MONTANA
LEGAL GUIDE TO
LONG TERM CARE PLANNING
2008
RESOURCES
Internet Resources Montana only: HYPERLINK
"http://www.montanabar.org" www.montanabar.org ; HYPERLINK
"http://www.montanalawhelp.org" www.montanalawhelp.org ; Montana Law
Libraries: (State) HYPERLINK "http://www.lawlibrary.state.mt.us"
www.lawlibrary.state.mt.us ; (UofM) HYPERLINK
"http://www.umt.edu/lawinsider/library/lawbysub/lawbysub.htm"
www.umt.edu/lawinsider/library/lawbysub/lawbysub.htm ; Nationwide:
HYPERLINK "http://www.findlaw.com" www.findlaw.com ; HYPERLINK
"http://www.freeadvice.com" www.freeadvice.com ; HYPERLINK
"http://www.findlegalhelp.org" www.findlegalhelp.org ; HYPERLINK
"http://www.nolo.com" www.nolo.com ; HYPERLINK
"http://www.law.cornell.edu/topics/" www.law.cornell.edu/topics/
American Civil Liberties Union (ACLU) 406-443-8590 The office does not
routinely assist individuals, but focuses resources on cases affecting
groups. HYPERLINK "http://www.aclumontana.org" www.aclumontana.org
Citizens Advocate Office 800-332-2272 Helps with problems or complaints
related to state agencies.
Montana Consumer Protection HYPERLINK "http://www.montpirg.org"
www.montpirg.org ; 406-444-4500 Assists with consumer problems relating
to complaints with vehicles, telemarketers, etc. and educates consumers
about their rights.
Crime Victim Compensation Program (CVC) 406-444-3653 or 800-498-6455
HYPERLINK "http://www.doj.state.mt.us/victims/victimcompensation.asp"
www.doj.state.mt.us/victims/victimcompensation.asp ; CVC provides direct
services to victims and processes claims for compensation for innocent
victims who have been injured or killed as a result of a crime.
Domestic Violence MLSA Domestic Violence Intake 406-951-0814 provides
legal assistance to victims of domestic violence.
Aging Services Legal Division John McCrea at 1-800-332-2272, or if you
would prefer, you can e-mail your request to: HYPERLINK
"mailto:[email protected]" [email protected]
Information and Assistance; home and community based services case
management, ombudsman program, state health insurance, emergency
intervention.
Adult Protective Services 800-551-3191; protects older persons from
abuse and neglect
Montana Human Rights Bureau 406-444-2884 Receives and investigates
complaints of discrimination.
Landlord-Tenant Issues/Housing & Discrimination Resources 1-888-345-7474
See internet site for information on all housing issues: HYPERLINK
"http://www.montanapirg.org" www.montanapirg.org
Montana People's Action Housing Hotline 1-406-728-5297 or 888-290-5711
Answers questions about landlord-tenant problems.
Montana Advocacy Program 800-245-4743 Provides information and referral
services, representation by professional advocates and training and
publications on the rights of people with disabilities. HYPERLINK
"http://www.mtadv.org" www.mtadv.org ; 406-449-2344 voice/TDD
Montana Attorney General's Office 215 N. Sanders, Helena MT 59620
(406) 444-202
Montana Office of Consumer Affairs 1424 Ninth Avenue, Helena MT 59620
(406) 444-4312
Office of Disciplinary Counsel 866-288-9528 Investigates claims of
ethical violations by lawyers.
People's Law Center P.O. Box 5046, Helena, MT 59604, 406-443-3896, The
People's Law Center handles social security disability cases (SSI and
SSDI), Bozeman/Billings: 866-650-9013; Helena/Butte/Missoula:
800-406-5567; Great Falls/Havre: 800-406-5560.
Public Service Commission 406-444-6150; Assists with complaints
regarding utility companies.
Montana Legal Services Hotlines 800-666-6899 or 800-926-3144 or
800-666-6124 Free civil legal assistance for low income persons.
HYPERLINK "http://www.montanalawhelp.org" www.montanalawhelp.org
State Law Library of Montana 215 North Sanders, Helena, MT 59620-3004
406-444-3660, HYPERLINK "http://www.lawlibrary.state.mt.us"
www.lawlibrary.state.mt.us ;
U. of Montana School of Law 406-243-4311, Fax 406-243-2576, HYPERLINK
"http://www.umt.edu/law" www.umt.edu/law
Veteran's Administration Veteran's Administration Center: 406-442-6410.
State Auditor's Office Senior Fraud Protection Network 1-800-332-6148
DPHHS - Senior and Long Term Care 1-800-332-2272
Montana Attorney General's Office 406-444-2026
Montana State Bar 406-442-7660
State Auditor's Office Senior Fraud Protection Network, 1-800-332-6148
TABLE OF CONTENTS
INTRODUCTION 1
POWER OF ATTORNEY
Explanation of Power of Attorney .6
Statutory Form Power of Attorney 9
Durable Power of Attorney for Health Care
.............................................13
Revocation of Power of Attorney 16
ESTATE PLANNING
Explanation of Estate Planning 17
Checklist for Estate Planning 20
Estate Planning Sheet 26
Sample Will 37
Declaration of Homestead Exemption 42
LIVING TRUST
Explanation of Revocable Living Trust 46
Montana Seniors Beware 50
Uses and Abuses of a Revocable Trust 54
ADVANCED DIRECTIVES
Explanation of Montana's Declaration of Living Will 67
Declaration of Living Will documents 71
Revocation of Living Will 72
Montana Rights of the Terminally III Act 73
GUARDIANSHIP & CONSERVATORSHIP...................................84
DISCLAIMER
This Legal Guide was compiled by the DPHHS Aging Services Division Legal
Service Developer. This publication is not intended to be a substitute
for legal advice. Rather, it is designed to help families become better
acquainted with some of the devices used in long term planning and to
create an awareness of the need for such planning. Future changes in
laws cannot be predicted and statements in this narrative are based
solely on those laws in force on the date of publication.
We recommend that you seek legal advice for all your planning needs.
INTRODUCTION
Montanans face numerous choices. This is especially true in their
retirement years. Life can become complicated. However, through proper
planning, every person will be able to prepare for these changes in
life.
This manual provides a layman's understanding of various legal documents
and explanations of their uses. These documents are important components
in planning for your future. It is important, however, to seek competent
legal advice for your estate planning.
The manual is divided into five sections:
1. POWERS OF ATTORNEY;
2. ESTATE PLANNING;
3. USE OF LIVING TRUSTS;
ADVANCED DIRECTIVE -LIVING WILLS; AND
GUARDIANSHIP AND CONSERVATORSHIP.
PART I. POWERS OF ATTORNEY
One of the most cost effective ways to make certain your decisions
regarding health, medical treatment, domicile and business affairs are
followed is through the use of a power of attorney. This document
allows you to identify another person to make financial and/or health
care decisions in the event you are unable to do so.
You are able to decide and control the amount of authority you give to
another person. You do not need a lawyer or a Court order to make a
legally binding power of attorney.
There are two different powers of attorney provided in this manual:
1. the Montana statutory form Power of Attorney; and
2. the Durable Power of Attorney for Health Care and Medical
Treatment.
The first power is primarily a financial power of attorney. It allows
you to delegate authority to another to make financial, banking, real
estate, and insurance decisions for you. It also allows you to determine
whether you want the power to be durable, meaning that it is enforceable
after you have become incompetent.
The second power allows you to delegate decision making authority to
another for your health and medical care and treatment. This power of
attorney is also very important, especially when you are unable to make
decisions for yourself.
The third document is a revocation of the power of attorney. This
document allows you to revoke or ``take back" the authority you have
given to a person if you later wish to do so.
PART II. ESTATE PLANNING
We have heard the statement there are two certainties in life: death and
taxes. Estate planning allows you to determine how and to whom you will
disperse your assets after you have died. You also have the ability to
decide who will administer your estate and how the administration will
be performed.
This section provides a common checklist of items you should think about
when you are engaged in estate planning. This checklist will be helpful
when working with your attorney. It provides an overview of your present
estate and your intent on how to distribute these assets upon your
passing.
The second document is an example of a simple Last Will. You must be
careful in drafting a Last Will. We recommend you seek the assistance
and consultation of an attorney licensed to practice law in Montana.
You can draft and execute a Last Will without an attorney. However,
there are certain legal principles that you may not be aware of that may
prevent you from achieving the result you wanted.
Your Last Will must be dated and signed by you. If you have typed your
Last Will, you must also have two adults, who are not beneficiaries of
your estate, witness your signing of the Last Will.
Finally, you should make certain that a copy of your Last Will is
available to your personal representative (administrator) so that he/she
knows what your intent is after you have passed away.
The third document is used and filed while you are alive. It is known
as the Montana Homestead Exemption form. Montana law allows you to
declare a Homestead Exemption. If the form is completed and recorded in
the Clerk and Recorders' Office in the county in which you live and
where you own your home, the form will protect a portion of your
"homestead" from creditors' claims. It does not protect you from
mortgages, Medicaid liens, or construction liens. The homestead is the
home in which you live. It includes your dwelling house or mobile home
and the land and improvements legally defined as "appurtenances" to the
land. There are limitations on homestead exemptions. The explanation
following the Declaration of Homestead will provide you with the
additional information.
PART III. LIVING TRUSTS
In recent times, Montanans have become increasingly interested in
establishing a "living trust" for their estate. The living trust is a
legal document that is effective while you are alive. It provides a
legal means to transfer your assets into a trust, to be managed by a
trustee for the beneficiaries designated in the trust agreement. A
beneficiary can include yourself. Upon your passing, the trustee can
transfer your assets according to the instructions in the trust. This
can be done without any probate.
The second section is an article prepared by the Dean of the Montana
School of Law. He cautions individuals to be careful before they engage
in the creation of a revocable living trust. The living trust document
can be expensive and may not necessarily save you money in a probate.
If the assets are not transferred properly into the trust, it may not
achieve what you had desired - the avoidance of probate and additional
costs.
We urge you to contact your local licensed attorney if you are seriously
considering creating a trust. We caution you not to utilize "financial
firms" or "trust organizations" who sell you a trust package. You may
want to contact the Montana Attorney General's office, the Montana State
Insurance Commissioner or the Office on Aging to get additional
information before you pay out any monies to a trust company.
PART IV. ADVANCED DIRECTIVE - LIVING WILL
Montana law allows you to make a "living will." This living will is
called a Declaration of Living Will, and it allows a legally competent
adult to instruct their physician to withhold or withdraw
life-sustaining procedures if they are in a terminal condition and are
unable to make medical treatment decisions. You are also able to
designate another person to make these end-of-life decisions for you.
You will find an explanation of the Living Will in Montana and a copy of
the Montana Rights of the Terminally Ill Act. We have also provided a
copy of the "Living Will" or "Declaration" forms. The Living Will must
be witnessed by two adults. Once you have completed the form, you
should make it available to your physician and local hospital so they
may place it in your medical records.
You have the ability to revoke the Living Will at any time. We have
provided you a form to revoke your Living Will if you should choose to
do so.
PART V. GUARDIANSHIP AND CONSERVATORSHIP
It is frightening to think that there could come a day when we are
unable to care for ourselves or handle our own finances. However, it is
reassuring to know that there are certain legal safeguards in place to
protect us if we do become incapacitated. These safeguards include court
appointed guardianships and conservatorships.
Montana law defines a guardian as one who is legally empowered and
charged with the duty of taking care of another who, because of age,
intellect, or health, is incapable of managing his or her own affairs.
