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Guardians – A Tough Decision for an Estate Plan

For a long time I delayed executing my own estate plan because I got hung up on one thing, but one very important thing, who would take care of my children if something were to happen to both my husband and I.  For families with minor children choosing guardians can be the most important and hardest decision to make when working on an estate plan.  When thinking about your will, you have to decide who you want to act as personal representative of the estate, who the beneficiaries of the estate will be, and who will be appointed guardian of minor children.  That last part can be the hardest, as it is so hard to imagine anyone replacing your role as mom or dad.  No one can truly replace you, but you can consider many things when making that difficult choice.

When we first started brainstorming guardians and who we wanted to raise our children if something were to happen to us, we thought of those whom we are closest with and also more importantly, whom our children are closest with.  We thought of my parents.  Although our children are also close with my husband’s parents, they live out of town and we don’t see them as often as we would like.  My parents live less than a ten-minute drive from us, so naturally my kids are vey close with them because we are able to spend a lot of time with them.  If something were to happen right now, I would love my parents to be there for the kids.  However, it is important to look further out.  Would my parents be able to care for the kids until they were old enough to be on their own?  With our parents getting older we didn’t know that we could answer yes to that last question.  Losing parents would be hard enough on our kids, and we would want to give them as much stability as possible, so we decided for us, our parents may not be a good long- term option.  With that in mind we were able to cross both sets of grandparents off our list of possible guardians.

Next, we looked at our siblings, our children’s aunts and uncles.  My husband and I each have two siblings, so this gave us four more options to consider.  How can you choose between sides of the family?  We considered everything from mental health, medical health, relationship history, financial responsibility, location, life- style choices, and again relationship between them and our children.  We ultimately ended up choosing the sibling who lives nearby, has children that are close with and close in age to our children, and even lives in the same school district as us, so that our children wouldn’t have to be uprooted from their school community.  That sibling doesn’t always make same the parenting choices I would, but ultimately, I know that my children would be taken care of, and would feel loved under their care as the guardian.

What I realized, was part of my delay was from not having what in my mind was the “perfect” choice for a guardian.  Because again, how can anyone replace me, as mom?  All the uncertainty of the current pandemic definitely gave me the urge to make a decision and get things in order.  You never know what is going to happen and having a plan in place will make things easier on everyone.  And although this kind of decision definitely warrants taking time to think about, it probably shouldn’t take 10 years like it took me!  Luckily, nothing happened to us during that time, but you never know and at some point you just need to make a decision.  Documents can always be redrafted at a later time if after further thought you change your mind.

-Lisa Villareal

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Stop Waiting – Burkhardt Law Firm

I joined Burkhardt Law about 5 months ago, and since joining the firm I have had an opportunity to shadow Martha. I have learned a lot from her in these 5 months.  One of the things I have seen while shadowing her is people who wait until it is too late to create an estate plan.  Did you know that for a will to be valid you have to have mental capacity when signing?  In the time that I have been at Burkhardt Law I have seen Martha have to turn away potential clients because they no longer had mental capacity to execute an estate plan.

Has a loved one recently been diagnosed with an illness that may affect their mental capacity? Their illness may progress faster then you think and it could become too late to execute an estate plan.  If your loved one doesn’t have capacity to execute an estate plan and does not have a power of attorney, it may become difficult to access funds they need.  If a power of attorney is not in place, a loved one may only be able to access accounts by going to the court and petitioning for a conservatorship.  This can take time and there is the added issue of court costs.

I have also unfortunately seen clients come in when they are sick but still have mental capacity to sign, however, they have passed away before coming back in to sign and execute their documents. That is just heart breaking. Don’t wait until it is too late.  Benjamin Franklin once said, “Don’t put off until tomorrow what you can do today.” This is excellent advice especially when it comes to creating an estate plan. You never know what tomorrow will bring so be prepared today.

 

— Lisa Villareal

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Different Probate Options

When I work with clients, my goal is often very simple: Avoiding probate. However, I believe it’s also important to have a backup plan that includes providing for probate in the most efficient way possible. In order to do this, having an understanding of the different probate cases is important.

For adults unable to make their own decisions or for minors, the court may appoint someone to be in charge of their money through a conservatorship. The court may also appoint someone to be in charge of their physical well-being through a guardianship. These proceedings are only avoidable if an adult had the mental capacity and executed a power of attorney in advance. For minors or adults with special needs, a conservatorship or guardianship will be required. For these situations, a will is the only place to legally designate a future guardian and conservator.

On the other side of probate is when a person passes with assets left in their name alone and without beneficiaries. In these situations, there are a few different proceedings in Missouri.

