Tuesday, November 16, 2010
What Happens When Your Child Turns 18?
Once your child becomes 18, he is a legal adult, and he should have an estate plan including a health proxy, power of attorney, and a Will. Because he has now reached maturity, HIPPA prevents you, as his parent, from even getting medical updates in the event that your child is unable to communicate his wishes to have you involved.
You may remember some high-profile national cases regarding the right to die of younger individuals. The names: Nancy Cruzan, Karen Quinlan, and Terri Schiavo are examples of such individuals who did not have the proper documents that would have prevented years of litigation regarding their care. All of that could have been avoided for the families if the young adults had signed a written statement of their wishes.
Also, you may have a child with a disability that prevents her from living a normal life, but she may be able to choose how she wants her assets to be distributed. She may choose a program that attended to her needs over years, or perhaps a favorite charity to receive at least a portion of her estate upon her demise. She may also wish to leave funds to her siblings instead of you, her parent.
Your special needs child's capacity to make decisions relative to her own health care and financial future may be determined by her treating physician, a psychologist, or a psychiatrist. She need not be 100% competent, but rather, she needs to understand the nature of what her decisions mean and who she wants to attend to her decisions if she becomes incapacitated.
Sometimes your disabled child is deemed to be incompetent, and a guardian and conservator may be appointed, which basically removes a decision-making power from your child. However, a situation may exist where your child does not have total capacity to make all decisions for himself, but he is sufficiently competent to understand the nature of what the decisions mean, and she may wish to sign a health proxy and power of attorney, which should eliminate the need for the guardianship or conservatorship, thus maintaining privacy, eliminating the probate court system, and alleviating the need for accounts and bonds in the court, etc.
You, as parent, should discuss with your child whether or not she wishes to be kept alive by heroic means if she would not have a meaningful quality of life. Other issues such as organ donations, burial instructions, cremation, etc. may also be determined by your child, as well as other important decisions as to who may receive their important tangible property and financial assets.
It is important to note that not every person has the capacity to make decisions, but in a situation where your child has the ability to state her preferences, goals, and objectives, and also supply input as to whom would make her decisions, her input should be considered. Then it's important to prepare and sign the documents to avoid the probate process.
You should also be aware that often a parent or grandparent has given funds to a minor, and upon the age of 18, these funds are vested and owned by the young person. In the unfortunate event that your child should predecease you, these assets may have to be probated and will pass to that person's heirs-at-law, normally you, his parent. In many situations, you have divested assets in order to reduce your estate for estate tax purposes or for asset protection purposes, and the receipt of assets merely frustrates the initial plan. To accomplish the initial goal it is important for your child to establish an estate plan, which may be as simple as a straightforward will, directing that the assets be left to individuals other than you, possibly siblings, or a charity.
Monday, November 15, 2010
Lawyer Contingency Plan - What Happens if Your Lawyer Dies?
Sample contract appointing
a successor attorney is approved
Clients and heirs of California attorneys who die or become disabled can be left with the same sorts of issues faced by families of an individual who does not leave a will or living trust behind: what happens to client files and any funds that may be on deposit in a trust account? With the approval of a surrogacy agreement last month, the State Bar Board of Governors made it both easy and free to avoid such problems. The first to take advantage of the new “Agreement to Close Law Practice in the Future” was bar President Bill Hebert, who designated his law partner, James Quadra, to administer his practice in the event Hebert could not continue to work.
The sample agreement, available to all lawyers, spells out the responsibilities of the primary attorney and his or her successor.
“This is an easy way for every California lawyer to put in place a contingency plan that protects both the lawyer and his or her clients,” Hebert said. “Although none of us likes to consider the possibility of an interruption in our practices, the prudent lawyer should consider succession planning and spell out how our practice should be maintained, with public protection of paramount importance.”
Added Quadra, “This agreement protects everyone. It’s online, costs nothing and should be a part of every lawyer’s business.”
Currently, if a lawyer dies or becomes incapacitated without having made any arrangements about the future of his or her practice, the State Bar seeks a superior court order to take over the practice. It collects the attorney’s files and attempts to return those files to the client, although it does not try to find a new attorney to take over cases.
However, if a lawyer designates a successor using the new sample contract, the designated surrogate goes to court for appointment as the practice administrator who can take control and dispose of the practice. A lengthy list of duties is part of the contract and includes the ability to open mail, become a signatory on bank accounts, notify clients and transfer files, pay bills and handle funds, and accept the original attorney’s clients and cases. The practice administrator also will have the power to sell the practice.
The agreement includes a requirement that clients must be notified in engagement letters that a successor attorney has been designated.
