If the pandemic has taught us anything, it is the importance of life decisions such as wills and estate planning. We’ve all heard that saying “Nothing is sure but death and taxes,” but we at the Law Office of Amy L. Phillips, PLLC would argue that confusion surrounding legal matters as we age is a pretty sure thing. Did you know that less than 40% of adults aged 50 and older have an estate plan in place? Are you familiar with the terms will, living will, power of attorney, and trust? Do you know what these terms mean or if you even need them?

To get answers to these questions and to learn more about preparing for your future, especially during these difficult times, we encourage you to listen to the Sage Aging podcast or read the transcript below.

Introduction:

In this episode of the Sage Aging podcast, attorney Amy Phillips covers everything you need to know about estate planning. From powers of attorney and wills to trusts and the importance of estate planning, Attorney Phillips gives an overview of what these processes look like and if they apply to your life. She also provides online resources and information you can use to pick out the right attorney for your estate planning needs.

Liz Craven:

Support for this episode of Sage Aging comes from Polk Eldercare Guide. Designed with families in mind, Polk Eldercare Guide gives you the tools and education necessary to make quality choices about senior care and living options in Polk County, Florida. Available in both English and Spanish, you can view the guides and much more online at polkeldercare.com.

Liz Craven:

Creating an estate plan is a good idea for every adult. Yet most people don’t have one. What happens if you become incapacitated and are unable to make medical or financial decisions for yourself? How does the lack of an estate plan affect surviving family members? Is it difficult and costly to create an estate plan? If you are 18 or older and you or your loved ones don’t have an estate plan in place, then this is the podcast episode for you.

Liz Craven:

Hi, I’m Liz Craven. Like so many others, I faced the overwhelming task of being a caregiver for people I hold dear. I understand how tough the day-to-day of a caregiver can be and how hard it is to come by good information. Here’s one thing I know for sure: Education is key. Equipped with the right tools and good information, caregivers will experience less stress and find better balance in day-to-day life. For the past two decades, I’ve built my career on connecting older adults and those who care for them to the education and resources they need to navigate the aging journey. This show is dedicated to the same. Welcome to the Sage Aging podcast. Hit subscribe now, and let’s get started.

Liz Craven:

Hello, and welcome to the Sage Aging podcast. I’m your host, Liz Craven. This is episode 10 and the first episode of a five-part series addressing the legal side of the aging process. We’ve all heard that saying, “Nothing is sure but death and taxes.” But I’d argue that confusion surrounding legal matters as we age is a pretty sure thing too. Did you know that less than 40 percent of adults age 50 and older have an estate plan in place? Are you aware that an estate plan isn’t just for wealthy people? Are you familiar with the terms will, living will, power of attorney, and trust, and do you know what they mean? Or if you even need them? We’re about to answer all those questions and more on this episode of Sage Aging.

Liz Craven:

My guest today is attorney-at-law Amy Phillips. Amy’s practice is dedicated exclusively to estate planning and probate. She focuses on planning for all ages, from young adults just starting their careers to older individuals looking at long-term care and end of life. I should also note that Amy practices law in both Florida and Pennsylvania and offers virtual services as well. To learn more about Amy and her practice, be sure to check the links section of the show notes for this episode, which can be found in the blog post for episode 10 at sageaging.us.

Liz Craven:

Welcome to the show, Amy, and thanks for joining me.

Amy Phillips:

Thank you for having me.

Liz Craven:

I’m so excited to have you here today to kick off our five-part elder law series. I’ve designed the series to hit the highlights of each area of elder law and give our listeners a good base knowledge of what they need to know.

Liz Craven:

It goes without saying that we’re not here today to dispense legal advice of any kind. I want to encourage anyone listening to reach out to Amy or any other elder law attorney directly to answer any specific questions you might have.

Liz Craven:

So, with that out of the way—before we jump into our topic, let’s do a quick lightning round of get-to-know-you questions. Are you ready?

Amy Phillips:

I’m ready.

Liz Craven:

Awesome. Okay. What is your favorite word?

Amy Phillips:

Right now, my favorite word is summer. We’ve been through such a crazy time; just having some normal happy summer things coming up is really, really good right now.

Liz Craven:

I’m a fan of summer too. I’d rather be hot than cold. What is the last thing that you ate?

