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IBA: Estate Planning 101 for Lawyers – Are You Prepared?

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By Rebecca Geyer, Hollingsworth & Zivitiz

Rebecca Geyer Geyer

As an estate planning attorney, I regularly counsel clients about disability and death planning. If truth be told, however, I’m not always good at following my own advice. Attorneys procrastinate as much as the clients we represent, too often getting caught up in our daily endeavors and failing to make sure our own affairs are in order. As fall approaches, I’m making time to review my estate planning, and I encourage you to do the same. Here are a few issues you might consider:

Wills and Trusts. If you have yet to do so, I strongly recommend taking the time to put a will or trust in place. Wills and trusts provide a mechanism for you to designate how and to whom your assets will pass following your death and who should administer such distribution. There are numerous ways to plan for the division and distribution of your assets to address potential concerns such as education planning, children with special needs, long term care concerns, or a beneficiary’s poor financial management skills. If you have minor children, your estate planning should address the issue of guardianship to ensure your children are raised by the people of your choice should you die. Although a will should address guardianship, don’t overlook Indiana’s new standby guardian statute (Ind. Code § 29-3-3-7) which allows the parent of a minor or the guardian of a protected person to designate a standby guardian for the minor or protected person in a written declaration. The designated standby guardian begins serving as guardian of the minor or protected person upon the death or incapacity of the parent or guardian. The statute is intended to ensure that a minor or protected person has a legal guardian in place until a petition for guardianship of the minor or protected person can be heard following the parent’s or guardian’s death.

Planning for Disability. Just as important as wills and trusts are documents designating someone to make financial and health care decisions on your behalf should you be unable to make such decisions yourself. A Power of Attorney allows you to designate someone to handle financial transactions for you should you be unable to act on your own behalf. Many married couples assume a Power of Attorney is unnecessary if their accounts are owned jointly as the non-disabled spouse can continue to access funds and pay bills. While this is true, a joint owner does not have authority to sign for you to sell or refinance an asset without legal documentation granting them such power. Most people also own at least one account, such as a retirement plan or life insurance policy, in their individual names, making a Power of Attorney necessary so that someone has authority to act on such accounts if the owner becomes disabled. Without a properly executed Power of Attorney, your family may be left with no choice but to pursue legal guardianship to access your finances in the event of your disability.

Health care documents are also extremely important. An Appointment of Health Care Representative or Health Care Power of Attorney allows you to designate someone to make medical decisions for you if are unable to speak for yourself. A properly designated HIPAA Release is also imperative. Since the passage of the Health Insurance Portability and Accountability Act (HIPAA), most medical providers will not speak to your family members about your medical condition without a HIPAA release so as not to violate your privacy rights. Indiana law also allows you to determine whether you want your life artificially prolonged by tubes and machines in a Living Will or Life Prolonging Procedures Declaration. If you have specific wishes for your funeral, you might also consider executing a Funeral Planning Declaration.

Review Your Existing Plan. If you have an existing estate plan, when was the last time it was reviewed? Numerous changes in Indiana and federal law may result in unintended consequences if your estate plan is not updated. Outdated estate tax clauses may require the unnecessary division of your assets at your death or result in loss of control for the surviving spouse. Reviewing the titles to your assets is also a must. Even with properly executed estate planning, your assets may not pass the way you envision. The title of your assets trumps your estate planning documents so carefully review each account to ensure you know exactly how it passes at your death. You may wish to take advantage of Indiana’s expanded Transfer On Death Act to transfer assets such as bank accounts, real estate, and motor vehicles at death without probate. If you have a living trust in place, are your assets titled in the trust’s name? Non-probate assets such as retirement plans and life insurance policies pass by beneficiary designation. Do you have primary or contingent beneficiaries named on such accounts? Failing to name a beneficiary on your life insurance policy may subject the proceeds to Indiana inheritance tax should the policy become payable to your estate. If you’ve set up a trust for your minor children, have you changed the beneficiary designations on your insurance policies and retirement plans so that such assets flow into the trust at your death? If your minor children are designated as the beneficiaries of your accounts, Indiana law will require a guardianship or protective order to collect such account proceeds (if they exceed $10,000), and they may pass to your children at age 18 instead of under the terms of the trust you established. You should also consider the income tax implications of your beneficiary designations. Proper planning can maximize the amount of retirement assets passing to your beneficiaries while deferring the payment of income tax over the course of such beneficiaries’ lifetimes.

