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Monday, October 31, 2011

Checking in with Your Relatives

I was talking to an elder care coach that I know by the name of Thomas P. Callahan, of A.F.I. Coaching and Consulting, and we started talking about our holiday plans. One interesting item that came up was how busy he tends to get right after the holidays. During this time of year, children return home to visit their elderly parents and become fully aware of how their parents have deteriorated over the course of the year.

If you are visiting home for the first time in a while, here are some warning signs that you should look out for if you are concerned about a loved one:
  1. If they are hoarding items (Such as numerous cereal boxes or sugar packets);
  2. If they have many unpaid bills;
  3. If they are becoming paranoid;
  4. If they having memory issues (do they repeat stories or fail to notice items right in front of them);
  5. If they have substantial weight loss or weight gain;
  6. If they are eating out a lot;
  7. If they are relying on untrustworthy companions (are they isolated from their normal friends and neighbors);
  8. If their car starts to have more dings and dents;
  9. If the laundry is not being cleaned;
  10. If they are sleeping on the couch or recliner instead of the bed; or
  11. If they are watching much more television than they used to.

According to Tom, these traits often go unnoticed because people view their parents as always capable…after all, they are your parents. They are the people you turned to as a child if you fell down.

It is important not to get frustrated when these things start to happen. That leads to unnecessary arguments. If you are seeing your parents exhibiting these traits, you must understand that your parents may not understand what is happening to them.

There are many creative ways to help, but letting things go on as they are is NOT a resolution. As a starting point, you will want to speak with an elder care coach. You will also want to make sure that you know where your parents Wills, Powers of Attorney and Advanced Health Care Directives are located. If they do not have any, you will want to encourage them to meet with an estate planning attorney before they are no longer have the ability to prepare such documents.

Tuesday, October 11, 2011

New Florida Power of Attorney Law

Effective October 1, 2011, a new law went into effect dramatically changing the Florida Power of Attorney Statute. A Power of Attorney is a writing in which one party grants authority to an agent to act in place of the principal; each act performed by the agent pursuant to the power of attorney has the same effect and benefit to the principal and the principal's successors in interest as if th principal had performed the act.

Important changes in the new Florida law include:
  1. An individual can no longer make a springing power of attorney - a springing POA is a power of attorney that becomes effective in the event of disability or some future contingent event (there is an exception of military powers);

  2. All Florida Powers of Attorney must be durable powers of attorney (i.e. they must be effective when signed);

  3. A Grantor must specifically initial any provision that allows for:
    - gifting, changing beneficiary of a retirement account,
    - changing any benefiary of an annuity,
    - changing the ownership or beneficiary of a life insurance policy,
    - amending, modifying, creating, revoking or terminating a trust,
    - waiving the principal's right to be a beneficiary of a joint and survivor annuity, including surivor benefits under a retirement plan, or
    - disclaiming property and powers of appointment;

  4. If multiple agents are named, absent explicit direction otherwise, each agent may act unilaterally. This changes the presumption, it used to be that if multiple agents were named, they had to act together; and

  5. Third parties are required to accept a copy of the power of attorney (and not demand an original).
The new Power of Attorney Act also modifies and clarifies the duties of an agent. Specifically, the agent may not delegate authority to act as agent (except for investment functions), the agent must keep record of all receipts, disbursments and transactions made on behalf of the principal, and the agent may not act contrary to the principal's reasonable expectactions, including preserving the principal's estate plan.

The changes are not retro-active, so powers of attorney drafted before October 1, 2011 are still valid (including gifting provisions that are not initialed). However, to avoid confusion, it may be best to redo any older power of attorney forms you have.

Saturday, October 1, 2011

Life Insurance for College Students

I was speaking with a colleague of mine the other day and the subject of college loans came up. It occurred to us that with the new stricter lending regime, it is probably more important than ever for a parent to consider getting life insurance on a child of theirs if they are co-signing a college loan.

Most college loans are no longer dischargeable in bankruptcy or upon the death of a child. So if you are co-signing a loan, consider taking out a life insurance policy on your child to pay off the loan in the event something happens to your child. As always, the larger the policy you obtain, the more worthwhile it is setting up a life insurance trust.