Amy Phillips:

Well, I had a smoothie for breakfast, so I guess that counts as eating even though I was technically drinking it. It’s still more food than it is a beverage, I think.

Liz Craven:

Okay, and the last one; it’s Saturday afternoon during football season. Are you in front of the TV watching your favorite team, or are you out shopping with the girls?

Amy Phillips:

I am absolutely in front of the TV and if I had to go shopping, I’d have my phone in front of me with the scores.

Liz Craven:

That’s great. Okay, I’ve got to ask now what’s your favorite team?

Amy Phillips:

Oh, I went to UF, so I am a Gator.

Liz Craven:

Well, I like you anyway, but I’m a diehard Seminole.

Amy Phillips:

I thought you were. I thought we might get into this.

Liz Craven:

Oh, that’s fun. Okay, good. Well, I don’t want to waste too much time because we’ve got a lot of ground to cover. So, let’s get into our topic. Today, we’re going to be discussing estate planning. I think there’s a lot of misconceptions out there about what estate planning is and who needs it. So, let’s start there. Just give us a brief description of what it is and who needs it.

Amy Phillips:

I guess as a definition, it’s a process of planning for where your property is going to go if you die, but also planning for your own incapacity. So, if you have an accident or you have an illness as you get older and you can’t care for yourself, a big part of estate planning is planning for who’s going to take care of you. Who’s going to oversee your finances and all of that? Really, my short answer for who needs to be concerned with this is everyone. When somebody turns 18, their parents are not necessarily able to get all that information anymore. So, anybody who is legally an adult needs to have at least a few pieces in place just to make sure that if there is an accident or something happens, they are going to be able to be taken care of.

Liz Craven:

The word “estate” tends to make people think of wealth. I think one of the messages that I really want to get across to people is that even if you don’t have wealth, you still need to put an estate plan in place for the reasons you just mentioned.

Amy Phillips:

Yeah, that’s right. I think a lot of people do think of this huge estate or something like that, or even just a huge amount of wealth. But, really, everybody has an estate in one sense or another. It’s whatever property you own—money, real estate. Anything that needs to change hands at the time of your death would be considered your estate.

Liz Craven:

When is the right time for somebody to create an estate plan?

Amy Phillips:

I think I would recommend age 18, at least to get the lifetime documents, the power of attorney and living will—things like that, which I’m sure we’ll cover in a little more detail later. But then, I always recommend to my clients that they reanalyze everything after I finish up with them. I think this goes for doing it the first time too. Any point in time there’s a big life change. So, you have a death in the family. Somebody in the family is diagnosed with something new or becomes disabled. You have a big change in wealth either for the better or for the worse. When you go through a divorce—anything that changes the structure of your life. That’s a good time to look at this stuff again even if you’ve already done it.

Amy Phillips:

So, I think those are kind of key areas to think about looking into this if you haven’t done it before. If you don’t have this stuff already in place, now is the time.

Liz Craven:

Good answer. Okay, let’s get into the nitty gritty and talk about the key components of an estate plan. Probably the component that people are most familiar with is a will. Can you talk a little bit about that?

Amy Phillips:

A will is very important in some senses, but not necessarily the key piece that everyone thinks it is. If you are married and most of your assets are joint assets, they’re just going to go to your spouse if you pass away. Any of those jointly owned assets—or if you have a life insurance policy or a retirement plan that has a beneficiary named on it—that’s going to trump whatever you put in your will anyway. But from a legal standpoint, a will is a document that tells the probate judge what to do. It tells the probate judge who you want to get your personal assets. If there’s anybody else’s name associated with it, your will is not how you’re taking care of those assets.

Amy Phillips:

A will is still very important, especially if you want something other than the “traditional” method of passing stuff down. If you want to leave something to charity or you’re wanting to ensure that things work out the way you’re hoping with a blended family, it’s important to have a will in place. Even just as a backup to some of those beneficiary designations.

Liz Craven:

That’s all really great information. So, the next component I want to talk about is often very confused with a will because it has the same word in it. I’m talking about a living will, which is very different.

