Lessons from Real Life: Why Everyone Needs an Advance Health Care Directive

End-of-life decisions are among the most difficult a family will ever face.  Most people do not like to think about life support, ventilators, and artificial food and hydration.  Young people, especially, believe that end-of-life decisions can wait until later.

The case of 33-year-old Marlise Munoz should be a wake-up call for everyone.  Marlise, a 33-year old paramedic, was found unconscious at home just before Thanksgiving.  Efforts to revive her failed, and just a few days later, she was pronounced brain dead at a Texas hospital.  Her family members, who are all in agreement about what Marlise would have wanted, said their goodbyes and instructed the hospital to remove her from life support.

But the hospital refused. 

Citing a state law that allows health care providers to override a woman’s end-of-life decisions if she is pregnant, hospital officials in Texas refused to terminate Marlise’s life support – because she was 14 weeks pregnant.  Marlise’s family spent the next two months in an agonizing fight with the hospital, finally asking a Texas court to determine the fate of Marlise and her unborn child.

While Marlise’s situation hinged upon a particular provision of Texas law, the case brings to light a significant issue: the importance of knowing your rights about your end-of-life decisions, and taking the necessary steps to make your wishes known.

In Maryland, this is accomplished by executing an Advance Health Care Directive.    An Advance Health Care Directive is a simple document that authorizes one or more individuals to make medical decisions on your behalf when you cannot.  Unlike several other states, including Texas and Illinois, which automatically invalidate a pregnant woman’s end-of-life decisions, Maryland law specifically allows a woman to write her wishes regarding pregnancy into her Advance Health Care Directive.  A Maryland Advance Health Care Directive gives voice to your wishes – and ensures that they will be carried out.  

The public tragedy of Marlise’s family is a real-life lesson that everyone should have an Advance Health Care Directive – or run the risk of forcing family members to fight for your rights. 

Cheryl A. Jones is an attorney in the Wealth Preservation Department of PK Law in Towson, MD.  She can be contacted by email at cjones@pklaw.com or 410-769-6141.

By:  Cheryl A. Jones, Esquire                                                          
cjones@pklaw.com

 

This information is provided for general information only.  None of the information provided herein should be construed as providing legal advice or a separate attorney client relationship. Applicability of the legal principles discussed may differ substantially in individual situations. You should not act upon the information presented herein without consulting an attorney of your choice about your particular situation. While PK Law has taken reasonable efforts to insure the accuracy of this material, the accuracy cannot be guaranteed and PK Law makes no warranties or representations as to its accuracy.

It’s Not Too Late to Use Your Spouse’s Unused Estate Tax Exclusion

In Revenue Procedure 2014-18 the IRS provided an extension of time to those who wished to be sure that a decedent’s surviving spouse could benefit from the concept known as “portability”.  In the Procedure, the IRS provides the ability for an estate of a decedent who died after December 31, 2010 and before January 1, 2014 to “port” the unused portion of the deceased spousal unused exclusion amount or “DSUE” to the surviving spouse.  The extension referred to in the Revenue Procedure is “automatic”.

The Internal Revenue Code allows a decedent to pass his or her DSUE to a surviving spouse for the survivor’s use during his or her lifetime (for gifts) and at death.  The IRS has provided a procedure by which an executor of the estate of the first spouse to die may file a Federal Estate Tax Return (Form 706) and claim the DSUE even though the due date for filing such a Return (without extension) has long since passed.  The Return must include a computation of the amount of the DSUE.

The executor of the estate of the deceased spouse must elect portability of the DSUE amount on a Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, which must include a computation of the DSUE amount. Under Code Sec. 2010(c)(5)(A), a portability election is effective only if made on a Form 706 that is filed within the time prescribed by law (including extensions) for filing such return.

Probably in response to requests for “letter rulings” from the IRS requesting extensions of time to file a Form 706, otherwise not required except to elect portability, the IRS decided to provide for a new “automatic” extension for filing the Form so that the DSUE may be claimed by the surviving spouse or his or her estate.

The requirements below must be met in order to earn the extension.  If the requirements are met, the estate will receive an Estate Tax Closing Letter acknowledging receipt of the electing Form 706.

In order to qualify for the automatic extension:

1. The taxpayer must be the executor of the estate of a decedent who: (a) has a surviving spouse; (b) died after Dec. 31, 2010, and on or before Dec. 31, 2013; and (c) was a citizen or resident of the United States on the date of death.

