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A Legal Wake Up Call for Boomers

Only as old as you feel? Don't bet your loved ones' financial well-being on it

We Boomers like to think were going to live forever. I cant tell you how many times Ive heard fellow Boomers say, Im sixty but I feel like Im 20. We may feel like were 20, or 30, but in reality, we are, as they say, getting up there. Wishing otherwise wont make it so. Waiting until we feel old before we get our legal affairs in order could put the lives of our spouses and children in financial jeopardy.

As pointed out in the article, A Spouses Death Often Leaves Tangled Finances, 32% of women 55 and older are widowed compared to nine percent of men.

This statistic reminds me of a 49-year-old man who died suddenly without telling his wife where his bank accounts were kept, or under what name. He unwittingly left her penniless. California attorney Mark Y. Umeda had a recent client who thought she was left without anything when her husband died only to discover he had stashed $1.4 million worth of stock certificates in a shoebox in their closet. Lucky for her, she didnt toss out the shoebox without first looking into it.

Umeda admits that practically every new client he sees comes into his office because of a trigger incident such as a spouse dying and the surviving spouse wanting to get things set up.

For Boomers facing the increasing likelihood of heart disease, cancer, and even dementia, proactively getting the legal documentation that we all need in order now is in everyones best interest. Planning rather than leaving everything to chance will reduce stress and since stress is a known contributing factor to such life-threatening conditions as heart disease, knowing you have the legal documents you need could help lower your stress level, which can only be a positive thing.

Basic legal documents Boomers need

Here are the basic documents that you should consider securing that relate to your property and assets as well as to the possibility that your physical or mental health will decline to the point that you need someone else (someone to whom you give the power of attorney) to make decisions for you as well as a document that summarizes your basic healthcare wishes:

• revocable or irrevocable trust;
• will;
• durable power of attorney; and
• health care directives

Revocable or irrevocable trust

You may think you need a will, and you do, but there might even be a better way. Every state is unique but the California lawyers I spoke with recommend a revocable trust as a way to save your survivors the time and money of going to probate court as well as providing some possible tax benefits.

Heres how it works. All your assets are put into a revocable trust your house, your stocks and bonds, and other property. Upon your death, it becomes an irrevocable trust; the trustee you have designated immediately administers the trust. All the assets in the trust are available to your beneficiaries. There are no additional costs beyond what you had to pay to set up the trust initially, which is around $2,000 to $3,000 (although this estimate may change based on the complexity and number of assets of the trust as well as if there are administration fees to the trustees).

That might sound like a lot of money but consider this: although a will may cost only $150 to $400 to have an attorney prepare, after you die, if your assets are not in a trust, your will has to go through probate court which could take up to a year. During that time, your assets are frozen, except for assets that were jointly held. Your surviving spouse will not be able to get access to those frozen assets.

That could mean that in order to get money to live on, your surviving spouse will have to petition the judge to get whats called a family allowance, or some funds from the estate until the estate is through probate. Furthermore, in most states, the probate process takes a percentage of the estate. In California, for example, if you leave an estate that is worth $300,000, 4-10% goes to the probate court, or about $18,000, with around $9,000 going to the lawyer that handles the case.

Attorney Umeda says, Every entity is different, whether its the federal government or the state of California, so its good to sit down and talk to professionals for tax purposes. In general, taxes are determined by the net value for a trust but for probate, the taxes are based on the gross value. Furthermore, a trust keeps your financial affairs private; a will that goes to probate becomes public.

That $2,000 to $3,000 to set up a revocable trust may actually save you thousands of dollars in the long run. But be careful about getting scammed. (See North Carolina Shuts down Living Trust Scheme). Always deal with a trusted knowledgeable attorney in these matters.

Why, you might ask, would anyone want be reluctant to set up a revocable trust if there are so many benefits to someones survivors and beneficiaries? Umeda explained that some clients feel their beneficiaries, whether its a surviving spouse, children, or a favorite charity, are lucky theyre getting anything from their estate and theyd rather avoid paying the fees to set up a trust.

But not so fast. Before you get the impression that a revocable trust is the way to go for you, consider that there is also something called an irrevocable trust which is set up and administered differently from a revocable trust.

As New York-based attorney John Wagner, who specializes in wills and trusts, among other civil matters, says, The bottom line is, there is no one size fits all but a trust is a very useful tool under the proper circumstances.

Adds Steven R. Wagner, an attorney in practice with his brother at Wagner Davis P.D., It depends on the nature of the assets, the family composition, family needs, and the willingness of the individual, the Boomer, to give up control over the assets.

Do you need a revocable trust, an irrevocable, or just a will? It depends on so many factors that Boomers need to seek out an attorney who specializes in these issues to help make the right decision for your particular set of circumstances. (See the section below on how to find an attorney if you do not already have one.)

You still need a will

Even if you set up a revocable or an irrevocable trust, it is recommended that you have a will as a backup. California attorney John N. Gulick, Jr., who specializes in wills and trusts, Gulick suggests having what he calls a pour over will, meaning, anything that you did not put into the trust you make sure is covered in your will.

There are four basic kinds of wills: an oral will, a holographic will (that is handwritten), a will that is drawn up by an attorney on your behalf; and a will that is created by using software, forms in a book, or through an online service, like Legal Zoom.

