I’m moved to share a recent email with you, because it focuses on a vital issue that affects all of us, that’s so often blundered, causing trouble for our families. I frequently fuss about it:
“We just moved to the Grand Strand from another state. I got to chatting with a neighbor who takes you very seriously, about having one’s estate affairs in order. He shattered my self-applauding bubble with: ‘Did you take your durable powers of attorney to the Recorder of Deeds’s office and have them recorded? They aren’t valid until you do!’
Hey, I didn’t know that! Is that right? And what else should we do because we now live here?”
Well, several thoughts, among many:
▪ It’s flattering to know that at last someone takes me seriously.
▪ Neighbor’s right. In both Carolinas. But before you spend recordation fees, make sure that the documents are valid in the new state of residence, because they’re “imported” from another state. If they were valid in the state of residence where you “executed” (created) them, they and all of your other estate plan’s legal documents are valid here.
▪ While you’re at it, do heed the advice of the experts to record your medical directive (”pull-the-plug”) living wills, but not before making sure that they contain the language that the doctors and hospitals who sooner or later will take care of you will honor. Around here they often decline to obey patients’ mandates that don’t meet the state’s statutory requirements for newly-drafted documents.
▪ Think your estate plans’ mandates will be implemented smoothly and exactly as intended? Maybe an awful lot of dismayed, perplexed, and disappointed families have news for you:
In both Carolinas your surviving spouse can invoke the “Elective Shares Option” for up to 50 percent of your net property estate, thus shattering the most meticulously-structured plans. In South Carolina it’s fifty percent, and in North Carolina it’s a length-of-marriage sliding scale ranging from 15 percent up to 50 percent after fifteen years. So, if your plan doesn’t benefit Beloved for at least those percentages, as often happens for good reason in blended-family second marriages, better have a nuptial agreement in which Beloved waives Elective Share.
▪ Our probate laws and systems are outstandingly diligent about their mission, to assure fair and equitable treatment of beneficiaries and creditors. Understandably, for many estates this creates a great deal of annoying processing work, expense, and time delays, especially frustrating for those whose beneficiaries and creditors don’t need probate’s safeguards. A whole lot of that can perfectly honorably and legitimately be avoided by probate-bypassing titling of assets and personal trusts.
▪ Back home, if you were worried that filial responsibiltiy laws would make the kids responsible to support you -- or hadn’t thought about it, and now that I mention it you’re worried -- the Palmetto State has none, but it’s “Yes” in Tar Heel country. Enforcement can be lax, but litigious creditors can invoke them.
▪ If my fan, your neighbor, has followed my and others’ suggestions, he’s done the crucially vital introspection, self-education, discovery, and decisions phases of estate planning, both for late-life and dying. He’s devised a thoughtful financial plan to meet his needs and wants. He’s benefited from the use of the right advisors and helpers. He’s created his Estate Operators’ Manual “Doomsday And Mayday File” for his carefully-chosen fiduciaries, as well as ethical wills “legacy letters”, property will, powers of attorney, medical directive, and maybe a personal trust. And he’s engaged a local estate-affairs-oriented attorney to review his “imported” instruments.
After dumping all of this on you, I surely should offer suggestions to help get it all done: Neighbor undoubtedly has many resources. The Internet offers many websites; I can give you some. Seminars abound, not all commercial sales-pitch infomercials. So do public libraries. Let’s also remember the excellent mostly-free consumer publications from AARP and the several National Institutes of Health (NIH) agencies.
Also, another, excellent resource: Neighbor will boast about our fast-growing and excelling local university, CCU. Besides fielding a champion baseball team, CCU also offers a world-class community outreach adult education program, Osher Lifelong Learning Institute (OLLI). There, for a few bucks you can interact with interesting folks, both in the classroom and in social, travel, and community service activities.
Most important, there you can enjoy and benefit from learning hundreds of subjects. Among those is a facts-rich seminar beginning on October 18, all about estate planning and administration for everyone, including state specifics -- both the basics for beginners and all the elements to make everyone’s plans better. The course is significantly expanded and even improved over its very successful previous editions, even worth it and fun for its alumni(ae) to join in, again. Three guesses (you won’t need two of them) who the pro bono moderator is: www.coastal.edu/OLLI, or email me.
Hey, I’ll bet you also didn’t know about the newly-emerging online data-bank idea: Some clever entrepreneurs are developing businesses that store all of your plan data, including the thousands of info bits from your “Doomsday And Mayday File,” and disseminate it to the right people at the right times. Some even help with planning and carrying out events, such as funerals. Employers and health insurers are starting to offer the services as percs.
Another new “Hey, I didn’t know that!”: Encouraged by long-term care facilities and funeral companies, who understandably would like to be paid for their services, and taking note of the surging geriatric population who sooner or later will need them but can’t afford them or don’t want to spend their children’s inheritances there, some life insurance companies are expanding their lines of “end-of-life” products.
The facilities are the commissioned insurance sales agents, and they receive guaranteed benefits in payment for the services that you have received. Some state laws require benefits to your named beneficiary, too. But, because some health problems don’t bar insurability and the typical entry age is so high, expect to encounter hefty premium rates and benefits limitations, far inferior to the generous policies that we’ve carried for decades, and the ones that our children now are buying.
About those seasoned, old life insurance policies that we think we don’t need any more: Neighbor will remember, we’ve explored the various options about what to do with them. Now surging also is the “life settlements” business. Now the profit-seeking speculators in the business are being joined by the long-term care facilities who are willing to buy your policy from you as an alternative to accepting an “assignment”, thus assuring that it will stay in force until you die and they can file a death claim to cover part of your bill. This way, they also can count the policy as a company asset and take advantage of the policyowner privileges. However, a collateral assignment probably is a better deal for you.
Your life insurance company likes it either way, instead of you cash surrendering the policy — which probably would be a blunder for you and the family, anyway.
Thanks for writing, New Transplant. Surely, we’ll all join in welcoming you and yours to our habitat. Indeed it offers many joys. Enjoy them — and we’ll see you at OLLI!
Contact Gary Newman at firstname.lastname@example.org. Your ideas and comments are always welcome.