Why You Want to Avoid Intestacy Laws – Part 1
In the past few months we have had calls regarding how to distribute assets of a person who dies without a will. This is what is known as dying “intestate”, without leaving a will or set of instructions as to how you want your assets distributed. Keep in mind that some assets may have payable upon death designations or be owned jointly with right of survivorship. I have written in previous blog posts about those assets being non-probate or not passing by way of the will so that the failure to leave a validly executed will would not pose a problem with these assets since their distribution is already determined. New Jersey’s intestacy statute was last amended 10 years ago. As I always explain, this law is the State’s determination of how most people would want to distribute their assets to their loved ones, however, that may or may not be in line with what you would actually want. That’s why a will is so important because it is your opportunity to distribute your estate exactly the way you wish to and not according to someone else’s (ie. the State’s) plan. In what I would call the easy cases
What Exactly am I Authorized to Do with a POA? Part 2
In last week’s blog post I started talking about the different types of powers of attorney. While it is important to have a power of attorney in place it is equally important to understand what it covers – what powers it confers upon the agent. We had two calls from family members designated as agents. The first caller was an agent under a financial power of attorney for her mother which included the power to talk with medical personnel and insurance companies about payment and claims. When it came time to talk with doctors and make a medical decision about her mother’s care, she was frustrated when they would not speak with her. Instead, they said her sister, who was the representative under her mom’s health care power of attorney, was the person they needed to speak with. The reason is because the power of attorney under which the caller was an agent only gave her the ability to talk with medical personnel and insurance companies concerning payment. The second caller needed to access her dad’s individual retirement account to pay for her care. She sent me the power of attorney which she
What Exactly am I Authorized to Do with a POA? (Part 1)
In my blog post this week I want to talk about the different types of powers of attorney and the confusion people sometimes have concerning what exactly each document allows them to do. Although different people may choose to use different names, I prefer to categorize the ability each of us has to choose someone to make decisions for us by way of executing a written document as, on the one hand financial/legal and on the other hand health care. When we prepare documents for clients in which they designate someone to make decisions for them we generally refer to these documents as a power of attorney and advance directives for health care. The power of attorney designates an agent to make decisions and take action on the principal’s behalf in the area of financial and legal matters. This typically includes dealing with bank accounts, retirement accounts, investment accounts, insurance policies, real estate etc. In our office we create a second document - an advance directive for health care which typically includes a health care power of attorney and a living will. As I have written in the past, a living will is a set of instructions concerning what
What If I Can’t Find the Original Will? Part 2
In my blog last week I discussed a question I have heard often enough in my practice. “What if I can’t find the original will”, meaning “can we probate a copy”? I explained last week that in the normal case in New Jersey there is no need for a judge to be involved unless there is a dispute or the original will cannot be located. As I said last week, the law presumes that if the original cannot be located then the testator (the person who executed the will) intentionally destroyed it because it no longer represented his/her wishes. But, what if that isn’t what really happened? What if the will was simply misplaced? In that case a copy of the will can be admitted to probate but not in the simple administrative way of scheduling an appointment at the Surrogate’s office. A judge must review the circumstances and decide whether it is likely that the testator destroyed the will or that it was simply lost. The Executor named in the will must file a complaint asking the probate judge to issue an order permitting the probate of a copy. In support of the application, the proposed Executor must
Gift or Theft? – Part 3
In this week’s post I give you the conclusion to John’s saga with Medicaid. As you will recall, we have applied for Medicaid for John’s sister, Mary. In reviewing the 5 years of records which we must submit to the State, we found that John’s brother, Jerry took $200,000 of Mary’s money for his own use while he was carng for Mary and handling her finances. I had John prepare for the likelihood that New Jersey Medicaid would impose a Medicaid penalty – a period of ineligibility – as a result of these transfers for which Mary did not receive anything of equal value in product or service. John filed a criminal complaint for theft as well as a civil complaint in an attempt to recoup the funds. Sure enough, the state focused on the transfers. I was ready with copies of both the criminal and civil complaints. But, then we got a surprise. Based on what John told me about Jerry’s financial troubles, I never thought we would ever recover a dime from Jerry. We only filed the legal actions because that is what Medicaid requires us to do. Except that not
Gift or Theft ? (Part 2)
In last week’s post I told you about John’s call about Medicaid for his sister, Mary. During our review of her 5 years of financial records we discovered transfers of funds while their brother, Jerry was handling her finances. Jerry admitted that he took the money without Mary’s knowledge so we have to contend with a transfer of $200,000. The question then is “how will Medicaid treat these transfers when we apply for Medicaid?” The State will assume that Mary gave the money to Jerry. We can’t simply tell them that Jerry took it – what amounts to theft. If it truly is theft, I explained to John, then he needs to file a criminal complaint. He should also file a civil complaint against his brother, Jerry to try to recover the funds. Why? Because we must show that we are trying to recover the funds. It does not matter whether we succeed or not. We just need to support our contention that the funds were not a gift – not a transfer for less than fair value – so we can avoid a Medicaid penalty. John complied with my request.