News

15 Jun

Death and Credit – Important Info You Need to Know

When a family member passes away, there are certain steps that should be taken to alert the passing to the major credit reporting agencies and to assess whether a freeze, or lifting a freeze, on their credit is needed.

Swift action is important when it comes to a decedent’s credit. Why? Because if the major credit reporting agencies, along with the financial institutions where your deceased family member had open checking accounts, saving accounts, retirement accounts, etc. are not timely notified, your loved one’s accounts would remain open and could heighten the risk of identity theft and other issues. Suffice it to say, when someone passes on, their credit reports aren’t closed automatically. There needs to be action taken by a personal representative to ensure the accounts are closed properly.

What Happens When Credit Reporting Agencies are Notified of a Death

Credit reporting agencies are notified when someone passes on in one of two ways: (i) they receive a notice from the Social Security Administration or (ii) they are notified by the executor of the decedent’s estate.

Regarding the Social Security Administration, in most instances, the funeral director will notify the SSA of the death. However, to ensure this done, someone will need to give the decedent’s Social Security Number to the funeral director. From there, the SSA will inform the credit reporting agencies and lenders.

Once the three major credit bureaus (i.e. Equifax, Experian and TransUnion) are notified someone has passed on, their credit reports are sealed, and a death notice is placed on them.

Of the two, the most effective and efficient notification option is having an estate executor notify the reporting agencies. This will help expedite the sealing and death notice process, rather than waiting for a large government beauacracy to accomplish the notification.

How an Estate Executor Should Notify Credit Reporting Agencies of a Death

If you are the executor of an estate or other court-appointed designee, here are the steps to take to notify the credit reporting agencies of a death:

1. Contact each of three major credit bureaus and ask a representative what needs to be done to have a death notice placed on the decedent’s credit reports. A death notice flags a person’s credit reports as “deceased – do not issue credit.” If someone attempts to use the deceased person’s information to apply for credit, the notice should be displayed informing the creditor the person is deceased.

2. Make sure to compile necessary legal and financial paperwork, including verification that you are an authorized representative of the decedent empowered to initiate the death notice request. The documents necessary to get the process started will vary, based on your relationship with the deceased and based on the credit bureau. In most instances, a credit reporting agency will ask for the following information:

  • The decedent’s full legal name
  • The decedent’s Social Security number
  • The decedent’s date of birth
  • The decedent’s date of death
  • An official copy of the death certificate
  • Copies of any required legal documents
  • Your full name
  • Your address (to send confirmation of death notice placement)

If you are also requesting a copy of the decedent’s credit report, you will need a copy of a government-issued ID, such as a driver’s license.

3. Submit the required documents to the credit bureaus. Consider making copies of everything you send and sending the documents via certified mail.

4. Review the decedent’s credit reports to get a better sense of what accounts are open, their status, the balances, etc.

What If a Credit Report Freeze Was in Place for a Minor and the Parents Pass On?

More parents are starting to put credit freezes on their children’s credit record because they are prime targets for identity theft via the web. So what happens if the freeze was initiated by the parents and they suddenly pass away? This interesting question was recently posed by one of my clients. He wanted to now who would have the authority to lift the freeze on his child’s credit report. Answer: In this scenario, the guardian selected by the parent via their estate plan would be vested with the authority to lift the credit report freeze.

Contact InSight Law Today

As you can see, there are numerous action items that need to be completed when someone passes away. The entire process can be quite daunting and overwhelming. This is why it makes sense to sit down with an experienced trust and estate planning attorney to discuss these scenarios, ways to streamline the process, and strategies for developing an effective estate plan that fits your unique situation. Contact InSight Law today to learn more.

17 May

Time to Re-Brand “Do Not Resuscitate”

Stories of hospitals being subjected to civil litigation for failing to intervene or, alternately, for wrongfully intervening to resuscitate a patient using advanced life support are quite common. These unfortunate incidents typically have at their core three central figures:  

  1. A dying patient;
  2. The dying patient’s family; and
  3. A healthcare professional who misunderstands the meaning of the term: “do not resuscitate.”

What Does “Do Not Resuscitate” Actually Mean?

The term “Do Not Resuscitate” (also referred to by its acronym DNR) means that a patient should not receive cardiopulmonary resuscitation (CPR) in the event of cardiopulmonary arrest. This is a situation where the patient is unresponsive, has no pulse and is not breathing (i.e. they have died).

