it bears repeating. In the mail this week I received an official-looking notice from an operation called National Record Service Inc. It referenced the official recording data for my house deed, and went on to state that "The U.S. Government Federal Citizen Information Center website recommends that property owners should have an official or certified copy of their deed." For the low one-time price of just $59.50 (which generously includes shipping and handling charges), National Record Service Inc. will obtain and send you a copy of this valuable document.

People, please DO NOT be taken in by this scam. Copies of your deed are available FOR FREE (or for a nominal photocopy charge) at the registry of deeds in the county in which your property is located. It is nothing short of highway robbery to part unsuspecting homeowners from $59.50 of their hard earned money for this purpose. This kind of stuff just makes my blood boil.

Health Care Proxies

One important component of a comprehensive estate plan is the execution of a Health Care Proxy. A Health Care Proxy is a document that allows the principal to appoint an agent with the legal authority to make medical and health care decisions on his or her behalf in the event of incapacity. The agent is legally empowered to authorize or withhold medical care in accordance with his or her best interpretation of the wishes of the principal. Because the agent must make such decisions and directions, a comprehensive Health Care Proxy will also include the principal's expression of wishes regarding types of medical care to be withheld or provided in the event of a terminal illness. Typically, the principal will be asked to express preferences regarding (a) do-not-resuscitate orders, (b) artificial respiration, (c) artificial nutrition, (d) major or minor surgery, (e) chemotherapy and other medications, and (f) a variety of other medical procedures. If you are embarking on the preparation of an estate plan, you would be well advised to consider who you would trust with making health care decisions on your behalf, and whether you would wish such medical procedures to be withheld or provided in the event you have a terminal condition and are unable to make such decisions on your own. A comprehensive Health Care Proxy can ensure that your wishes on this important subject will be carried out in accordance with your expressions.

Estate Planning articles

A couple of good articles in the New York Times about estate planning to share:
http://www.nytimes.com/2010/07/16/business/global/16iht-nwestate.html?pagewanted=1&tntemail1=y&_r=1&emc=tnt

also http://www.nytimes.com/2010/07/16/business/global/16iht-nwcheck16.html?emc=tnt&tntemail1=y, simple but clear and good advice.

What is a Trust?

Trusts of all kinds are widely by estate planning attorneys as excellent vehicles to assist in the management and disposition of assets. But what, exactly, is a Trust?

Think of a Trust as a box, or a holding tank. It is a legal entity that can hold title to all sorts of property for the benefit of one or more people or entities. The box contains a set of instructions that set out how the property is to be held, managed and ultimately distributed. Assets are placed into the box by an individual, thereby segregating them for a stated purpose.

A Trust is created by an individual known as the Settlor, Grantor or Donor (these terms are interchangeable). The Trustee is an individual or institution charged with the responsibility of carrying out the instructions for the benefit of the Beneficiaries, those given an interest in the property by the Trust’s terms. A Grantor may also be a Trustee and/or a beneficiary at once.

Trusts may be "inter vivos", created during the Grantor’s lifetime, or "testamentary", meaning they may come into play only upon death. Trusts are also revocable or irrevocable. A revocable Trust can be modified, amended or revoked by the Grantor; an irrevocable Trust cannot.

Trusts may be created for a multitude of purposes. Some common uses of trusts include:
1. Avoidance of probate upon death.
2. Reguation of control over the amount and circumstances of distribution.
3. Holding assets for the benefit of young children before they reach an age appropriate for outright distribution.
4. Protecting assets used by a surviving spouse for the benefit of children in the event of remarriage by the surviving spouse.
5. Funding housing, education or special needs costs for the beneficiaries.
6. Sheltering assets against liability for estate taxes.
7. Creating charitable tax shelters.

Creating a Trust is just one part of the process, however; once a Trust is created, it must be properly funded in order to achieve the purpose for which it was established.
The benefits of the trust will only apply to those assets which are actually transferred into it, which means putting appropriate assets into the name of the trust.

A Trust is a very flexible tool for achieving a wide range of estate planning goals. Ask me about a Trust and whether it might be right for your needs.

Time for a Rant

OK, it’s time for a rant.

I have, to date, limited my postings in this space to useful information relating to legal topics, but lately I feel like the general level of civility in our society has taken a nosedive off a cliff and I have been at the bottom of the pit breaking the fall. I long for the kinder, gentler days when people had manners, and compassion, and something more than just a self-focused need to be number one at all times. For the most part I love my career and I love my clients and colleagues, but in the last year I have come across enough challenges that a reminder feels warranted.