Amy Phillips:

Yes, very different; they do get confused. A living will is one part of a couple different documents having to do with your healthcare if you can’t speak for yourself. With healthcare, we’re always going to ask what does the person want? If the person can speak for themselves and make decisions, they’re going to be making their own decisions. But if a point comes where you can’t do that, your living will is a set of instructions as to what it is that you want. It’s also important to have a healthcare surrogate designation, which sometimes is a separate document or done as part of a living will surrogate designation.

Amy Phillips:

Your healthcare surrogate is the person who’s going to make that decision for you. They kind of go hand-in-hand. The healthcare surrogate designation tells who, and the living will tell us what is going to be done. It’s your instructions to that surrogate decision-maker.

Liz Craven:

Is that something someone has to do through an attorney, or is there a way that somebody could put together a living will even if they didn’t have the rest of the pieces of an estate plan?

Amy Phillips:

I’m always hesitant to recommend doing it yourself. However, there are some really good resources out there—Hospice puts out a document, and I think the Florida Bar even has a do-it-yourself document on that, at least to get that person named. The living will in and of itself isn’t the most important part, as long you’ve communicated what you want to your decision-maker. I think the most important thing is naming that person. Especially if you’re not necessarily wanting your next-of-kin to do that. If you’re in a partnership where you’re not married to the person but they are your closest person, or if you’re wanting only one of your siblings or children to make the decision, naming the person is important. 

Amy Phillips:

So, it becomes really important—but there are some resources out there that don’t have to be done through an attorney.

Liz Craven:

It sounds like it’s really important to put these things in place in an official manner to avoid some sticky situations later on with family.

Amy Phillips:

Yeah, absolutely. With the will, the Florida laws are going to assume that people want certain things—but it tends to be the traditional, very straightforward. The law plans for mom, dad, two and a half kids, that type of situation. So, if you have anything else that you want, then it becomes all the more important to get that surrogate named and have witnesses and all of that in place.

Liz Craven:

Do the policies vary a whole lot between states?

Amy Phillips:

As far as living wills, no, not from what I’ve seen. It tends to be based on a lot of case law over the years. Of course there’s statutes that solidify some of that. But the principles behind it are pretty universal. In most states, the underlying principles tend to be the same. For example, pretend I’m going to look at what my parent told me they wanted for the plan. I’ll do that first, then I’m going to take my knowledge of that person and apply it to what I think they would want based on the other things I know about them. Then, we go to more of a best interest—what’s the universal best interest of that person. Those principles tend to remain the same from state to state. The need to have someone named is important in every state.

Amy Phillips:

What tends to differ a lot in estate planning are formalities of executing these documents. Florida might require two witnesses and a notary for a regular will, and another state might require three witnesses, but no notary.

Liz Craven:

Let’s move on to the next component of an estate plan: power of attorney. That’s a biggie.

Amy Phillips:

Yes, definitely. That is probably the most important. In some ways, it’s more important than your will and who’s going to take care of your property. It’s definitely the most important thing you can put in place for your finances and all of that. So, the power of attorney is a document that’s going to name a person to stand in your shoes—to do financial transactions, real estate transactions, deal with your insurance company. Any of those business end of things that we need to do during end-of-life situations or serious illness. That’s going to go for anything that’s not an actual healthcare decision. There’s even some medical issues that can fall under a power of attorney, like dealing with an insurance company or something like that.

Amy Phillips:

So that’s very, very important, especially as someone gets much older and is looking toward long-term care, going into a nursing home, facing dementia, or losing their ability to care for themselves. The older you get, the higher the chances you’re going to actually need to use this.

Liz Craven:

So a power of attorney—is that a document that can be structured so the power of attorney goes into effect in the event of somebody reaching a stage where they can’t make decisions for themselves? In other words, somebody who doesn’t really want to give that up while they’re still able to make their own decisions—can that document be structured to accommodate that?

Amy Phillips:

That’s an advanced question. It’s something that’s changed over the years. That is not something we’re technically able to set up in Florida anymore; they changed the law significantly. Proving that someone is incapacitated is a sticky subject at best, and it’s also cumbersome. When there’s an emergency, you need that person to be able to step into action immediately without having to seek out two doctors’ opinions or something like that.