Vague Terms Creates Confusion

Unfortunately, a wide array of healthcare providers and patients misinterpret a DNR order to mean that no life support should be given when there is evidence of clinical deterioration. Basically, this is a fancy medical term meaning a patient has not yet died but is rapidly getting sicker. In other instances, someone will mistakenly interpret a DNR to mean that there should be no intubation in order to place a patient on a breathing machine when their oxygen level plummets.

There is also concern that if someone has a DNR, it may result in reduced medical care in general. For example, a recent survey of more than 500 internal medicine residents revealed that doctors were less likely to pursue aggressive or invasive medical treatment when a patient had a DNR order in place, according to a great article published on The Hill.

Progression of Medical Terminology Highlights Need for Change

The evolution of medical terminology contributes to misunderstanding. CPR was first introduced in the 1960s and became standard of care for cardiopulmonary arrest. In the mid-1970’s, concerns that universal CPR might cause more harm than benefit for some patients led hospitals to develop policies allowing patients to forgo CPR, described as “orders not to resuscitate.”

In the 90s, the term “resuscitation” started appearing in medical literature to describe strategies to treat people with reversible medical conditions, such as IV fluids for shock from bleeding or infection. As the medical terminology surrounding treatments designed to intervene before arrest might occur effectively appropriated the term “resuscitation,” an unintended consequence is that the term “DNR” became ever more confusing to healthcare providers, patients, and their loved ones.

In an effort to try and address these misunderstandings, the Physician Orders for Life Sustaining Treatment (POLST) paradigm actually separated CPR from other forms of life-sustaining medical treatments. For example, POLST describes CPR as only being necessary “when the patient is unresponsive, has no pulse and is not breathing. This is similar to a do not resuscitate order, but a patient only has a DNR Order when they do not want CPR.”

Now is the Time to Re-Brand DNRs

An initiative is afoot to try and modify the terminology surrounding DNRs. Some people have suggested modifying the term to “Do Not Attempt Resuscitation” (DNAR) or “allow natural death” (AND). Another option is for a patient to have a document that simply states “No CPR.” The ability to designate a preference against CPR would make it more transparent to patients, families and medical providers what treatment, exactly, the patient wants withheld.

A full-on re-branding of DNRs would likely create administrative burdens for the state governments, hospitals, nursing homes, etc. needing to modify statutes, policies, forms and information technology. Nevertheless, healthcare systems make these types of modifications quite frequently. For example, the United States recently adopted a new diagnosis and treatment code categorization system in order to improve billing detail, which is expected to cost in excess of one billion dollars to fully implement. Officially eliminating DNRs from medical lingo and replacing it with a more appropriate term such as “No CPR” or “Allow Natural Death” is just as worthwhile. 

Have Questions About Your End-of-Life Care? Contact an Experienced Trust & Estate Planning Attorney with InSight law

The decisions concerning end-of-life care, including whether you prefer to be resuscitated, are extremely personal and should be respected by family, friends, and medical professionals. That is why it is important to retain the services of the right estate planning attorney who is able to explain your options and clearly communicate your preferences to your healthcare agent. A skilled and knowledgeable attorney can also help train your healthcare agent on how to communicate your preferences to healthcare providers. This is what effective counseling is all about. The legal team at InSight Law provides these services, and many more. Schedule a meeting with one of our team members today.

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Pros and Cons of a Revocable Transfer on Death Deed for California Residents

The California legislature enacted a law in 2016 that offered residents an alternative to keep their homes out of the costly and inefficient probate process. This alternative is known as a “revocable transfer on death deed.” This type of deed is sometimes referred to as the “poor man’s trust.” Why? Because it is a less costly way to transfer real property to a named beneficiary without having to create a full-fledged trust.

Limitations to a Revocable Transfer on Death Deed

There are some limitations associated with transferring real property through this type of deed. For example, the only forms of real property that qualify for a transfer through this deed are (i) a single-family home or condo unit, (ii) a single-family residence that sits on agricultural property of 40 acres or less, or (iii) the residence has no more than four residential dwelling units.

