Q.  I heard that the proposed CA Budget cuts to the Medi-Cal program are now off the table. Is that true?

A.  Yes!  Some background:  Faced with a proposed $54 Billion Budget Deficit, last month Governor Newsom had proposed drastic cuts to Medi-Cal and other social programs that serve low income seniors and the disabled. Fortunately, the California State Senate and Assembly just soundly rejected those cuts included in the Governor’s “May Revise” Budget. Instead, they agreed to a budget deal that would address the deficit by relying, instead, on a combination of drawing on reserves, borrowing from special funds, temporary furloughs for state workers, limiting corporate tax credits and relying upon Congress to pass a relief package for states and local governments. This is very good news. It means that the proposed cuts to Medi-Cal and most other social service programs are now off the table. However, a part of the deal was that the Governor could still make these cuts effective July, 2021, if state finances do not approve.

Here is a list of what was saved:

1) Home and Community-Based Services (aka, adult day care)

2) The Multipurpose Senior Services Program (“MSSP”)

3) The In-Home Supportive Services Program (“IHSS”);

4) SSI/SSP:  Current SSI/SSP benefit levels will remain;

5) Other Senior Programs:  the budget preserves senior nutrition, caregiver resource centers, Long-Term Care Ombudsman Program, aging and disability resource centers, and Independent Living Centers.

6) Increased Income Limits to qualify for the “Aged, Blind and Disabled Program”, slated for August 1, 2020, is still on schedule, which will permit more seniors to qualify for ‘No Share of Cost Medi-Cal’, as well as dental benefits.

7)  Very important:  the deal avoided reinstatement of the old, draconian pre-2017 rules, which allowed the state to recover the value of Medi-Cal nursing home benefits received during lifetime, which claims often resulted in the forced sale of homes and the displacements of low income families after the death of their loved ones.

This Budget Deal is a very big deal, as the May reductions proposed to target some of the most vulnerable seniors and the disabled.

Unfortunately, the budget did not include extending Medi-Cal coverage to undocumented senior immigrants, but it does include intent language to do so should funding become available.

Saving these programs was the result of an effort by many well community groups, citizens who called their legislators, and the good will of our Governor and Legislators.  As Hilary Clinton once said, it “takes a Village” to preserve our community.

One important related event:  By directive from the Governor and ruling from Medi-Cal, almost all negative actions are on hold to ensure that individuals retain coverage during the COVID-19 Pandemic emergency.

References: Justice in Aging Summary; Center for Elders Independence “Adult Day Health Centers Spared“; Governor’s Budget Summary as of 05/14/2020 (before recent compromise); Medi-Cal Eligibility Information Letter No: I 20-08 (April 10, 2020), to prioritize “eligibility determinations for new applications”, immediate need requests, restoration of benefits, and to avoid negative actions and coverage gaps.

Q. I hear that Medicare has announced that, due to the Corona Virus Pandemic, it will now be more generous in covering nursing home stays by relaxing some of its long-standing coverage requirements. Do you know anything about this?

A. Yes. A bit of background may be helpful. Medicare has traditionally imposed three conditions as prerequisites to covering nursing home care, more properly known as Skilled Nursing Facility (“SNF”) coverage:

(1) The 3 Midnights Rule:  The patient must have spent at least three (3) nights in the hospital as an admitted patient before being discharged to a nursing home (aka a Skilled Nursing Facility, or “SNF”);

(2)  100 Day Cap For Single Spell of Illness:  The duration of coverage would not, in any event, last longer than 100 days for a “single spell of illness”. That 100 day limit could only be extended in the rare case where the patient established a new benefit period by “breaking” that single spell of illness. A break occurs where he or she was discharged from the SNF to either return home, or to a custodial care setting, for at least 60 continuous days. In the rare case where that break occurred, only then could the individual re-qualify for another SNF benefit period of up to 100 days. However, see “New Development“, below ; and

(3) Must Need Skilled Care:  The coverage, in any event, would be for only for so long as the SNF patient needed skilled therapies (e.g. Occupational Therapy, Physical Therapy, Speech Therapy, wound care); when it appeared that the patient needed only custodial care, Medicare coverage would end even if before the 100 day limit.

