Question 1: What is a standby guardian?

Answer: A standby guardian is a person who will take over your parenting responsibilities if you should suddenly fall ill or get injured. These guardians take over when you lose your capacity to take care of your children and need someone else to do it for you. Unlike other forms of guardianships, a standby guardianship does not remove your parenting rights, it merely allows you to have someone else take over when needed.

Question 2: How do you appoint a standby guardian?

Answer: A parent can file a petition with an Arkansas court that asks it to approve the parent’s choice for a standby guardian and, once approved, the guardian can begin parenting responsibilities when the parent is no longer able. The court must determine that the nominated guardian can properly care for the child and that naming him or her as standby guardian is in the child’s best interests.

Question 3: When does the standby guardian assume parenting responsibilities?

Answer: That depends on the condition of the parent. A standby guardian can begin caring for the child when the parent dies, when the parent is mentally incapacitated or when the parent is physically incapacitated and grants his or her consent for the standby guardian to take over parenting duties. Once the standby guardian takes over, he or she must immediately notify the court. The court will then enter a guardianship order granting the guardian parenting rights.

Deborah Sexton Law Office, PA is a member of the American Academy of Estate Planning Attorneys.

According to a recent Wall Street Journal article, anyone who intends to use Medicaid as part of his or her estate planning preparations needs to take special care as states continue tightening the restrictions on who is allowed to receive long-term care coverage under the program.

Medicaid is a program funded both by states and the federal government, and currently provides 40% of the long-term care spending in the United States. To be eligible for long-term care under Medicaid a person can own a home and a car, but otherwise cannot have more than $2,000 in cash assets. This $2,000 limit includes gifts you may have given in the past five-year “look back” period. To ensure that you qualify, there are specific Medicaid planning steps you will have to make.

Trusts: One step is to create an irrevocable living trust that transfers ownership of your property to the trust while naming you as beneficiary. The trust must allow you to receive as much benefit and protection as possible, yet it must also be irrevocable. This means that you cannot change the trust terms after you’ve created it. Further, the trust must be created outside of the five-year window required for Medicaid coverage.

Insurance: If you are concerned about long-term care and worry that you may not be able to meet the five-year gift window, you can also acquire long-term care insurance for that five-year time period. After the five-year period is over, you can terminate the insurance coverage and then use the trust to protect your assets as you apply for Medicaid coverage.

Deborah Sexton Law Office, PA is a member of the American Academy of Estate Planning Attorneys.

Question 1: Who is responsible for paying my credit cards if my spouse dies?

Answer: That depends on the credit card account and the state in which you live. If your spouse was the sole account holder, then only he or she is responsible for paying. Any debt on account has to be repaid by the estate and not by you. On the other hand, if you were joint account holders, the surviving spouse is personally responsible for the debt. Also, if you live in a community property law state, you may have to pay for your deceased spouse’s credit card debt even if he or she was the sole account holder. However, Arkansas is not a community property state so most Arkansas residents do not have to worry about this.

Question 2: What if the credit card company tells me I’m responsible?

Answer: Don’t believe them right away. Review the credit card account to determine if you are a joint account holder. If you are not a joint account holder, you aren’t usually responsible for paying even if the card company tries to convince you that you are. Contact an attorney and ask how you can stop the creditor from contacting you. If they are too aggressive, you may even be able to sue them.

Question 3: Can I use my spouse’s cards after he or she dies?

Answer: Probably not. You can only continue using the card if you are a joint account holder. If you are an authorized user or otherwise used a card that your spouse owned, you can no longer use it after he or she dies.

Deborah Sexton Law Office, PA is a member of the American Academy of Estate Planning Attorneys.

Question 1: What is the difference between an executor and a personal representative?

Answer: There really isn’t one. Arkansas law states that a person’s property left behind after death must go through an administration before the Probate Division of the Circuit Court in the county in which the person lived. During this administration process, the decedent’s estate is represented by a personal representative, sometimes known as an executor. Though the two words are often used interchangeably, even by attorneys, the appropriate legal terminology for this person, in Arkansas, is the personal representative.

