Creating an End of Life Checklist

Creating an end of life checklist including assets, personal information and locations of important documents will help your family act on your behalf.

Spend the energy, effort, and time now to consider your wishes, collect information and, most importantly, get everything down on paper, says In Maricopa’s recent article entitled “Make an end-of-life checklist.”

The article says that a list of all your assets and critical personal information in an end of life checklist is a guarantee that nothing is forgotten, missed, or lost. Estate planning attorneys can assist you and guide you through the process.  Our firm prepares Estate Planning Binders which include schedules to hold that exact information.  As described here https://galligan-law.com/not-a-little-black-book-but-a-big-blue-estate-planning-binder/  Especially in the age of computers, it’s critical to leave this information for fiduciaries in a way they can find it.  They’ll be glad you did.

Admittedly, it’s an unpleasant subject and a topic that you don’t want to discuss, and it can be a final gift to your family and loved ones.

When you work with an experienced estate planning attorney, you can add any specific instructions you want to make that are not already a part of your will or other estate planning documentation. Make certain that you appoint an executor, one you trust, who will carry out your wishes.

This isn’t a complete list, but consider including the following personal information in your end of life checklist: your name, birthday, and Social Security number, as well as the location of key documents and items, birth certificate, Social Security card, military discharge paperwork (if applicable), medical directives, ID cards, medical insurance cards, house and car keys and details about your burial plot.  Your attorney will give you copies of your estate planning documents, such as your will, trust, documents relating to trust funding, powers of attorney, medical powers of attorney and so on.

In addition, you need to let your family know about the sources of your income. This type of information should include specifics about pensions, retirement accounts, 401(k), or you 403(b) plan.  Be sure to include company and contact, as well as the account number, date of payment, document location, and when/how received.

You also need to include all medicine and medical equipment used and the location of these items.

And then double check the locations of the following items: bank documents, titles and deeds, credit cards, tax returns, trust and power of attorney, mortgage and loan, personal documents, types of insurance – life, health, auto, home, etc. It’s wise to add account numbers and contact information.

Another area you may want to consider is creating a list of online passwords, in printed form, in a secure place for your family or loved ones to use to access and monitor accounts.

Be sure to keep your End of Life Checklist in a secure place, such as a safe or safety deposit box because it has sensitive and private information. Having it in one place will help your family when the time comes to act on your behalf.

Reference: In Maricopa (Feb. 14, 2020) “Make an end-of-life checklist”

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Making End of Life Decisions Part of your Estate Plan

End of life decisions are an important part of your estate plan.

If your end of life decisions are important to you, there are a handful of documents that are typically created during the process of developing an estate plan that can be used to achieve this goal, says the article “Choosing a natural end” from The Dallas Morning News.

The four documents are the Medical Power of Attorney, the Directive to Physicians, the Out-of-Hospital Do-Not-Resuscitate, and the In-Hospital Do-Not-Resuscitate. Note that every state has slightly different estate planning laws. Therefore, you will want to speak with an experienced estate planning attorney in your state. If you spend a lot of time in another state, you may need to have a duplicate set of documents created. Your estate planning attorney will be able to help.  In Texas, attorneys often prepare the Medical Power of Attorney and Directive to Physicians, and Do-Not-Resuscitate Orders are prepared by medical systems.  See Mary’s excellent blog for further background https://galligan-law.com/living-wills-and-medical-powers-of-attorney-why-they-are-important/.

For the Medical Power of Attorney, you are appointing an agent to make health care decisions if you cannot. This may include turning off any life-support systems, refusing life-sustaining treatment and other end of life decisions. Talk with the person you want to take on this role and make sure they understand your wishes and are willing and able to carry them out.  You have the right to change your agent at any time.

The Directive to Physicians, which is basically the Living Will of Texas, is a way for you to let physicians know what you want for comfort care and any life-sustaining treatment in the event you receive a diagnosis of a terminal or irreversible health condition. You aren’t required to have this, but it is a good way to convey your wishes. The directive does not always have to be the one created by the facility where you are being treated, and it may be customized to your wishes, as long as they are within the bounds of law. Many people will execute a basic directive with their estate planning documents, and then have a more detailed directive created when they have a health crisis.  It and the Medical Power of Attorney serve to nominate and provide guidance to your healthcare decision-maker on end of life decisions.