New Development as of 03/13/2020:  Because of the Corona Virus Pandemic, the Administrator of the Center for Medicare & Medicaid Services, Seema Verma, recently announced major changes in how Medicare covers SNF level care:  On behalf of Medicare, she has now eliminated or substantially relaxed the “3 Midnights Rule” and the “Single Spell of Illness” rule. Thus, to qualify for SNF level Medicare coverage now, an individual need not first spend three nights in the hospital. Likewise, he or she can now receive a second benefit period of up to 100 additional days without first needing to return home for 60 days. Further, the federal CMS Agency has just released clarifying Questions and Answers. In particular, the extension does NOT depend upon having a COVID-19 related illness. See the link in the References section, below.

However, the requirement that the individual must still show the continued need for skilled care, as opposed to custodial care, remains in effect. Thus, if the individual were granted a second 100 benefit period of coverage, but was unable to fully participate in physical or occupational therapies during that new benefit period, then coverage would still end before the full 100 day coverage extension. Thereafter, if his doctor still felt that he still needed care in the nursing home, the individual would then have to either pay from his or her own funds or apply for Medi-Cal coverage.

Remember:  Medi-Cal – unlike Medicare—will pay even for custodial level care for those who financially qualify, and for so long as needed, even if it be for the remainder of an individual’s lifetime.

References:  Letter from Seema Verma, Administrator, Center for Medicare & Medicaid Services, 03/13/2020; Article by American Health Care Association; Questions & Answers about the Medicare Rule. See, the Q&A on page 98: The Q and A reads as follows:

“Y. Skilled Nursing Facility Services 1. Question: Does the section 1812(f) waiver for the 3-day qualifying hospital stay apply only to those beneficiaries who are actually diagnosed with COVID-19, or does the waiver apply to all SNF-level beneficiaries under Medicare Part A? Answer: The qualifying hospital stay waiver applies to all SNF-level beneficiaries under Medicare Part A, regardless of whether the care the beneficiary requires has a direct relationship to COVID-19. See: https://www.cms.gov/About-CMS/AgencyInformation/Emergency/EPRO/Current-Emergencies/Current-Emergencies-page

Q. I hear that there is some news from Social Security, in that it will now allow recipients to name a Representative Payee in advance of actual need. Is this important and do you know about it?

A. Yes, and it is considered a major change for social security. So, first, let’s address what a Representative Payee is:

In the Social Security system, a representative payee is a person or organization appointed to receive funds for someone, who is unable to manage their own money or pay their own bills. A representative payee (“RP”) would have the power and the responsibility to manage those funds for the beneficiary’s benefit, whether thye be Social Security Retirement, Supplemental Security Income (“SSI”), or Special Veterans Benefits. The RP is essentially a fiduciary for the beneficiary and must be careful about handling the beneficiary’s money, must keep good records, and make annual accountings to social security as to how the money was spent.

Up until now, anyone could apply to be the RP for a beneficiary who was deemed unable to manage his or her funds, which could encourage “bad actors” to get involved. Further, there was no mechanism for a competent recipient to make an advance designation as to who should be his or her RP. In this respect, the situation has always been very unlike the advance designation that one could always make in one’s estate planning documents as to who would his or her Trustee, Executor, Agent Under Financial Power of Attorney, and Agent for Health Care.

But now you can!  This new right stems from the “Strengthening Protections for Social Security Beneficiaries Act of 2018”, and now allows you to choose an individual to manage your benefits whom you know has genuine concern for your well-being, should the need later arise.  The advance designation can be made by competent adults and emancipated minors. You may select up to three individuals, in the order that you designate.  If the need later arises for an RP, social security will contact those individuals on your behalf, but will still verify that they are suitable to serve.  In addition, social security will send an annual reminder to you of your designations, so that you can update their identities and contact information as necessary.

