Question:
My husband has recently been diagnosed with Alzheimer's disease. He has become quite forgetful, but is still in the early stages. We both agree that we should put our affairs in order. The problem is that we don't know where to start. Do you have any ideas for us?
Answer:
You and your husband face a very difficult situation. The best advice I can give is that you plan sooner rather than later. There are a number of things that you and your husband should be thinking about. I will address a couple of the most important.
First, your husband should execute a Durable Power of Attorney while he is sufficiently competent to do so. A Durable Power of Attorney appoints someone to act as his agent or attorney-in-fact, to take care of necessary financial, banking, tax, legal, and other matters if he is unable to do so. Executing a Power of Attorney now may save the need of going to court for a conservatorship in the future.
Second, your husband should complete an Advance Directive for Health Care. This is a legal document in which a person names a health care representative and can also state the type of health care treatment he wishes to receive if he can no longer make decisions himself. This again may save the need of going to court for a guardianship in the future.
You also need to consult an Elder Law attorney concerning your estate plans and long term care options. This would include advice regarding Medical Assistance Rules and payment for long term care costs should your husband require care in the future. You need a plan in place that provides for your husband’s care should you predecease him. At the same time, should you die before your husband, you would avoid having your joint estate pass to your husband directly if he is incapacitated.

Question:
My husband, to whom I have been married for 15 years, died recently. We lived in my house that I had from before we were married. When he died he left some property, including a house, that was totally in his name. We both have children from prior marriages. He didn’t have a Will. Am I entitled to his property and the house?
Answer:
Maybe. Normally under Oregon law a surviving spouse takes the entire estate upon the death of the other spouse. However, when the decedent leaves children who are not children of the surviving spouse, those children have a right to a right to a portion of the probate estate. As the surviving spouse, you are entitled to fifty percent of the probate estate. Your husband’s surviving descendants, which would mean his children, take the remaining fifty percent.
If your husband had left a Will, he could have protected his own children to the extent desired, and you would have known ahead of time which properties would have gone to them and which properties would go to you. He might have avoided probate altogether had he transferred the other property into joint ownership, or established a revocable living trust. If you and your husband’s children can not decide on who gets what, all of the property might have to be sold to ensure that each gets his or her proper share.
Unfortunately, too many people have neither a will or a trust which would identify their intent and desires after their death. They become so involved in their daily activities that they give little thought to what happens after they die. Families can be financially devastated and ripped apart by this procrastination.

Question:
My grandfather has been diagnosed with Alzheimer’s Disease. I am trying to help him with his affairs. I have a Power of Attorney for him but someone told me that I may need something else to make medical decisions for him. Is that right?
Answer:
A Power of Attorney will allow you to take care of necessary financial, banking, tax, legal, and other matters if your grandfather is unable to do so. In addition to the Power of Attorney your grandfather should also have an Advance Directive for Health Care. The Advance Directive allows a person to give health care instructions to his physician and to name a person (called a health care representative) to speak for him about medical treatment if he cannot speak for himself. To give a power of attorney or to appoint a health care representative, the person making the appointment must understand what he or she is doing. Once a person loses capacity, it is too late for that person to give someone a power of attorney or to appoint a health care representative. At that point, a conservator or a guardian can be appointed by the court if there is a need. You should speak with an Elder Law attorney to help you understand the options available to you and your grandfather and determine which of those options fits your situation.

Question:
I have a Will leaving my property to my family and friends. I was wondering if I need to do anything with my IRA or will that money also be included in my Will?
Answer:
How your IRA assets are distributed depends on whether or not you have named a beneficiary on your IRA account. If you named a beneficiary when establishing your IRA, that designation normally controls who receives your IRA assets. The custodian of your IRA account will distribute your assets directly to your named beneficiary. If you did not designate a beneficiary, your IRA assets will go into your estate and be distributed in accordance with your Will. This will require that those assets also go through probate before distribution.
You should review all IRA’s, life insurance policies, and estate planning documents periodically, to ensure that they are up to date and meet your current needs. Taking the time now to review and update these documents can save you and your beneficiaries both time and money in the future.