2. The taxpayer is not required to file an estate tax return;

3. The taxpayer did not file an estate tax return within the time prescribed for filing an estate tax return required to elect portability; and

4. A person permitted to make the election on behalf of a decedent must file a complete and properly-prepared Form 706 on or before Dec. 31, 2014.

5. The person filing the Form 706 on behalf of the decedent’s estate must state at the top of the Form 706 that the return is “FILED PURSUANT TO REV. PROC. 2014-18 TO ELECT PORTABILITY UNDER Code Sec. 2010(c)(5)(A).”

Taxpayers who are not eligible for relief as outlined above may request an extension of time to make the portability election by request for a letter ruling.  However, the IRS has made it clear that the above procedure is to be followed if the estate meets the requirements set forth above.  If it is later learned that the estate was required to file Form 706 because of its size, the extension becomes void and the Return will be deemed NOT to be timely filed.

As a result of this Revenue Procedure, estates of deceased surviving spouses (the second spouse to die) may be able to claim the DSUE in the estate of the first spouse to die and then file a claim for refund if any tax was paid in the estate of the second spouse to die, subject to the time limitations for claiming a refund of the estate tax paid.

The Revenue Procedure does not contain any special rules for same-sex spouses who should rely on Revenue Procedure 2013-17 for a discussion of the handling of Returns for same sex married persons.

The decision as to whether an election should be made to “port” the DSUE should not be undertaken without the guidance of an experienced estate planning attorney.  The PK Law Wealth Preservation Attorneys are ready to assist you with the process.

   

This information is provided for general information only.  None of the information provided herein should be construed as providing legal advice or a separate attorney client relationship. Applicability of the legal principles discussed may differ substantially in individual situations. You should not act upon the information presented herein without consulting an attorney of your choice about your particular situation. While PK Law has taken reasonable efforts to insure the accuracy of this material, the accuracy cannot be guaranteed and PK Law makes no warranties or representations as to its accuracy.

New Year’s Resolution #1: Get Your Estate Plan In Order

The New Year is almost here and it’s time to put your estate planning on the top of your “to do” list.  If you don’t have an estate plan in place, now is the time to put one in place.  If you already have a plan, now is the time to do an estate plan review.  As time passes, many things in your life change, and those changes can have a drastic impact on your estate plan wishes.  Not sure where to begin?  Take a look at the list below. 

Do you have any assets?
Do you have children?
Are you married?
Are you divorced?

If the answer to any of the above is yes, and you do not have an estate plan, or you have not had your estate plan recently reviewed (within the past five years), then it is time to contact a PK Law Estate Planning Attorney to schedule a consultation appointment.  Click here to contact a PK Law Estate Planning Attorney or contact information@pklaw.com.

During the consultation appointment a PK Law Estate Planning Attorney will gather information about you, your family, your assets and your wishes.  They will review your estate planning options, identify the estate planning documents that will best fit your needs and tell you how much it will cost to prepare the documents. Not ready to make an appointment, join us for a PK Law Estate Planning Seminar.  Check our website for upcoming seminars.

Health Care Decision Making

If you become incapable of making your own medical decisions, it is critical to have planning in place so that medical providers and family members know and can implement your wishes.   This is especially important if you have a serious illness or a condition with potentially life-threatening complications.

In Maryland, there are two primary components to such planning.  The first is an Advance Health Care Directive.  Once completed by you, this document appoints one or more trusted individuals to act as your health care agent.

Your health care agent can act on your behalf when you cannot.  He or she can access your medical information, talk with your doctors and health care providers, and make medical decisions for you, based on your wishes as you have made them known. 

The second part of your health care decision planning is the Maryland Medical Orders for Life-Sustaining Treatment (MOLST).  The MOLST is a medical order designed to make your wishes regarding end-of-life care and life-sustaining measures known to health care professionals.  The MOLST covers a number of very specific situations, including cardiopulmonary resuscitation (CPR), artificial ventilation, blood transfusion, hospital transfers, medical workups, antibiotics, artificially administered fluids and nutrition, and dialysis.

Since the MOLST is a medical order, you do not sign it.  Only a physician or nurse practitioner may sign it after discussions with you, if you are competent to make decisions, or if you are incapacitated, after discussions with those authorized to act for you or based upon information contained in your Advance Health Care Directive.