You can make an advance designation in one of the following ways:

1) Online using your personal “mysocialsecurity”(www.ssa.gov/myaccount);

2) By telephone at 1-800-772-1213 (TTY: 1-800-325-0778);

3) In Person by going to your local field office, but only after it reopens following the COVID-19 closures.

So, along with your estate planning designations, you can now also do so as to your social security benefits. This is an important change for social security.  Further, the process on line is simple and can usually be completed in less than 10 minutes.

Q.  My wife and I signed our estate planning documents quite some time ago. In view of the current COVID-19 Pandemic, we wonder whether there are any revisions we should consider?

A. Excellent question. The short answer is, “Yes”. Here are some specific suggestions relating to some important estate planning documents which you probably signed:

Durable Power Of Attorney: As you know, a Durable Power Of Attorney (“DPOA”) allows you to nominate an Agent who will act for you in managing your financial affairs if you become unable to do so, yourself.  Many of these documents are what we call “springing” DPOA’s, in that they only “spring to life” if you lose capacity. Your loss of capacity would typically be certified by one, or possibly two, examining physician(s). In the current chaotic environment of the COVID-19 Pandemic, getting letters from physicians may be difficult. Consider changing your DPOA so that you designate your Agent to have immediate powers, as this will eliminate the need for doctors’ letters.  Note: just because you designate your Agent to have immediate powers does not mean that you have surrendered yours. It is like having two sets of cars keys to the same automobile. Each of you would retain powers. Obviously, you would only do this if you have total trust in your designated agent.

Trust:  You might consider something similar if you have a Trust and have nominated a successor Trustee to take over upon your incapacity. Instead,  consider elevating the Successor to the status of a Co-Trustee, with recitals that trust affairs can be managed by either one of you.

Advance Health Care Directive: An Advance Health Care Directive (“Directive”) appoints a Health Care Agent to speak for you in regard to medical treatment in the event you are unable to do so, yourself. Usually your Agent would meet personally with your physicians to convey your wishes, especially in a critical care situation. However, in the current environment, meeting personally may not always be possible, especially if you were in a hospital setting, and even more so if you contracted the Corona Virus and were in quarantine. Consider authorizing your Agent to communicate with your doctors by electronic communication, video, or  other alternate means of communication, as an alternative to a personal meeting, so that your wishes can still be honored. You might also express your wishes about being intubated and connected to a ventilator to save your life. There is growing concern that being on a ventilator may result in lasting disability for the patient, even if he or she recovers from the virus.

POLST: Many patients, especially if they are in a hospital or critical care setting, have signed a “Physician Order for Life-Sustaining Treatment” (“POLST”). A POLST is a two-way statement between you and your doctor which expresses your wishes on end-of-life care. Unlike the health directive, it carries the weight of a Physician’s Order, and usually is prominently positioned in your medical file on bright pink paper so that it can be easily retrieved. Studies indicate that these Physician’s Orders are generally honored more frequently than wishes stated in a  Health Directive. Importantly, many POLSTS contain prohibitions on intubation, and this may be the very thing that a doctor might prescribe if you contracted the virus, especially if you need to go on a ventilator.   Discuss changes as appropriate with your doctor and then sign a new POLST.

Consider these changes now and chances are that you and your wife will feel much better about your preparedness.

Q. My mother resides in a nursing home where she receives the care that she needs. However, we worry about the risk of her getting ill from the Corona Virus. Should we bring her home?

A. That is a difficult decision, but here are some thoughts:

The number of coronavirus cases in nursing homes and assisted living facilities across the country continues to grow. A Washington state nursing home was one of the first cluster of coronavirus outbreaks reported in the United States, with at least 37 deaths associated with the facility.  NBC news reported on April 16 that coronavirus deaths in long-term care facilities across 29 states had soared to 5,670.