Question:
Several years ago I transferred my house to my 4 children, keeping a "Life Estate" for myself. Since then, one of my children passed away. I now want to sell the house, but I was told that my deceased son's estate would have to be probated before it can be sold. Is this true?
Answer:
Maybe. It depends on how the property is titled. If you transferred the property to your children, jointly, with right of survivorship, then your surviving children now own your deceased son's interest in the property. However, if you transferred the property to your children as tenants-in-common, then your deceased son's interest belongs to his estate and has to be probated. The probate process will legally transfer your son's interest in the property to his beneficiaries in accordance with his Will. If he died without a Will, then his interest in the property will pass to his heirs at law, generally, his spouse if he has one, or to his children. Your son's beneficiaries or legal heirs will then have the right to make a decision about what they want to do with the property, including whether or not they want to transfer their interest back to you so you can sell the house like you want.
Often, older people transfer their homes into the names of their children, sometimes reserving a life estate in the home. A life estate gives the person transferring the home the right to live in the home or rent it out during her lifetime, but she must continue to pay taxes, insurance, and upkeep on the house during that lifetime. The person to whom the home is transferred is referred to as the "remainder person" because he or she acquires full title to the property after the death of the person holding the life estate. Upon the death of the life estate holder, the property goes to the remainder person(s) automatically, without probate.
This attempt to avoid probate, is one of the many reasons a person may transfer his or her property to another. However, as with all legal transactions, there are advantages and disadvantages which should be carefully discussed with an attorney prior to taking action. One problem that should always be considered is the possibility of a remainder person dying before the life estate holder. As you have discovered, if a remainder person dies before the person with the life estate, things can get tricky and the outcome may not be what you would expect or want.

Question:
My grandfather is becoming increasingly forgetful and is having difficulty paying his bills and taking care of himself. Should I be considering a guardianship or conservatorship for him?
Answer:
Not necessarily. Guardianship or conservatorship is not needed in every case where a loved one requires financial management or personal care help. Oregon has strict standards that must be met in order to establish a guardianship or conservatorship. To determine if a guardianship or conservatorship is appropriate you should always contact an attorney. The attorney will review with you the standards that must be met to establish a guardianship or conservatorship and help you identify reasonable alternatives to a guardianship or conservatorship. You may discover that there are less restrictive alternatives for meeting your grandfather’s needs short of a legal guardianship or conservatorship.

Question:
When should I update my Will?
Answer:
A Will should be reviewed at regular intervals and updated when the Will no longer meets your needs. A change in your family or a substantial change in assets should also cause a review and possible change of your Will. Some of the major changes to cause a Will review, and possible change, include: a) A death of a beneficiary; b) A change in family circumstances such as births, deaths, marriages, divorces; c) A change in your economic status; d) A change in Federal or State tax laws; e) A change in business venture; f) A move from one state to another; g) A change in the property that is intended to be distributed. In essence, anything that might effect how you want your property to pass to your heirs.

Question:
My wife and I have been married for many years. My wife and I have one son together. We each have a Will that leaves everything to the surviving spouse but to our son after we both die. I also have another child from a previous marriage, a girl who is 40 now. I have not heard from my daughter for many years but I have been worried lately about whether she can contest my Will and claim part of my estate. Is that possible?
Answer:
Anything is possible. Anyone can contest a Will, even a Will that has what we call a “no-contest” clause. Whether or not a person is successful in making a claim against another’s estate is another matter and will be determined upon the facts of the case and the basis of the claim, e.g., lack of testamentary capacity. Each case is different. However, generally speaking, a parent has no obligation to leave anything to an adult child. I would recommend that to put your mind at ease you speak with an attorney and review your estate plans to make sure that your current plan meets your needs.

Question:
I have my son on my checking account so that he has access to my money and can pay bills. Recently, he has had a bit of a problem paying his own bills and is being sued by a credit card company. All the money in the account is mine and I can’t afford to lose it. Is there any problem for me by having his name on my account?
Answer:
Yes. You should take your son’s name off of your account as soon as possible.
If your son’s creditor gets a judgment against your son for the amount he owes, the creditor will then try to find ways of satisfying the judgment. One of the first things the creditor will look for is any bank accounts in your son’s name. The creditor can use the judgment to "garnish" any bank accounts in your son’s name. This “freezes” the account and you will not have access to your money to pay bills. Any checks that you may have outstanding may bounce and you may have to pay charges for “insufficient funds” even though you have money in the account. The bank may also charge you an administrative fee for having to go through the paperwork of the garnishment.
Even though the money in the account is yours, the creditor may argue that your son’s name on the account indicates that he is an owner of those funds and that he is entitled to some of the money in the account. The creditor may force you to go to court to prove that the funds in the account are totally yours and not subject to garnishment for your son’s judgment.
I often see older people placing a child’s name on their bank accounts as a way of planning for incapacity. However, as with all legal transactions, there are advantages and disadvantages which should be carefully discussed with an attorney prior to taking action. As in this case, placing someone on your bank account is not always the best or safest approach and can have unexpected and undesirable consequences.

