How often should I update my estate plan by Scott Jensen, Attorney

How often should I update my estate plan?

This question is one of the most popular that I get from clients and there are many factors that go into the answer. 

As a general rule, I recommend my clients to dust off their documents every three to five years and review their plan.  However, there are many things that can prompt an earlier review than the fact that three years have passed.  Some questions that should be asked if you should come in to update your documents include: 

-Has anything changed financially to my estate?

-Have there been any children born or adopted into my family?

-Has there been a marriage or divorce?

-Has there been a death in the family?

-Have any trustees, personal representatives or other fiduciaries named in my documents passed away? 

-Have I moved?

-What is my current relationship with those chosen as fiduciaries or beneficiaries under my estate plan?

-Has there been a change in the law?

-Have I retired?

As my clients’ family, financial or geographic location changes over time, so can their estate plan. 

Sometimes a person we choose as a fiduciary might be getting older and struggling with good health.  It would be important to update the documents to put in a fiduciary that is better able to carry out those responsibilities. 

Other times, when a person moves there may be differences in the law from state to state that could affect an estate plan.  Furthermore, after a move, a personal residence or other property may need to be titled to a trust to avoid probate or additional administration in the new state. 

There also may be conflicts or reconciliations between you and those named as beneficiaries under your estate plan.  If you fail to update your documents, that beneficiary may receive more or less than your wish.  In other cases it could be important that a beneficiary receive their inheritance at a different age or in a different way protect their inheritance from creditors or in some cases themselves. 

If you are not sure whether or not updates in your documents are needed, it is my recommendation to have an estate planning attorney review your documents and discuss with them your current situation to determine your best options moving forward.  

Why pay for services when it's free?

Paying someone to do something you can do for free is worth your time, peace of mind and effort.

For example:  Veteran's Benefits can be time consuming and if you did not cross all your T's and dot your I's correctly you stand a chance of getting the benefit denied.  It can also take you anywhere from 6 months to two years to get benefits. Whereas, if you used a Certified adjuster or benefits specialist/counselor it may shorten the time.

Arizona Long Term Care Systems (ALTCS) AZ Medicaid program is another one of those time consuming benefit programs.  It can take 3 - 4 months to go through the whole process with the chance to get denied.  73% of the people that apply on their own will be denied.

The State workers are not there to help you understand policy and how to use it appropriately.  This is one of the best reasons to pay someone that knows the system and can help you qualify.

AZ Medicaid medical eligibility

Arizona Long Term Care Systems (ALTCS) is one of AZ's Medicaid programs.  You have to be financially and medically eligible to qualify for assistance.

When we talk about medical requirements it does not mean you or someone you care for has to be in a nursing home.

The applicant must need care now that is equal to care provided in a nursing home setting.  The applicant needs to score 60 or more points to be eligible.

This means a diagnosis of Parkinson's, Alzheimer's or dementia are needed.  IF, the applicant does not have a diagnosis 10 to one ALTCS will deny.

ADL's (activities of daily living)  used to be enough to qualify someone if they needed help with bathing, dressing, etc.  Not anymore, a diagnosis (see above) is required.

Getting the right help to establish eligibility is crucial.  73% of applicants that apply on own are denied.

What is income & what is a resource?

Recently, I have noticed people do not understand the difference between income and resources (assets).  

This is very common for Medicaid/ALTCS applicants. 

Income is  money coming in via wages, Social Security benefits,  pensions (either earned or unearned) on a monthly basis via direct deposit or a check.  

Resources or assets are anything of value that can be converted into cash such as a bank account, stocks. bonds, CD's etc.

Income is not a resource in the month it is received but if not spent then the following month of receipt it becomes a resource or asset. 

Some resources produce income such as dividends and interest.

Importance of Power of Attorney

Recently, I saw a Financial Power of Attorney (one page only) and a Health Care Power of Attorney that had an expiration date.  Lady is 90 yrs old and in good mental health however in 5 yrs when the HCPOA expires she might not be.  What happens then?  More than likely a Guardianship will be needed and the family will have to pay over $10,000 in attorney fees, court costs and other expenses.

Why would any attorney put an expiration date when the client could be unable to sign a new one sooner than later?

It could be they went to an attorney that does not understand Elder Care or believes the document should have an expiration date.

When getting your documents in place (Estate Planning) it is a good idea to go to the correct attorney. If you are young and have minor children then an Estate Planning attorney will be good.  But if you are at retirement age you might want to consider meeting with an attorney knowledgeable in the Elder Care area. Planning for the unforeseen future will save you time, money and trouble.

Power of Attorney documents need to be more than one page to cover all of the areas that may come up such as: gifting, creating Trusts of any kind, include language that will allow the bank, life insurance or brokerage firms to work with you.

Be diligent and aware when getting your legal affairs in order.