In an effort to contain the virus’s spread, most long-term care facilities are limiting or excluding outside visitors, making it hard to check on loved ones. Social activities within the facility may also be cancelled, leading to social isolation for residents. In addition, long-term care facilities face staffing shortages even in the best of times. With the virus affecting staff as well as residents, facilities are having trouble providing needed care. Assisted living facilities, which are not as heavily regulated, may have greater trouble containing the virus than nursing homes, because their staff is not necessarily medically trained. Still, most staff do try to observe basic protocols with protective masks and gloves.

With this in mind, many families are considering bringing their loved ones home. Before taking this extreme step, however, you need to consider the following questions:

  • Is your family able to provide the care that your loved one needs? Some patients require help with eating, dressing, medication, and going to the bathroom. You need to consider whether you can adequately provide that care at home. In addition to your loved one’s practical needs, you need to think about your physical and emotional stamina. Can you lift your Mom to assist her out of bed? Can you rent or purchase a mechanical list for her room to assist? Is your house set up to safely accommodate her? Are there a lot of stairs? Does the bathroom have rails? If your loved one has dementia, there may be other considerations to take into account.
  • How well can you prevent infection? Will you be better able to prevent infection in your own home, than a nursing home? If your entire household is homebound, you may be in a good position to prevent bringing home the virus. However, if one or more members of your household is working outside of the home in an essential business, you will have to take extra precautions to make sure he or she don’t bring the virus home to your loved one. Are you taking the necessary precautions to keep your house and yourself disinfected?
  • Big Question: Will your mother be allowed to return to the facility when the threat of the virus has abated? If you take your family member out of the nursing home or assisted living facility, the facility may not let your family member back in right away. You should check with the facility to determine if your loved one will be able to return.

Bringing a family member home is a difficult decision, which depends upon the individual circumstances of each family. Unfortunately, the choice is not an easy one.

*********

Thanks to Harry Margolis, Esq., of MA for permission to use and modify this article.

Q. My father is confined to his Assisted Living Facility (“ALF”) and is very anxious to sign a Will and other estate planning documents. However, the facility is on ‘lock-down’ due to the COVID-19 pandemic, his caregivers will not be able to serve as witnesses, and I cannot arrange for a mobile notary to enter to notarize documents. What can I do?

A. Be aware that not every estate planning document must be witnessed or notarized. Take advantage of this legal fact, so he can sign those that can be created without these formalities, as follows:

Last Will:  Conventional wisdom has it that a Will executed in California always requires the presence of two witnesses to observe the Testator sign, and who so attest in writing. However, a little known provision of California law allows a Will to be found valid even if not so witnessed, if it is later established by “clear and convincing evidence” that the Testator intended the signed document to constitute his Will. So, ask your father’s attorney to be creative so as to enable the signing to meet this evidentiary standard. In our office, we are working up procedures to do just that, which include: remotely supervising and video recording the signing, having the signer clearly state on video that the document is his Will, and having the supervising attorney prepare an affidavit describing the signing event.  Our plan also contemplates re-signing the Will with the traditional two witnesses once the COVID-19 crisis has passed. Note:  To my knowledge, this work-a-round has not yet been fully tested in the courts, but the “clear and convincing evidence” alternative is clearly written into the law. CA Probate Code § 6110 (c)(2).

Alternatively, and perhaps even following a template, he might write it out all in his own handwriting on a blank piece of paper and thereby create a holographic Will, which requires neither witnesses nor notary.

Trust: While it is customary and even preferred for the Trustor’s signature on a trust to be notarized, California law does not so require.  A trust declaration signed only by your father would be sufficient. If real property is to be included in the trust assets, those properties can be described in the trust by their common and legal description, and formal deeds moving them into the trust prepared and notarized later, if necessary. If your father were to die before the COVID crisis is over, there would be a simple court procedure that could then be invoked to transfer them into the trust, in accordance with his intention, so as to eliminate the need for a probate. This is called a “Heggstad Petition”.

