Thursday Q&A: Estate Planning & Elder Law – July 2, 2020

Each week, Estate Planning and Elder Law attorney Bill Henry spends time educating the community about their estate planning options.

Thursday Q&A:Estate Planning and Elder Law is dedicated to answering your questions. See what Coloradans asked on July 2, 2020. (A transcript of the event is available below.)

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All right, Bill Henry here back with another estate planning Thursday where I answer all of your elder law and estate planning questions from throughout the week. Sometimes think of a few of my own that I hear. Let’s get started. So I wanted to start with a little bit of housekeeping from last week.

How long does a judge take to determine a conservatorship case?

Looks like we had a question come in and unfortunately I didn’t see it, so I didn’t answer it. I wanted to make sure I did answer. This one is to Jolene. And she asks, “What is a reasonable time for a judge to take “in determining a conservatorship case?” So the question is: Are there any sort of guidelines that the judge has to abide by? Well of course, judges have a lot of flexibility of when they decide to render a ruling. And of course, we do have a pandemic going on, so things are absolutely going to be pushed out. In terms of probably what we see, so I wouldn’t necessarily say that this is reasonable or not reasonable but just in terms of what we see, most often after hearing, I would say most judges typically in normal times will render an opinion two to three weeks after. So your normal conservatorship case, if it’s not contested, will take somewhere around six weeks or so to actually get an opinion from the judge. So anyway, just wanted to clean that up. My apologies, Jolene, for not getting to that last week.

How do I execute my husbands medical POA?

Another question that came in over the Q and A throughout the week, so the firm has a Q and A on its website, you can feel free to use it, where people can post questions. And if it has to do with estate planning, I will get the answers, or elder law. So let me read the question to you. It’s a little bit longer, so I just wanna read it. So it says, “My husband had a massive stroke “and is currently in rehab.” She has a durable power of attorney paperwork, but she doesn’t know how to execute it. In other words, does she need a witness and a notary? Just a witness? Just a notary? And her goal is to get a loan on the house after he becomes discharged. And then finally, although her husband has this stroke and has very limited verbal ability, he does have his mental acuity. So let’s kind of break that down. Let me start with the law. Here I want to read this to you. A little boring but that’s how the law is. All right the law reads: “A power of attorney must be signed “by the principal or in the principal’s conscious presence “by another individual directed by the principal “to sign the principal’s name on the power of attorney.” And then it goes on to say, “A signature on a power of attorney “is presumed to be genuine if the principal “acknowledges the signature before a notary public “or other individual authorized by law “to take acknowledgements.” A lot of words there. Let’s kind of apply it to what we have here. So I think the first thing to know is: What are the requirements to sign a power of attorney in Colorado? Well the truth is you actually don’t need a witness or a notary. Having said that, at the law firm and really what is best practice would be have both a notary and two witnesses. And so, that would be what I would always recommend here to this questioner is that we have everything, both two witnesses and a notary. And in this case, the question is, oftentimes I’ll get a question is: Can someone sign it if they have a stroke? And I’ll have another question later about dementia. But if somebody has a stroke and they’re physically disabled, are they allowed to sign the power of attorney? Well the answer is a resounding yes. So if you have mental capacity, you can sign legal documents. And just like it said in the statute, you can have somebody else sign for you assuming you tell them to do that. So if you say, “Hey, go sign this document for me,” then that’s okay. That’s good enough. In this case, because we’re trying to get a loan, I would presume it’s a loan on a house, we also need to get the document notarized. That’s to do more with recording than it has to do with actual power of attorney law. So in this case, at a minimum, we’d want to have the power of attorney both signed, or signed by another at her husband’s direction. But then also, we would want the power of attorney notarized for recording purposes ’cause it’s gonna need to be notarized. In addition to that, by notarizing the document, it creates or sets off a chain of events in terms of the acceptance of that power of attorney. Because now, the bank or other financial institution can presume that that document is genuine because it was notarized. So in other words, they don’t have to be as concerned with fraud; and if in their own good faith opinion they think it’s a valid power of attorney, they can accept it. If you don’t have it notarized, well now all of a sudden, they’re gonna be far more reluctant to actually accept that power of attorney. And then finally, always have the document witnessed because if it’s used in other states, you don’t know what their execution requirements are in those states, and they may require witnesses. So again, long-winded answer. But the answer is: Have it notarized and have it witnessed by two independent witnesses.

