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Washington, DC Elder Law Blog

How portability affects estate planning for married couples

District of Columbia couples who created their estate plans a few years ago may want to consider updating or replacing it. In the past, each spouse had a certain amount of assets that could pass to heirs and beneficiaries free of federal estate taxes. Now, however, the concept of "portability" has changed how married couples can use the federal estate tax exemption during estate planning.

For 2015, each individual can pass on assets tax free up to $5.43 million. In the past, it would typically take two trusts to ensure that a couple got the maximum benefit from this exclusion. A couple would use the trusts to combine their exemption amounts for a total of $10.86 million. However, when the first spouse passed away, the other spouse was still limited to only the maximum of his or her exemption.

Long-term care planning options for Washington, DC residents

Without a doubt, every Washington, DC resident is going to grow older. As that happens, it may become clear that some degree of care will be needed -- whether it is in the home, at an assisted living center or in a nursing home. Doing some long-term care planning ahead of time could soften the blow when it comes to the logistics and cost of that care.

One thing that individuals need to consider is that they may lack the competency to make decisions for themselves at some point. In preparation for this possibility, powers of attorney for finances and health care are needed. The powers granted in these documents can be as broad or narrow as the individual is comfortable giving to the person entrusted with the job. More than one person can be appointed in either or both documents. The most important factor for anyone appointed is that he or she has the trust of the Washington, DC resident giving them the powers.

Washington, DC parents with young children need estate planning

Washington, DC parents who have young children usually spend a great deal of time worrying about their safety. Numerous dangers lurk even in the child's home when they are young and exploring their world. However, it is the danger of losing their parents that is the most unpredictable. Estate planning may not be able to prevent the untimely demise of a child's parents, but it can provide a plan for who will care for him or her in the event such a tragedy occurs.

Without a will, surviving family members could end up spending valuable time and resources in court battling over who will become the child's legal guardian. In addition, there is no guarantee that the court will choose the same person the parents would have chosen. With a will, the parents retain control over who that person or persons will be.

Simple estate planning can backfire on Washington, DC, residents

When some Washington, DC, residents are advised to create an estate plan, they may decide not to because so many other people's estates are settled without going through this process, and they believe it will work for them as well. Simple, right? Not necessarily, because simply letting your assets be divided through the laws of intestacy can backfire. Without estate planning, there is no way to guarantee who will receive an individual's assets or to guarantee that the beneficiaries will handle their inheritances responsibly.

This is also just the tip of the iceberg of the issues that surviving family members will go through if a loved one dies without an estate plan. All of the person's assets will have to go through probate, which can be a time-consuming and costly process. By the time it is over, there may not be much left for the individual's heirs.

Younger residents of Washington, DC, need estate planning, too

Younger Washington, DC, residents most likely do not feel any urgency in preparing for incapacitation or death. They have their whole lives ahead of them and believe that there will be time for estate planning when they are older. Hopefully, that is true, but catastrophic accidents or illnesses can occur without warning and, without some estate plan in place, family members could be left scrambling and spending a significant amount of time and money in court.

If any Washington, DC, resident is involved in a serious accident or contracts a serious illness, he or she may not be able to make critical health care and financial decisions. Without an advance medical directive or durable power of attorney, family members will have to go to court in order to obtain the right to make decisions on behalf of their loved one. Such a delay could potentially be the difference between life and death.

When is a guardianship appropriate and how is one obtained?

With the average age of the population rising, concerns about what will happen to elderly family members is coming into the forefront of elder law. Estate planning options, such as powers of attorney and living trusts, may be used to care for an elderly family member, but if those options are not available, it may be necessary to obtain a guardianship. The key for District of Columbia residents is to get a guardianship put into place before a loved one suffers any harm.

No one wants to think of a beloved elderly relative not being able to take care of him or herself. Forgetting to pay bills, to take medications or even to take a shower for days at a time could be warning signs that help may be needed. Sometimes, the decline is slow, but there are no guarantees that it will not accelerate.

Storing estate planning information digitally could help family

A great deal of detail and attention goes into creating an estate plan. Family members and the executor of the estate will need to have access to the information and details regarding the assets and other estate property in order to properly administer it. Otherwise, all of the time and effort put into estate planning by a District of Columbia resident could be for naught. 

Putting all of the required documents and information into one place where it can easily be accessed and used can be problematic. Many people use computers to store all kinds of information such as photos and videos. In addition, more accounts are handled online these days than ever before. Therefore, it might make sense to keep all of the pertinent information regarding a person's estate online as well.

Blended families have unique estate planning needs

The definition of family has changed drastically in recent years. Many families in the District of Columbia are so-called "blended families," in which one or both spouses have children from a prior relationship and may also have children together. Attempting to satisfy everyone in this situation creates a challenge when it comes to estate planning.

A recent survey conducted by UBS of 2,715 of its high net worth investors revealed that 14 percent consisted of blended families. Of those families, approximately 55 percent felt that financial issues were more complex than traditional families. The real cost of supporting additional children was a surprise for nearly 44 percent. Around 63 percent felt that their stepchildren did not completely accept them despite the fact that they willingly took on responsibility for their care.

Get a durable power of attorney and advance medical directive

When it comes to estate planning documents, most District of Columbia residents immediately think of wills and trust. Where it is true that these documents are an integral part of any estate plan, they are not the only documents every resident needs. A durable power of attorney and advance medical directive are crucial in the event that an individual becomes unable to make financial and/or health care decisions alone.

A durable power of attorney appoints someone that the individual trusts to deal with a portion or all of his or her financial affairs. This document can give the appointed agent broad or limited powers depending on the individual's comfort level. For instance, the agent may be able to sell property, but only under certain conditions.

Estate planning is also to make things easier on family members

Of course, creating a District of Columbia estate plan is done in order to provide for the disposition of a resident's assets upon death. Wills, trusts and other documents allow a person to maintain control over where and how heirs and beneficiaries receive an inheritance. However, estate planning is also designed to make things easier for an individual's family members if he or she becomes incapacitated or passes away.

Without an estate plan of any kind, family members will have to go to court in order to be granted the right to take care of a loved one's estate after his or her death. This is also the case if the loved one is still alive, but is not able to make decisions due to an illness or injury. This could take up valuable time and economic resources even if family members are not arguing over who will be put in charge.

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