Don’t take your passwords to the grave with you.

There’s a terrific post at Bankrate.com on a subject most folks don’t think about when creating their estate plan — who will know what your passwords are so they can access your accounts? There is now a service called Legacy Locker which will store them on-line for $30 per year. Whether that service is right for you may depend on how squeamish you feel storing your passwords somewhere out in the cosmos.

Of course, you could do things the old-fashioned way — write down a list of all your passwords, along with a list of your accounts, life insurance policies, safe deposit boxes, etc., etc., and give them to your attorney or someone else you absolutely trust to safely store the information. If you do that, you and your lawyer should have an agreement describing the circumstances upon which that list will be released and the person(s) that it may be released to.

Estate Plan Messes — Outdated Documents

When was the last time you actually LOOKED at your Will? That’s right — the one stuck in the back of your filing cabinet, along with the receipts for stuff you bought in 1991. Are the kids who were then in kindergarten now out of the house and have babies of their own? Does it still name your brother — the one who has since developed a drinking problem — as the executor? If you have $1 million or more worth of combined real estate, investments, and other assets (and despite the recession, there are still folks who do), and you live in a state which still has a separate estate tax (like Massachusetts), does it have any provision for how the taxes might get paid?

I encourage my clients to take their wills out of the file for ten minutes every year or so and just look them over. If the situation hasn’t changed, fine — put them back. But if there are now children or grandchildren, or a change (for good or bad) in their financial lives or their health, or it’s been five years or more since you and your lawyer have talked, then it’s time to come in for an estate plan check-up. Maybe the Will just needs a small tweak, which can be done with a codicil — an amendment to the Will. Maybe it’s time for a new Will. But a few minutes of review and a possible update can save your estate thousands of dollars in the future, and give you peace of mind that your plan will work the way you intend.

Estate Plan Messes — Naming the Wrong Fiduciaries

A fiduciary is someone you’ve placed in a position of trust to act on your behalf. In estate planning, the fiduciaries are the executor (or personal representative) of your will, the trustee of your trust, the attorney-in-fact for your power of attorney, and your health care agent for your health care proxy.

Most of the time, my clients want to name one or more of their children as their fiduciary. They come in thinking that “Joe” should be a fiduciary because he is the oldest or the child holding the “most important” job or some other reason. I tell the client two important things. First, being a fiduciary is usually a thankless job — and it can be a JOB. There is no honor or glory in running from one bank to another to close out accounts or paying the bills or getting a house cleaned out and sold. It takes time, energy and organizational skills. The client needs to be sure that the proposed fiduciary is cut out for the job.

The second thing I tell — or ask — the client is how well does Joe handle his own money? Does he have a drinking problem? Can he hold down a job? A good fiduciary needs to have good character. If Joe is not responsible in his own life, the client shouldn’t assume that Joe will somehow be more careful with the client’s affairs.

Just Out — 2004 National Nursing Home Survey

Credit — Tim Takcas, TN elder law attorney extraordinaire

http://www.cdc.gov/nchs/data/series/sr_13/sr13_167.pdf

Data Highlights include:

  • In 2004, there were 1.7 million nursing home beds in the U.S. compared with 1.9 million beds in 1999.
  • The number of nursing home residents decreased from 1.6 million in 1999 to 1.5 million in 2004.
  • Mental disorders were the second leading primary diagnosis among residents at time of interview (22%). This represents more than a 20-percent increase over the 1999 estimate, when 18% of nursing home residents had a primary diagnosis for a mental disorder at the time of interview.
  • Almost 9 percent of current residents had a fall reported in the 30 days prior to the facility interview.
  • About 65 percent of current nursing home residents had at least one type of advance directive.
  • In the 90 days prior to the facility interview, almost 11 percent of current nursing home residents had at least one hospitalization or emergency department visit while in the care of the nursing home.
  • Estate Plan Messes — Failing to update beneficiary designations

    OK, you’ve finally seen a lawyer. You signed your will, durable power of attorney, health care proxy, and maybe a trust. What did you forget — or what did the lawyer forget to talk with you about? How about checking that beneficiaries on your life insurance, retirement accounts, and other assets which pass outside of probate are updated?

    When I prepare an estate plan or administer an estate for someone who has died, I ask for information about ALL of the property owned by the living clients or the decedent. That includes life insurance policies, annuities, and retirement plans, like 401ks and IRAs. I have seen a number of these policies name as beneficiaries long-dead parents, ex-spouses, or children that the client stopped speaking to years ago. Not making sure that these changes are addressed when one is putting together an estate plan is only doing half the job.

    Tax credit for advance directives?

    Rep. McDermott (D-WA) has introduced HR 2705, which would provide a tax credit of 30% of qualified costs of legal work up to a maximum of $500 for preparation of advanced directives.

    Given current pressures on federal revenues, I’m not holding my breath waiting for this measure to pass, and I question how much of an incentive this credit would give anyone to go see a lawyer. But anything that gets Congress to talk about end-of-life decision-making is a good thing.

    Pending Legislation in the MA Legislature to Support Family Caregivers —

    According to a 2007 survey by the National Alliance for Caregiving, a broad-based coalition of organizations and corporations, family caregivers spent $5,500 of their own money caring for elders, not counting lost wages. Yet MassHealth has taken the position that family caregivers shouldn’t be compensated for the services they provide because family members are “supposed to” take care of their loved ones. Unfortunately, an agency’s peculiar 19th-century vision of a moral good doesn’t recognize hard truths. It is less expensive to keep elders in the community than for the state to pay for nursing home care. Yet spouses and children of disabled elders who put their personal and financial lives on hold — often for years at a time — lose the opportunity to pay into Social Security and save for their own retirements — thus increasing the risk of real poverty in their old age. They may be unable to pay current bills or help put children through college because they have stepped out of paid employment to care for loved ones.

    Now the Massachusetts legislature has a chance to make it clear that this difficult work has true economic and social value. State Senator Mark Montigny and State Representative Kay Khan have introduced An Act to Help Families Care For Elders, House Bill 536, Senate Bill 59. The proposed statute would make it clear that elders could enter into fair and reasonable contracts for care with their loved ones where a medical professional or social worker has documented that the services are required to allow the elder to stay or return to the community. It would recognize the fact that families shouldn’t be forced to chose between paying for their own living expenses and caring for a parent. Hearings on this important bill will happen this week.

    Please contact your state senator or representative and let him or her know that we shouldn’t penalize our elders because they choose to hire a child rather than strangers from an agency to give them care. You can locate your legislator’s telephone number and e-mail address by going to the Legislature’s main page and scroll down the left side of the page to the links by city or town.