Question:
I have heard that there may be changes in the Medicaid law. My mother, who is in poor health, has been making gifts to her grandchildren during the past couple of years. If she goes into long-term care, such as in a nursing home, are these gifts going to be a problem with eligibility for medical assistance to help pay for the cost of care?
Answer:
You are right about the changes. President Bush recently signed into law the Deficit Reduction Act of 2005. (“the Act”) which makes some significant changes to the Medicaid system. Following are a few of those changes:
1. The Act increases the “look-back” period. This is the period in which gifts that have been made by a person applying for long term care assistance are scrutinized. Under the old rules, a person who transferred or gave away assets for less than fair market value within 3 years prior to the Medicaid application could be assessed a penalty. The Act increases this “look-back” period to 5 years.
2. The Act also makes a fundamental change to how the penalty for making a gift is applied. Under the old rules, the Medicaid program imposed a penalty on persons making gifts during the “look-back” period. The penalty created a period of ineligibility for benefits and started when the gift was made. The Act changes that process so that the penalty starts from the date of application for medical assistance rather than from the date the gift was made. This change could have adverse consequences for many persons applying for long term care assistance who unwittingly made gifts during the last 5 years.

Question:
My companion of 15 years died recently and his children are asking to pick up a bunch of things that they say belong to him. My companion and I had never been married but we put the house into joint ownership with right of survivorship. There are also a number of personal things that we bought together, I bought individually, or he and I each bought to help take care of the house. I think I should be entitled to this property but his children are being quite forceful about demanding a number of those items. My companion didn’t have a Will. What can I do?
Answer:
It is fortunate that you and your companion put the house into joint tenancy which means that ownership automatically passes to you upon the death of your companion. The personal property is much more problematic. If your companion had left a Will, he could have provided for his own children to the extent desired, and you would have known ahead of time which items would have gone to them and which property would go to you. Without a Will, any property owned or purchased by your companion alone, legally, belongs to his children. However, they are not entitled to come into your home or your garage without your permission and simply take items which may be in dispute. If they insist on coming onto your property without permission, you can call the police and charge them with trespassing. Also, if they remove property which in fact belongs to you, they can also be charged with theft. The biggest problem with personal property is that it is untitled and proving ownership is difficult. I would suggest a negotiated settlement with them as to which items they can take and which items you should keep. If that doesn’t work, the children can probate their father’s estate but, again, they have the burden of proving which personal property they have a right to. This would be both costly and time consuming. This is a situation where it is in everyone’s best interest to try to work out a reasonable agreement. And, also a lesson to us all of the importance of having a Will.

Question:
I am the sole caregiver and legal custodian of my two grandchildren, ages 13 and 17. My only child is my grandchildren’s father. My son and the children’s mother have had no contact with the children since they were babies. A friend told me that if I should die before my son, my son would inherit my estate. I am a 76-year-old widow and I want to take care of my grandchildren even after my death. Can I disinherit my son so that my grandchildren are provided for after my death?
Answer:
Yes. You can disinherit your son, but in order to do so you must do some sort of estate planning. If you die without a Will, your estate will be distributed according to Oregon laws of intestacy. Because you do not have a spouse, your next of kin is your son and he would inherit your estate. If you do not want this to happen, you need to have an estate plan in place before you die that provides for your grandchildren and disinherits your son. Since your grandchildren are both minors, you also need to think about who should have custody of your grandchildren and who should manage your assets for your grandchildren’s benefit upon your death.
You can plan your estate using either a Will or a Trust. A Will is a legal document that shows who gets your assets after you die. A Trust is a legal document that also shows who gets your assets after you die but may be a better vehicle for managing the assets for your grandchildren’s benefit until they come of age. You should consult with an attorney about which legal document is best for you and your situation. In addition, you should also plan ahead for yourself. You are elderly and it is possible that you may become ill and require care. There are several options for protecting you and your grandchildren in this situation. However, you should discuss your situation with an attorney so you know which legal options are best for you.

Question:
I have been thinking about making out an Advance Directive for Health Care but keep putting it off. The subject is a rather morbid one, and I find it hard to address. What are the consequences of not having an Advance Directive?
Answer:
As you know, an Advance Directive for Health Care is a document in which a person can put in writing some important things in case he or she ever gets into a medical crisis. It permits the person to name an agent to make health care decisions if the person, in the opinion of the treating physician, does not have the capacity to make or communicate health care decisions. The Advance Directive also has a section permitting you to put in writing what kinds of medical treatment, including life support, you wish to receive under different scenarios. If you do not make out an Advance Directive, there are no directions, one way or another, as to what care you wish to receive when you are in a medical crisis. Obviously, your treating physician will talk to your next-of-kin about health care decisions, but the goal would be to try to determine what your wishes would have been had you been able to make decisions or communicate them.
You may recall the recent situation of the young woman from Florida. In 1990, when she was 26 years of age, she suddenly collapsed in her home after her heart stopped. This incident left her in a vegetative state where she was dependent upon feeding tubes to survive. After many years of keeping her alive in this vegetative state, her husband, who was her legal guardian, attempted to disconnect the feeding tubes. This action was opposed by her parents. The parents brought a court case to try to keep their daughter alive by keeping the feeding tubes in place. This one example speaks volumes about how something that should have been a personal decision got completely out of control. It also is a lesson for us all to put something in writing to avoid this happening to ourselves and our families.