A conservator is defined as one who is appointed by a district court to
manage the affairs of a protected person who, because of age, intellect,
or health, is incapable of managing his or her own property.
This section provides a detailed description of the responsibilities,
roles, and limitations for guardians and conservators; the rights of the
alleged incapacitated person; and the procedure followed by the court
when a petition is filed for the appointment of a guardian or
conservator.
CONCLUSION
If you should have any questions or desire to discuss these documents or
legal issues further, please feel free to contact:
Your local Area Agency on Aging at 1-800-551-3191; or
the State Office on Aging at 1-800-332-2272.
If you would like to receive additional information on any topics in
this publication, please feel free to also contact your
Local Extension Office -
(Look in the yellow pages under county government)
Family Economics Specialist
Marsha A. Goetting, PhD, CFP, CFCS
P.O. Box 172800
Montana State University
Bozeman, MT 59717
406-994-5695
Powers of Attorney
POWER OF ATTORNEY
A Power of Attorney is a written document authorizing someone you name
(your "agent" or "attorney-in-fact") to make decisions for you in the
event you are unable to speak for yourself. These decisions can include
financial and business decisions. They may include health and medical
care, decisions. This document can also contain instructions or
guidelines you want your agent to follow.
You will find two different forms of Power of Attorney in this section:
a Statutory Form Power of Attorney; and
a Durable Power of Attorney for Health Care and Medical Treatment.
The Statutory Power of Attorney, was created by the Montana legislature.
It will allow you to decide the powers you want to delegate to another
person. You will be able to decide when the authorization to act on your
behalf, will take effect.
You will also find a Durable Power of Attorney for Health Care and
Medical Treatment. If you should ever lose your capacity to make and/or
communicate decisions because of a temporary or permanent illness or
injury, the Durable Power of Attorney for Health Care allows to you
retain some control over important health care decisions by choosing a
person to make health care decisions for you.
Without a Power of Attorney, many health care providers and institutions
will make critical decisions for you, not necessarily based on what you
would want. In some situations, a court appointed guardian may become
necessary unless you have a health care power of attorney, especially
where the health care decision requires that money be spent for your
care.
A Durable Power of Attorney for Health Care is different from a Living
Will. A Living Will is a written statement of your wishes regarding the
use of medical treatments in end of life situations. The statement is
to be followed if you are unable to provide instructions at the time the
medical decision needs to he made. Living wills are recognized in
Montana. However, they are limited to decisions about "life-sustaining
procedures'' in the event of "terminal illness" and when your life
expectancy is a "short period of time.''
The Health Care Power of Attorney applies to all medical decisions,
unless you decide to include limitations. This power can include
specific instructions to your agent about any treatment you want done or
want to avoid.
You need to be careful with the use of the power of attorney. The power
you grant to another person may be broad and sweeping . The power will
become effective immediately unless you state otherwise.
You need to have your signature notarized on your Power of Attorney by a
Notary Public. You also need to give the original Power of Attorney to
your agent so he/she will have the document when the time comes to make
decisions for you. You want to make certain the person who you give the
power to is trusted and knows your intent.
You may revoke your power of attorney at any time. You will find a
"Revocation of the Power of Attorney" at the end of this section. You
must sign and date the revocation. You must make a copy of the
revocation and deliver it to the businesses, physicians, banks and
hospitals who may be relying upon the power of attorney you originally
executed.
POWER OF ATTORNEY
(STATUTORY FORM)
NOTICE: THE POWERS GRANTED BY THIS DOCUMENT ARE BROAD AND SWEEPING.
THEY ARE EXPLAINED IN THIS PART. IF YOU HAVE ANY QUESTIONS ABOUT THESE
POWERS, OBTAIN COMPETENT LEGAL ADVICE. THIS DOCUMENT DOES NOT
AUTHORIZE ANYONE TO MAKE MEDICAL AND OTHER HEALTH CARE DECISIONS FOR
YOU. AND YOU MAY REVOKE THIS POWER OF ATTORNEY IF YOU LATER WISH TO DO
SO.
I, ________________________________________________________________
insert your name and address) appoint
___________________________________
________________________________________ (insert the name and address of
the person appointed) as my agent (attorney-in-fact) to act for me in
any lawful way with respect to the following initialed subjects:
TO GRANT ALL OF THE FOLLOWING POWERS, INITIAL THE LINE IN FRONT OF (N)
AND IGNORE THE LINES IN FRONT OF THE OTHER POWERS. TO GRANT ONE OR MORE,
BUT FEWER THAN ALL, OF THE FOLLOWING POWERS, INITIAL THE LINE IN FRONT
OF EACH POWER YOU ARE GRANTING. TO WITHHOLD A POWER, DO NOT INITIAL THE
LINE IN FRONT OF IT. YOU MAY, BUT NEED NOT, CROSS OUT EACH POWER
WITHHELD.
INITIAL
__________ (A) Real property transactions;
__________ (B) Tangible personal property transactions;
__________ (C) Stock and bond transactions;
__________ (D) Commodity and option transactions;
__________ (E) Banking and other financial institution
transactions;
__________ (F) Business operating transactions;
__________ (G) Insurance and annuity transactions;
__________ (H) Estate, trust, and other beneficiary transactions;
__________ (I) Claims and litigation;
__________ (J) Personal and family maintenance;
__________ (K) Benefits from Social Security, Medicare, Medicaid,
or other
governmental programs or from
military service;
__________ (L) Retirement plan transactions;
__________ (M) Tax matters;
__________ (N) ALL OF THE POWERS LISTED ABOVE. YOU NEED
NOT INITIAL ALL OTHER LINES IF YOU
INITIAL LINE (N).
SPECIAL INSTRUCTIONS: ON THE FOLLOWING LINES, YOU MAY GIVE SPECIAL
INSTRUCTIONS LIMITING OR EXTENDING THE POWERS GRANTED TO YOUR AGENT.
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
UNLESS YOU DIRECT OTHERWISE ABOVE, THIS POWER OF ATTORNEY IS EFFECTIVE
IMMEDIATELY AND WILL CONTINUE UNTIL IT IS REVOKED.
This power of attorney revokes all previous powers of attorney signed by
me.
STRIKE THE PRECEDING SENTENCE IF YOU DO NOT WANT THIS POWER OF ATTORNEY
TO REVOKE ALL PREVIOUS POWERS OF ATTORNEY SIGNED BY YOU.
IF YOU DO WANT THIS POWER OF ATTORNEY TO REVOKE ALL PREVIOUS POWERS OF
ATTORNEY SIGNED BY YOU, YOU SHOULD READ THOSE POWERS OF ATTORNEY AND
SATISFY THEIR PROVISIONS CONCERNING REVOCATION. THIRD PARTIES WHO
RECEIVED COPIES OF THOSE POWERS OF ATTORNEY SHOULD BE NOTIFIED
This power of attorney will continue to be effective if I become
disabled, incapacitated, or incompetent.
STRIKE THE PRECEDING SENTENCE IF YOU DO NOT WANT THIS POWER OF ATTORNEY
TO CONTINUE IF YOU BECOME DISABLED, INCAPACITATED, OR INCOMPETENT.
If it becomes necessary to appoint a conservator of my estate or
guardian of my person, I nominate my agent.
STRIKE THE PRECEDING SENTENCE IF YOU DO NOT WANT TO NOMINATE YOUR AGENT
AS CONSERVATOR OR GUARDIAN.
If any agent named by me dies, becomes incompetent, resigns or refuses
to accept the office of agent, I name the following (each to act alone
and successively, in the order named) as successor(s) to the agent:
1. ______________________________________________________________
2. ______________________________________________________________
For purposes of this subsection, a person is considered to be
incompetent if and while: (1) the person is a minor; (2) the person
is an adjudicated incompetent or a disabled person; (3) a conservator
has been appointed to act for the person; (4) a guardian has been
appointed to act for the person; or (5) the person is unable to give
prompt and intelligent consideration to business matters as certified by
a licensed physician.
I agree that any third person who receives a copy of this document may
act under it. I may revoke this power of attorney by a written document
that expressly indicates my intent to revoke. Revocation of the power of
attorney is not effective as to a third party until the third party
learns of the revocation. I agree to indemnify the third party for any
claims that arise against the third party because of reliance on this
power of attorney.
BY ACCEPTING OR ACTING UNDER THE APPOINTMENT, THE AGENT ASSUMES THE
FIDUCIARY AND OTHER LEGAL RESPONSIBILITIES OF AN AGENT.
Signed this _______ day of ___________________________, 20___.
_______________________________________
Your
Signature
Your Social Security Number: ________ - ______ - ________
State of Montana
County of ___________________________________________
This document was acknowledged before me on ________________________.
Name of Principal: _______________________________________________.
______________________________________________
Notary Public for the State of Montana
Residing at:
____________________________________
My commission expires:
__________________________
(Notarial Seal)
BY SIGNING, ACCEPTING OR ACTING UNDER THIS APPOINTMENT, THE AGENT
ASSUMES THE FIDUCIARY AND OTHER LEGAL RESPONSIBILITIES OF AN AGENT. THE
AGENT WORKS EXCLUSIVELY FOR THE BENEFIT OF THE PRINCIPAL. THE FOREMOST
DUTY AS THE AGENT IS THAT OF LOYALTY TO AND PROTECTION OF THE BEST
INTERESTS OF THE PRINCIPAL. THE AGENT SHALL DIRECT ANY BENEFITS DERIVED
FROM THE POWER OF ATTORNEY TO THE PRINCIPAL. THE AGENT HAS A DUTY TO
AVOID CONFLICTS OF INTEREST AND TO USE ORDINARY SKILL AND PRUDENCE IN
THE EXERCISE OF THESE DUTIES.
__________________________________
Signature of Agent
Signed this _________ day of _________________, 20_____.
DURABLE POWER OF ATTORNEY
FOR HEALTH CARE AND MEDICAL TREATMENT
I , _________________________ of the City of _________________________,
State of Montana, do hereby make, constitute, nominate and appoint
____________________________presently residing in ____________________,
County, State of Montana, as my true and lawful attorney-in-fact to act
for me and in my place and stead for the purpose of making any and all
decisions regarding my health and, medical care and treatment at any
time that I may be, by reason of physical, mental disability,
incompetency or incapacity, incapable of making decisions on my behalf.
1. I grant said attorney-in-fact complete and full authority to do and
perform all and every act and thing whatsoever requisite, proper and
necessary to be done in the exercise of the rights herein granted, as
fully for all intents and purposes as I might or could do if personally
present and able with full power of substitution or revocation, hereby
ratifying and confirming all that said attorney-in-fact shall lawfully
do or cause to be done by virtue of this power of attorney and the
rights and powers granted herein.
2. If, at any time, I am unable to make or communicate decisions
concerning my medical care and treatment, by virtue of physical, mental
or emotional disability, incompetency, incapacity, illness or otherwise,
my said attorney-in-fact shall have the authority to make all health
care decisions and all medical care and treatment decisions for me and
on my behalf, including consenting or refusing to consent to any care,
treatment, service or procedure to maintain, diagnose or treat my mental
or physical condition.
3. In the absence of my ability to give directions regarding my health
care, it is my intention that my said attorney-in-fact shall exercise
this specific grant of authority and that such exercise shall be honored
by my family, physicians, nurses, and any other health care provider(s)
or facility in which or by which I may be treated, as a final expression
of my legal rights.
4. This power of attorney is durable and will continue to be effective
if I become disabled, incapacitated, or incompetent.
5. This durable power of attorney is effective in any state that I may
seek or receive medical-treatment and health care.