Advantages of a Transfer on Death Deed

There are many advantages associated with a  revocable transfer on death deed. For example, the filing and recording of the transfer on death deed is fairly cost effective and straightforward. This deed will protect your property from probate court, as long as your chosen beneficiary does not predecease you. Another advantage is, as the name implies, the deed is fully revocable during your life time so you can maintain control and ensure the property is passed on to the beneficiary of your choosing.

Disadvantages of a Transfer on Death Deed

Despite the many advantages associated with a revocable transfer on death deed, there are some disadvantages to consider. For example, your property will be subject to probate court if your beneficiary predeceases you and you lack an alternate estate plan. Another disadvantage is if you co-own property under a joint tenancy. In this situation, your joint tenant becomes the sole owner of the property upon your passing and has full control of the property, even if you created a transfer on death deed. Yet another disadvantage is the fact that if you leave your property to a beneficiary who is still a minor when you pass on, the beneficiary will not automatically receive your property. Instead, a court-appointed custodian will be granted control and management of the property until your beneficiary reaches legal age. Another issue that your real property may still be subject to Medi-Cal estate recovery if you were a recipient of Medi-Cal benefits.

Talk to an Experienced Trust & Estate Planning Attorney in California

As you can see, there are many factors to weigh when deciding whether it makes sense to create a revocable transfer on death deed. To ensure you are making the best decision for your family, take the time to sit down with an experienced and knowledgeable trust & estate planning attorney who is familiar with California law.

 

Dying with Debt – Who Is on the Hook to Pay It Back?

Debt is something many American grapple with. In fact, the average U.S. household with credit card debt carries close to $7,000 in revolving balances, or balances carried from one month to the next, according to NerdWallet.

Given the prevalence of debt in our society, an important question needs to be answered: “If you die with an outstanding debt (whether it be a credit card, personal loan, student loan, mortgage, etc.) who or what will be responsible for paying it back?”

The laws pertaining to debt after death vary by state so there isn’t a single answer to this question. Nevertheless, in general, people do not inherit a loved one’s debt. For example, a son or daughter would not be responsible for the debt of a parent, unless they cosigned a loan. An exception to this general principle is in states that have “filial responsibility” laws related to children of aging seniors.

Can I Just Run Up My Balances Before Passing Away and Leave the Credit Card Company with the Bill?

When someone learns that their children may not be on the hook to repay their debts, they think, “well, I guess this means I can spend like a drunken sailor before I pass on.” Not exactly. Your estate is responsible for paying off any balances you owed upon your passing. If your estate goes through probate, the administrator or executor will look at the debts and assets and, guided by the laws of that state, determine in what order the bills should be paid. The remaining assets will be distributed to the heirs according to a will or state distribution laws if no will exists.

Generally, all debts must first be paid by the estate before any remaining assets are distributed to the heirs. An outstanding credit card balance, for example, must be paid before any money or gifts can be distributed to an heir. If there are not enough assets to pay the debts, then all assets and property will be sold to pay down as much of the debt as possible and the heirs will inherit nothing.

Except for certain situations which include joint property or joint debt, creditors typically won’t go after surviving family members when a debt cannot be paid out of the estate under probate.

Secured Debt

If a loan was secured with collateral such as property or another asset, you should expect a creditor to pursue that collateral if the debt is not repaid. However, you may be able to keep the collateralized asset if you are willing to assume your deceased loved one’s debt.

Unique Laws in Community Property States

In community property states, such as California, married couples are considered to own their property, assets, and income jointly. In fact, credit accounts opened during marriage are automatically considered to be joint accounts. This may affect what a surviving spouse will have to pay, depending on the debt incurred by the deceased spouse.

The majority of married couples have joint accounts and joint debt. In these situations, a surviving spouse will be held legally responsible for the debt of their deceased spouse, even if they did not incur the debt themselves.

Filial Responsibility Laws

Filial Support (or Responsibility) laws establish a duty for adult children to take care of their indigent parents, meaning that the child may be required to pay for bills accumulated by parents for nursing homes and other form of elder care. Filial Responsibility laws are on the books in 30 states. Nevertheless, they have historically been seldom enforced and lawsuits citing filial responsibility often fail. Furthermore, filial support laws are not a major issue in the DMV. Maryland repealed its filial support laws in 2017. The District of Columbia does not have a filial support law on the books. Virginia has a filial support law on the books but, as mentioned, it is rarely enforced thus far. That does not mean the policy could change in the future. Proper planning can protect most from being blindsided by these debts.

