Trusts, Estates and Succession

Let’s face it – as we get older, we tend to forget things.  But, when we seem to notice it more and more, when do we need to get concerned?  While this blog is not meant to be medical advice, it may help you put some things into perspective for either yourself or a loved one. 

There are many levels of dementia.  The first is mild cognitive impairment where some memory problems are experienced, but the individual can live independently.  Some physicians do not consider this to be a “stage” of dementia at all as the symptoms are simply normal age-related cognitive decline.

The second level is mild dementia where the impaired memory and thinking skills render the individual to no longer be able to live completely independently and may require assistance with finances, grooming, dressing, meal planning and cooking.  Confusion may be experienced when in public.  Less interest in hobbies or activities may occur. There is an unwillingness to try new things; inability to adapt to change; a show of poor judgment; losing items and blaming others for the loss; becoming forgetful of recent events; being more irritable or upset if they fail at something. 

Moderate dementia – the third level – is when the memory impairment becomes more severe and difficulty in communicating occurs.  Independent living is not suitable and help is needed for basic activities.  Going out in public is done only with assistance.  There can be confusion regarding time and place, the forgetting of names of family or friends may occur, wandering to the point of becoming lost, behaving inappropriately, being repetitive, have noticeable mood unstableness or becoming neglectful of hygiene or eating. 

The fourth level is severe dementia where the person experiences severe problems with communication, incontinence and requires constant care.  Help with dressing and eating is needed and the individual is too impaired to go out in public.  There is the inability to remember things even for a few minutes. They fail to recognize everyday objects, may be disturbed at night, be restless, aggressive, have uncontrolled movements and even have difficulty walking. 

Lastly, the severest stage is profound dementia where the individual is usually bedridden. 

As dementia progresses, the individual does not necessarily lose their sense of touch and hearing or their ability to respond to emotion.  How often do we unconscientiously speak loudly to someone who is disabled, even if it is physical disability, thinking that the louder we speak the more likely they will be able to understand?

If an individual suffers from dementia, that does not necessarily mean that they are unable to complete estate planning. It is best to let an attorney determine if the individual is able to do so. 

When communicating with someone with diminished capacity, speak distinctly, speak slowly and pause before changing the topic.  Stay in the line of sight and make strong eye contact.  If trying to have more than a casual conversation, reduce the distraction in the surrounding area. 

Remember to be gentle with someone with diminished capacity.  It is not their fault and they are probably more frustrated than you with your interactions. 

We are using the digital world more and more with each passing day.  Not only do we use it for communicating and entertainment, but we also use it for storing and accessing our asset information.   You may know your logins and passwords, but what happens if you pass away or are not able to access the information due to any number of reasons – incapacity, illness, or simply because you forgot?

In more and more estate administrations, we are finding it more and more difficult to obtain information about assets and liabilities because rather than receiving paper statements, so many of us are going paperless and receiving information digitally. 

How can this affect the administration?  The decedent could own assets that if digital access is not available, they would not necessarily be located.  If there are liabilities, they may not become known until collection efforts are commenced and demands for payment start appearing among the decedent’s mail.  There could be penalties and interest for non-payment.  Further, once an internet service provider learns of a user’s death, the license for use expires and access to the account and all of the digital data is usually cut off.  This can happen even if the fiduciary knows the login and password. 

You may ask how this can happen – well, it is all in the “fine” print.  When you create an account, there are the Terms of Service Agreements that the majority of us do not read but merely click through the acceptance of them so that we can move on.  What we may not realize is that the right to access the digital content stored on the internet service provider servers are usually considered personal and are non-assignable to anyone else. 

So, what is the answer?  Check your internet service provider to see if there is the ability to add an individual as a party who can access your account for limited purposes. 

There are conflicting federal statutes and state statutes that govern the actions of fiduciaries.  This has led to the work on the Uniform Fiduciary Access to Digital Assets Act (UFADAA) to help alleviate the differences between federal and state statutes.  However, even with such an Act, there can still be challenges and you should check your estate planning documents to ensure that they contain language which grants your fiduciary (power of attorney or executor) access to your digital assets. 

You should not use a work-related email account for accessing your personal digital content as most employers will not allow a fiduciary to access a deceased or former employee’s email account. 

If you are fully digital, you might want to consider requesting that once a year you receive hard copy statements of your assets that will provide information if and when needed.  The prior year’s statements could be destroyed when the current statements are received, thereby reducing the amount of paper documentation you have on hand.

Chances are, if you purchased your home from a third party, you know exactly how your home is titled – meaning whose name is on the deed. 

But, what if your home has been in the family for generations and has passed among family members.  Is YOUR name on the deed?  Don’t know?  Well, here are some suggestions as to steps you can take to determine how the property is titled.

            First, if you have a deed, look at the deed.

            No deed? Take a look at the tax notices for the real estate taxes. 

            Still no luck? Then, you may need to consider having a title search completed.

So, why might this be an issue?  Well, sometimes when property is inherited through an estate, a new deed may not have been prepared and the title may still be in great grandma Susie’s name – even though family members may have lived in the property as their own in the intervening times.  It may be that because one person was the sole beneficiary of an estate, it was thought that no new deed was needed.  However, if you think and claim to be the owner, then make certain the title to the property is in your name. 

Why is this important?  There are several reasons.  You may want to get a home equity loan and if the title is not in your name, then the lender will raise a red flag.  You may be of an age that you can get a freeze on your real estate taxes or qualify for a real estate tax rebate.  If the property is not in your name, you may not be eligible for these benefits.  If the property is not in your name, you should not be taking a deduction on your income taxes for real estate taxes, even if you paid the same.  The list could go on and on. 

If you “own” your home, make sure you “own” your home by way of the deed.  If the home has been in the family for generations, you may want to consider a title search and even title insurance so that, should you decide to sell the home, you won’t face any surprises.  Should there be a title issue, it may not be easily corrected and it could deter you from selling your home.  Be proactive and know whose name is on the deed.  If you purchased the home from a third party, this blog most likely won’t pertain to you, but if it is a family homestead – BEWARE.