Protecting Your Children at College

As parents are getting ready to send their adult children off on their next adventures in life, there are a few legal documents parents should consider completing to keep their children prepared for the future.  

Once a child is over the age of eighteen, they are legally considered an adult and parents no longer have legal authority over the child’s medical or financial affairs.  Having these documents handy can help relieve some of the stress that goes along with a child leaving the home.  These documents give parents the opportunity to speak to creditors, insurance agents, doctors, or any other medical or financial institute on behalf of the adult child.  Having these documents does not mean that the child cannot speak on their own behalf to medical or financial professionals; it simply gives the parent the option to speak on their child’s behalf if they wish.  When thinking about creating these documents for your adult child, consider what each document entails.   

        

Health Care Proxy

A Health Care Proxy is a legal document that allows the adult child to name a person to be in charge of making health care decisions on their behalf if they are ever unable to do so for themselves.   

 

Having a Health Care Proxy is extremely beneficial for an adult child and their parents.  If anything was to ever happen to the adult child while away at school, for example, the Health Care Proxy document would give the Parent or Guardian the legal ability to make the medical decisions for the child in the event that the child is mentally incapacitated.  The benefit of a Health Care Proxy document goes beyond the college years as well.  Until the adult child has another adult in their life that they trust, a Health Care Proxy should be completed naming the Parents as the Proxy.     

Power of Attorney

A Power of Attorney is a legal document that allows the adult child to name a person to be in charge of their financial affairs should they be unable to do so for themselves.  Along with college usually come student loans.  A power of attorney would give the parent, for example, the ability to speak with the Bursar’s office at the child’s college and with the financial institute that is handling the student loan.  This can relieve a lot of stress on the student as well as the parents who may be financing the child’s education, by being able to monitor the amount of the loan as well as payments.  In addition, the benefit of the Power of Attorney goes beyond the college years. 

There are many different types of Power of Attorney’s that can be completed including a full or general power of attorney which gives the parent the complete right to conduct business on the adult child’s behalf.  There is also a limited power of attorney which can be tailored to whatever the child and parent decide.  An example would be that the parent can speak to the Bursar’s office about their student loans but is unable to have access to their bank account.  Finally, a durable power of attorney remains in effect if the child becomes incapacitated for any reason.  

Naming a Guardian and Conservator

Among the many difficult prospects that people face when drawing up their wills is the matter of who will care for their minor children in the even that one or both parents dies before the children reach adulthood.  

As a general matter, if both parents are willing and able to care for the children, and one of them were to die, the remaining parent would take over physical custody and assume responsibility for the children’s care.  

If a single parent or both parents were to die, there must be a plan in place that addresses the care of the children.  This involves naming a personal guardian for minor children in the will.  Additionally, it is necessary to name a conservator, who is the person that will be in charge of the financial affairs of the children.  While these people are often the same, it does not necessarily have to be the case.  

The most common obstacle parents encounter when preparing their estate plan is choosing whom they should name as legal guardian and/or conservator for their children.  

It is advisable that both parents name the same person as guardian in each of their wills to avoid the possibility of dispute in the event that both parents were to die simultaneously.  

Whether the problem arises because the parents aren’t comfortable with any of their options, cannot agree on the same person, or want to avoid hurting the feelings of those family members not named, this issue can often cause parents to put off the preparation of their estate plan altogether.  

A qualified estate planning attorney can assist in navigating these and other estate planning pitfalls and help put your mind at ease regarding the process of estate planning. 

 

Estate Planning During and After a Divorce

Developing a comprehensive estate plan is essential to protect your assets, ensure that your desires are carried out and to lessen unnecessary burdens on your loved ones in the event that tragedy strikes.  During and following a divorce, making changes to your estate plan is a necessary step the importance of which cannot be overstated. 

When contemplating a divorce or once the process has begun, it may be in your best interest to execute a new Power of Attorney, Health Care Proxy and HIPAA Release.  You need not wait until a divorce is final to complete updated documents, so that the individual with access to your medical information, the person appointed to make healthcare decisions should you become incapacitated and the person with the ability to take financial action on your behalf is not your soon to be ex-spouse.  

At the time that your divorce is final, it is imperative that you execute a new Last Will and Testament.  This would allow you to choose a new personal representative to be responsible to carry out your final wishes and, if necessary, name the person that you would choose to be responsible for caring for your child(ren) and being responsible for their financial decisions.  

While some of these documents cannot be finalized until the divorce is settled, consulting an estate planning attorney prior to or during the divorce proceeding can assist you in advanced planning and provide valuable advice regarding any issues in the divorce that may affect your estate.

Bankruptcy Basics

There are two (2) types of bankruptcy that would be applicable to the majority of debtors.  It is important to understand the difference between these chapters of bankruptcy and what may be accomplished under each chapter. 