Of these four methods, working with an attorney is preferable because you have someone you can discuss things with. However, if you want to do a will yourself, 25 states recognize a holographic or handwritten will and it does not even have to be witnessed. A holographic will, writing out what your wishes are, and dating and signing it, is better than no documentation at all. Just remember to keep it in a safe place such as a safe deposit box at your bank, and then of course, make sure your spouse or next-of-kin knows where it is.

Although such a will is acceptable, it could be more open to questions and contests than a will that is drawn up in a more traditional way with an attorney and is witnessed.

Oral wills are acceptable in only the most restricted of circumstances such as in an emergency situation, when someone is about to die, or when someone is in active service in the military and preparing a written will is improbable.

There is a new trend toward video wills but this is simply the reading of the will by the person before he or she dies. It is more of a personal touch to the reading of the will or done for theatrics, rather than any legal reasons.

If you only have a will and you do not have a trust, upon your passing, the will has to go through probate court. If you have a trust and a will, it does not have to go through probate court.

Durable power of attorney

The Durable Power of Attorney (DPOA) is a legal document that gives someone the power to make decisions on your behalf if you are no longer able to because of mental or physical incompetence. The document is meaningless as long as you are of sound mind and body. But setting up the power of attorney while you are still healthy and competent, you are the one making the choices as to whom you give this auspicious power, whether it is a spouse, adult child, an attorney, family friend, sibling, or extended family member.

Carolyn L. Rosenblatt practiced nursing for ten years before becoming a lawyer. In her book, A Boomers Guide to Aging Parents, she writes: Some such documents are valid at the time of signing them. Others require that a physician or perhaps two doctors verify that the elder is no longer able to handle finances without help. Her advice applies to Boomers getting a DPOA for themselves as well as for their aging parents. As Rosenblatt suggests: We recommend that everyone 60 years old and above get this document done and store it in a safe place with other important papers such as a will, trust, deed, or birth certificate.

Health care directives/DNRs

Health care directives cover what your wishes are if you should get sick. It could cover whether or not you want "heroic" measures to be taken if you become ill, as well as the use of a feeding tube to keep you nourished and alive (generally not considered heroic). It could also cover whether you want your organs donated, even specifying which organs.

A health care directive is different from a DNR (do not resuscitate) order. Attorney Umeda does not recommend a blanket DNR for typical Boomers. He explains: What if your DNR is posted on your refrigerator with a magnet. A paramedic sees you are in cardiac arrest and doesnt know what to do.

Dont sign a DNR until you know for sure what your medical situation is and thats usually when you get to the hospital. Or if youve been diagnosed with some form of terminal illness such as cancer and you have less than six months to live. You might want to sign a DNR at that point because youd rather die of a heart attack in a month than die of cancer in six months. But thats a big exception to the general rule, Umeda said.

Let your loved ones know where everything is

Whether its a shoe box, a file drawer, your lawyer's office or in a safety deposit box, you need to let your loved ones know where all the key documents are being kept. That includes the passwords to your computer and any documents that your survivors might need to have handy including marriage certificate, divorce decree, birth certificates, military discharge papers, insurance policies, title to cars, deed on the house, and if you have a business, any documentation that someone who will take over, run, or sell the business will find useful.

Sue Moss is a matrimonial and family law attorney with Chemtob Moss Forman & Talbert, LLP of New York City. In discussing these key documents, Moss suggests that your attorney should keep a copy and always have a copy in a safe that is fire resistant or in a safe deposit box.

Every state is different

Remember that this article only provides very basic information; it is not meant to substitute for legal advice, which can only be provided by a licensed attorney with expertise in wills, trusts, estates, and elder care concerns. Furthermore, every state has its own laws so you need to consult an attorney in the state where you currently reside. This article has only covered general considerations that Boomers might find useful.

Finding a lawyer you can trust

Most people find a lawyer the way they find a doctor or dentist; through a referral from a neighbor or friend. But if you are new to a community, there are other ways to find a lawyer, including an nearly infinite number of online sites claiming to be directories. However, many of these sites are really in the "paid lead" business; they extract a lot of personal information from you and many are more than a little vague about what they do with it. Some that we checked did not even have a privacy policy.

Most knowledgeable attorneys and consumer advocates recommend that you contact your local or state bar association referral service. These services are trustworthy, unbiased, confidential and free. They will provide you with the names and contact information of attorneys in your area who have expressed an interest in handling your type of case. Most bar referral services offer a discount or guaranteed rate for the initial consultation with the lawyer you choose.

To find a complete national listing of local and state lawyer referral services, check the American Bar Association Web site, which contains lots of other useful information that is completely trustworthy and unbiased.

As a final safety measure, check's legal services section to see what other consumers have said about their lawyers.

Peace of Mind

So all you Boomers, who are between the ages of 46 and 64, give yourself some peace of mind and take the time now, while youre relatively healthy and of sound mind, to get your affairs in order so there are no surprises down the road. And dont wait until you feel old to do it. Youre old enough now.




  • AARP Crash Course in Estate Planning. Updated edition. New York: Sterling Publishing Company, 2008.
  • Randolph, Mary. 8 Ways to Avoid Probate. 7th edition. Berkeley, CA: Nolo Press, 2008.
  • Understanding Power of Attorney., March 20, 2005.

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