After a year has passed since a person’s death, the heirs may also file a determination of heirship. Another simplified proceeding, this simply produces a court order effectively giving title to the legal heirs. Because fewer documents are required than other proceedings, this can give access quicker and generally less expensively. Unfortunately, the major downside to this probate process is the assets are given to the legal heirs under intestate law which may not have been the intention. In addition, the court requires a list of all assets going through the determination of heirship and would not give access to unknown assets.

Another option is the small estate affidavit. For estates under $40,000.00, this includes subtracting debt, the court may issue a certificate based on this affidavit. This allows the person signing the small estate to collect the listed assets. While this is a simplified option giving access to assets often within a few months, you must know and have statements for the assets. Because there are normally fewer documents require, it again is often also much less expensive than other probate proceedings. In addition, some counties will allow an individual to file these affidavits without an attorney. Unfortunately, St. Louis County does require an attorney.

Finally, the last option is a full probate proceeding. If a company says you need “Letters” this is what they are referring to.   The proceeding begins by issuing the Personal Representative (or Executor) Letters of Administration or Letters of Testamentary. These Letters allow the Personal Representative to call companies to gather information and assets for the heirs or devisees of a will. Generally, these proceedings will take a minimum of 7 months and can take years. It also gives an open court case for creditors. It is most likely to be the most expensive, but if the assets exceed $40,000, it has been less than a year since the death, or there are unknown assets, this is the only option.

So, how does this effect an estate plan? For small estate affidavits and a full probate proceedings wills can be admitted. However, a will can actually (nominally) increase the court fees. But a will can also waive bond (another expense) which may not always be done otherwise.   If a specific person should be appointed Personal Representative or intestate law is not the desired outcome, a will is always going to be necessary. But knowing the different methods of probate and potential fees should also help decide a backup to the main estate plan.

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Still You: What Happens if Your Incapacitated

For those who don’t know me, I read.  A lot.  I’m in two book clubs and average probably a book a week.  Last year I read a wonderful book called “Still Alice” by Lisa Genova.  It’s a book written from the point of view of a woman with early onset Alzheimer’s disease.  It was well written and an interesting story, but it also focuses on something that is all too common, the inability of a loved one to make decisions for themselves.  The book doesn’t touch on the legal complications that can arise with incapacitation, but I, of course, will.

When a person no longer is able to remember where they live, generally, they are not in a position where they can remember their medications, decide if they should be living in their house, or determine if they should take money out of their IRA. This means someone else must make these decisions for them and hopefully make the decisions that person would have made for themselves.  But who makes those choices for them if they’re not capable?

In the best case scenario, they’ve already made arrangements for someone to take over in a power of attorney or have set up a trust. In which case a person they’re decided upon simply begins to act for them with the legal document.  However, many people don’t have these documents.

Without them, a person must go to probate court and file for a guardianship or conservatorship over the incapacitated or disabled person.  Guardianship is the process where a person is given control over the care and custody of another, whereas conservatorship is the process where a person is given control over another’s finances.  In both types of cases, the information needed for filing is extensive, including a full report of the person’s assets/income and an assessment by a doctor.

After filing, an attorney (the guardian ad litem) must be appointed for the disabled/incapacitated person.  This attorney is completely separate from any attorney hired by the family or loved ones to file the legal documents.  What this means is often two attorneys are involved, which of course means two sets of legal fees.

Next, a hearing is schedule where the court will hear evidence on why the incapacitated/disabled person needs a guardian/conservator.  Generally, this occurs a week or two after the petition has been filed.  The judge overseeing the hearing will eventually make the decision on what powers the guardian/conservator will be granted and will only grant that person the powers necessary for the incapacitated/disabled person’s wellbeing.  These powers are issued through the letters of guardianship/conservatorship.

However, that does not end the probate court’s supervision.  After a conservator is appointed, that person must then inventory the disabled person’s assets.  If property must be sold or leased, the conservator must also petition the court before taking action. The conservator/guardian must also file an annual report with the probate court detailing the actions of the guardian/conservator over the year.  For a conservator this includes a detailed accounting of the incapacitated person’s assets.

Without the proper estate planning, an already difficult situation of an incapacitated loved one, becomes a lot more complicated and expensive, including legal proceedings, multiple attorneys, and continuing court supervision.  Essentially, while the disabled/incapacitated person is alive (and perhaps well after depending on their other estate planning) the probate court will be involved.  Hopefully, we never find ourselves or a loved one disabled or incapacitated, but planning for it will make it that much easier if it does happen.

Burkhardt Law Firm

Phone: (314) 518-1581
Email: mburkhardt@burkhardtlaw.com
Address:
2333 Grissom Dr., Suite 107
St. Louis, MO 63146