Health Care Surrogate Statement: Any patient may orally, or in writing, designate another person to act as his/her Health Care Surrogate. CA Probate Code § 4711. This act is different from naming an Agent in an Advance Health Care Directive (“AHCD”), which does require witnesses or notary, as well as the joinder of an Ombudsman if signed while the patient is in a nursing home.  However, your father may orally, or in writing, designate a health care surrogate by so informing the supervising health care provider at his ALF, and this designation requires no witnesses and no notary.  The designation would be good for your father’s current course of treatment or illness, or 60 days, whichever is shorter.  During that term, it actually overrides the designation of Agent in an AHCD.

Physician Order for Life Sustaining Treatment (“POLST”): This document requires only the signature of the patient (or patient’s representative) and his/her physician. No witnesses and no notary are needed.

Power of Attorney (“POA”): Unfortunately, a POA does require either two witnesses or a notarization.

So, help your father sign documents that he can sign now, even without witnesses or notary, and revisit this issue after the COVID-19 crisis passes. Both of you will likely feel much better for having done so.

 

Q.  My wife and I spend a substantial amount of time each year living in two other states, so that we can spend time living near each of our two children and their own families. We have our California estate planning documents created some time ago, but wonder whether we should create new documents in each of the other states, as well?

A.  Good question! While, technically, you do not necessarily need a separate set of estate planning documents created under each of the other state’s laws, nevertheless it might be wise to do so as to at least as to two of them, and here’s why:

The United States Constitution requires that each state give what is called “full faith and credit” to the laws of every other state in the union. This means that your estate planning documents created under California law should be honored in every other state of the union, without the need to create new documents in each of those other states. That said, however, the practical realities of dealing with California documents in other states might nevertheless create problems, especially as to your Durable Power Of Attorney (“DPOA”) and your Advance Health Care Directive.

If you both remain permanent residents of California, you should not need new wills or a new trust, yet as to your “DPOA” and your Advance Health Care Directive, it may be a different story:  you might very well meet some resistance if you attempt to use your California documents in those other states. Reason:  financial and healthcare institutions are used to seeing the documents commonly used in their own states and may refuse to honor out-of-state documents of which they are unfamiliar. Further, as to your Health Directive, other states may use different terms for the document, such as “durable power of attorney for health care” or “Living Will”.

Remember that the people at the bank, and the people in the hospitals, are not constitutional lawyers, and may therefore not know that they should fully honor your California documents. Therefore, I recommend that you consult an attorney in each of the other states and prepare at least a DPOA and the equivalent of a Health Care Directive, both in a form that is customarily seen and used in each of those other states.

Further, even as to your wills and trust, my recommendation is still to consult with a lawyer in each of the other states in order to make sure there are no special rules that might trip up your family in the event it became necessary to handle some of your estate affairs outside of California.

So, even though you could stand upon your constitutional rights to assert the validity of all of your California documents in the other two states, my suggestion is that, upon your next visits, you create new Health Directives and DPOA’s that would be easily recognized by financial and medical folks in those other states. When doing so, try to make them as similar as possible to your California documents, especially in terms of who is authorized to act as your agent, so as to avoid confusion in the event of need.

Q. It’s tax time again and I hear that the IRS may offer free tax preparation services to seniors. Do you know anything about this?

A. Yes. The IRS offers information on its site about free tax preparation software, fillable forms, and free taxpayer assistance, all available in an effort to make tax compliance easier, especially for seniors, those with a disability and those whose primary language is not English.

The free tax software is actually available from private vendors, but studies find that the availability of the free software is not well known and, in fact, is not easy to find on an Internet Search. It seems that, some years back, in an effort to increase the number of electronically filed returns, the IRS decided to encourage the use of tax preparation software.  In aid of that goal, the IRS entered into an agreement with private software vendors whereby the latter agreed to make their software available for free to low income persons, especially seniors, and in exchange the IRS agreed not to design its own free software to compete with those private companies.

Unfortunately, it seems that some of these companies have initiated computer code so that their free software is not easily “findable” on an internet search and the searches direct the user to software for purchase. As a result, the number of taxpayers actually using the free software is relatively tiny. For more, click on the following link.  The IRS has now amended its agreement with the software industry to bar the companies from hiding their free products.