Review Your Practice Contingency Plans. Do you have plans in place for your legal practice should you be unable to work or die? Now is the time of year we pay our annual dues to remain active lawyers in the state of Indiana. Part of the annual registration process is the designation of an attorney surrogate to cover your practice should you become disabled or die. Have you considered who this individual should be for your practice? If you are a solo practitioner, this issue is of extreme importance. Who will handle your cases should you be unable to work or pass away? Do you have disability insurance in place to cover your overhead expenses and provide you with income if you are unable to practice law? Taking time to consider these issues now can help alleviate some of the stress and uncertainty when the unexpected occurs. So practice what we preach and get your own planning in order this year.•

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  1. I grew up on a farm and live in the county and it's interesting that the big industrial farmers like Jeff Shoaf don't live next to their industrial operations...

  2. So that none are misinformed by my posting wihtout a non de plume here, please allow me to state that I am NOT an Indiana licensed attorney, although I am an Indiana resident approved to practice law and represent clients in Indiana's fed court of Nth Dist and before the 7th circuit. I remain licensed in KS, since 1996, no discipline. This must be clarified since the IN court records will reveal that I did sit for and pass the Indiana bar last February. Yet be not confused by the fact that I was so allowed to be tested .... I am not, to be clear in the service of my duty to be absolutely candid about this, I AM NOT a member of the Indiana bar, and might never be so licensed given my unrepented from errors of thought documented in this opinion, at fn2, which likely supports Mr Smith's initial post in this thread: http://caselaw.findlaw.com/us-7th-circuit/1592921.html

  3. When I served the State of Kansas as Deputy AG over Consumer Protection & Antitrust for four years, supervising 20 special agents and assistant attorneys general (back before the IBLE denied me the right to practice law in Indiana for not having the right stuff and pretty much crushed my legal career) we had a saying around the office: Resist the lure of the ring!!! It was a take off on Tolkiem, the idea that absolute power (I signed investigative subpoenas as a judge would in many other contexts, no need to show probable cause)could corrupt absolutely. We feared that we would overreach constitutional limits if not reminded, over and over, to be mindful to not do so. Our approach in so challenging one another was Madisonian, as the following quotes from the Father of our Constitution reveal: The essence of Government is power; and power, lodged as it must be in human hands, will ever be liable to abuse. We are right to take alarm at the first experiment upon our liberties. I believe there are more instances of the abridgement of freedom of the people by gradual and silent encroachments by those in power than by violent and sudden usurpations. Liberty may be endangered by the abuse of liberty, but also by the abuse of power. All men having power ought to be mistrusted. -- James Madison, Federalist Papers and other sources: http://www.constitution.org/jm/jm_quotes.htm RESIST THE LURE OF THE RING ALL YE WITH POLITICAL OR JUDICIAL POWER!

  4. My dear Mr Smith, I respect your opinions and much enjoy your posts here. We do differ on our view of the benefits and viability of the American Experiment in Ordered Liberty. While I do agree that it could be better, and that your points in criticism are well taken, Utopia does indeed mean nowhere. I think Madison, Jefferson, Adams and company got it about as good as it gets in a fallen post-Enlightenment social order. That said, a constitution only protects the citizens if it is followed. We currently have a bevy of public officials and judicial agents who believe that their subjectivism, their personal ideology, their elitist fears and concerns and cause celebs trump the constitutions of our forefathers. This is most troubling. More to follow in the next post on that subject.

  5. Yep I am not Bryan Brown. Bryan you appear to be a bigger believer in the Constitution than I am. Were I still a big believer then I might be using my real name like you. Personally, I am no longer a fan of secularism. I favor the confessional state. In religious mattes, it seems to me that social diversity is chaos and conflict, while uniformity is order and peace.... secularism has been imposed by America on other nations now by force and that has not exactly worked out very well.... I think the American historical experiment with disestablishmentarianism is withering on the vine before our eyes..... Since I do not know if that is OK for an officially licensed lawyer to say, I keep the nom de plume.

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