Amy Phillips:

So, that’s not typically the way these are done. I think it’s kind of fading out across the country, but not in Florida. What I’d recommend there is number one, you should be choosing a person you have the utmost trust for in the first place. If this is a person who’s going to take power away from you while you’re still able to function for yourself, it’s not the right person in the first place.

Amy Phillips:

I think that’s important. This isn’t something you have to hand to that person in that moment. It’s more important that your close family members know this planning has been done. They need to know how to get access to it. But we don’t have to put this document in that person’s hands the minute it’s signed, if that’s not what you want to do. With my clients, a lot of times I’ll give them a couple of extra business cards and their kids will know to contact me when things do need to go into effect. But from a legal standpoint, a power of attorney is in operation from the time it’s signed, which is why you have to trust that person 200 percent.

Liz Craven:

Thank you for clarifying that, because I think that’s something people are often wondering about, confused about, and concerned about.

Liz Craven:

The next component that I wanted to talk about was trusts. Can you tell us the basics of trusts? I know that’s a big topic, but kind of give us a brief—why do you need one and who needs one?

Amy Phillips:

Yeah, you’re right. We could do an entire series just on trusts, probably. But the basic way I describe a trust to people is it is a method of controlling your assets after you die, more so than just saying who it goes to. Typically it’s, “I want to leave everything to my brother.” I say in my will that at the time of my death, it goes to him. It’s now his money he can do whatever he pleases with it. End of story.

Amy Phillips:

With a trust, you’re going to be able to exert a little more control. So, a trust is going to allow you to say, “Okay, if my children are under 18 (or really under any age that you choose) at the time of my death, I want that money held back from them.” I want it passed out only for certain reasons, education, their wedding, those really important milestones, but I don’t want it to be a source of income for them. I want them to learn to stand on their own two feet.

Amy Phillips:

Then, maybe I want that money to be passed out to them in a specific way. For example, they get half of it when they turn 30 and half of it when they turn 35 or something like that. It’s whatever plan works best for each family. That is one of the big reasons for doing it: exerting control. If there’s underage people, that might be a reason to use a trust. It could also be if one of your children has a substance abuse problem or really any issue that makes you wary of giving them outright access to money. It gets complicated legally with that, so I won’t go into too much more detail. But any time you don’t want somebody to exert total control over their money, a trust is important.

Amy Phillips:

I’m not going too deeply into this, but it somewhat overlaps with a power of attorney as far as while you’re still alive. But like I said, I’m getting a little bit advanced with that. We don’t need to go into that too, too much.

Amy Phillips:

I usually recommend trusts for blended families. For example, if you have two long-term marriages and they’re getting remarried to each other after their spouses die, and they’re getting remarried at age 65 with wealth from their previous marriages. Both of them want that wealth that was made with the other parent to go to those children and each side of that blended family. A trust can keep that in place.

Amy Phillips:

Anybody who has a more complicated distribution plan, lots of different or non-family members or different percentages going to different family members, sometimes the trust can be easier to make than some of the will-based planning we would do.

Liz Craven:

So those are the main components of an estate plan. The will, the living will, the power of attorney, and the trust. Are there any components that I have neglected to ask about that are important to mention?

Amy Phillips:

I think you hit the high points on that. There are some other documents that go hand-in-hand with some of these, like when we do a trust package for somebody. In that, there’s half a dozen different documents that get done, but it’s all kind of under that trust umbrella. I don’t think there’s anything that we haven’t talked about as far as the big, main umbrellas of this.

Liz Craven:

Okay. So, now that we know what an estate plan is, what happens if I don’t have an estate plan in place and I become incapacitated or pass on?

Amy Phillips:

The overarching answer to that is the Florida statutes have a plan for you. There’s going to be default things that apply and dictate who gets your stuff and who takes care of you, those kinds of things. As far as your assets, after you die without a plan in place, there are a set of Florida statutes—it’s the Intestacy Statutes—that dictate what happens if there is no will. It works for most people. For example, if there’s a spouse and only children from that marriage, everything would go to that spouse. Then, when the spouse dies, it would go to those kids.

Amy Phillips:

It gets a little more complicated with a blended family, where it splits between the kids from the previous relationship and the new spouse. So, there’s a plan, and it tends to be whatever the state thinks most people want. Sometimes it works out exactly the same whether you have a will or not, but sometimes it doesn’t.

