By Tim Barkley. August 2017.
Your will and power of attorney are nestled in your safe deposit box. Your living will is in your file at your doctor’s office. You feel prepared for all the uncertainties that life can fling at you.
But are you really as prepared as you hope you are? If your will is yellowing with age, if your power of attorney has your old address on it and your living will contains outmoded and legally problematic language like “heroic measures,” then consider updating your documents.
Three circumstances can prompt an update: Changes in your life situation, changes in your family, and changes in the law.
Have you recently married? Divorced? Are you newly retired? Have you been told that you have a suddenly shortened life expectancy? Did you just win the lottery? Did you just start a new business, or did your old business just go down the drain? Or both?
In any of these and many other circumstances, a review and update of your estate plan is warranted.
If your children have all left home, or a parent has taken up residence with you; if you have just downsized from a house to a condo or retirement facility, or if you’re the one moving in with your children, you need to review and revise your plans. Likewise, the death or relocation of a trusted family member or friend who was to serve as trustee, executor or agent should prompt a review and revision of your plans. Estrangement or reunion with children or parents, birth of your first child or grandchild can all prompt a rethinking.
An estate of well over five million dollars is now exempt from the federal estate tax. For married couples, that exemption has effectively doubled to nearly eleven million dollars. The Maryland estate tax exemption, however, remains at three million dollars. Has your estate rebounded to its pre-2007 levels? Do you need to revisit your tax avoidance planning?
More likely, your estate plan might no longer need the complexity of estate tax avoidance. Some clients of this writer have estate plans drafted in the 1990s, carefully structured to avoid a federal estate tax that will no longer apply to their estate. Their plan is overly complicated for their present reality.
Your plan might be burdensome to your loved ones because of unnecessary complexity, or costly to them due to oversimplification. Visit your estate planning professional and keep your plan current!
A “living will” describes the situations in which you want your doctor to take certain actions, or omit certain treatment. That’s helpful, but it can be better to give someone – an agent – authority to make medical decisions for you in case your situation is not as described in your living will. That “medical power of attorney” can be coupled with an “advance care directive” to describe situations in which your agent should allow, withhold or withdraw life support.
Standards of medical treatment and terminology have changed. Make sure your documents are current!
The Maryland courts have ruled that a power of attorney – naming someone else to make financial decisions for you if you can’t do so for yourself – must be explicit. There are no implied powers in a power of attorney. That means that a general provision allowing your agent under your power of attorney to do “anything I could do myself” is meaningless.
The Maryland legislature created a statutory power of attorney form in 2010. If your power of attorney has not been reviewed since that date, consider an update. Standards of drafting and legal standards – along with the fast-paced technological world we live in – have changed. Keep current!
Life is joy-filled and beautiful, but it can also be unpredictably short. We don’t always get “fair warning” before our loved ones need our estate plan. Make sure yours is kept current.
Attorney Tim Barkley
The Tim Barkley Law Offices
One Park Avenue
P.O. Box 1136
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