6. I specifically direct all health care providers, including
physicians, nurses, therapists and medical and hospital staff to follow
the directions of my attorney-in-fact and such decisions are superior to
and shall take precedence over any decisions made by any member of my
family.
7. The rights, powers, and authority of said attorney-in-fact herein
granted shall commence and be in full force and effect immediately.
8. If any agent named by me dies, becomes incompetent, resigns or
refuses to accept the office of agent, I name the following persons
(each to act alone and successively, in the order named) as successor(s)
to the agent:
A. _____________________________________________________
B. _____________________________________________________
9. Special instructions: On the following lines I give special
instructions limiting or extending the powers granted to my agent.
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
10. 1 hereby designate _________________ to determine whether I am
unable to make or communicate decisions concerning my medical care and
treatment by virtue of my physical, mental, or emotional disability,
incompetency, incapacity, illness or otherwise. This determination will
be provided in writing and attached to this Durable Power of Attorney
For Health Care and Medical Treatment.
Dated this __________ day of __________________________, ___________.
Signature of Principal: ____________________________________________
Social Security Number: ___________ - ________ - __________.
State of Montana
County of ___________________________________
Subscribed, sworn to and acknowledged before me this __________day
of _______________________, ___________.
(Notarial Seal)
___________________________________
Notary Public For the State of Montana
Residing at ________________________
My commission expires: _____________
REVOCATION OF POWER OF ATTORNEY
I, ___________________________, hereby revoke all powers of attorney
granted
to _______________________________ on __________________. This is a
full revocation and is effective immediately.
(Date)
Dated this ________day of _____________________________, ___________.
State of Montana
County of _________________________________
Subscribed, acknowledged, and sworn to before me this __________ day of
__________________, ____________.
_____________________________________________
Notary Public for the State of Montana
Residing at: ___________________________________
My commission expires: _________________________
(Notarial Seal)
Estate Planning
ESTATE PLANNING
Who will get your assets when you die? How will these assets be
distributed? Do I have any control over how these assets are
distributed? What issues and concerns must I think about prior to
contacting an attorney in preparation for preparing my will? These are
common and important questions that all Montanans have in their estate
planning process. This section of the manual is intended to assist you
through this process.
You will find two planning guides. These are entitled "Checklist for
Estate Planning" and "Estate Planning Data Sheet". They are intended to
assist you in estate planning. The checklists are common questions that
will be asked by your attorney. They will be very helpful if you have
filled these out prior to meeting with your attorney. You will have the
benefit of time and consideration in making some of these decisions.
Estate planning is a complicated and a personal process. It should not
be delayed. It is also very important that you consult with a licensed
attorney. Estate law and will preparation requires professional
training. Your attorney will explain several options available to you in
your estate planning.
You will read the term "personal representative." A personal
representative is the administrator of your estate (previously known as
an executor or executrix of the estate). They do not have any power
until you have passed away. A personal representative is required to be
appointed by the Court into their position.
You will also find a "Sample Will". This is only a sample and should
be used as a reference for your estate planning needs. We do not
recommend you draft your own will.
Will preparation is relatively inexpensive for the typical middle-income
Montanan. Feel free to call or visit several attorneys and request
information on their fee charges for a will preparation. The general
rule of thumb is the more complex your family situation and the more
assets you have to distribute when you die, the greater the cost in the
preparation of the will.
Montana recognizes holographic wills, which are written documents,
prepared in your own handwriting and signed and dated by you. You have
the ability to declare your intent through the use of a holographic
will.
Finally, we have provided a copy of the Montana "Declaration of
Homestead Exemption. Montana law allows you to protect part of the
equity in the home you live in. You must reside in the home. A
detailed explanation of the instructions and recording of a Homestead
Exemption Declaration is found on the reverse side of the declaration
form.
CHECKLIST FOR ESTATE PLANNING
FORM ONE
Name: ____________________________________________________________
Address: __________________________________________________________
City:_______________________
__________ State: _______________________
Home Telephone: __________________ Work Telephone: __________________
Information Necessary in the Preparation of A Last Will And Testament
1. Full Legal Name
2. Date of Birth
3. Place of Residence, Address, City, State
4. Social Security Number
5. Present Marital Status
6. Previous Marriage(s)
A. Divorced: Yes ____ No ____
7. Children: Full Legal Names, Date of Birth, Current Residence
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
Children of Previous Marriage:
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
Children born out of wedlock:
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
Adopted Children:
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
8. Grandchildren: Full Legal Names, Date of Birth, Current Residence
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
Spouse: Full Legal Name, Date of Birth, Current Residence
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
10. Married or common law: _________________________________________
11. Do you now have a will? ______________________ Where is it?
_________
__________________________________________________________________
Do you have a codicil (addendum/modification) to the will?
______________
12. Real Property: Describe in general._________________________________
_________________________________________________________________
Is the property in Joint Tenancy or Tenancy in common?
_______________
13. Savings Account: _________________ Location: ____________________
Certificate of Deposits: ____________ Location:
___________________
Stocks:______________________________________________________
Bonds:_______________________________________________________
IRA's: _______________________________________________________
Other Assets: _________________________________________________
14. Is the total value of the estate $500,000 to $600,000? Yes _____ No
_____
15. Present health of testator (person signing the will)?
________________________________________
__________________________________________________________________
16. Present health of testator's spouse?
________________________________
_________________________________________________________________
17. Is this a potential nursing home client who may have Medicaid
eligibility issues?
Transfers of Assets in the last 3 years? Yes or No? Explain.
18. Distribution of Assets:
Beneficiaries:
If your primary beneficiary does not survive you who is the alternative
beneficiaries? ____________________________________________________
________________________________________________________________
How are the assets divided? _________________________________________
________________________________________________________________
19. Is there any person you want to exclude from receiving a devise from
the
estate? ___________________________________________________
Why? _______________________________________________________
_______________________________________________________________
20. If minors are involved:
Guardian: ________________________________________________
Alternative Guardian: ________________________________________
Power of Attorney: __________________________________________
21. Trust creation
Reason for minor trust includes Health Education Maintenance and Support
________________________________________________________________
_________________________________________________________________
Do you want the income and principal to be distributed equally or within
discretion of trustee?
_______________________________________________
22. Do you want a spendthrift clause?
___________________________________
23. Name of Trustee: ________________________________________________
24. Alternative Trustee: ______________________________________________
25. Do you want your trustee to be bonded (insured)?
_______________________
26. Personal Representative (Administrator of Will)
If not the spouse why not? _______________________________________
Alternative Personal Representative: _______________________________
27. Do you want the personal representative or alternative personal
representative bonded?
28. Any property located outside of state of Montana?
______________________
__________________________________________________________________
29. Do you want a special provision for distribution of personal
property? This is a separate sheet of paper testator can change
periodically without having to update the Last Will and Testament.
30. Special Instruction: ______________________________________________
_________________________________________________________________
31. Special Instruction: ______________________________________________
_________________________________________________________________
32. Special Instruction: ______________________________________________
_________________________________________________________________
33. Do you have a safe deposit box? ____________________________________
34. Do you want a living will?
_________________________________________
35. Do you want to designate a person to make a decision on your
continued health care if you are unable to do so?
________________________________
36. Is this case a possible Power of Attorney client?
Examine the alternatives.
A) Statutory Power of Attorney
B) Durable Power of Attorney
C) Specific Power of Attorney
D) Springing Power of Attorney
E) Durable Power of Attorney for Health Care
37. Any physical or mental disability?
__________________________________
_________________________________________________________________
38. Other: _________________________________________________________
__________________________________________________________________
ESTATE PLANNING SHEET
FORM TWO
The following is an outline which may be used at an initial estate
planning conference with clients. Some of the areas covered will not be
applicable in every situation. In some cases, more questions will have
to be asked.
CLIENT: _____________________________________________
Address: ______________________________________________
Home Phone: _________________________________________
Business Phone: ________________________________________
I. FAMILY BACKGROUND
A. Client and Spouse
CLIENT SPOUSE
1. Name: _________________
________________
a/k/a: _________________
________________
2. Date of Birth _________________ ________________
3. Occupation _________________ ________________
4. Employer of Firm _________________ ________________
5. How long employed _________________ ________________
6. Prior employment _________________ ________________
7. Education _________________
________________
8. Money management and
investment experience _________________ ________________
9. Condition of Health _________________ ________________
10. Nuptial agreements _________________ ________________
(Secure copy)
11. Social Security No. _________________ ________________
12. Prior marriage _________________ ________________
a. Date: _________________
________________
b. Number of children
of prior marriage ________________ _______________
c. Financial obligations ________________
_______________ 13. Have any children from prior marriage(s) been
adopted by client or spouse? If so, list children:
a. Name _______________
________________
a/k/a _______________
________________
b. Date of birth
c. Natural or adopted child ______________ _________________
d. Address ______________
_________________
e. Occupation ______________
_________________
f. Education ______________
_________________
g. Financial Status ______________
________________
h. Money management/
investment experience ______________
________________
i Condition of health ______________
________________
j. Marital status ______________
________________
k. Spouse's name ______________
________________
l. How long married ______________
________________
m. Names and ages of ______________
________________
children _______________
n. Discuss relationship between client and each child (and child's
spouse, if child is married)
o. Are any of client's children deceased and if so are there any living
issue of deceased child? If so, secure name and ages.
B. OTHER INFORMATION REGARDING FAMILY:
C. OTHER DEPENDENTS:
D. FINANCIAL AND OTHER ADVISORS:
1. Accountants
2. Life Insurance Agent
II. ASSETS OWNERSHIP AND FAIR MARKET VALUE
Joint Tenants
Description & location Client Spouse
(H&W) In Common
(H&W)
A. Real Property $______ $______
$______ $_______
(Check deeds)
B. Mineral interests ______ _______
______ _______
(Note whether production)
C. a. Savings account ______ _______
_______ _______
b. Checking account ______ _______ _______
_______
c. Certificates of deposit ______ _______ _______
_______
D. Securities (other than closely ______ ______ ______
_______
held stock and US treasury
bonds)
E. US Treasury Bonds ______ ______
_______ ______
"Flower Bonds"
F. Closely held stock ______ ______
______ ______
G. Leases ______ ______
______ ______
H. Outstanding Contracts/notes ______ ______ ______
______
I. Motor Vehicles (Excluding ______ ______ ______
______
used in trade or business)
J. Motor Vehicles (used in ______ ______
______ ______
trade of business)
K. Other machinery/equipment ______ ______ ______
______
(used in business)
Joint Tenants
Description & location Client Spouse
(H&W) In Common
(H&W)
L. Household furnishings _______ _______
_______ _______
M. Office furnishings $______ $______
$______ $______
N. Collections _____ _____
_____ _____
O. Jewelry or other personal _____ _____ _____
_____
effects of substantial
intrinsic value
P. Livestock ______ ______
______ ______
Q. Brands ______ ______
_______ ______
R. Grains ______ ______
_______ ______
S. Life Insurance ______ ______
_______ ______
1. Face value of insurance ______ ______
_______ ______
on self policy owned by self
2. Cash value of policies on ______ _______ _______
______
life of others
3. Face amount of policies ______ _______
_______ ______
on life of others
T. Employee/other death benefits ______ _______ _______
______
U. Deferred compensation ______ _______
______ ______
V. Powers of Appointment ______ _______
______ ______
(obtain documents)
W. Annuities ______ _______
______ _____
TOTALS: $______ $______
$______ $____
III. DEBT
Description Client
Spouse Joint
A. Mortgages $______
$______ $______
B. Outstanding Contracts/notes ______ ______
______
C. Other ______
______ ______
TOTALS: $______
$______ $______
IV. BUSINESS INTERESTS
A. Name
B. Location
C. Business structure (sole proprietorship, partnership, corporation,
or other)
If incorporated:
1. Sub-charter S ( ) or Conventional ( )
2. Classes of stock (describe each class)
3. Stock, Ownership
4. History of dividends declared and paid
D. If other than corporation, specify ownership arrangement.
E. Business agreements (buy-sell, etc., obtain copies)
F. Assets owned by business - when acquired
G. Estimate of fair market value of business
H. Estimate of basis
I. Gross income (prior year) _____________ (estimate current)
_________
Net income (prior year) _______________ (estimate current)
_________
J. Key employees
K. Salaries
L. Pension and profit sharing plans
M. Insurance programs
N. Future plans - desires insofar as family concerned.
V. JOINT PROPERTIES
A. Description
B. When joint tenancy created
C. How acquired (purchase, inheritance, gift, etc.)
D. Gift tax return filed
E. If real property, was election under IRC 1954, S2515(C) made?
F. What basis, if any, is there for establishing contribution by
spouse?