What is a trust protector?

All right, on to the next one. “What is a trust protector?” So this is a great question. A trust protector, most people have never heard of a trust protector before. But in estate planning, it’s becoming more and more popular. So let’s talk about what it is. Most people understand what a trustee is. So a trustee is the person that is let’s call him in charge of the trust. So they’re the one that is going to defend the trust. They’re gonna administer the trust. They’re gonna make distributions from the trust to the beneficiary. So if you have a revocable trust, that may be you. And then after you die, it may be someone else. So for example, you may set up a trust for your children, so maybe for your minor children, and you say, “Until my kids reach the age of 25, “I want this held in trust; and I want my brother,” or sister or someone else, “to be in charge of the money “for the benefit of my kids.” Well, that brother or sister that’s in charge of the money is the trustee. That’s what that position is. So what is a trust protector? So we can think about a trust protector as someone that sits above the trustee. And there’s all sorts of rights depending on what you decide to give them, but one of the main ones is if we have a trustee that’s we’re not talking about stealing but just not administering the trust in the way that the trust maker or the person that made the trust would want, well they can go in and they can remove the trustee and appoint someone else. Other uses of trust protectors if we’re talking about an irrevocable trust, so after someone dies, their trust if it was revocable often becomes irrevocable. Well in that case, then the trustee or the trust protector can go in and amend terms in certain circumstances to the irrevocable trust. You’re like, “Bill, why do we do that? “That’s why we made it irrevocable? “Why would we wanna change anything?” Well, let me give you an example. Let’s say I have one of the beneficiaries of the trust lives in California, and they’re making beaucoup bucks, and they’re at the top tax rates. I don’t know how much does California charge, 10%? Something outrageous. So charging 10% whereas in Florida the tax rate is zero. Right, there’s no tax. Well maybe, it becomes advantageous for the trust to move its domicile, so just move where the law or the jurisdiction is of that trust to Florida and not have it in Colorado, not have it in California. So that would be something that the trust protector could theoretically do if those rights were given. So I think you’re gonna see a lot more and more of it. Initially came in the 1990s from international as a protection trust when people were putting all their money offshore. And they were like: Now everybody’s offshore, who’s gonna be in charge of it if the trustee, the bank in this other country starts doing something untoward? So anyway, that’s a trust protector, or trust advisor you often hear it called in Colorado. Really at the end of the day, it’s the same thing. So someone that kind of sits above the trustee.

What happens if you’re late filing a will after someone’s death?

Okay, after that, question, “What happens if you’re late “filing a will after someone’s death?” So this goes back to I think a question I answered maybe last week or two weeks ago. It has to do with after someone dies, whoever is the custodian of the will, the one person that finds the will has 10 days to go to court and lodge the will wherever the person lived. So what happens if you don’t do it? And generally, not much if you do it as soon as you realize you’re supposed to do it and no one’s demanded it. So there could be penalties and contempt actions and court actions and a lot of unpleasant things that can happen if someone says, “Hey, you were in possession of the will “and you didn’t give it to the court.” So I guess my message to you is you’ve got 10 days from the date that you find this will to lodge it with the court. That doesn’t mean open a probate, just lodge it. If you haven’t done it, don’t fear. Go and do it now, all right.

Can someone with dementia sign a will?