Question 2: Does an executor have to be an attorney?

Answer: No. The personal representative is typically a spouse or family member of the decedent and there is no requirement that he or she be an attorney. However, unless the personal representative is an expert on Probate law, he or she typically hires an attorney. The attorney is there to advise the personal representative so all processes are complete and requirements are adequately met.

Question 3: Can I choose my own executor?

Answer: Yes, but you must do so in your Will.  An Arkansas Will does not have to state who the testator chooses as a personal representative in order to be legally valid. However, if you do not select a personal representative in your Will, the court will make the determination for you. You can choose whomever you wish to serve as representative, though all representatives must be at least 21, of sound mind and bondable.

Deborah Sexton Law Office, PA is a member of the American Academy of Estate Planning Attorneys.

Officials from the Utah Department of Health issued a statement in late March stating that 24,000 people had their personal information stolen as a result of a security breach on a state computer. Since then, the officials have revised the total number of affected individuals several times. It now stands at nearly 900,000. 

Security experts say that those affected by the security breach could have done nothing to prevent their information from being stolen. The breach occurred when hackers discovered a weak password used by a state server technician. They then exploited the weak password and stole 24,000 files that contained sensitive information. The stolen data includes such information as patient names, dates of birth, Social Security numbers, employer identification numbers, and other information that a thief could use to open new financial accounts.

All of the information came from the state computer database that housed Medicaid patient identification information including information on low-income children. 

 The Utah Department of Health is offering a year of free credit monitoring to anyone affected by the data loss. They are also recommending that affected individuals monitor their credit card statements and bank accounts closely over the next several months.

Security experts say that because much of the data stolen included information about children, hackers could use this to open credit accounts in the child’s name and not get caught for years. Children do not have credit reports, so it is often very hard to determine if a fraudulent account has been opened in the child’s name.

Deborah Sexton Law Office, PA is a member of the American Academy of Estate Planning Attorneys.

Concern 1: Your digital legacy. Planning to transfer your digital assets after you die or in the event you fall ill requires you to carefully inventory your properties. This goes beyond your email accounts or online bank accounts. It also includes personal information you have on your computer:  photos, music, personal letters and emails, etc. If you die tomorrow, would your family or estate executor even know what you have on your computer or have the ability to look?

Concern 2: Your password list. If you create a single list of all your login information, passwords, security questions, and other related online security data, the question of where to keep it is very important. If you have an attorney, your attorney may not want to keep your information in his or her office for fear that a staff member may knowingly or unknowingly compromise your security. A safety deposit box is a great option, while a home safe may also be a good alternative.

Concern 3: Agent’s authority. Even if you have created a Power of Attorney for finances, or a general Power of Attorney, will your attorney-in-fact have the authority to access your account information? State laws aren’t exactly clear on digital authority so it’s important you specifically word your Power of Attorney, and your Will, to include authority for your agent and successors to access and manage your digital property.

Deborah Sexton Law Office, PA is a member of the American Academy of Estate Planning Attorneys.

If you’re like many people, you have a lot of passwords associated with various websites, programs, or even files. You may also have online bank accounts, stock trading accounts, personal sites, and any number of digital properties of one kind or another. Like all your other property, you should make sure you’ve included your digital property in your estate plan.

Step 1: Inventory. Develop a list of all your digital property:  whether it’s your Facebook account, online bill paying accounts, or your monthly online credit card bills. Come up with a list of all your digital properties and keep a special section for those that are bills or other obligations you have to manually pay.

Step 2: Access List. Write down all your passwords, user names, answers to identity questions, etc. You should also have your email address and information included so your fiduciary or estate administrator can reset the passwords if necessary.

Step 3: Secure Storage. Once you have your list, it’s very important to keep it safe and secure. A bank safety deposit box or similar secure storage area is ideal.