G. Basis in property
H. Fair market value (estimate)
VI. LIFE INSURANCE
Insured
Type of policy
Owner
Beneficiary
Face Value
Loan
Cash Value
VII. GIFT HISTORY
A. Gifts over $15,000 in any one year to single person. (Specify
person relationship, date, nature, and amount
of gifts).
B. Gift Tax Returns filed: (Obtain copies)
C. Use of specific exemption.
D. Taxable gifts made.
E. Does client have a regular gifting program which is expected
to be continued?
F. Amount of inter-spousal gifts made after December 31, 1976,
marital deduction utilized (amount).
VIII. INCOME DATA
(Obtain copies of most recent federal and state income tax returns).
Client Spouse
Joint
A Wages, salaries $______ $ ______ $ ______
B. Dividends ______ ______
______
C. Interest ______ ______
______
Client Spouse
Joint
D. Net rents, royalties $ _____ $ ______ $
_____
E. Partnership ______ ______
______
F. Sub-chapter S ______ ______
______
G. Annuities ______ ______
______
H. Pensions ______ ______
______
I. Trust and Estates ______ ______
______
J. Other ______ ______
______
TOTALS: $ _____ $ ______
$ _____
Number of Exemptions claimed: _______ _______
Top federal income tax bracket: _______% _______%
_______%
Federal income taxes paid: $ ______ $ ______
$ ______
State income taxes paid: $ ______ $ _______
$ ______
IX. ESTIMATED FAMILY INCOME NEEDS AND SOURCES
After After Client &
A. Sources of Income Client's Death
Spouse's Death
Wages, salaries $ ________ $ _________
Dividends ________
_________
Interest ________
_________
After
After Client &
A. Sources of Income Client's Death
Spouse's Death
Net rents, royalties ________
__________
Trust and estate _________
__________
Insurance proceeds
Other death benefits _________
__________
Pension _________
__________
Social Security _________
__________
Other _________
__________
TOTALS: $ _________ $ _________
B. Income Needs
Taxes (property & income) $ _________ $
_________
Food, clothing _________
_________
Housing _________
_________
Medical _________
_________
Insurance _________
_________
Education _________
_________
Entertainment _________
_________
TOTALS: $ _________
$ _________
X. WILLS
A. Date of Will
B. Dispositive provisions
C. Tax Liability (federal estate and state inheritance) using current
estate values and distributing in accordance with wills, if any, or
otherwise by intestate succession statute.
XI. NEW WILLS
A. Dispositive desires of Client and Spouse
1. Family
2. Charitable Organizations
3. Other
B. Personal Representative:
Name:
2. Address:
3. Relationship:
Successor Personal Representative:
Name:
2. Address:
3. Relationship:
C. Guardian(s):
1. Name:
2. Address:
3. Relationship:
Successor Guardian
Name:
2. Address:
3. Relationship:
D. Trustee(s)
1. Name:
2. Address
3. Relationship:
Successor Trustee(s)
1. Name
2. Address:
3. Relationship:
E. Special Requirements:
1. Exercise of Power of Appointment
2. Orphan's exclusion
Disposition of certain personal items by means of separate writing.
SAMPLE WILL
WILL
OF
JOHN DAMIEN WHITE
(Fictitious name)
I. INTRODUCTION
I, John Damien White, also known as J.D. White, domiciled and residing
in Missoula, Missoula County, Montana, declare this to be my will,
revoking all prior wills and codicils.
II. FAMILY INFORMATION
I am married to Mary Helen White. All references of "my wife" are to
her. I have two (2) children, namely, David Baxter White and Cynthia
Baxter White. All references to "my children" refer to the two children
named in this paragraph and any other children hereafter born to or
adopted by me and my wife.
III. PRE-RESIDUARY GIFTS
A. Gifts of Special Items:
If my sister, Mary Vivian Jones, 115 Main Street, Prairie City, Utah,
survives me, I give her (and not her descendants) the Steinway grand
piano which was given to me by my mother. If for any reason I do not own
that Steinway grand piano at my death, the devise to my sister is
canceled.
B. Tangible Personal Property List
If my wife survives me, I give her all of (the rest of) my tangible
personal property.
If my wife fails to survive me, I might leave a written statement of
list disposing of items of tangible personal property. If I do and if my
written statement of list is found and is identified as such by my
personal representative no later than 30 days after the statement of
list is to be given effect to the extent authorized by law. Any
Page 1 of 5
Dated: _____________________
tangible personal property not effectively disposed of by such a
statement or list shall be distributed to my surviving children (and not
to their descendants) as they may agree. If my surviving children fail
to reach agreement within 90 days after the probate of this will, such
tangible personal property shall be divided among my surviving children
as my personal representative determines appropriate, in shares of
substantially equal value.
If any child of mine is a minor at the time of such division, my
personal representative may distribute the child's share to the child or
for the child's use to the child's guardian or to any person with whom
the child is residing, without further responsibility, and the
distributee's receipt shall be a sufficient discharge to my personal
representative.
IV. RESIDUARY CLAUSE
If my wife survives me, I give her the residue of my estate. If she
fails to survive me, I give the residue of my estate to my descendants
who survive me by representation.
V. METHODS OF DISTRIBUTION TO CERTAIN BENEFICIARIES
If under this will any property is distributable to a minor or to a
person under twenty-one (21) years of age, my personal representative in
my personal representative's absolute discretion, may distribute such
property in any manner permitted by law and additionally in any one or
more of the following ways:
(A) If the person is a minor, directly to the minor or on behalf
of the minor for the minor's exclusive benefit;
(B) If the person is a minor, to a guardian or conservator for the
minor; or
(C) If the person is under twenty-one (21) years of age, to any
person (including my personal representative) selected as a
custodian by my personal representative under the applicable Uniform
Transfers to Minors Act of any state.
Page 2 of 5 Pages
Dated ___________________
VI. APPOINTMENT OF PERSONAL REPRESENTATIVE
I appoint my wife as personal representative of my estate. In the event
she shall die, be adjudicated incompetent, or resign, I hereby name as
successor personal representative to fill such vacancy or any vacancy
that may thereafter occur, the first in the order named who is then
willing and able to serve:
(A) Steve Johnson
(B) Arvid Thompson
(C) Norwest Capital Management & Trust Co., Montana
VII. POWERS OF PERSONAL REPRESENTATIVE
In addition to the powers given to my personal representative by law
effective at death, my personal representative shall have all powers
authorized by the Montana Uniform Probate Code, as that Code exists on
the date of this will.
VIII. MONTANA LAW
This instrument shall be construed under the laws of the State of
Montana.
IX. REPRESENTATION
The persons who take under this will as "descendants by right of
representation" shall take in accordance with the rules of S72-2116 MCA
as that section exists on this date of this will.
X. CAPTIONS
The captions set forth in this Will at the beginning of various
provisions are for convenience of reference only, and shall not be
deemed to define or limit the provisions of this Will, or to affect in
any way its construction or application.
Page 3 of 5 Pages
Dated____________________
XI. CONCLUSION AND ATTESTATION
I, John Damien White, the testator sign my name to this instrument this
_______________day of ___________, and being first duly sworn, do hereby
declare to the undersigned authority that I sign and execute this
instrument as my will and that I sign it willingly (or willingly direct
another to sign for me),
that I execute it as my free and voluntary act for the purposes therein
expressed, that I am 18 years of age or older, of sound mind, and under
no constraint or undue influence.
__________________________
JOHN DAMIEN WHITE
We, witnesses, sign our names to this instrument, consisting of four
pages, being first duly sworn, do hereby declare to the undersigned
authority that the testator signs and executes this instrument as the
testator's last will and that the testator signs it willingly (or
willingly directs another to sign for the testator), that each of us, in
the presence and hearing of the testator, hereby signs the will as a
witness to the testator's signing, and that to the best of our knowledge
the testator is 18 years of age or older, of sound mind, and under no
constraint or undue influence.
_____________________________
WITNESS
Residing at ___________________
_____________________________
_____________________________
WITNESS
Residing at ____________________
_____________________________
Page 4 of 5 Pages
Dated________________________
STATE OF MONTANA)
County of Missoula )
SUBSCRIBED, SWORN TO AND ACKNOWLEDGED before me by John Damien White,
the testator, and subscribed and sworn to before me by the above-named
witnesses, this ________________day of ______________________,
____________.
__________________________________
Notary Public
for the State of Montana
Residing at:________________________
My Commission
expires:______________
(Notarial Seal)
Page 5 of 5 Pages
Dated: ____________________
Return to:
DECLARATION OF HOMESTEAD
KNOW ALL MEN BY THESE PRESENTS:
That ______________________and ___________________________, of
______________________________, ____________, Montana _________, select,
claim and declare a homestead on the dwelling house and all
appurtenances which are situated and located in the County of
__________, State of Montana, on land more particularly described as
follows:
That the persons making this declaration are acting solely and makes
this declaration for their own benefit and that of their family's; that
the undersigned reside on the premises above described and claim the
same as a homestead under the provisions of Sections 70-32-101 through
70-32-107, MCA.
This Declaration of Homestead amends and supersedes any Declaration of
Homestead executed by prior to this.
IN WITNESS WHEREOF, the undersigned have hereunto set their hand and
seal this _____ day of _______________.
STATE OF MONTANA )
: ss.
County of ______________ )
This instrument was acknowledged before me this ______ day of
_________, 200__ by
___________________________________________________________.
___________________________________________________
[ ], Notary
Public
(NOTARIAL SEAL) State of Montana, Residing at ___________________
My Commission Expires: ______________________
INSTRUCTIONS FOR RECORDING HOMESTEAD EXEMPTION
DECLARATIONS
I. PURPOSE OF HOMESTEAD EXEMPTION DECLARATION
If you complete this form and record it in the Clerk and Recorder's
Office in the county in which you live and have your home, it protects
your home from creditors' claims except for mortgages, construction
liens, and Medicaid liens.
II. MEANING OF HOMESTEAD
The exemption protects the home you live in. You must actually reside on
the property for it to be apply. Homestead includes the dwelling house,
or mobile home, and the land and improvements legally defined as
appurtenances to the land. This may include a mobile home where the
mobile home owner does not own the land the mobile home is situated on.
III. LIMIT ON VALUE EXEMPT
The maximum value of the protection is two hundred fifty thousand
dollars ($250,000). If the value of the property exceeds this amount,
the creditors may partition the land, selling part of it or may sell all
the property. If they sell all the property you get the first two
hundred fifty thousand dollars ($250,000) of the proceeds and this money
is protected from creditors for 18 months.