Back to the question I promised I’d answer before. Can someone with dementia sign a will? And really, we could open that up to say: Can someone with dementia sign any sort of a legal document? I’ll get this question from time to time is that post diagnosis of someone that has dementia, the question is can they sign a will. And oftentimes, people say well they can’t because they have dementia. But that’s not true. Just because we have dementia and maybe our faculties are reduced does not mean we can no longer sign a will. What we’re really looking at is whether or not the person has what’s called testamentary capacity. And although there’s more factors to it, but just generally speaking, do they know what they’re signing? Do they know who they’re giving their property to? Do they know what the document is? And to the extent that they understand those things, then they’re absolutely free to sign the document. Testamentary capacity doesn’t necessarily mean that we have to have a doctor say that we have this level of capacity, not that they can’t be an expert and weigh in on it. It really all has to do about their understanding. So attorneys, whenever they’re signing documents with someone that may have somewhat diminished mental capacity, well they’re gonna ask them a lot of questions. And they’re gonna have the witnesses available just to make sure that the person does understand what they’re doing because that’s what’s critical. And then, beyond that sometimes, the person may or may not be videoed depending on the attorney and what they think should happen. But that’s a really good question.

Should I count my income with my grandmas if I’m living with her and she needs Medicaid?

Uh, here’s a good one. “I lived with my grandma who needs Medicaid,” and they wanna know if they should include their income, so in other words the person that’s living with Grandma, on the application. And unfortunately, it depends. There’s no way I can give you an answer on that. It all has to do with how Medicaid defines a household. The laws can be pretty complicated. So you really need to talk with an attorney. But generally speaking, the question is: Who is listed as a dependent? So are you listed as a dependent on Grandma’s tax return, vice versa? So those are the type of things that you have to look at to determine whether or not your income has to be included on the Medicaid application. But that’s a really good question. I think that was on our question, or excuse me our Q and A a few weeks back, so good question.

Is a living will or living trust better?

Let me see if I have anything else here. “What is better: a living will or a living trust?” This is a great one to clarify some confusion. They’re completely different documents. It’s not either or; it’s do you need both. So a living will has nothing to do with a trust whatsoever. It has nothing to do with a will, a last will either. So a living will is an advance directive. That’s what we call it in Colorado. A living will is an advance directive for medical and surgical treatment, also known as a living will. That’s saying if I’m in a persistent vegetative state, do I want to be on a ventilator? Do I want to be on a feeding tube? So if you recall the Terri Schiavo case back in 1990s, she was a woman, 25-years old, that had a heart attack in her house. Paramedics came, rushed to the scene. They took her to the hospital, and the doctors diagnosed her with persistent vegetative state at that point. If she had had a living will, then the doctors would have followed it. So if she had said, “Don’t give me life support,” or “Don’t put in a feeding tube,” then that’s what they would have done. She did not have a living will. A living trust is totally different. That would not have helped Terri Schiavo in that case. A living trust says is putting our assets into a trust with various goals: could be as a protection, could be probate avoidance, could be protecting minor children. There are lots of different reasons we would put our assets into a living trust. Living trust simply just means that the trust is in existence during life, during your life. You created it, it’s a living trust. It’s not what’s referred to as a testamentary trust or one that you create in the will. So fantastic question there. I wanna make sure I didn’t miss any.

Does CO have doctor assisted suicide?

Ah, here’s one. This one came up in an assessment recently, so I thought I would talk about it here. Does Colorado have doctor-assisted suicide? The answer is yes. Of course, the statutes do not call it doctor-assisted suicide. It is the Options in Dying Act. There’s a bunch of different rules around it, but at a high level, you have to have been diagnosed within six months of date of death. You must have the capacity to agree to quote unquote doctor-assisted suicide. And then there’s, of course, counseling and some other things that also need to occur. But it’s nothing that you would do ahead of time. Again, it’s yours within six months of date of death and you have capacity to make that decision. Those are really the biggest pieces there.

All right, let’s see here. Make sure I’m not missing anything. Nope, think I got it all. So I wish everyone a happy and safe July Fourth. Enjoy yourself. I know it’s been a stressful 2020. So hopefully, you’re getting a little rest and relaxation. And I will talk to you next Thursday. Again, if you’ve got any questions, feel free to put ’em in the notes below; or alternatively, put ’em in our Q and A. Send them over to me and I’ll make sure I get ’em answered for you next week. And I’ll talk to you then; have a great.