Answers to Common Concerns

Sooner or later most people think about and talk about common concerns should they pass away. Below is a brief summary of some of those concerns.

A big one is avoiding probate, a word with overblown fears. For the average family this is not very difficult and is often not needed at all. That is because jointly owned assets do not pass through probate, and most husbands and wives own property jointly. For people who are not married, a simple solution is to name one or more people as beneficiaries on the accounts. In Connecticut, you can name a beneficiary on the back of you registration certificate. For those with larger investment assets, or who are not married, a revocable trust might be considered, and will pass the assets to the named beneficiaries without going through probate. This will not avoid a probate fee in Connecticut, however, because the fee is not based on property passing through probate. It is based on the value shown on the inheritance tax return, called the succession tax return. Since the Connecticut Succession tax has an exemption of $12.92 million, the vast majority of people simply do not have to worry about the tax. But the return must be filed to show the state there is no tax due. If a husband and wife own property, such as a home or other real estate, and one of them dies and no return is filed, the survivor will not be able to sell the house until a return is filed, and a certificate of no tax is received and filed on the land records. Even if no tax is due, it is important to file the return and get the certificate of no tax and file it on the land records. Two other questions are whether or not a power of attorney and living will are necessary. The answer to all is an emphatic yes. That applies to whether you are eighteen or eighty eight. When my older daughter was going to Africa to do research on a Fulbright scholarship, I insisted she do them despite her questioning why she needed them at age 23 with almost no assets. That is because if she had become incapacitated while there for any reason, I and my wife would have been able to deal with any organization or authorities who were responsible for giving her care or hire an agency to return her to the U.S. When my younger daughter Halley became a Navy JAG lawyer, all of the officers and enlisted men in her command were encouraged to do those documents. And in the service “encouraged” means you better do it. A common fear of people as they age is “losing all their assets to the nursing home” if they need long term care. In Connecticut, in almost all husband and wife situations, it is possible to save all the assets as long as the sick spouse has that all important power of attorney in place with gifting powers to the spouse. For a single person, there are often techniques permitted by law that will protect some of the assets, as long as that person can still sign. If not, that is where the power of attorney again comes into play and is all important. People often ask if a revocable trust will protect assets and the answer is no. Revocable means what it says, “it is revocable” and if it is revocable, it still owned by the person making the trust in the eye of the law, and will count as their personal asset if they need Medicaid. In order to protect assets, an irrevocable trust with special powers is needed, but these are not for everyone, depending on age, health and family situation. So the simple answer to common concerns is to have those basic documents in place to handle any situation that can arise for a single person, or a married couple.