IV. WHO SHOULD SIGN
If married, both spouses should sign the declaration. If one does not
sign, his or her interest in the property is not protected. Both must
sign in front of a notary.
NOTE: Under Montana property law, a spouse may acquire an interest in
property due to the marriage, even though the spouse is not listed on
the deed or other documents of title, and even though the spouse has not
directly contributed money to pay for the property. Therefore, every
effort should be made to have both spouses sign the declaration.
V. RECORDING DECLARATION
After the Homestead Exemption Declaration form on page 42 is completed,
signed, and notarized, record the form in the Office of the County Clerk
and Recorder for the county in which the land (or mobile home) is
located. The recording fee for a one page document is between $7 and $12
and this fee must be paid when the document is delivered to the Clerk
and Recorder for recording.
Living Trusts
REVOCABLE LIVING TRUSTS
by
Marsha A. Goetting, PhD, CFP, CFCS
Montana State University
Extension Service
Living trusts have been promoted as the ideal solution for Montanans who
wish to secure a wide variety of financial planning objectives. Avoiding
probate and taxes are the primary goals of some. Others are concerned
about protecting assets for family members should they be confined to a
nursing home for a long period of time. Another may feel the need for
investment assistance because of his or her inexperience. Still others
want a way to continue their business if they should become disabled.
Are all these objectives possible? The answer is yes - but the most
appropriate legal tool to accomplish each one may not be a living trust.
What is a Living Trust?
A revocable living trust is just what its name implies - one that is
created during an individual's life that can be changed and terminated
at any time. It is a legal arrangement by which an individual
transfers ownership of assets to a trustee who manages the assets for
the beneficiaries designated in the trust agreement. Beneficiaries
named, in the trust agreement, can be the individual who formed the
trust, friends, family members, a college, hospital, library, charity or
other organization. Any type of asset - cash, certificate of deposits,
stocks, bonds, life insurance or real estate - can be placed into a
living trust.
The person providing assets for the trust is called the trustor or
grantor. The grantor must actually change the title of ownership of each
asset that will be placed in the trust from his or her name to ownership
by the trust. The trustee manages the assets according to the directions
in the trust agreement. The trustee can be the person creating the
trust, several individuals, a corporate entity such as a bank or trust
company, or any combination of these.
A trust agreement is a document containing instructions to the trustee
stating, for example, who is to receive income from the trust and when
and how it is to be distributed. When the trust terminates, the
agreement designates the distribution of the assets to the beneficiaries
who are named in it.
Considerations in Forming a Living Trust
Consider the following issues to determine whether a living trust would
fit into your specific financial planning goals.
?promoted" as a tax avoidance tool. However, a living trust does not
provide the tax savings that are often attributed to it. Income earned
in a revocable living trust is taxed to the person creating it (grantor)
and must be reported on his or her personal state and federal income tax
returns. No federal gift tax is payable upon the creation of a revocable
living trust because the trust can be changed at any time by the person
forming it.
State and federal law require the value of revocable living trust
property to be included in the grantor's estate upon death. Since the
grantor is viewed as having control of the assets, their value must be
included for determining federal estate and Montana estate tax.
Typically, the following rights are reserved by the grantor when he or
she forms a living trust: to amend the trust, to change the
beneficiaries, to change the trustee, to change the date of termination
or to change the entire trust by revoking it and having the property
returned.
If none of these rights or similar rights are retained by the grantor,
then the trust becomes irrevocable and the value of the assets in it are
subject to federal gift taxation at the time the trust is formed. At the
death of the grantor, the value of assets in an irrevocable trust are
not usually subject to the Federal estate tax.
Probate Costs vs. Living Trust Costs. Probate in Montana is not
nearly as burdensome as it is in other states that have not adopted the
Uniform Probate Code. In some states probate can be quite costly, as the
attorney and personal representative must appear before the court for
approval of almost every act involved in probating an estate. In
Montana, formal approval by the court is not required for any action
authorized in the Uniform Probate Code. The Montana Uniform Probate Code
specifically exempts from probate the following: assets in living
trusts, property owned as joint tenants with right of survivorship,
payable-on-death deposits, and life insurance payable to a named
beneficiary.
How much of your present estate is subject to probate? Typically only
solely-owned property or a deceased's share in tenancy in common
property is subject to probate. However, even for non-probate property
there are reporting requirements for inventory taxes, and perhaps
Montana and federal income taxes.
Even if your property is subject to probate, your heirs have the right
to ask the attorney to handle the case on an hourly fee basis which may
be less than the maximum statutory percentage. In Montana the maximum
charge allowed for the attorney is one and one half times (1 1/2) the
amount allowable to the personal representative. The percentage for the
personal representative (which is a maximum fee) is three (3%) percent
of the first $40,000 and two (2%) percent in excess of that amount.
For example, on a $200,000 estate, a personal representative could
receive a maximum of $4,400 and the attorney $6,600. ($40,000 X .03 =
$1,200; $160,000 X .02 = $3,200; $1,200 + 3,200 = $4,400; $4,400 X 1.5 =
$6,600).
An hourly fee could result in less expense for the estate and/or heirs,
especially if the individual accomplished estate planning before his/her
death.
There is no guarantee that a living trust will save money over probate.
For example, if you use a paid trustee such as a bank or trust company,
management fees over the years could easily exceed the cost of probate.
Trust fees are often based on a percentage of income or principal, with
annual minimums ranging from $500 to about $2,500 depending upon the
institution. Many institutional trustees won't accept trusts with under
$50,000 in assets.
Protecting Assets For Heirs. With nursing home costs averaging $44,000
a year, many parents are concerned with preserving assets for their
heirs. One source of assistance is Medicaid. But to be eligible an
applicant must not have cash and other non-exempt assets exceeding
$2,000 as an individual. Assets in a living trust would be considered as
non-exempt assets. A home placed in a living trust is not exempt from
creditors' claims. The one exception to the general rule is the family
home; as long as one spouse is living at home, he or she can't be forced
to sell the home to pay for the other's nursing home care. The state of
Montana, however, can make a creditor's claim on the estate after the
surviving spouse has died to recoup the nursing home costs. However, the
Montana homestead allowance protects value in a home up to $100,000.00.
The homestead allowance is exempt from and has priority over all claims
against the estate.
Those who are concerned about nursing home costs should explore a
long-term care insurance policy to see if it would better meet their
financial planning goals than does a living trust.
Is an Inexperienced Investor A Concern? There are many instances where
inexperienced investors may prefer placing assets in a living trust
until they feel the confidence to take over management themselves. For
example, a recent widow had very little investment experience and did
not want to be responsible for investing the sizable amount of money she
received upon the death of her husband. Although she is willing to learn
more about investing, she needed the emotional security of having
someone else manage her assets for her, so she established a revocable
living trust.
Incompetency. Advancing age, serious illness, or accident may render
a person incapable of either supervising his or her investments and
business, or making necessary payments for his or her well being. A
revocable living trust could be a management tool in this case. As an
example, a retired bachelor with only distant relatives suffered a
severe heart attack and was away from his business for several months.
As a result of that experience he chose two living trusts - one naming a
corporate -- trustee for his investments and the other naming a trusted
partner for the business. Under this arrangement his investments are
being continually supervised and, if he should become incapacitated, the
corporate trustee can step in to take care of his living expenses. An
alternative to a living trust may be a power of attorney.
SUMMARY
Before establishing a living trust, make a list of financial planning
objectives you wish to achieve. Then discuss your needs with
professionals such as an attorney, a trust officer, a certified public
accountant and/or a certified financial planner. They may suggest an
array of financial planning tools that could better help you achieve
your goals than a living trust.
Living Trust Scams: Montana Seniors Beware
by: Rick Bartos
The popular television series Dragnet introduced us to Sergeant Friday.
A constant fighter of crime, Sergeant Friday was always able to protect
the innocent by asking for, "Just the facts." Here are a few facts about
living trusts.
What is a living trust?
A living trust is an alternate way to own, manage and dispose of your
property. It is much like a bank account in that you cannot see or touch
the trust. The trust owns the property you transfer into it while you or
someone you choose takes care of that property.
The living trust is created by a trust document. The document states who
is creating the trust (grantor), who will manage the trust (the
trustee), who will benefit from the trust (the beneficiary), and what
property will become part of the trust.
You are the grantor of your living trust. You decide which pieces of
your property should become part of the trust body. Your trust can
include real estate, bank accounts, stocks, bonds and other personal
property items. You decide if you want to transfer all or only some of
your assets into your trust.
You may also be the trustee of your living trust. Being the trustee
allows you to exercise full control of the property you have transferred
into the trust. If you do not want to manage your living trust, you may
appoint another person or a financial institution to do so for you.
Can I avoid probate with a living trust?
In many instances the answer is yes. However, the cost of buying a
living trust and transferring your assets into the trust may well exceed
any probate costs you may encounter.
Your assets must be properly transferred into the trust. If they are
not, you might not avoid probate. Even if you have a proper trust, you
still need a will to cover property you might have missed or which is
later acquired and never transferred into the trust.
In many instances, if your property is held in joint tenancy with right
of survivorship (husband and wife) you will not have to probate any
property when the first spouse passes away. The surviving spouse has no
legal need to probate. If the estate is less than $600,000 in value
there will be no estate or inheritance taxes. Do not be misled by
probate delay and fee horror stories. Not all individuals need a trust -
not all probates are expensive or time consuming.
Can a living trusts save me estate or inheritance taxes?
No.
Can a living trust allow me to qualify for Medicaid if I were to enter
a nursing home and thereby save my assets?
In virtually every instance the answer is no. It is unlikely a living
trust will save any assets from the spend-down requirements to become
Medicaid eligible.
What are the expenses of a living trust?
1. Cost of having the trust instrument drawn up to establish the trust.
2. Paying the trustee's fee.
3. Paying for transferring the assets into the living trust.
Why should I consult an attorney?
1. Licensed Montana attorneys must follow strict ethical standards.
They are subject to review for their actions by the Commission on
Practice and ultimately the Montana Supreme Court.
Montana attorneys have at least 7 years of higher education. They are
required to
complete rigorous legal education training and testing.
3. In consulting an attorney, you establish an attorney-client
relationship. The information you share with the attorney must be kept
confidential. You continue to receive the services long after the
trust document was created.
If you are reluctant to approach an attorney, your local Area Agency on
Aging office has trained volunteer counselors to assist. Also your bank
trust officer or a licensed or certified public accountant would be
excellent resource people to assist you.
Many trust kits and commercial packages are sold by unlicensed persons
claiming to be insurance salespersons or financial planners. They walk
the line of unfair trade practices and the unauthorized practice of law.
They exaggerate the time and cost considerations of probate. And because
they are neither licensed or regulated, they may not keep your financial
information confidential.
Why should I be cautious about the commercial trust packages?
1. These salesperson are not regulated by any local or state government
consumer office.
2. Trust kits do not allow the trust to be tailored to your specific
needs and goals. You receive no individualized legal or estate
planning advice.
3. Commercial trust packages will more likely cost you more than it
costs to have a lawyer establish a living trust.
4. Trust kits and commercial trust packages require you to transfer
your property into your trust. This can be a time consuming and
complicated task, involving the completion of new deeds and
transfer documents. If you have an attorney establishing your
trust the attorney can assist in transferring your property into
your trust.
Where can I get the facts on living trusts?