Amy Phillips:

So, if you’re wanting anything outside of that, that makes the will all the more important. Even with a will, though, if you haven’t done a tremendous amount of planning—if you’ve owned all your assets all by yourself—your family ends up having to go through the probate process, which I know you’ve got somebody else coming to talk about. So I won’t take much of a dive into that, but you have to go through a court process that can take six months minimum for people, but almost always ends up being longer than that. I recently closed a case that had been open since 2014.

Liz Craven:

Oh boy.

Amy Phillips:

It can get tricky, it can get messy, it’s expensive, and it sometimes takes forever for people. But you can plan around that easily, and for little cost. Now, avoiding probate isn’t appropriate in every situation, which you guys will probably cover more later.

Amy Phillips:

If you have mostly joint assets, your spouse is going to be able to take care of that stuff without a power of attorney. So the need for an estate plan is not so much there; it’s when you’re single. If your spouse has already passed and you’re now in a state where you’re incapacitated, a lot of people end up in a guardianship situation. It’s not a terrible system from what I’ve seen in my practice; it gets the job done and is fine most of the time. But it is still stressful, especially on the senior citizen. They’re being examined by three strangers. They have their own attorney appointed for them. So, that’s four new people coming into the life of someone who probably is fairly recently incapacitated. It’s expensive, and it’s stressful on the family. It’s just not something you want to do. It can be avoided with a document that costs a few hundred dollars. So, that’s definitely something we want to try to plan around.

Liz Craven:

Absolutely. We actually have an episode on guardianship coming the very next episode. So, episode 11, we will be talking more about guardianship. I think that the statement you just made about a few hundred dollars and you can avoid that kind of situation, I think that a lot of people have a misconception that it’s going to just cost them thousands and thousands of dollars to see an attorney and put their affairs in order. But that really isn’t the case, is it?

Amy Phillips:

No, it’s really not. In almost every case, the cost of planning ahead is way cheaper than the cost of not planning for your family. Now, it’s different who pays that cost—it’s your family, it’s coming out of their inheritance after you died, but it’s a lot more money then. So, do you want to spend the money now or do you want your kids to spend that money a few years from now, plus some—plus some time, plus some headache? There’s some intangible benefits to doing it ahead of time too. It’s much calmer. It’s not in a crisis situation in most cases. It’s just easier to sit back and think about what you really want instead of trying to scramble and do it all once when you’re approaching incapacity or your kids are trying to sort it out after your death.

Liz Craven:

Definitely better not to make decisions when you’re in an emotional state, for sure.

Amy Phillips:

Absolutely.

Liz Craven:

So, now that we know what all of that is, we know that everybody needs an estate plan of some kind, how do we prepare ourselves when we are going to go and visit with an attorney to create our estate plan?

Amy Phillips:

We have people gather a couple of types of information. I typically start a consultation with an estate planning client by asking them to kind of draw me a picture of their family tree. What’s the layout, what are the family dynamics? To prepare for that, you’re going to want to have full names, contact information for anybody who is receiving an asset from you or anybody who you’re going to be naming to take care of you. If I have a best friend, that’s going to be my personal representative in my will to oversee everything and take care of business for me, but I’m not leaving her anything. I still need to bring all of her information. So, definitely who your people are.

Amy Phillips:

Then, you also want to have a good grasp on your assets, deeds to any real estate that are important to have, any bank statements—just kind of a general idea of what you have. If you do have significant personal property, if you have a lot of antiques or firearms or art, any personal items like that, you’ll want to have a grasp on that as well.

Liz Craven:

So now, there’s no excuse. Everybody knows what they need. Then, when they go to search for the right kind of attorney to help them with an estate plan, what should they be looking for?

Amy Phillips:

I would say if it’s a person who has significant wealth—I’m talking millions, 5 million, 10 million dollars in the estate—you’re going to want an attorney who knows the tax side of things who can possibly arrange your assets in a way that minimizes your tax responsibilities. Most families don’t have that problem—that would be a great problem to have, but the majority of people don’t. So, in my opinion, if you aren’t in that high-wealth category, looking for an estate planning attorney who at least has some grasp on elder law and long-term care planning will benefit you. Just so you can make sure your plan is set up in a way that it’s going to work seamlessly if you do have to go into a nursing home one day and you are running out of money one day. Again, I know this is another episode, but it’s all linked together.

