Many people think that estate plans are for someone else, not them. They may rationalize that they are too young or don’t have enough money to reap the tax benefits of a plan. But as the following list makes clear, estate planning is for everyone, regardless of age or net worth. (For more information on estate planning, see our Estate Planning section.)

1. Loss of capacity. What if you become incompetent and unable to manage your own affairs? Without a plan the courts will select the person to manage your affairs. With a plan, you pick that person (through a power of attorney).

2. Minor children. Who will raise your children if you die? Without a plan, a court will make that decision. With a plan, you are able to nominate the guardian of your choice.

3. Dying without a will. Who will inherit your assets? Without a plan, your assets pass to your heirs according to your state’s laws of intestacy (dying without a will). Your family members (and perhaps not the ones you would choose) will receive your assets without benefit of your direction or of trust protection. With a plan, you decide who gets your assets, and when and how they receive them.

4. Blended families. What if your family is the result of multiple marriages? Without a plan, children from different marriages may not be treated as you would wish. With a plan, you determine what goes to your current spouse and to the children from a prior marriage or marriages.

5. Children with special needs. Without a plan, a child with special needs risks being disqualified from receiving Medicaid or SSI benefits, and may have to use his or her inheritance to pay for care. With a plan, you can set up a Supplemental Needs Trust that will allow the child to remain eligible for government benefits while using the trust assets to pay for non-covered expenses.

6. Keeping assets in the family. Would you prefer that your assets stay in your own family? Without a plan, your child’s spouse may wind up with your money if your child passes away prematurely. If your child divorces his or her current spouse, half of your assets could go to the spouse. With a plan, you can set up a trust that ensures that your assets will stay in your family and, for example, pass to your grandchildren.

7. Financial security. Will your spouse and children be able to survive financially? Without a plan and the income replacement provided by life insurance, your family may be unable to maintain its current living standard. With a plan, life insurance can mean that your family will enjoy financial security.

8. Retirement accounts. Do you have an IRA or similar retirement account? Without a plan, your designated beneficiary for the retirement account funds may not reflect your current wishes and may result in burdensome tax consequences for your heirs (although the rules regarding the designation of a beneficiary have been eased considerably). With a plan, you can choose the optimal beneficiary.

9. Business ownership. Do you own a business? Without a plan, you don’t name a successor, thus risking that your family could lose control of the business. With a plan, you choose who will own and control the business after you are gone.

10. Avoiding probate. Without a plan, your estate may be subject to delays and excess fees (depending on the state), and your assets will be a matter of public record. With a plan, you can structure things so that probate can be avoided entirely.

We rely heavily on cars in our society; in many places, they are the only convenient link to the outside world. Unfortunately, as people age, driving can become more difficult and more dangerous. The elderly drive less, but have more accidents per mile than younger drivers. This is partially because elderly individuals are more likely to be affected by poor eyesight, chronic disease, and medications that might impair driving.

States vary widely on how they treat older drivers. While no state will revoke a driver’s license based only on the driver’s age, some states put restrictions on license renewals for elderly drivers. Other states do not differentiate based on age, and still others have fewer requirements for older drivers.

The states that put restrictions on license renewals do so in a number of ways. Fourteen states (Arizona, Colorado, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Maine, Missouri, Montana, New Mexico, Rhode Island, and South Carolina) have accelerated renewal periods for people over a certain age. These periods can vary widely. For example, Colorado requires everyone age 61 and older to renew their license every 5 years as opposed to every 10 years for people under age 61. Illinois has a 4-year renewal period, but the period shortens to 2 years if the driver is between the ages of 81 and 86, and then to 1 year if the driver is age 87 or older.

Six states (Florida, Maine, Oregon, South Carolina, Utah, and Virginia) and the District of Columbia require elderly drives to take a vision test when renewing a license. Another way states monitor older drivers is by not allowing drivers over a certain age to renew their licenses by mail. Five states (Alaska, California, Colorado, Louisiana, and Montana) restrict mail renewals. Finally, two states (Illinois and New Hampshire) require a road test if the driver is 75 years old or older.

While not all states put restrictions on license renewals, all state Departments of Motor Vehicles, Highway Safety, or Transportation have an office where a family member or doctor can make a referral about an unsafe driver. The state office will investigate the claim, and the driver may have to take a road test. Doctors are generally not required to report patients they feel are unsafe. In California, however, doctors must report demented patients and in California, Delaware, Nevada, New Jersey, Oregon, and Pennsylvania doctors must report patients with epilepsy.

Two states have laws that actually put fewer restrictions on older drivers. In Tennessee, drivers over age 65 do not have to renew their license. In North Carolina, drivers 60 and older are not required to parallel park in the road test.

For information on state laws about older drivers, click here.

For information on confronting an unsafe driver, click here.

Have you considered your pet or pets when planning your estate? If not, you should, according to The Humane Society of the United States, the nation’s largest animal protection organization.

“Since pets have shorter life spans, people don’t think to include them in their estate plans,” says Anne Culver, Director of Disaster Services for the Society. “But animals left homeless when an owner has failed to make adequate provisions for their care are distressingly common in animal shelters around the country.”