Montana Office on Aging: 1-800-332-2272
Montana Attorney General Office: (406) 444-2026
Montana State Bar Elder Assistance Committee (406) 442-7660
REMEMBER: Determining if you really need a trust is the first step;
correctly identifying your assets and tailoring the trust is the second
step; and do not forget the third and critical step, legally and
properly transferring assets into the trust.
They're your assets. It's your future. Be careful.
THE USES AND ABUSES OF REVOCABLE TRUSTS
IN MONTANA:
WHEN THEY ARE NEEDED AND WHEN THEY ARE NOT
E. Edwin Eck
University of Montana
School of Law
I. INTRODUCTION
A revocable trust is one where the trustor (settlor) has a right to
revoke. In most states, this right to revoke must be retained by the
trustor in the trust instrument. However, in Montana unless a trust is
expressly made irrevocable by the trust instrument, the trust is
revocable. Of course, from a drafting standpoint, it is preferable to
include an express provision indicating the trustor's ability to revoke
the trust.
Revocable trusts are often characterized as either "funded" or
"unfunded". The primary purpose of the funded trust is to avoid probate
of those assets which were placed in the trust prior to the trustor's
death. The "unfunded" trust does not contain assets prior to the estate
owner's death. Rather, the unfunded trust is to receive assets upon the
death of the estate owner. Thus, the unfunded trust does not avoid
probate.
The focus of this presentation is the funded revocable trust.
II. USES OF REVOCABLE TRUSTS
There are a variety of uses of such trusts.
A. Asset Management (during lifetime). An estate owner may wish to have
someone else manage assets for him or her during lifetime, but does not
want to give up control. A number of circumstances could be cited where
management by someone else is desirable. I will list three such
circumstances:
1. Client A may have recently received a windfall but be
inexperienced in asset management.
2. Client B may be intending to travel substantially. Client B
wants someone else to handle the continuing monitoring of investments as
well as the mechanics of transferring dividends and interest to a
checking account.
3. Client C is an elderly person and no longer enjoys
investment decision making.
In all of these circumstances, a revocable trust could be considered. In
all of these cases, someone other than the trustor will be named
trustee. While the trustee selection is beyond the scope of this
outline, the client in need of asset management often considers the
corporate trustee because of its investment experience.
This use of a revocable trust involving the selection of a corporate
trustee is not one of the uses typically cited by promoters of revocable
trusts. They focus on the "self-trusteed" trust, where the trustor is
also the trustee.
B. Future Incapacity (during lifetime). An estate owner may fear a
possible future incapacity. Without a revocable trust, if a Montanan
became incapacitated, a conservatorship proceeding could be initiated
(see discussion under Guardianships & Conservatorships). Critics of the
conservatorship proceedings cite the following which they perceive to be
disadvantages of a conservatorship.
court costs;
attorney fees;
the potential publicity associated with a hearing concerning the alleged
incapacity;
the possibility of the court imposing bond;
the requirement to inventory assets within 90 days of appointment;
the limitations on conservators making gifts, conveying or releasing
contingent interests, entering into contracts, creating trusts,
exercising options to purchase, and other restraints of conservators'
powers which require prior court approval;
the requirement of annual accounts.
With the use of a funded revocable trust, all of these disadvantages are
avoided.
A revocable trust is not the sole devise used to avoid the disadvantages
of a conservatorship. The estate owner can also utilize a durable power
of attorney, to achieve the same goal.
C. Privacy in the disposition of assets (Probate Avoidance). A will is
filed as part of the probate proceeding. A revocable trust is not part
of the public record. Thus, clients who wish to dispose of their assets
privately are likely to find the revocable trust to be the preferred
vehicle.
Examples of clients who wish private disposition include:
a parent who wishes to disinherit a child;
a parent who wishes to impose further trust restrictions on an adult
child who is incapable of managing assets;
a man who is acknowledging the existence of an illegitimate child;
and a man or woman whose estate plan is beyond the mores of the
community.
D. Privacy in the nature and value of assets (Probate
Avoidance). The probate statutes of many states require the personal
representative to file in court an inventory of the property owned by
the decedent and to list fair market values as of the date of the
decedent's death. Some clients do not wish the nature and extent of
their assets to be part of the public record.
However, privacy in the nature and value of assets is not a valid reason
to establish a revocable trust in Montana. MCA 72-3-607(3), reads:
The personal representative shall send a copy of the inventory to
interested persons, or file the original of the inventory with the court
and send a copy of the inventory to interested persons who request it.
Thus, a personal representative in Montana is not required to file an
inventory with the court.
E. Avoiding the fees and costs associated with probate (Probate
Avoidance).
1. Effective July 1, 1992, the filing fee for the
commencement of a probate is $70. MCA 25-1-201(m).
2. The personal representative is required to publish a notice to
creditors. MCA 72-3-801. Publication fees vary from newspaper to
newspaper.
3. Personal representatives are entitled to reasonable compensation.
Under Montana law, that compensation shall not exceed 3% of the estate
for the first $40,000 of assets and 2% of the value of the estate in
excess of $40,000 without court approval. MCA 72-3-631.
4. The compensation of the attorney shall not exceed 1 1/2 times
the compensation allowable to the personal representative. MCA
72-3-633. An interested person may file a motion for a court
determination of the "reasonableness" of the compensation of any person
employed by the personal representative, including any attorney. MCA
72-3-634.
The Montana Supreme Court has concluded that these statutes require that
the fee charged for legal services be reasonable. Such is ascertained by
considering the time spent, the nature of the service, and the skill and
experience required. ESTATE OF ROBERT E.. STONE, 768 P.2d 334, 336
(Mont. 1989). In the same case the court expressly rejected the argument
that the percentages set forth in MCA 72-3-631 and 72-3-633 are
standard fees.
Because of the lack of published and reliable data concerning all of
these fees, it is simply difficult, if not impossible, to make any
certain comparisons. Further, it is likely that fees vary substantially
from lawyer to lawyer. Also, the same lawyer might charge different
amounts to different clients for performing similar services depending
upon the responsibility assumed, the matter's complexity, and the time
devoted to the project. These variances in fees and the lack of data
concerning fees opens the door for irresponsible advocates of revocable
trusts and the advocates for probate to overstate their positions.
Avoiding the delays associated with probate (Probate Avoidance)
The public perceives that there are a number of delays associated with
probate. In fact, the Montana Uniform Probate Code does set certain time
periods which must elapse before the estate can be closed. A creditor
has four months after the date of the first publication of notice to
creditors within which to file a claim. An estate cannot be closed by a
sworn statement until the expiration of six months after the date of the
original appointment of the personal representative. No corresponding
restrictions are applicable to a revocable trust.
However, death tax considerations may keep both a probate estate and a
trust estate in existence well after the death of the decedent. If a
distribution is subject to Montana inheritance taxation, both a personal
representative of a probate estate and a trustee of a trust may delay
closing until 18 months after the decedent's death in order to postpone
the payment of tax and still qualify for the 5% discount of MCA
72-16-440.
If the value of the gross estate exceeds the applicable exclusion
amount, a federal estate tax return must be filed within 9 months after
the decedent's death. IRC 6018 and 6075. If either a probate estate
or a trust estate contains assets which are difficult to value or assets
which raise other estate tax issues, it is not unreasonable to assume
that the fiduciary will need the full nine months to collect the data
necessary to complete the return. Further, the Internal Revenue Service
has three years after the return was filed, to audit and assess
additional tax. IRC 6501. This three year period applies both to a
probate estate and to a trust estate.
In summary, while a probate estate does require that certain time
periods elapse prior to closure, both the probate estate and the trust
estate face the same tax considerations which could mean the
continuation of the estate.
G. Avoiding probate generally. As noted, one primary use of the
revocable trust is simply to avoid probate generally. Without
identifying any specific perceived undesirable characteristic of
probate, such as a lack of privacy or excessive cost, some of the public
simply believe that probate is bad.
III. PROMOTERS OF REVOCABLE TRUST
Unfortunately, there are a variety of unscrupulous promoters of
revocable trusts who make misstatements and misleading statements
concerning their uses. The following is a listing of such statements and
one teacher's response.
A. A revocable trust can save taxes which cannot be saved though a
will and probate.
False. To a considerable extent a revocable trust is disregarded for
all tax purposes. For gift tax purposes, the transfer of assets to a
revocable trust is not a taxable gift because of the trustor's power to
revoke renders that transfer incomplete. For income tax purposes, the
income, deductions, and credits of the trust are attributed to the
trustor. IRC 676 and 671. For estate tax purposes, all of the
trust's assets are included in the trustor's gross estate. IRC 2038.
A common estate tax planning technique is the use of a "bypass B'', or
"credit shelter" trust. Assets placed in such a trust are not subject to
estate taxation upon the death of the surviving spouse. Often the
maximum amount of assets which can be sheltered against the estate tax
unified credit of IRC 2010 are placed in such a trust.
These trust provisions can be part of a will (a testamentary trust)
funded upon the death of the estate owner. The same trust provisions can
be made part of a revocable trust. The same estate tax savings can be
achieved either instrument.
B. A will is subject to possible contests. A revocable trust is not
subject to contest, or is subject to contest to a lesser degree.
ESSENTIALLY FALSE. Montana has cases which indicate that gratuitous
transfers by trust are subject to attack on the basis of a lack of
capacity, undue influence, and fraud. See e.g ADAMS v. ALLEN, 679 P.2D
1232 (Mont. 1984). These same grounds can be used to attack a transfer
by will.
Perhaps one could argue that the Montana Uniform Probate Code's notice
requirements might encourage a contest. For example, MCA 72-3-603
requires a personal representative to give notice of his appointment to
the decedent's heirs and devises within 30 days of the personal
representative's appointment. No similar requirement exists for
revocable trusts upon the death of the trustor. However, I think that
if there is evidence of a lack of capacity, undue influence, or fraud, a
substantial gratuitous transfer will be attacked whether the transfer is
made by trust or will.
C. Assets placed in a revocable trust are not subject to creditor
attack.
FALSE During the trustor's lifetime, property in a revocable trust is
subject to the claims of the trustor's creditors. MCA 72-36-301. After
the trustor's death, trust property is subject to the claims of the
creditors of the decedent trustor's estate. MCA 72-36-302.
D. Assets placed in a revocable trust are not subject to a spouse's
claim for an elective share.
FALSE Assets placed in a revocable trust are included in the trustor's
augmented estate and subject to the spouse's right of election.
MCA 72-2-705(l)(b) and 72-2-702.
E. Assets placed in a revocable trust are not counted for Medicaid
purposes.
FALSE. The income and principal of a trust is treated as an available
resource of the trustor for Medicaid purposes if the trust was
established by the trustor during the trustor's lifetime. 42 USC
1396p(d).
F. One may transfer assets at death in trust wherein a second person
is a discretionary beneficiary. The second person does not have to count
those assets for Medicaid purposes.
ESSENTIALLY TRUE. If such a trust is a testamentary trust (i.e., if the
trust was created by will), the assets of such a trust are expressly
excluded by statute. 42 USC 1396p(d). There is no similar express
statutory exclusion if the discretionary trust provisions are part of a
revocable trust. Policy considerations could argue that there should be
no distinction between either trust since the discretionary beneficiary
cannot force a distribution to him/herself in any event. Nevertheless, a
cautious practitioner might prefer a discretionary trust created by will
over one created by a revocable trust in such a circumstance.
G. A probate proceeding necessarily includes many court hearings.
FALSE An estate can be probated informally under the Montana Uniform
Probate Code. While documents have to be filed with the Clerk of Court,
NO HEARINGS ARE REQUIRED. MCA 72-3-201 et seq.