Amy Phillips:

I feel you should look for somebody who understands what’s going to be needed if you do have to apply for veterans’ benefits one day. They can set your estate plan up in a way that you don’t have to make major changes later on when that application needs to be done.

Liz Craven:

So, the last thing I’d like to ask you is can you point our listeners to some resources—whether that’s books, websites, videos, somewhere they can go to dig a little deeper? We’ve covered the surface of a very big topic, and I’d love for people to be able to dig in just a little deeper.

Amy Phillips:

Sure. So my go-to for people would be the Florida Bar. On their website, there’s a public section across the top with a drop-down menu. Go to consumer information, and there’s information about lots of legal topics. Actually, there’s information about child custody and civil cases and all that. They have an excellent section on wills, trusts, and estates. It’s very factual information. It’s not trying to sell you anything. It’s simply a user-friendly version of what the law says and what you might want to put in place. 

Amy Phillips:

Also, though we can’t guarantee this information, I personally think that if you go to an attorney’s website that has a blog or has some information there, that information is going to be more reliable than information not put out by an attorney. So, look online for an attorney whose practice is focused on the area you need help with and read what they have to say.

Amy Phillips:

Now, I wouldn’t necessarily make big decisions based on that information, but we are pretty regulated. We’re not supposed to be putting false information out there. So, typically, you can trust that information.

Liz Craven:

Very good. And you mentioned the Florida Bar—does each state have a similar organization, and do those websites typically have the same type of information on them?

Amy Phillips:

Yeah, it’s pretty much across the board. The information is going to be there in one form or other; some state bars even have some do-it-yourself forms and things like that available. The big difference between states that I’ve seen with practicing in Pennsylvania and Florida is that in Pennsylvania, the bar association in and of itself is voluntary. In Florida, everybody’s a member of the Florida Bar. In Pennsylvania, we’re licensed and there’s a licensing board, but it’s not the mandatory membership of this larger organization the way it is in Florida. So, in Florida, we automatically get access to a lot of resources. In Pennsylvania, we have to opt in and join that.

Amy Phillips:

At the same time, the consumer information on the consumer end, it’s going to be very similar. There’s going to be a lot of factual information, not a lot of attempts to sell you anything, which I think is important when you’re trying to figure this out. You don’t need somebody trying to upsell you to a trust if that’s not what you need at this point in your life. The bar is not going to do that.

Liz Craven:

What about specific organizations? Is there a special certification for estate planning? Is there an association website where someone could search for somebody there?

Amy Phillips:

Sure. The Florida Bar does have certifications for different practice areas. I don’t know as many people with an estate planning certification in Florida, because people tend to go more for the elder law one. With elder law, there’s the elder law section of the Florida Bar and then there’s the National Association of Elder Law Attorneys, or NAELA. All of those organizations are going to be your people who are serious about elder law and really focusing their practice on it. So, those are good resources. Those are good places to find a referral to an attorney, if you’re looking for somebody.

Liz Craven:

That is terrific, and just so our listeners know everything that we’ve been talking about here, when we’ve mentioned any type of resource, including all of the links to those websites, you’ll find those in the show notes. You can find show notes any place you pick up your podcasts, or you can go directly to sageaging.us and find the show notes for each episode with a corresponding blog post. 

Liz Craven:

Amy, thank you so much for taking time out of your day. I know you’re super busy and I appreciate so much you stopping by so we can talk about all of this and get the ball rolling for our month-long journey through elder law.

Amy Phillips:

Thank you, Liz. It was a pleasure to be here and it was fun talking to an old friend too. We hadn’t talked in a while, so [crosstalk 00:32:42]-

Liz Craven:

It was good to catch up. I hope everybody has a great day. Check back next week for our next topic, which is guardianship. We’ll be talking to Sarah Fuentes about that. Thanks for listening, guys.

Liz Craven:

Thanks for listening. If you found value in today’s conversation, I’d really appreciate it if you would click “subscribe” now and share the Sage Aging podcast with a friend. If you have topic ideas you’d like to share, we’d love to hear from you drop us a line at info at sageaging.us.