That said, seniors and retirees should know that they can take advantage of free help to file their tax returns.  There are basically four (4) categories of free assistance, depending upon income, age, disability and facility with English, as noted below. In each case, seniors can go to the IRS website [IRS.gov] and type in the following words in the search bar: Free File: Do Your Federal Taxes for Free.  A screen will then pop up to give you choices, as follows:

1) Free Tax Preparation Software:  This option is for seniors whose Adjusted Gross Income (“AGI”) is less than $69,000.  Seniors who qualify can peruse the IRS site, choose their favorite vendor, and download free federal and state tax preparation software from vendors with such familiar names as Turbo Tax and H&R Block.

2) Free Fillable Forms:  Seniors whose income is above $69,000 for the year can opt for Free Fillable Forms, but must have a basic understanding as to how to do their own taxes.

3) Free Voluntary Assistance:  The Volunteer Income Tax Assistance (“VITA”) program offers free tax help to people who earn $56,000 or less, persons with disabilities and taxpayers with limited English speaking skills. IRS-certified volunteers provide free basic tax return preparation with electronic filing for qualified individuals.

4) Tax Counseling for the Elderly (“TCE”) program:  The TCE offers free tax help for all taxpayers, particularly those who are 60 years of age and older, and specialize in dealing with  pensions and retirement-related issues unique to seniors. The IRS-certified volunteers are often retired individuals associated with non-profit organizations.

You can find a location near you to obtain free assistance in any one of the following ways:

a) Call the VITA locator phone number at 1-800-906-9887; b) Call the AARP Foundation’s Tax Aid Program at 1-888-227-7669; c) Go to the gov web page, type the following into the search bar: “Free Tax Return Preparation for Qualifying Taxpayers”. Then Click on one of the two Locator Tools. Alternatively, you can just call one of these nearby locations: Hayward Area Seniors Center, Hayward: (510-881-6766); Eden Social Services Agency, Hayward: (510)271-9141; Laney College Ad Hoc, Oakland: (510-986-6947).

Of note, also, is that the IRS now also offers a simplified two page tax form designed especially for seniors. It is called the Form 1040-SR “US Tax Return For Seniors” and is designed to simplify the process for retirees.

Q. I heard that there is a new law which makes major changes to IRA’s and other retirement plans. Can you comment?

A. The new law, signed by President Trump on December 20, 2019, and effective January 1, 2020, is called the “SETTING EVERY COMMUNITY UP for RETIREMENT ENHANCEMENT ACT”, or the “SECURE ACT” for short. It was designed to promote more saving for retirement, but it may require seniors to rethink some of their estate planning. Following are the major changes:

  • Stretch IRA’s Limited. The biggest change eliminates “stretch” IRA’s for many beneficiaries. Under former law, your Designated Beneficiary (“DB”) could choose to take distributions over his or her lifetime and to pass what was left, after the DB’s death, onto future generations (called the “stretch” option). The required minimum distributions were then withdrawn each year based upon the beneficiary’s life expectancy. This allowed the IRA to grow tax-deferred over the course of the beneficiary’s life and to be passed on to his or her own beneficiaries, potentially “stretching” the payout over two or more generations. Unless the beneficiary is a member of one of five (5) favored categories (see below), the SECURE Act requires beneficiaries who inherit retirement accounts to withdraw all the money within 10 years of the original owner’s death. In many cases, these withdrawals will now occur during the beneficiary’s highest tax years, meaning that the elimination of the “stretch” option is effectively a tax increase for many beneficiaries. This provision will apply to those who inherit retirement plans on or after January 1, 2020.
  • Stretch IRA’s Still Available For Certain Beneficiaries: The “stretch option” is still permitted for the following beneficiaries: (1) the surviving spouse of the account owner; (2) Children of the owner, but only until they reach age 18; (3) Disabled persons; (4) Chronically Ill persons, and (5) Beneficiaries not more than 10 years younger than the account owner.
  • Required minimum distributions. Under prior law, the owner was required to begin taking distributions from his IRA beginning when he reached age 70½. Under the new law, individuals can now wait until age 72 to begin taking distributions.
  • No Age Cap on Contributions. The new law allows workers to continue to contribute to an IRA after age 70 ½, eliminating the former age cap.
  • Annuities. The new law removes roadblocks that made employers wary of including annuities in 401(k) plans by eliminating some of the fiduciary requirements used to vet companies and products before they could be included in a plan.
  • Withdrawals. The new law allows an early withdrawal of up to $5,000 from a retirement account without penalty in the event of the birth of a child or an adoption. Formerly, there was a 10 percent penalty for early withdrawals in most circumstances.