The Humane Society says that all too often, people erroneously assume that a long-ago verbal promise from a friend, relative or neighbor to provide a home for a pet will be sufficient years later. Even conscientious individuals who include their pets in their wills may neglect to plan for contingencies in which a will might not take effect, such as in the event of severe disability or a protracted will challenge.

To help pet owners ensure that their wishes for their pets’ long-term care won’t be forgotten, misconstrued or ignored, the Farr Law Firm inserts language recommended by the Humane Society in all our Wills and Trust for clients who indicate they have pets.

A court decision in Virginia highlights the potential dangers of relying on joint accounts for estate planning. Caine v. NationsBank, N.A. (Va. Sup. Ct., No. 002615, Sept. 14, 2001).

In May 1989, Dr. Andrew A. Freier opened a joint checking account in his name and that of his daughter, Susan Freier Caine, at NationsBank. In 1998, when Dr. Freier’’s health began to decline, his wife asked the bank to add her to the account so that she could pay bills. Although she was told by a bank employee that the signatures of all parties to the account would be required to make such a change, Mrs. Freier returned a new signature card to the bank that contained the signatures of only herself and her husband. The bank nevertheless added Mrs. Freier to the account.

From January 2 through February 3, 1998, Mrs. Freier wrote thirty-five checks totaling $100,181.13 on the account, including one check for $75,000, which was deposited to her own account on January 27, 1998, the day Dr. Freier died.

Mrs. Caine sued the bank for $100,181.13 plus interest, claiming that the bank breached its contract with her when it added Mrs. Freier to the joint account without her permission. The trial court ruled in favor of the bank, holding that Virginia law allows a new owner to be added to a joint account without the consent of all parties. Mrs. Caine appealed.

The Virginia Supreme Court also sided with the bank. In reaching its decision, the court focused on the wording of the joint account contract, which states that “[e]ach owner appoints all other owners as his or her agent to endorse, deposit, withdraw and conduct business for the account.” The court said that “conduct business for the account” can include adding a party to the account.

Joint accounts have been viewed as “the common person’s estate plan” because they look like an easy way to distribute assets and avoid probate. But, as this case illustrates, there are serious risks involved. This is why most elder lawyers suggest that clients consider other methods of managing their finances, such as powers of attorney and revocable living trusts.

Here’s another story about a person who tried to create an estate plan without an attorney’s help, and ended up causing huge problems for his beneficiaries.

A California man wrote his own will, in which he divvied up his real estate among two friends. He also stated that he wanted 50% of his “money” to go to one friend, and 50% to the other. Under state law, anything that wasn’t specifically provided for in the will would go to his cousins.

When he died, the man had, in addition to cash, various bank accounts and certificates of deposit, a money market fund, a Fidelity mutual fund, some U.S. treasury bills, and some U.S. savings bonds.

The friends and the cousins then began to argue over what “money” meant. Did it include the savings bonds, the mutual fund, etc.? Were these items “money”?

A court case ensued, which eventually went all the way to the California Court of Appeals, with both sides spending a lot of time, money and effort to untangle the will.

A few months ago, the court decided that the man had intended to leave all the various financial instruments to his friends, not his cousins. But had the man simply gone to a lawyer, who would have known to draft the will more carefully, he could have saved his friends years of anxiety and court costs.

A new federal law on medical privacy is having a big effect on estate planning, and many people should consider reviewing their documents as a result. The law is the Health Insurance Portability and Accountability Act, or HIPAA, which went into effect last year. Many people have become familiar with HIPAA because their doctors are making them sign privacy statements, which are required by the law. The problem is this: A great many estate planning documents say that one person can make decisions for another person if that person becomes “incapacitated” — meaning a doctor determines that they are disabled and unable to handle their affairs. But under HIPAA, doctors have to respect patients’ privacy and can’t tell just anyone about a patient’s condition. In fact, doctors who improperly reveal someone’s medical details could be fined, or even go to jail. So it’s very possible that even if a person does become incapacitated, a doctor will be legally barred from saying so — and therefore no one else will be allowed to make decisions for them. This can happen in many situations. For instance:

• Many people have signed health care proxies, which allow a friend or relative to make medical decisions for them if they become incapacitated.

• Many people have signed “powers of attorney” that allow a friend or relative to make financial and legal decisions for them if they become incapacitated.

• Many trusts provide that a trustee can be removed if he or she becomes incapacitated.

• In many partnerships (including family limited partnerships), a managing partner can be removed if he or she becomes incapacitated.

All of these provisions could become useless if a person becomes incapacitated but a doctor is not allowed to say so. In general, HIPAA allows a doctor to share a patient’s medical information only with the patient and with someone whom the patient has specifically authorized to receive it. So with health care proxies and durable powers of attorney, it’s often a good idea to revise the document to say clearly that a person’s friend or relative is authorized under HIPAA to obtain medical information about whether the person is incapacitated.

In many cases, the way the document is already written is technically okay, and should allow a friend or relative to obtain the information. However, many doctors are worried about HIPAA and very cautious about it. If the document is not absolutely clear, a doctor might hesitate to disclose the information, or a hospital might want to consult an attorney before revealing the facts. This could cause a delay, which could make it impossible for a friend or relative to take actions quickly to protect a person’s interests. Therefore, it’s often good to revise the documents and refer specifically to HIPAA.

If you would like to review any of your documents in light of these medical privacy rules, we would be happy to help you.