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ESTATE PLANNING 101:
WILLS, TRUSTS,
AND POWERS OF ATTORNEY:
WHAT SOCIAL SERVICES PROFESSIONALS
NEED TO KNOW TO SERVE THEIR CLIENTS
JANNA DUTTON, ATTORNEY
GOVERNOR'S CONFERENCE ON AGING, 2011
Issues Involved in Planning for Older Age
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Financial Decision-Making and Management
Health Care Decision-Making and Management
Estate Planning
Long-Term Care Costs
Power of Attorney
The Power of Attorney for Property allows an individual, referred to as the
"principal" in the document, to designate another person, known as the "agent"
to act for the principal as described in the document for purposes of financial
and other property transactions. The agent stands in the shoes of the principal
and is then legally authorized to act.
Advantages
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Durable -effective beyond mental incapacity
Revocable
Amendable
Low cost to set up
Power of Attorney for Property
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Requires “legal capacity” to execute by principal
Agents to act one at a time – no co-agents
Can be customized to situation
Can be effective immediately or “spring” into
action upon occurrence of incapacity
Is revocable and amendable (requires capacity)
Agent can delegate authority to others
Agent entitled to reasonable compensation
Power of Attorney for Property
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Must be witnessed; limits who may act as witness
Executing new power of attorney for property does
not revoke old powers unless spelled out
Agent must act in accordance with principal’s known
expectations otherwise in principal’s best interests
Powers of agent defined in statute unless modified
in document – very broad
Agent must keep record of receipts, disbursements,
significant actions as agent
Power of Attorney for Property
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Duty to Account
 Agent
must provide upon request a copy of receipts,
disbursements, significant actions to principal or
fiduciary agent on behalf of principal, elder abuse
agency, ombudsman, or court
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Standard of Actions
 Agent
must act in “good faith” using “due care,
competence and diligence” in acting for principal
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Gifting
 No
authority to Gift unless added at paragraph 3
Power of Attorney for Property
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New statutory changes define who may go to court
to protect principal: principal, agent, guardian,
spouse, parent, descendant, heir, death beneficiary,
elder abuse agency, ombudsman, caregiver, or
anyone demonstrating interest in principal’s welfare
Attorneys fees and costs to elder abuse agency
Duty to Preserve Estate Plan
 The
agent shall take the principal’s estate plan into
account insofar as it is known to the agent and shall
attempt to preserve the plan.
Health Care Power
of Attorney Document
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A Power of Attorney for Health Care allows persons
to legally designate other persons to make
enforceable health care decisions, including refusing
and withdrawing life sustaining treatment, in the
event that they are unable to make their own
decisions.
Powers of Health Care Agent
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Authority to make any and all decisions concerning
personal care, medical treatment, hospitalization
and health care and to require, withhold or
withdraw any type of medical treatment or
procedure, even though death may ensue
Authority to access medical records
Authorize an autopsy and direct the disposition of
remains
Power of Attorney for Health Care
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May be customized to values of principal
Revocable (even without capacity) and amendable
May name only one person to act at a time
Agent to use substituted judgment in making
decisions
Although agent has no duty to act, if agent does
act, must be with due care for principal
New statute is clear that signing new power revokes
old powers
Powers that the Health Care Agent
does not have include:
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does not have custody of the principal
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cannot control visitation
Possible Limits on the
Health Care Agent’s Powers
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Examples:
 may not have authority to consent to certain
treatments contrary to the principal’s religious belief
such as blood transfusions
 may not have authority to consent to life-sustaining
treatment
Considerations
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Choice of agent
Communication with agent
Trusts
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Established by a transfer of property to yourself or to another
person to hold for your benefit.
The powers and responsibilities of a trustee
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Similar to those of an agent under a Power of Attorney for Property
Controlled and limited by the terms of the trust document.
Example: Eliza transfers her house and her brokerage account to
herself as trustee of the Eliza Living Trust. In the trust
document, Eliza designates her son, Elliot, as successor trustee if
she becomes disabled.