H. Everyone needs a revocable trust.
FALSE In Montana there are some good reasons to consider a revocable
living trust. Perhaps a client desires asset management by another
person or a trust company. Perhaps a client desires privacy in the
disposition of his assets. Or perhaps, a client owns real property in
another state where probate proceedings are more cumbersome or clearly
costly.
While there are good reasons for some to consider revocable trusts,
there is no good reason for everyone to adopt a revocable trust.
Potential disadvantages must be considered.
First, typically revocable trusts are more expensive than wills to
create. Trust instruments are usually more complex than wills. Also,
time has to be devoted to assets transfers.
Second, simplicity favors retaining assets in the name of the estate
owner. During the estate owner's lifetime there is no trust instrument
which must be provided to a stockbroker, a title company, or other third
party.
One alternative for a married couple who wants to avoid probate is to
place assets in joint tenancy with rights of survivorship and adopt
durable powers of attorney.
IV. THE TRANSFER AND HOLDING OF ASSETS IN REVOCABLE
TRUSTS:
CONSIDERATIONS PRIOR TO THE TRUSTOR'S DEATH
A. Title to assets should be transferred to "[name of trustee],
trustee under Trust Agreement dated [date of execution] between [name of
trustee] and [name of trustor]." Some trust drafters also provide a name
for the trust in the trust instrument and include that name in the title
of transferred assets.
If a partnership interest is to be transferred, any written partnership
agreement should be examined. Express procedures for making the trustee
an assignee of the partnership interest should be followed. Written
consent of the other partners may be necessary. If a limited partnership
interest is being transferred, it will also be necessary to amend the
certificate of limited partnership.
If real property is to be transferred, the trustor's title insurance
policy
should be examined to see if the title company's guarantee will be
sufficient after the transfer.
If the property is subject to an encumbrance, the deed of trust or the
mortgage should be examined to see if it includes a "due on transfer"
clause. Some practitioners as a matter of course obtain express written
permission from the lender before making a transfer of encumbered
property to a revocable trust.
D. If an asset does not have title, a written assignment should be
prepared.
Some practitioners who routinely include clauses in wills authorizing
the use of a separate writing to dispose of tangible personal property
as provided in MCA 72-2-312, include similar clauses in both the pour
over will and in the revocable trust. Thus, even if such an asset was
not effectively transferred in trust prior to the trustor's death, the
dispositive provisions of both the will and the trust are identical.
E. Stock in an S corporation can be held in a revocable trust. IRC
1361 (c)(2)(A)(I) provides that when the grantor is treated for general
income tax purposes as the owner of a trust, as is the case with a
revocable trust, such a trust may own stock in an S corporation without
jeopardizing the S election.
F. The transfer of an installment obligation to a revocable trust is
not a disposition of the obligation which would result in a realization
of the untaxed profit at the time of transfer. Rev. Rule. 76613. 1974 2
C. 3. 153.
Some uncertainty can arise if the installment obligation is owned by
husband and wife and a transfer is intended to a trust which is
revocable by only one spouse. One alternative is to make the transfer in
two distinct steps. First, one spouse could simply make an outright
transfer of his interest in the obligation to the other spouse. This
transfer should not result in the recognition of gain. IRC 453B(g)(1)
and 1041. Second, the transferee spouse could make a subsequent transfer
to her revocable trust.
G. The transfer of Series EE U.S. savings bonds to a revocable trust
does not cause the acceleration of recognition of bond interest. Rev.
Rul. 58-2, 1958-1 C.B. 236. PLR 9009053.
H. The capital gains exclusion on the sale of a principal residence
is not affected if title to the house is held in trust. IRC 121
provides a capital gains exclusion of up to $125,000 to a person over
the age of 55 who sells his principal residence. This exclusion is
obtainable even when the title to the home is held in a revocable trust.
PLR 8007050.
I. "Flower" bonds may be held by a revocable trust. Certain
outstanding U.S. government bonds are eligible for redemption at par for
the payment of the federal estate tax. When such bonds are held in a
revocable trust, either (1) the trust instrument must require the
trustee to pay all or a pro rata portion of the estate tax or (2)
statutes in the decedent's domicile must require the trustee to pay the
tax or the proportionate share of the tax that is attributable to the
trust assets. While MCA 72-16-603 is such an apportionment statute, it
is preferable that the trust instrument require the trustee to pay such
taxes. Any tax apportionment provisions of a pour over will should be
consistent with the trust instrument.
J. The trust instrument and a durable power of attorney should be
drafted so that the trustee could make similar distributions to an agent
who in turn could make gifts to third parties.
K. Generally trusts must have their own identification numbers and
file their own income tax returns, unless they have under $600 in gross
income. IRC 6012(a)(4). Most grantor trusts are subject to these same
requirements, although all of the items of income, deduction, and credit
are included in the computation of the trustor's personal income tax
liability. Regs. 1.6019-3(a)(1), 3(a)(9).
However, if the trustor or the trustor's spouse is a trustee or a
co-trustee of a revocable trust, such a trust does not need its own
identification number and no trust income tax return need be filed.
Regs. 1.671-4 and 301.6109-1(a)(2).
V. THE REVOCABLE TRUST AFTER THE TRUSTOR'S DEATH
A. Transfer of assets. The trust instrument may provide for trust
termination upon the death of the trustor. If the trustor is also the
trustee, a successor trustee would serve. Typically that successor is
designated in the trust instrument. However, if no practical method of
appointment is included in the trust instrument, a co-trustee or a
beneficiary may petition to court to fill the vacancy. The court is to
give consideration to the wishes of trust beneficiaries who are 14 years
of age or older. MCA 72-33-621.
The successor trustee will need to present proof to third parties with
whom the trustee must deal that he or she is properly acting as trustee.
If the successor trustee is court appointed, a copy of the trustor's
death certificate and a certified copy of the court order should
suffice.
If the successor trustee is not court appointed, the procedure is less
certain and will likely vary from third party to third party. Perhaps a
copy of the trustor's death certificate and a verified copy of the trust
instrument will satisfy the requirements of most third parties. If a
third party requires that the copy of the trust instrument be certified
by a public official (clerk and recorder or clerk of court), the
revocable trust's advantage of privacy in disposition of assets would be
lost.
In the case of Montana real property, the identity of any successor
trustee may be established by a recorded affidavit of the successor
trustee specifying: (1) his name, (2) his address, (3) the date of his
succession, (4) the circumstances of his succession, and (5) confirming
that he is currently lawfully serving as trustee. MCA 72-36-206(6).
B. Corporation stock. After the trustor's death, the trust becomes
irrevocable. The irrevocable trust may continue to hold S stock for two
years after the trustor's death. IRC 136(c)(2) (A)(ii). Unless the
continuing trust provisions satisfy the requirements of a "qualified
Subchapter S trust' ' as specified in IRC 1361 (d)(3), the corporation
will lost its S status.
Advance Directives
ADVANCE MEDICAL DIRECTIVES
The "Montana Rights of the Terminally Ill Act" (also known as the
Montana Living Will Act") allows individuals the maximum possible
control over their own medical care and inevitable death. The law allows
you to declare your intent not to have life sustaining treatment which
only prolongs the process of dying. This Declaration of Living Will only
becomes effective if your attending physician determines you have an
incurable or irreversible condition that will result in death in a
relatively short time.
The law provides immunity for physicians and facilities which carry out
the provisions of the living will. It also provides a procedure which
requires the physician who will not honor your living will to so notify
you, and transfer you to another physician who will comply with your
wishes. You have the ability to revoke this Declaration of Living Will
at anytime and in any manner. There are also provisions allowing you the
option of designating another to make the decisions regarding
withholding or withdrawal of life sustaining treatment.
If you do not write a living will, or you do not designate another to
make these decisions, the law provides a list of individuals who will be
allowed to make the decision for you, in the following order:
1) spouse;
2) adult child or majority of your adult children;
3) parents;
4) adult sibling or majority of your adult siblings;
5) nearest other adult relative.
Living wills have no affect on life insurance or on annuities.
Before considering a "living will" there are three important points to
bear in mind.
1. First, a "living will" is only used when you can no longer
participate in the decision making process surrounding your treatment
and you have been diagnosed with a terminal condition which will result
in death in a short period of time. As long as you remain competent you
may refuse or accept treatment, regardless of the existence of a living
will.
2. Second, the living will is a personal statement which should
reflect your end of life treatment desires. It should be developed by
you, with consultation with your attorney if you wish to use one. You
may wish to discuss this topic with loved ones and your personal doctor
or health nurse. Any generic or standardized form of a living will
should be examined to ensure that it reflects your wishes.
3. Third, the validity and composition of living wills may vary
from state to state. If you anticipate spending a substantial amount of
time in another state, you should research that state's law.
If you have decided to exercise your right to a living will, please
consider the following steps:
A. Do the research. Materials and other samples may be obtained
from a variety of sources (for example: Montana Senior Citizens'
Association; American Lung Association of Montana; or Montana Code
Annotated). Be positive that your ideas concerning the nature of
incompetency which triggers the use of the will,
the severity of the medical condition necessary to withhold treatment,
and the types of treatment to be withheld are expressed in the document.
B. Consider carefully who will serve as witnesses. Although
Montana law has little to say concerning witnesses, other states have
set out more specific requirements. As a general rule, your attending
physician or other medical personnel who may be attending to you in time
of illness should not act as witnesses. In some states relatives may not
act as witnesses.
C. The living will should be easily accessible to those likely
to be involved in a time of emergency. Copies of the executed document
should be in your medical records, and family members and your personal
physician should also have a copy. You may also want to carry a card in
your wallet or purse stating the existence of your living will and how
it may be located.
D. A living will should be re-executed, or rewritten, at
relatively frequent intervals. This will add to the perception that the
document truly reflects your wishes.
E. Remember, you have the ability to revoke the living will at
anytime and in any manner.
F. Montana law does not specify whether food and water are
considered ``life sustaining treatment. Therefore your living will
should be specific as to whether you wish food and water to be provided
or not.
Like a testamentary will, the living will allows you to maintain your
right to self-determination. It is a document of great significance
which requires research and reflection before drafting. Contact your
local Area Agency on Aging for additional information if you feel it is
necessary.
Use the form on the following page if you want to appoint someone else
(who is of sound mind and 18 years of age or older) to make the
decisions for you about withholding or withdrawing life-sustaining
treatment. If your appointee is unavailable or unwilling to serve as
your designee, your doctor will make the determination. If you use the
form, check with the people you want to be designees to make sure they
are willing to so serve.
DECLARATION OF LIVING WILL APPOINTMENT
If I should have an incurable and irreversible condition that, without
the administration of life-sustaining treatment, will, in the opinion of
my attending physician or my attending advanced practice registered
nurse, cause my death within a relatively short time and I am no longer
able to make decisions regarding my medical treatment, I appoint
_______________________________________, or if he or she is not
reasonably available or is unwilling to serve I appoint
________________________________ in the alternative, to make decisions
on my behalf regarding withholding or withdrawal of treatment that only
prolongs the process of dying and is not necessary for my comfort or to
alleviate pain, pursuant to the Montana Rights of the Terminally 111
Act. If the individual(s) I have appointed are not reasonably available
or are unwilling to serve, I direct my attending physician or my
attending advanced practice registered nurse, pursuant to the Montana
Rights of the Terminally Ill Act, to withhold or withdraw treatment that
only prolongs the process of dying and is not necessary for my comfort
or to alleviate pain.
Signed this____ day of _________________, 20___.
___________________________________
Signature
______ Printed name
______ Address
The declarant voluntarily signed this document in my presence.
