1.  WHAT COULD HAPPEN IF YOU DON’T HAVE POWERS OF ATTORNEY AND ADVANCE MEDICAL DIRECTIVES:

A husband and wife in their early 50’s have 3 children but have no wills, durable powers of attorney or advance medical directives. The wife is involved in an automobile accident, her injuries are aggravated by improper care at a local hospital, and she is left in a vegetative state in a nursing home. Her husband must deal not only with the tremendous grief surrounding his wife’s condition, but now must file a guardianship action in Court seeking to become his wife’s guardian so that he has legal authority to make financial and medical decisions on his wife’s behalf.

Guardianship applications typically cost several thousands of dollars and take approximately three months to proceed from start to finish in the courts. Though the husband had consulted with an attorney in connection with filing for guardianship, he made no progress on the guardianship issue until he consulted with Timothy Rice as the original attorney was not sufficiently experienced or knowledgeable about guardianship laws. Mr. Rice obtained the required medical and legal proofs to file for guardianship and also assisted the husband with a Medicaid application to seek Medicaid coverage for his wife’s very expensive nursing home care. The wife’s Medicaid eligibility was delayed because the husband did not have legal authority to liquidate assets owned solely by his wife. If this couple has executed Durable Powers of Attorney and Advance Medical Directives, the guardianship application would have been avoided, the Medicaid application would have been expedited, and the husband’s burden would have been reduced.

2.  ACT SOONER THAN LATER TO GET A WILL, ESPECIALLY IF YOU HAVE DISABLED BENEFICIARIES:

A woman has advanced lung cancer and asks her financial planner to contact an attorney to meet with her regarding her estate planning documents. Timothy Rice meets with the woman at the hospital that evening and discusses the appropriate documents – a will, durable power of attorney and advance medical directive, and obtains information from the woman to customize those documents to meet her intentions. The woman has two sons, one of whom is disabled and receives Medicaid and SSI benefits. Mr. Rice suggests that her will include a Supplemental Benefits Trust for the benefit of her disabled son. Unfortunately, the woman’s medical condition deteriorates quickly, she is unable to meet with Mr. Rice the next day to execute her estate planning documents, and she passes away before she could execute her estate planning documents. The New Jersey probate laws provide that an unsigned will cannot be probated by the county Surrogate’s Office, and the proposed executor named in the unsigned will retained Mr. Rice to seek approval from the Probate Court to probate the will and create the Supplemental Benefits Trust. Although there are no published case decisions which permit the probate of unsigned wills, Mr. Rice successfully gained court approval of this probate application. The good news is that this woman’s intentions have been fulfilled. The bad news is that those intentions could have been fulfilled at much less cost if she had contacted an estate attorney such as Mr. Rice sooner than she did.

3.  ANNUITIES:  NOT ALWAYS A GREAT INVESTMENT FOR THE ELDERLY.

A woman in her early 80s requires nursing home care due to a decline in her physical and mental condition. Her husband meets with a financial advisor who convinces the husband to use their life savings to purchase two annuities. According to the financial advisor, these annuities will not be counted as assets under the Medicaid laws. The husband meets with Timothy Rice who advises the husband that he has received incorrect advice from his financial advisor regarding the Medicaid laws. In order to obtain Medicaid eligibility to pay for his wife’s nursing care, which costs over $8,000 per month, the husband must liquidate those annuities. However, the insurance companies were unwilling to permit the surrender of those annuities, requiring threatened litigation from Mr. Rice, the husband’s counsel. The insurance companies ultimately agreed to surrender the annuities but the annuity contracts previously signed by the husband subjected the husband to surrender charges and income taxes. Mr. Rice successfully obtained Medicaid benefits to pay for the wife’s nursing home care, but the husband’s purchase of those annuities prior to meeting with Mr. Rice unnecessarily complicated and delayed Medicaid eligibility and incurred thousands of dollars in surrender charges and other costs that could have been avoided had the husband consulted with Mr. Rice at an earlier date.

4.  FAILING TO DO YOUR ESTATE PLAN RESULTS IN THE STATE INTESTACY LAW DETERMINING YOUR BENEFICIARIES:

A woman is hospitalized with cancer and other ailments, and Timothy Rice meets with the woman and her sister at the hospital. The hospitalized woman is able to tell me that she would like me to draft a Power of Attorney, Advance Medical Directive and will for her which appoints her sister as financial agent, health care representative and executor. The woman is either unwilling or unable to decide on alternate agents and executors or how she wishes to divide her estate. Unfortunately, the hospitalized woman passed away shortly after our meeting and before she could fully communicate her intentions for her estate or sign any legal documents.

Because she died without a Will, her sister, as her closest next-of-kin, was required to not only make application to become Administrator of the estate, but also, by law, was required to pay premiums for an insurance bond to serve in that capacity. The bond requirement would have been avoided with a properly drafted Will. More significantly, the state intestacy law - which applies when one dies without a will – caused this estate to pass to nephews and nieces whom the decedent had not seen in many years, and with whom she had no ongoing relationship.

Had the woman been proactive in meeting with an estate attorney before she became too ill to plan and sign estate planning documents, her estate would have passed to those relatives to whom she was closest or to persons of her choosing. Unfortunately, her estate plan was a failure because she failed to plan.