Although New York and Indiana have successor attorney programs in place and the authors of the California contract used some of their language, Encino probate attorney Marshal Oldman conformed the contract to California law. As drafted, the agreement is aimed primarily at the solo practitioner with no back-up. “It really is more focused on the attorney in active practice for whom, at some point, either because of an accident or a sudden heart attack, everything comes to screeching halt,” Oldman said. With the surrogacy contract in place, a practice administrator “can come in and do the job.” In the meantime, Oldman, who said he suspects most attorneys have not made contingency succession plans, urges attorneys to adopt good business practices, including keeping their books and files in order.
Murray Greenberg, who for 15 years has handled State Bar takeovers of attorneys’ practices, whether for death, disability or discipline, said the numbers vary from year to year. He’s seen an uptick recently, probably due to the graying of the profession in general, he said. He shares Oldman’s belief that many attorneys aren’t well-prepared for the unforeseen: “No one expects to become disabled.”
“We view this both as a client protection feature and also as protection for attorneys and their estates,” said Greenberg, who called the surrogacy contract “an insurance policy that costs nothing. We are trying to assist the practitioner in understanding that something could potentially happen to them and this is an effort to protect their clients and their law practice.”
Monday, November 15, 2010
Elite Club? You'd think so based on the cost of membership...
Active lawyer dues will be $410 next year
Gov. Schwarzenegger signed the State Bar’s dues bill last month, leaving member fees at the 2010 level of $410 per active member. The measure was amended by the legislature at the last minute to earmark $10 of the fee for legal services, and it includes requirements that a public protection task force be created and that bar employees’ salaries and benefits be made public upon request. The amendments were introduced by the judiciary committees of both the Senate and Assembly.
The diversion of $10 to legal services amounts to a $2 million hit to the bar’s general fund. (The 2010 general fund budget totals $66.2 million, and 79 percent of that underwrites the discipline system.) Bar members will have the option to deduct that $10 from their dues payment and the money collected from those who choose to pay it will be used to underwrite legal aid through 2013. Attorneys also can opt out of paying $5 for lobbying and $5 for elimination of bias efforts.
The bill requires the bar president to create a “Governance in the Public Interest Task Force” of 11 members to submit a report every three years to the Supreme Court, the governor and the legislative judiciary committees with recommendations for improving the bar’s public protection efforts. Bar President Bill Hebert appointed the task force last month.
According to an analysis by the Senate Judiciary Committee, the public protection provision was added in response to “concerns that recent actions taken by the State Bar Board of Governors have not sufficiently taken into account the protection of the public.” The analysis cited approval of a scaled-back “Find a Lawyer” program that excludes some information from search criteria, opposition to two legislative efforts concerning attorney participation in foreclosure-related scams, reduced malpractice insurance disclosure requirements, and the board’s decision last year to not reappoint the bar’s chief trial counsel.
The legislative committees also received recommendations from Robert Fellmeth, executive director of the Center for Public Interest Law at the University of San Diego. Fellmeth, a longtime bar watchdog, recommended that the board of governors be appointed rather than elected and that its composition be changed to include a majority of public members, that the chief trial counsel be appointed by the Supreme Court, that the bar be subject to the Bagley-Keene Open Meeting Act, and that the Lawyer Assistance Program be independently audited or eliminated.
Although none of the recommendations is included in the fee measure, the public protection task force was created in part to address them and a representative of Fellmeth’s group offered support for the amendments.
The committee also looked at the bar’s so-called rainy day fund that holds $6.4 million as well as other reserves that were under consideration during the summer to fund possible employee buyouts. A proposal to do so was pulled from a board agenda in July.
At the same time the buyout was under consideration, the analysis noted, funding for legal services has taken a nosedive. Revenues from the IOLTA (Interest on Lawyer Trust Accounts) program have declined 75 percent since 2007 and donations to the Justice Gap Fund have dropped by 40 percent over the last three years.
The $410 dues for active members includes $315 as the annual fee, $40 for the Client Security Fund, $25 for disciplinary activities, $10 for the Lawyer Assistance Program, $10 for a building fund and $10 for technology upgrades. The fee for inactive attorneys will be $125.
The lawyers at Sowards Law Firm assist clients with Estate Planning, Wills, Living Trusts, Probate, Estate Administration, Medi-Cal Planning, Business Law and LLC Preparation throughout California, including clients located in and around, Oakland, Palo Alto, Petaluma, Pleasanton, Point Reyes, Redwood City, Richmond, Salinas, San Carlos, San Francisco, San Jose, San Leandro, San Rafael, San Ramon, Santa Clara, Santa Cruz, Santa Rosa, South San Francisco, Sunnyvale, Union City and Vallejo.