Given these changes, retirement plan owners (including IRA’s, 401K’s, etc. ) should review their estate plans, especially if they relied upon “stretch” options as an estate planning tool.  One way some did this was to name a trust as the beneficiary of their IRA. Those trusts should now be reviewed to determine if they need to be reformed to conform to the new law. If an IRA “stretch option” is part of your estate plan, you may wish to consult with your attorney or tax advisor to determine if you need to make changes.

*********

Gene L.  Osofsky  wishes to thank Harry Margolis, Esq. of MA for permission to use and modify his original article on topic.

Q. My wife and I would like to set up a basic estate plan. What are the essentials?

A. Many people believe that if they have a will, their estate planning is complete. But there is much more to a good estate plan. A good plan should be designed to avoid probate, minimize estate taxes, protect assets if you need to move into a nursing home, and appoint someone whom you trust to act for you if you become disabled.  Here is a list of the basics:

(1) Will: The most basic document is a will. A will directs who will receive your property upon your death and who will be your executor to see that your wishes are honored.  If you have minor children, it may also nominate guardians for them. But a will usually requires a probate proceeding, and only controls property that is part of your probate estate. Indeed, many people own assets which are not part of their probate estate, such as joint tenancy assets, life insurance policies, retirement plans, IRA’s, 401K’s, and annuities. The disposition of these non-probate assets is controlled by the form of title or by the associated beneficiary designation, and not by your will.  For example, property held in joint tenancy goes to the surviving joint tenant, regardless of what the will says.

(2) Durable Power Of Attorney (“DPOA”): In a DPOA you designate a person to act in your place for financial matters when you are unable to act for yourself.  The DPOA is usually considered a better alternative than a court supervised conservatorship, which can be cumbersome, public, and expensive. A DPOA can, if properly drawn, also authorize long-term care planning on your behalf.  But the DPOA ceases to exist upon your death, and therefore cannot function as a will-substitute.

(3) Advance Healthcare Directive: By this directive, you nominate someone to make health care decisions for you in the event you are unable to do so yourself. It usually also expresses your wish about end-of-life matters, burial and autopsy, and will authorize your agent to access your medical records and select physicians for you.

(4) Trust.  If you have a home or other significant assets, you should consider creating a trust. Unlike a will, a trust is designed to avoid probate and, upon your death, pass your trust assets to your beneficiaries in a manner which is usually speedier and less costly than a probate proceeding. Also, if you become incapacitated, a trust typically appoints a successor trustee to step in to handle your financial affairs on your behalf. Unlike the DPOA, a trust does not suddenly cease to exist upon your death, but remains in effect long enough to distribute your trust assets as you have directed.  In larger estates, trusts may also include provisions to minimize estate tax.

(5) Beneficiary Designations.  At the same time that you create an estate plan, you should also review all beneficiary designations on assets such as insurance policies, retirement plans and annuities. This is because these beneficiary designations override your will or trust, and you should make sure that your beneficiary designations are current.

A good estate plan should also be customized to your particular circumstances.  For example, if you are concerned about future long-term care expenses, you may wish to integrate long-term care planning into your estate plan so that you or your spouse may access available government benefits to help pay for care without depleting a lifetime of savings and impoverishing the survivor.