So here are Judy’s top ten rules for the proper care and feeding of your faithful lawyer:

1. Be reasonable about deadlines. There is, for the most part, no such thing as a real estate or estate planning emergency. If your children are 10 and 8 and you have not had a will for the duration of their lives, don’t suddenly remember 3 days before both parents are scheduled to get on a plane together that you forgot to do a will and expect your lawyer to be able to produce an entire estate plan in 48 hours. If you have a two-week deadline, don’t wait until the 12th day to hire a lawyer and then expect it to be done on time.

2. Be faithful. If you have a relationship with your lawyer, and you are happy with that person’s service, trust that (s)he will be there for you. Don’t go off and hire someone else if (s)he doesn’t return your phone call within 3 hours of your sending an email.

3. Listen to your lawyer’s advice. If your lawyer is recommending a certain course of action, it should be for your best interest, so don’t then go off and do something completely contrary to that advice without at least discussing it first with your lawyer. And for goodness sake, stay away from legal forms found on the internet!

4. Respect your lawyer’s or colleague’s work product, documents and other written materials. As Abraham Lincoln once said, "a lawyer’s time and advice is his stock in trade". If you have work product in your possession, don’t clone it for your own use without consent, or make changes without notification, or otherwise use the work product in ways that are inconsistent with the lawyer’s intentions.

5. On a related note, don’t expect free advice. If you call or email your lawyer to "run something by" him or to "pick her brain" on a topic, expect to be billed for that. Even if it’s a 10 or 15 minute phone call, those small increments can add up to a lot of uncompensated time.

6. Understand that your lawyer cannot control all events in a transaction and is not responsible for everything that happens. If you sign a contract to buy a house that requires you to borrow more money than you can qualify to get, or more cash than you have in the bank, it will never be the lawyer’s fault when the deal falls apart, as much as you might like to blame him/her. Do your homework, be prepared, and take responsibility for your part.

7. Respect that lawyers are people too. They have spouses, and children, and aging parents, and aging bodies that sometimes need medical attention, and other obligations that sometimes interfere with their ability immediately to return a phone call or an email, or produce work product. If you have no actual deadline, and your lawyer is generally responsive, cut them some slack when necessary.

8. If you are another lawyer in a transaction, don’t make it personal. The actions of a good opposing counsel are not (or should not be) personal, but instead simply the zealous representation of the client’s interests are required by our canons of ethics. Maintain civility.

9. Institutions, this one’s for you: don’t make your attorney do all the work for the same transaction multiple times. There is nothing more frustrating than spending two hours preparing a closing only to be told there is an error in the documents and everything will have to be done again. Do your homework in advance and respect your attorney’s time. And if due to some unavoidable event a big chunk of work has to be duplicated, then at least have the courtesy to apologize—and mean it—instead of just assuming we have nothing better to do but clean up after your mistakes.

10. Be nice. No matter what, there is just no reason not to be. And everything is easier when you are.

Annuities and Estate Planning

I am often asked by my older estate planning clients what they can do to protect their assets in the event they need to enter a nursing home. Under the regulations governing Masshealth financial eligibility, many assets would need to be spent down to pay for such care before benefits would accrue, but certain assets are exempt from countability. Once excellent way to protect assets for couples where one spouse is in the community and the other is in a nursing home is by the purchase of an annuity. While the payments from an annuity are countable as income, the community spouse may use excess and otherwise countable assets to purchase an immediate, irrevocable monthly annuity, and the purchase of such will not be considered a transfer which disqualifies the institutionalized spouse from eligibility for Masshealth benefits so long as the technical requirements of the regulations are met. The term of the annuity may not exceed the annuitant’s life expectancy and should generally be as short as possible. At the end of the term, when the annuity converts to cash in the name of the community spouse, that cash will not be considered a countable asset. Of course, if you are considering the purchase of an annuity as an asset protection technique, you should seek the advice of competent counsel to advise you on the necessary terms and procedures, but consider the use of annuities as an effective estate planning and asset protection tool.

Mortgage Interest Rates are Down Again

Besides being the most amazing assistant any professional could ask for, my intrepid sidekick Lynna Henderson is a news junkie. Thanks to her for pointing out this article in today's Wall Street Journal http://online.wsj.com/article_email/SB10001424052748704269204575270554112427046-lMyQjAxMTAwMDIwNzEyNDcyWj.html . If you missed the last refinancing wave, now is your opportunity!