The Do-Not-Resuscitate (DNR) forms come in two different forms in most states. Unlike the Directive to Physicians, the DNR must be signed by your attending physician. The Out-of-Hospital DNR is a legally binding order that documents your wishes to health care professionals acting outside of a hospital setting not to initiate or continue CPR, advanced airway management, artificial ventilation, defibrillation or transcutaneous cardiac pacing. You need to sign this form, but if you are not competent to do so, a proxy or health care agent can sign it.

The In-Hospital DNR instructs a health care professional not to attempt CPR, if your breathing or heart stops. It is issued in a health care facility or hospital and does not require your signature. However, the physician does have to inform you or make a good faith effort to inform a proxy or agent of the order.

If you have specific wishes for your end of life decisions, especially if you want a natural end, speak with your estate planning attorney about how to legally prepare to protect your wishes.

Reference: The Dallas Morning News (Jan. 12, 2020) “Choosing a natural end”

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Inherited Property? What You Need to Know

There are many options for what to do with inherited property, but they depend on debts, costs of property, beneficiaries and your needs.

Many clients wonder what to do with inherited property, particularly real property like a house.  There are choices, and they depend on several factors. Are there other siblings who also have inherited portions of the ownership of the house? Is there another owner who needs to be bought out? Can the heir afford to take on the responsibilities and expenses of a home? Is someone else already living there?  These are all questions presented in the article “What to do when inheriting a house” from The Mercury.

There’s a tax issue to consider, for starters. Property that was titled in the name of the decedent at the time of death or is part of their estate taxable estate and then inherited, receives what is called a “step-up” in basis. This means that there is no federal tax due on the appreciation in value from the time the person purchased the home to the time that the person died.  They may also be state taxes as well.

Let’s say the person bought the home for $100,000 and at the time of her death the property is worth $300,000. The federal government will not tax the $200,000 difference between the original value and the DOD (Day of Death) value of the home. If the heir obtains an appraisal shortly after the death of the home owner and then moves in or if you already live there and the house is transferred into your name, the “clock” starts running again for another tax break, which is an additional $250,000 exclusion from capital gains on resale after you have lived there for two years.  If the property is sold shortly after the person’s death to a third party in an arms-length deal, the sales price would be the DOD value of the inherited property.

Now, this all assumes that any other beneficiaries have been satisfied as to the ownership of the house. A good elder law estate attorney will be able to help with the details, including the transfer of title.

Another issue: is there a mortgage on the house? If so, the new owner may need to satisfy the lender and refinance. If the heir has enough money to meet monthly payments, a strong credit rating to be able to get a mortgage and enough income to maintain the home, then it should be a relatively simple transaction.

Have the home inspected before moving in. Is the inherited property in good shape? If repairs need to be done, are they budget-friendly, or will they make the inheritance too expensive to be financially viable?  Who will pay for it?  The estate, the heirs, or a new owner?

Property maintenance is another consideration. If the estate can carry costs associated with the property until the property is sold and if the estate can pay for repairs, upgrades and maintenance so the house can be sold for a good price, then that is a reasonable approach to take. If there are other beneficiaries, they should all part of a discussion about how much money is worth investing in the house and what the return on investment will be.

One key concern that I’ve told countless clients over the years is decide early what to do with the inherited property, and stick with the plan.  Maintaining the property is time consuming, potentially costly, carries a risk in the form of liability and may prevent the estate from making liquid distributions if it isn’t sold.  Some of the worst estate administrations I’ve dealt with involved not deciding what to do with inherited property, and that lead to unnecessary cost and years of administration. So, the executor or trustee should decide earlier what to do with the property.

Finally, if the language of the will says “equally to my three children” or language similar to that and one sibling wants to buy out the other two, then an agreement on the value of the house and a plan for working out timing of the sale will need to be created. An estate planning or elder law attorney will be able to help create a family settlement agreement that will include an informal accounting, whereby all of the heirs receive their fair share of the inheritance and all sign off that they have agreed to the transaction.

Reference: The Mercury (Jan. 15, 2020) “What to do when inheriting a house”

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