Busy Wills, Inc. creates estate plans preparing loved ones for a broad array of life’s challenges. One type of challenge is foreseeable and specific to each client – whether there’s a senior in your family who is becoming increasingly dependent, or if you have a child with a debt problem, or if you would like to take advantage of the extremely generous amount that can be gifted without incurring tax this year, these are all situations where you need an effective strategy and Busy Wills, Inc. is happy to help.
The other type of estate planning is more similar to an emergency survival kit. Just as FEMA has identified common needs in the face of natural hazards, so the State of California has identified common legal documents which can help you no matter what unforeseen crisis you may face.
Whether people get caught up in an earthquake or a tornado, FEMA instructs us to organize a flashlight and an out-of-state emergency contact. In the same way, whatever unforeseen crisis hits, whether it’s a serious car crash, or a stroke, or an increasingly confused senior, the State of California provides a framework of legal documents that can help us manage the situation as seamlessly as possible. It is not luck which enables some families to thrive after an emergency – it is a well drafted estate plan. Without the right estate plan, crisis can quickly turn to tragedy.
Here’s an example of how events can unravel for a previously healthy adult in the absence of a basic estate plan. Our example is Sally Go-Lucky – she’s in her thirties and has a house and partner – she feels pretty happy about her life – she’s healthy, earns enough to contribute her share of the mortgage and so far she has no children. Sally Go-Lucky doesn’t think estate planning applies to her.
Let’s take the example of Sally Go-Lucky. She’s going about her merry happy-go-lucky way driving from work to the gym. Suddenly, in rush hour traffic, she feels a sharp bump. Her head smashes against the side window and then richochets back, landing with a thump against the steering wheel. Sally Go-Lucky has been in a serious car accident.
There’s blood everywhere and she can’t quite think straight. Delivered to ER by ambulance, she lies on a stretcher in the corner. Fading in and out of consciousness, Sally notices that other patients, who arrived after her, are being visited by their loved ones. Those loved ones are having meaningful dialogs with the ER doctors and soon after the patients get rolled into the Operating Theater.
But when Sally’s loved ones show up, the doctor says, “I’m very sorry but I’m not allowed to discuss this patient’s healthcare with you.” And they are, essentially, shown the door, while Sally lies in the corner, ignored.
LEGAL FIX #1
One of the estate planning documents everyone needs is an advance healthcare directive, which is sometimes called a “living will”. This document permits doctors to speak with whoever you choose about your healthcare. You need to choose someone who is assertive, but not aggressive, someone who can intelligently engage with a doctor and advocate for you to get the best possible healthcare when you are unable to speak for yourself. You need to appoint someone who remains calm but quick-thinking in an emergency.
Let’s return to the terrible tale of Sally Go-Lucky, who is now in stable condition although she is still confused and unable to drive. She is delivered by ambulance to the Hollywood Hills home which she jointly owns with her significant other. There are five rickety steps up to the front door. The paramedics get her into a chair in the living room and leave.
It’s not very long before Sally’s significant other has to make a decision. Sally is unable to get out of the house alone. Living in the Hollywood Hills, Sally is unable to go anywhere because she cannot drive. The rickety steps make it unsafe for Sally even to stroll around the tiny yard. Sally’s significant other decides they will have to move house. They need to live in Studio City or the flats of Beverly Hills, so that at least Sally can get out into the neighborhood and walk to the corner store alone. But moving – which would enable Sally to regain some quality of life – is impossible. It turns out that now Sally is incapacitated (that is, she is unable to make decisions for herself), she is unable to sign on the dotted line to buy and sell real estate – she no longer has the mental facility to understand the legal contract.
LEGAL FIX #2
Buying and selling real estate held in the name of someone who is incapacitated requires a springing durable power of attorney. When a springing durable power of attorney is first signed, it does not have any effect. But once a physician acknowledges in writing that the principal (the person for whom decisions will be made) is incapacitated, the power of attorney “springs” into life and provides the agent (the person who will make the decisions) with power over assets belonging to the principal.
Soon, Sally’s significant other tells her that he is going on a business trip. Now that Sally is unable to work, it’s necessary for someone in the household to hold a job which provides benefits. So, this trip is unavoidable. Sally can make a sandwich and get around on her Zimmer frame, so the situation seems manageable.
However, a couple of days later, Sally is found in a nightgown, wandering the streets, unable to say her name or where she belongs. Her knees are bloodied and her hair is disheveled. The police pick her up.
Eventually in that situation, if the police are not able to figure out who Sally is or where she belongs, Sally will come before a judge. The judge discovers that while the police have figured out who Sally is, they are still trying to locate Sally’s loved ones, and right now Sally has no-one to help her. So what should the judge do?
In California, there is a whole body of professional conservators who, for a fee, will look after the lifestyle (that is, act as Conservator of the Body) and the assets (that is, act as Conservator of the Estate) of an incapacitated person. Most likely, the judge gets to know some of these professional conservators as they appear before her in court most days. So, given that the judge cannot take Sally home to look after her and there isn’t anyone else immediately available, the judge might say, “I note the police are still trying to track down Sally’s loved ones. So I suggest we have another court appearance in three weeks to see if any family member or friend has been found who is willing to look after Sally. In the meantime, I am appointing a professional conservator as temporary conservator to look after Sally.”
So now Sally has to pay a fee for someone she doesn’t know to make financial and lifestyle decisions for her. And perhaps, that’s fair enough in the circumstances.
However, in three weeks everyone comes back into court. This time, Sally’s loved ones have rallied around and one of them is willing to act as conservator for Sally. Sally is overjoyed. But, it turns out that now that a temporary professional conservator has been appointed, not only is Sally (who is no longer able to earn a living) on the hook for the professional conservator’s fee, but also the professional conservator is permitted to hire an attorney at hundreds of dollars per hour at Sally’s expense to defend the appointment. Meanwhile, Sally’s loved ones are not allowed to access any of Sally’s money to hire their own attorney to challenge the professional conservator. So, while the judge may order that the permanent conservator should be Sally’s nearest and dearest, nevertheless this is a very expensive proceeding.
LEGAL FIX #3
We all need to sign a Nomination of Conservator, a document which tells the judge who we want as our conservator if we are unable to make decisions for ourselves. Moreover, if you are looking after a dependent adult, it is wise to consider an ID bracelet, in case of confusion when out and about.
Estate planning is not just about what happens to your assets when you die. Creating an estate plan puts in place the correct documents so that your lifestyle and assets can be seamlessly managed by those nearest to you if you become incapacitated. It’s about taking responsibility to minimize the effect of crises and ensuring our wishes are carried out when we are unable to speak for ourselves.
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Attorney Elizabeth Botsford LLM Tax (Hons)
Busy Wills, Inc.
11684 Ventura Blvd., #145
Studio City CA 91604
(818) 579 7900
Please visit busywills.com for more information.
At Busy Wills, Inc., attorney Elizabeth Botsford LLM Tax (Hons) is always mindful that you are busy. Access valuable advice, for an affordable fixed price. Protect your loved ones with an estate plan designed for your unique circumstances. Live every day as though it’s your last. Your loved ones will be glad you did.
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Attorney Advertising: This article has been prepared for general informational purposes only and is not intended as legal advice.