 

Natural Burial – Is it Right for You?

As we learn more about the environmental impact of metal caskets and traditional forms of burial, many people are opting for “green” or “natural” burials. These are burials where no chemicals are used at any stage of the burial. This means no embalming fluid is placed in your body, no vault, and no metal casket. Some natural burial services place a body into the ground wrapped in a shroud or placed inside a non-treated and biodegradable coffin.

Are Traditional Burials Harming the Environment?

The growing popularity of natural burials has been associated with the growing body of evidence highlighting the potential environmental impact associated with a traditional burial where a body is embalmed and placed into a metal casket. Embalming involves filling a body with formaldehyde, phenol, methanol, and glycerin. Formaldehyde is a potential human carcinogen, and can be lethal if a person is exposed to high concentrations, according to Business Insider. In addition to using a troubling combination of potentially dangerous chemicals, traditional burials in the United States use approximately 30 million board feet of hardwood, more than 2,700 tons of copper and bronze, more than 104,000 tons of steel, and 1.6 million tons of reinforced concrete each and every year, according to the Berkeley Planning Journal.

Example of a Natural Burial Service in Virginia

Natural burial services are available across the DMV (i.e. DC, Maryland, & Virginia). For example, there is the Cool Spring Natural Cemetery at Holy Cross Abbey in Berryville, Virginia. Cool Spring Natural Cemetery is maintained by the Cistercian monks of Holy Cross Abbey. They believe that the “sacredness of life and the dignity of each human person” is honored by a natural burial since it is effectively returning your body to the earth from which it came. Their natural burial service means that your body is embalmed, your casket will be made of organic material (i.e. not metal), and that there be no vault. A grave is marked with simple engraved stones.

Is a Natural Burial Right for You?

The decision to have a natural burial or a traditional burial is a purely personal decision. There are many reasons to have a traditional burial. For example, you may want to be buried next to family members in a casket. That is perfectly understandable. The key is to have a plan in place so your wishes are respected and you are buried in a manner you prefer.

To discuss your burial plan, and other estate planning issues, contact InSight Law today.

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Natural Burial – Is it Right for You?

As we learn more about the environmental impact of metal caskets and traditional forms of burial, many people are opting for “green” or “natural” burials. These are burials where no chemicals are used at any stage of the burial. This means no embalming fluid is placed in your body, no vault, and no metal casket. Some natural burial services place a body into the ground wrapped in a shroud or placed inside a non-treated and biodegradable coffin.

Are Traditional Burials Harming the Environment?

The growing popularity of natural burials has been associated with the growing body of evidence highlighting the potential environmental impact associated with a traditional burial where a body is embalmed and placed into a metal casket. Embalming involves filling a body with formaldehyde, phenol, methanol, and glycerin. Formaldehyde is a potential human carcinogen, and can be lethal if a person is exposed to high concentrations, according to Business Insider. In addition to using a troubling combination of potentially dangerous chemicals, traditional burials in the United States use approximately 30 million board feet of hardwood, more than 2,700 tons of copper and bronze, more than 104,000 tons of steel, and 1.6 million tons of reinforced concrete each and every year, according to the Berkeley Planning Journal.

Example of a Natural Burial Service in Virginia

Natural burial services are available across the DMV (i.e. DC, Maryland, & Virginia). For example, there is the Cool Spring Natural Cemetery at Holy Cross Abbey in Berryville, Virginia. Cool Spring Natural Cemetery is maintained by the Cistercian monks of Holy Cross Abbey. They believe that the “sacredness of life and the dignity of each human person” is honored by a natural burial since it is effectively returning your body to the earth from which it came. Their natural burial service means that your body is embalmed, your casket will be made of organic material (i.e. not metal), and that there be no vault. A grave is marked with simple engraved stones.

Is a Natural Burial Right for You?

The decision to have a natural burial or a traditional burial is a purely personal decision. There are many reasons to have a traditional burial. For example, you may want to be buried next to family members in a casket. That is perfectly understandable. The key is to have a plan in place so your wishes are respected and you are buried in a manner you prefer.

To discuss your burial plan, and other estate planning issues, contact InSight Law today.

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