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is sometimes called a straight bankruptcy or “Fresh Start” bankruptcy.  There is a maximum level of income at which an individual would not be eligible to file a Chapter 7 bankruptcy, based on income, family size and certain allowable expenses.  This eligibility determination is case-specific and cannot be determined without providing certain financial information to the attorney. 

The debtor (bankruptcy filer) after a hearing and review by the Chapter 7 Bankruptcy Trustee, will receive a discharge of all debts which are deemed dischargeable under the Bankruptcy Code.  Dischargeability may be dependent on many factors specific to each case, including but not limited to, whether the debt is secured, such as a mortgage or car payment, or unsecured, such as credit cards and medical debt, when it was incurred and the overall actions of the debtor prior to the filing of a Bankruptcy Petition.

The duration of a Chapter 7 Bankruptcy is approximately four months in which time the debtor is in the Bankruptcy Proceeding and is protected by the automatic stay. At the end of the process, the debtor will receive a discharge of those debts to which he or she is entitled. 

There are exemptions that may be taken from the Federal Exemptions or Massachusetts State Exemption Law in order to protect some if not all of the debtor’s assets. 

Chapter 13 Bankruptcy

Chapter 13 Bankruptcy is also known as a reorganization bankruptcy or wage earner Bankruptcy. Bankruptcies are often filed under this Chapter by individuals who need to pay off some portion of their debts over a period of three to five years or who do not qualify to file a chapter 7.  

A Chapter 13 Bankruptcy may also be appropriate for individuals who have non-exempt property that they want to retain following the bankruptcy. 

One common reason for filing a chapter 13 bankruptcy would be if a debtor has a Home in Foreclosure and wants to stop the foreclosure, he or she could file a Chapter 13 Bankruptcy, which would stop the foreclosure, providing time for the debtor to pay off the outstanding mortgage arrears through a chapter 13 Plan. 

Alimony Reform Act and Orders from Divorces Prior to 2012

There has been significant interest lately regarding the circumstances under which the Alimony Reform Act allows for the suspension, reduction and (of particular interest) termination of alimony orders for divorces that were completed prior to the enactment of the law. 

As a preliminary matter, there is one significant distinction regarding agreements entered into prior to March of 2012.  If the Divorce Agreement contains language stating that the alimony provisions are surviving, meaning they are not subject to future modification by the Court, the provisions of the Alimony Reform Act regarding termination do not apply.

If the Divorce Agreement contains language stating that alimony provisions merge, meaning that they are modifiable by the Court, some of the provisions regarding the suspension, reduction and termination of alimony may apply.  

On January 30, 2015, the Supreme Judicial Court issued 3 decisions impacting the right to seek modification of an alimony order issued prior to the enactment of Massachusetts’ Alimony Reform Act.

  • Doktor v. Doktor, 470 Mass. 547 (2015)
  • Rodman v. Rodman, 470 Mass. 539 (2015)
  • Chin v. Merriot, 470 Mass. 527 (2015)

As a result of these decisions, some provisions of the Alimony Reform Act apply to alimony orders issued prior to 2012, while other provisions of the Alimony Reform Act do not:

  • Retirement Age – Alimony Reform Act Does Not Apply – Under the Supreme Judicial Court rulings, the provision of the Alimony Reform Act that provides for the termination of alimony when the paying party reaches normal retirement age does not apply.
  • Cohabitation – Alimony Reform Act Does Not Apply – Under the Supreme Judicial Court rulings, the provision of the Alimony Reform Act that provides for the reduction or termination of alimony when the party receiving alimony remarries or cohabitates with a new partner does not apply.
  • Durational Limits – Alimony Reform Act Does Apply – Under the Supreme Judicial Court rulings, the durational limits for marriages of less than 20 years can be used to seek a termination of alimony through a Complaint for Modification.

School on Wheels of Massachusetts

At the Law Offices of Lee Darst, we are committed to giving back to our community.  School on Wheels of Massachusetts is a supremely worthy cause.  

The mission of School on Wheels of Massachusetts is to support the academic, social and emotional growth of students impacted by homelessness.

Today School on Wheels of Massachusetts provides one-on-one tutoring services to 280 students a week in grades K through 12 at 18 program sites.  Last year they distributed 2,892 backpacks to children and youth living in 31 communities in Massachusetts.  They currently mentor 26 high school and 57 college students as part of their High School Plus program.  

As a board member and tutor, Attorney is committed to the cause of assisting homeless students in receiving the resources and one-on-one assistance that they need to address the gaps in education that often result from homelessness.

The Law Offices of Lee Darst recently organized a Supply Drive to assist in the effort to provide school supplies to all homeless children in need.