Common Trust Disability provision
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2.2 Determination of Incapacity. I shall be
incapacitated if I am under a legal disability or am
unable to give prompt and intelligent consideration
to financial affairs.
(a) Written Determination. The determination of
my inability shall be made in writing, signed by my
personal physician and my children who are then
living and able to so act, and delivered to the
trustee. The trustee may rely conclusively on that
writing.
Trusts as Disability Planning Tools
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Good disability tool:
 If
trustworthy individual or corporate fiduciary is
named as trustee
 If all assets are transferred to trust before disability.
 To protect finances after disability
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authority or protection over personal affairs.
Guardianship Court has no jurisdiction over Trusts
Trustee Accountings \Accountability
Common Trust Provision:
7.2Accountings. Upon written request, the trustee
shall send a written account of all trust receipts,
disbursements, and transactions and the property
comprising the trust to each income beneficiary and,
at the option of the trustee, to the future
beneficiaries of the trust. A “future beneficiary” of a
trust is a person to whom the assets of the trust
would be distributed or distributable if the trust then
terminated.
Illinois Trust and Trustees Act
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Requires the Trustee to provide annual accountings
to the income beneficiaries of the trust, and provide
an inventory of trust assets. The Trustee must make
trust books and records available for inspection by
the beneficiaries.
Problem: Incapacitated beneficiaries
Duties of a Trustee
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Must follow the terms of the trust document
Loyalty to beneficiaries
Protect and invest trust assets
Provide inventory and accountings to beneficiaries
No self dealing
No comingling of assets
Trust Protectors
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Can be included in trust documents
Can be empowered to act at incapacity of primary
beneficiary
Can be empowered to review and approve trust
accountings, to remove and replace a trustee, to
take legal action against a trustee
OBRA Individual Payback Trust
Requirements
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Irrevocable
Established by parent, grandparent, court or guardian
Beneficiary under age 65 and disabled
Any state which paid out Medicaid benefits on behalf of
beneficiary is paid back at the death of the beneficiary
before any other payment except taxes and reasonable
expenses of administration.
If proceeds of trust are from personal injury action, the
Department lien must be paid off before transferring the
proceeds to the trust.
OBRA Pooled Trust Subaccount
Requirements
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Irrevocable
Established by parent, grandparent, court or guardian or the
beneficiary him or herself
Beneficiary disabled (may be over 65)
Payback to any State providing Medicaid unless retained by
the Trust
If States are paid back at the death of the beneficiary must
be before any other payment except taxes and reasonable
expenses of administration.
Last Will and Testament
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A Last Will and Testament specifies the persons or
organizations to receive your assets after your
death and also designates a person who is
responsible for effectuating the terms of your will –
an executor.
Does not avoid probate. Whether or not your
estate requires probate depends on the ownership
of your assets.
Duties of Executor
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Executors have duties upon court appointment
No powers or duties during lifetime of testator
Once appointed, duties to notify creditors, heirs and
beneficiaries
Collect and protect estate assets
Must defend the Will
Must pay final expenses of decedent, file tax
returns, pay claims
Distribute according to terms of Will
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More than 50% of individuals
today who are 65 years old will
need some kind of long term care
during their lifetimes.
Plan for Long Term Care
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If you needed assistance with Activities of Daily Living, how would
you access that assistance?
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Driving
Meal Preparation
Bathing
Toileting
Dressing
Transferring from bed to chair, etc.
How would you pay for it?
Paying for Long Term Care
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Private Pay (Medicare provides limited long term
care coverage)
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Long Term Care Insurance
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Medicaid
DUTTON & CASEY, P.C.
ADVOCATES FOR OLDER ADULTS,
PERSONS WITH A DISABILITY, AND THEIR FAMILIES.
Attorneys:
Janna Dutton, Kathryn C. Casey, Melissa Howitt, Lara A. Duda
Appointments Available In:
Arlington Heights, Chicago, Skokie, and Vernon Hills, Illinois
Phone:
E-mail:
312-899-0950 or 847-261-4706
contact@duttonelderlaw.com
www.duttoncaseylaw.com
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THANK YOU
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