Step 4: Transfer. Have a financial power of attorney ready to go in case you are incapacitated. Give your agent the ability to access your list and make sure your responsibilities are met. Make sure your agent is someone you trust. You should also make provisions for your digital assets in your Will.

Deborah Sexton Law Office, PA is a member of the American Academy of Estate Planning Attorneys.

Tip 1: Be clear about what your Will covers and what it doesn’t.

When you’re creating your estate plan it’s important to keep in mind that your Will only covers specific property, known as your probate estate. Other property, such as joint property you own with your spouse and property that has a right of survivorship, will not pass through probate and is not covered under your Will. This means that if you want to give equal portions of your estate to certain people, you will have to look at all of your property and include that which does not pass through probate. Otherwise, if you only rely on your Will to distribute equal portions of your entire estate you may inadvertently give someone a larger share than you had wished.

Tip 2: Be careful when gifting specific property.

If you name specific property in your Will it’s important to go back and change your Will if you later dispose of that property. For example, if you give your granddaughter your classic car in your Will and later sell it, your granddaughter will not receive anything when it comes time for her inheritance. If you choose to include specific gifts, you may also want to include clauses that specify alternate gifts should you no longer own the specific gift at the time of your death.

Tip 3: Get professional advice.

The easiest way to accidentally disinherit someone is by making a mistake in creating your estate plan. To prevent this problem all you need to do is talk to your estate planning lawyer to regularly review your plan and make changes as they become necessary. Otherwise all your effort may be for naught.

Deborah Sexton Law Office, PA is a member of the American Academy of Estate Planning Attorneys.

Question 1: How much does it cost to create a Living Trust?

Generally, Living Trusts are simple to create and are not very expensive. However, the Living Trust has to be run properly by a trustee, and that trustee may incur expenses as he or she administers the Trust. Depending on how long the Trust lasts and how much you pay the trustee, these costs can be considerable.

Question 2: How do I actually transfer property to the Trust?

The transfer of property to your LivingTtrust is known as funding. To fund the Trust, you have to sign over your property to the Trust as the owner. So, for example, to have the Trust own your home, you’ll have to transfer the deed or title to the Trust. It’s important that you properly fund your Living Trust, or you may lose all the benefits of having one, so talk to a qualified estate planning attorney for more information.

Question 3: How much effort and paperwork are involved?

That depends. For some Living Trusts there is a minimal amount of paperwork involved, while people with more property to transfer may have to go through a complicated process of making sure all the necessary paperwork is properly drafted. However, one good thing about a Living Trust is that after you die, your estate does not have to file the Trust with the court. Living Trusts are private and are not subject to probate court requirements.

Deborah Sexton Law Office, PA is a member of the American Academy of Estate Planning Attorneys.

If you haven’t already seen the Academy award nominated film The Descendants, you may want to rent it, especially if you are currently creating your own estate plan. The film follows Matt King, played by George Clooney, an attorney who is left to care for his two daughters after his wife is injured and goes into a coma. There are several estate planning issues that come up in the film that may be of interest to you.

Issue 1: Inherited Wealth. In the movie, King is the descendant of wealthy Hawaiians and has inherited land on the island of Kauai, owned by a trust. King must determine whether to sell it or keep it, and knows that transferring too much wealth to his own daughters can leave them spoiled and unlikely to have a happy life. It is a common concern amongst wealthy families, and the issue of how much to leave to your children is always difficult.

Issue 2: Living Wills. After she is injured and goes into a coma, it is revealed that King’s wife and the mother of his children has left behind a Living Will in which she indicates her preference to not receive life-sustaining care in her situation. Because she did leave behind a Living Will, her doctors must follow her directions and cannot artificially prolong her life.

Issue 3: Long Term Trusts. In the film, King is a beneficiary of a trust started by his grandfather. Because of certain arcane laws the trust can not last forever, which is why King must make the decision to either sell it or keep it in the family. Creating a trust has its own special requirements and restrictions, and you should speak to your estate planning lawyer for more information.

Deborah Sexton Law Office, PA is a member of the American Academy of Estate Planning Attorneys.