Happy New Year from all of us at Kyle-Wynn & Associates, a Madison-based elder law and estate planning law firm that has been providing services to clients in Mississippi, Louisiana, and Tennessee for more than forty years.
You have probably made New Year’s resolutions for 2023, just like the majority of respondents in a recent survey. The top four resolutions for this year were to eat better, exercise more, save more or spend less money, and in general, take better care of oneself. Unfortunately, putting the appropriate documents in place in the event of death, disability, or incapacity did not even make the list. If you are like the majority of Americans, you have done no planning for those events, at least one of which is inevitable, but here are some New Year’s resolutions that if kept, will help you to stay in control of your assets while you’re alive and well, provide for you and your loved ones in the event of your disability or incapacity, and when you’re gone, give what you have to those you want, when you want, the way you want, and to do it all at the lowest overall cost to you and your family.
1. Make a Financial Power of Attorney. Everyone should have a durable financial power of attorney. This is a document in which you appoint one or more agents, and at least one back-up, to make decisions over your finances, your property, and other affairs in the event of your inability to act. If you become disabled or incapacitated and have no power of attorney in place, the Chancery Court may have to appoint a conservator or guardian to make financial decisions on your behalf and to take control of your property under Court supervision, probably for the rest of your life. That being said, your power of attorney, while better than nothing, still may not work in all instances. In some cases, it may be necessary for your family to obtain conservatorship because your bank or another financial institution may simply refuse to honor your power of attorney. A power of attorney that lacks specific “gifting powers” may cause someone going into a nursing home to lose all of their assets to the cost of their care because the proper instructions and powers were not included in the document that would have otherwise protected their assets from Medicaid’s nursing home asset spend-down requirement. These problems may be successfully avoided by relying not on a power of attorney, but on a Trust instead. (See #4 below.)
2. Make a Health Care Power of Attorney. If you do not have an advance healthcare directive, you need one. This is a document in which you appoint a healthcare agent (and a backup) to make medical decisions for you when you cannot make them for yourself. If you become disabled or incapacitated and have no advance directive in place for your health care, a guardian or conservator may have to be court-appointed for you. Your directive should also include important Health Insurance Portability and Accountability Act (HIPAA) provisions allowing your agent access to your medical records and to sign releases of those records to others as well as documentation of your wishes for your medical treatment regarding end-of-life care and the withholding or withdrawing of life-sustaining treatment (when to “pull the plug”). In our firm, we provide our clients with the means to have this document electronically available to healthcare providers any time, or anywhere in the world the client may be, if needed.
3. Make a Will. Without exception, everyone should have a Last Will and Testament. But remember, a will only takes effect after your death and even then, it must go through the probate process. Your will generally only governs property owned solely by you at the time of your death which has no transfer-on-death or payable-on-death beneficiary designation. If you have property that is owned jointly with others or has a transfer or payable on death beneficiary designation, that property bypasses all of the instructions in your will. Your will has two basic instructions, who gets your stuff and who makes it happen. The person you appoint in your will to make it all happen is your Executor, who will distribute your property to those you designate, but formal appointment of your Executor and the actual distribution of your assets to your named beneficiaries only takes place through the probate process, which is often very lengthy and time-consuming. Most people, when told that probate is unnecessary and avoidable, and that there is a very attractive option for avoiding probate, want to learn more about their options. That brings us to Resolution Number 4.
4. Consider a Trust. A trust is a document that is active both during your lifetime and after your death and can allow your family to avoid the complications of guardianship, conservatorship, and probate discussed above. Trusts can provide many protections and benefits that are not available with a will. In addition to protection of privacy by completely avoiding the court system, a trust can also safeguard the inheritances of minors or young adults, protect beneficiaries from their soon-to-be ex-spouse in a divorce, or from their creditors. It can also be used to motivate beneficiaries to become self-sufficient, protect the inheritances of disabled or addicted beneficiaries, provide higher education funding for children or grandchildren or even provide for the continuing care of beloved family pets. It can also be used very effectively to ensure your beneficiaries abide by your wishes and won’t try to receive more than you would want them to receive.
5. Review Your Estate Planning Documents. If you already have a will, power of attorney, healthcare directive, or a trust, they should be reviewed. Just as you should have an annual health check-up, you should have a periodic estate plan check-up. Reviewing your plan keeps you current with changes in your personal and family situation and your finances, tax, and non-tax changes in the law. Failure to properly update your estate plan may cause unintended results. These may include conservatorship during your lifetime or probate after death, distributions not in accordance with your goals and objectives, unnecessary taxes, and additional administrative, legal, and other expenses.
Make (or Keep) Your New Year’s Resolutions Today. If you do not have any estate planning documents in place, resolve to make it happen in 2023. At a minimum, you should have financial and health care powers of attorney and a will. You may also benefit from having a revocable living trust. If you have any of these documents in place already, review or possibly update them in 2023, and if you have a trust, use 2023 to make sure that it is fully funded. The attorneys of Kyle-Wynn & Associates would be pleased to help you with these resolutions, meeting with you in person, or virtually, if you prefer.
R. Kelly Kyle is a 1992 graduate of the Mississippi College School of Law. He joined Kyle-Wynn & Associates in 2010. He is admitted to practice in the State of Mississippi, the State of Louisiana, as well as the United States Court of Appeals for the Fifth Circuit and the United States Supreme Court. He has served as President of the Mississippi College School of Law Alumni Association, and as a member of the Board of Governors of the Jackson Yacht Club and the Jackson Yacht Club Foundation. Mr. Kyle is a member of the National Academy of Elder Law Attorneys, was voted “Best Estate Planner” in the 2019 “Best of Jackson” competition.