You will need a MOLST if you are admitted to certain health care facilities, including assisted living programs, home health agencies, hospices, kidney dialysis centers, and nursing homes.   Hospitals must complete a MOLST for you if you are being discharged to another hospital or to one of these types of facilities.  A completed MOLST will travel with your medical records and can freely pass from one facility to another.

Together, a MOLST and an Advance Health Care Directive can help make sure your wishes regarding your health care are carried out.

Cheryl A. Jones is an attorney in the Wealth Preservation Department of PK Law inTowson, MD.  She can be contacted by email at cjones@pklaw.com or 410-769-6141.

By:  Cheryl A. Jones, Esquire                                                          
cjones@pklaw.com

 

This information is provided for general information only.  None of the information provided herein should be construed as providing legal advice or a separate attorney client relationship. Applicability of the legal principles discussed may differ substantially in individual situations. You should not act upon the information presented herein without consulting an attorney of your choice about your particular situation. While PK Law has taken reasonable efforts to insure the accuracy of this material, the accuracy cannot be guaranteed and PK Law makes no warranties or representations as to its accuracy.

“Magic” Words To Ensure and Ex-Spouse Remains in Will

Attorneys often encounter situations in which someone makes a will or designates a beneficiary naming their spouse as the heir or beneficiary, separates from their spouse, fails to make changes to their will or beneficiary designation, divorces, and then dies.  In the case of beneficiary designations, there is virtually no way to prevent a former spouse from taking title to the property unless the deceased was diligent in making a change in beneficiary designation. 

However, in the case of inheritance by will the Maryland legislature provides relief to “non-diligent” former spouses by means of a statute contained in the Estates and Trusts article of the Annotated Code of Maryland.  A recent case closely decided by Maryland’s highest court, albeit with a dissent, makes clear that if one wishes to allow their former spouse to inherit, they had best make that clear.

The facts of Nichols v. Baer, decided October 22, 2013 were simple.  Husband and wife were married in 1965 and lived together until 1996, when they agreed to voluntarily separate. Their separation agreement provided that either party could bequeath his or her property to the other notwithstanding their mutual releases: “either party to this Agreement may, by his or her Last Will and Testament, give, devise or bequeath any part or all of his or her estate to the other.”  In 2003, Husband while he and his spouse remained married, albeit living separately, executed his Last Will and Testament, bequeathing his residuary estate to his wife, by name and not by reference to their then status as husband and wife.  Approximately three years later, they were granted an absolute divorce and within months, husband died. The will was admitted for probate, and husband’s nephew petitioned to be the Personal Representative of the estate, with he and his two siblings identified as the residuary beneficiaries. The former spouse of the decedent challenged the appointment and identification of beneficiaries and was successful, arguing that she was the primary beneficiary and the nephew and his siblings were contingent beneficiaries.  The nephew argued that Section 4–105(4) of the Estates and Trusts Article of the Maryland Annotated Code revoked the bequest to the former spouse because the husband’s will did not specifically mention the divorce (and his intention to allow her to inherit) in spite of the language quoted above allowing each spouse to leave all or part of their estate to the other.

Maryland’s highest court ruled that revocation of a bequest to a former spouse is “…effective upon the occurrence of the triggering factor, the subsequent divorce, …, unless there is ‘provided in’ the will or the [divorce] decree a statement to the contrary, that the decedent intended the bequest even though they were divorced.”  The Court stated that such a position was in accordance with the Legislature’s intent to save divorced spouses from the unintended consequences that flow from not changing their wills after their divorce, which most individuals wish to do.

While this ruling does help those individuals whose divorce has been finalized, it does not apply to individuals who are separated, but not legally divorced.  Those individuals should contact a competent estate planning attorney to have their wills revised to reflect their intentions. 

Helen M. Smith is an Estate Planning Attorney with PK Law’s Wealth Preservation Group.  She can be contacted by email at hsmith@pklaw.com or by phone at  410-339-5789.

By:  Helen M. Smith, Esquire                                                          
hsmith@pklaw.com

 

This information is provided for general information only.  None of the information provided herein should be construed as providing legal advice or a separate attorney client relationship. Applicability of the legal principles discussed may differ substantially in individual situations. You should not act upon the information presented herein without consulting an attorney of your choice about your particular situation. While PK Law has taken reasonable efforts to insure the accuracy of this material, the accuracy cannot be guaranteed and PK Law makes no warranties or representations as to its accuracy.