_______________________________ ______________________________
Witness Name Address
_______________________________ ______________________________
Witness Name Address
DECLARATION OF LIVING WILL
If I should have an incurable or irreversible condition that, without
the administration of life-sustaining treatment, will, in the opinion of
my attending physician or my attending advanced practice registered
nurse, cause my death within a relatively short time and I am no longer
able to make decisions regarding my medical treatment, I direct my
attending physician or my attending advanced practice registered nurse,
pursuant to the Montana Rights of the Terminally III Act, to withhold or
withdraw treatment that only prolongs the process of dying and is not
necessary to my comfort or to alleviate pain.
Signed this_____ day of ___________________,20____.
______
Signature
_____ ____
Printed name
______________________________
Address
The declarant voluntarily signed this document in my presence:
_______________________________ ______________________________
Witness Address
_______________________________ ______________________________
Witness Address
REVOCATION OF DECLARATION
OF LIVING WILL
I, ____________________ hereby revoke my Declaration (Living Will)
regarding withholding or withdrawal of life-sustaining treatment in the
event I am in a terminal condition which will result in my death in a
short period of time.
This revocation is effective immediately and must be communicated to my
attending physician and other health care providers as soon as possible.
Dated this _________ day of ___________________________, 20___.
__________________________________
(Signature)
RIGHTS OF THE TERMINALLY ILL ACT
Excerpts from Montana Codes Annotated
Title 50, Chapter 9
50-9-102 Definitions. As used in this chapter, the following
definitions apply:
(1) ``Advanced practice registered nurse'' means an individual who
is licensed under Title 37, Chapter 8, to practice professional nursing
in this state and who has fulfilled the requirements of the Board of
Nursing pursuant to 37-8-202 and 37-8-409
(3) "Attending physician" means the physician selected by or
assigned to the patient, who has primary responsibility for the
treatment and care of the patient.
(4) "Board" means the Montana state board of medical examiners.
(5) "Declaration" means a document executed in accordance with the
requirements of 50-9-103.
(7) "Emergency medical services personnel" means paid or volunteer
firefighters, law enforcement officers, first responders, emergency
medical technicians, or other emergency services personnel acting within
the ordinary course of their professions.
(8) "Health care provider" means a person who is licensed,
certified, or otherwise authorized by the laws of this state to
administer health care in the ordinary course of business or practice of
a profession.
(9) "Life-sustaining treatment" means any medical procedure or
intervention that, when administered to a qualified patient, serves only
to prolong the dying process.
(13) "Qualified patient" means a patient 18 years of age or older who
has executed a declaration in accordance with this chapter and who has
been determined by the attending physician to be in a terminal condition
(14) "Terminal condition" means an incurable or irreversible
condition that, without the administration of life-sustaining treatment
will, in the opinion of the attending physician or attending advanced
practice registered nurse, result in death within a relatively short
time.
50-9-103. Declaration relating to use of life-sustaining treatment
-designee. (1) An individual of sound mind and 18 or more years of
age may execute at any time a declaration governing the withholding or
withdrawal of life-sustaining treatment. The declarant may designate
another individual of sound mind and 18 or more years of age to make
decisions governing the withholding or withdrawal of life-sustaining
treatment. The declaration must be signed by the declarant, or another
at the declarant's direction, and must be witnessed by two individuals.
A health care provider may presume, in the absence of actual notice to
the contrary, that the declaration complies with this chapter and is
valid.
(2) A declaration directing a physician to withhold or withdraw
life-sustaining treatment may, but need not, be in the following form:
DECLARATION
If I should have an incurable or irreversible condition that, without
the administration of life-sustaining treatment, will, in the opinion of
my attending physician or my attending advanced practice registered
nurse, cause my death within a relatively short time and I am no longer
able to make decisions regarding my medical treatment, I direct my
attending physician or my attending advanced practice registered nurse,
pursuant to the Montana Rights of the Terminally Ill Act, to withhold or
withdraw treatment that only prolongs the process of dying and is not
necessary to my comfort or to alleviate pain.
Signed this _________ day of _________________, _________.
Signature ______________________________
City, County, and State of Residence ___________________________________
The declarant voluntarily signed this document in my presence.
Witness ______________________
Address ______________________
Witness ______________________
Address __________________________.
(3) A declaration that designates another individual to make
decisions governing the withholding or withdrawal of life-sustaining
treatment may, but need not, be in the following form:
DECLARATION
If I should have an incurable and irreversible condition that, without
the administration of life-sustaining treatment, will, in the opinion of
my attending physician or my attending advanced practice registered
nurse, cause my death within a relatively short time and I am no longer
able to make decisions regarding my medical treatment, I appoint
_______________________or, if he or she is not reasonably available or
is unwilling to serve ____________________ to make decisions on my
behalf regarding withholding or withdrawal of treatment that only
prolongs the process of dying and is not necessary for my comfort or to
alleviate pain, pursuant to the Montana Rights of the Terminally Ill
Act.
If the individual I have appointed is not reasonably available or is
unwilling to serve, I direct my attending physician or my attending
advanced practice registered nurse, pursuant to the Montana Rights of
the Terminally Ill Act, to withhold or withdraw treatment that only
prolongs the process of dying and is not necessary for my comfort or to
alleviate pain.
Signed this _________ day of _________________, ________.
Signature ________________________________________.
50-9-104. Revocation of declaration.
(1) A declarant may revoke a declaration at any time and in any
manner, without regard to mental or physical condition. A revocation is
effective upon its communication to the attending physician, attending
advanced practice registered nurse, or other health care provider by the
declarant or a witness to the revocation. A health care provider or
emergency medical services personnel witnessing a revocation shall act
upon the revocation and shall communicate the revocation to the
attending physician or the attending advanced practice registered nurse
at the earliest opportunity. A revocation communicated to a person other
than the attending physician, attending advanced practice registered
nurse, emergency medical services personnel, or a health care provider
is not effective unless the attending physician or the attending
advanced practice registered nurse is informed of it before the
qualified patient is in need of life-sustaining treatment.
(2) The attending physician, attending advanced practice registered
nurse or other health care provider shall make the revocation a part of
the declarant's medical record.
50-9-105. When declaration operative.
(1) A declaration becomes operative when:
(a) it is communicated to the attending physician or the
attending advanced practice registered nurse; and
(b) the declarant is determined by the attending physician or
the attending advanced practice registered nurse to be in a terminal
condition and no longer able to make decisions regarding administration
of life-sustaining treatment.
(2) When the declaration becomes operative, the attending physician
or attending advanced practice registered nurse and other health care
providers shall act in accordance with its provisions and with the
instructions of a designee under 50-9-103(l) or comply with the transfer
requirements of 50-9-203.
50-9-106. Consent by others to withholding or withdrawal of treatment.
(1) If a written consent to the withholding or withdrawal of the
treatment, witnessed by two individuals, is given to the attending
physician or the attending advanced practice registered nurse, the
physician or attending advanced practice registered nurse may withhold
or withdraw life-sustaining treatment from an individual who:
(a) has been determined by the attending physician or
attending advanced practice registered nurse to be in a terminal
condition and no longer able to make decisions regarding the
administration of life-sustaining treatment; and
(b) has no effective declaration.
(2) The authority to consent or to withhold consent under subsection
(1) may be exercised by the following individuals, in order of priority:
(a) the spouse of the individual;
(b) an adult child of the individual or, if there is more
than one adult child, a majority of the
adult children who are reasonably available
for consultation;
(c) the parents of the individual;
(d) an adult sibling of the individual or, if there is more
than one adult sibling, a majority of the
adult siblings who are reasonably available for
consultation; or
(e) the nearest other adult relative of the individual by
blood or adoption who is
reasonably available for consultation.
(3) If a class entitled to decide whether to consent is not
reasonably available for consultation and competent to decide or if it
declines to decide, the next class is authorized to decide. However, an
equal division in a class does not authorize the next class to decide.
(4) A decision to grant or withhold consent must be made in good faith.
A consent is not valid if it conflicts with the expressed intention of
the individual.
(5) A decision of the attending physician or attending advanced
practice registered nurse acting in good faith that a consent is valid
or invalid is conclusive.
(6) Life-sustaining treatment cannot be withheld or withdrawn
pursuant to this section from an individual known to the attending
physician or the attending advanced practice registered nurse to be
pregnant so long as it is probable that the fetus will develop to the
point of live birth with continued application of life-sustaining
treatment.
50-9-107. When health care provider may presume validity of declaration.
In the absence of knowledge to the contrary, a health care provider may
assume that a declaration complies with this chapter and is valid.
50-9-108. Effect of previous declaration. An instrument executed before
October 1, 1991, that substantially complies with 50-9-103(1) is
effective under this chapter.
50-9-109. Reserved.
50-9-110. Authority to adopt rules. The department may adopt rules to
implement this chapter.
50-9-111. Recognition of declarations executed in other states. A
declaration executed in a manner substantially similar to 50-9-103 in
another state and in compliance with the law of that state is effective
for purposes of this chapter.
PART 2
Effect on Health Care -- Rights and Duties
50-9-201. Recording determination of terminal condition and content of
declaration. Upon determining that a declarant is in a terminal
condition, the attending physician or attending advanced practice
registered nurse who knows of a declaration shall record that
determination and the terms of the declaration in the declarant's
medical record.
50-9-202. Treatment of qualified patients.
(1) A qualified patient may make decisions regarding life-sustaining
treatment so long as the patient is able to do so.
(2) This chapter does not affect the responsibility of the attending
physician, attending advanced practice registered nurse or other health
care provider to provide treatment, including nutrition and hydration,
for a patient's comfort care or alleviation of pain.
(3) Life-sustaining treatment cannot be withheld or withdrawn
pursuant to a declaration from an individual known to the attending
physician or attending advanced practice registered nurse to be pregnant
so long as it is probable that the fetus will develop to the point of
live birth with continued application of life-sustaining treatment.
50-9-203 Transfer of patients. An attending physician, attending
advanced practice registered nurse or other health care provider who is
unwilling to comply with this chapter shall take all reasonable steps as
promptly as practicable to transfer care of the declarant to another
physician, advanced practice registered nurse or health care provider
who is willing to do so. If the policies of a health care facility
preclude compliance with the declaration of a qualified patient under
this chapter, that facility shall take all reasonable steps to transfer
the patient to a facility in which the provisions of this chapter can be
carried out.
50-9-204. Immunities.
(1) In the absence of actual notice of the revocation of a
declaration, the following, while acting in accordance with the
requirements of this chapter, are not subject to civil or criminal
liability or guilty of unprofessional conduct:
(a) a physician or advanced practice registered nurse who
causes the withholding or withdrawal of life-sustaining treatment from a
qualified patient;
(b) a person who participates in the withholding or
withdrawal of life- sustaining treatment under the direction or with the
authorization of a physician or advanced practice
registered nurse;
(c) emergency medical services personnel who cause or
participate in the withholding or withdrawal of life-sustaining
treatment under the direction of or with the authorization of a
physician or advanced practice registered nurse or who on receipt of
reliable documentation follow a living will protocol;
(d) emergency medical services personnel who proceed to
provide life-sustaining treatment to a qualified patient pursuant to a
revocation communicated to them; and
(e) a health care facility in which withholding or
withdrawal occurs.
(2) A health care provider whose action under this chapter is in
accord with reasonable medical standards is not subject to civil or
criminal liability or discipline for unprofessional conduct with respect
to that decision.
(3) A .health care provider whose decision about the validity of
consent under 50-9-106 is made in good faith is not subject to criminal
or civil liability or discipline for unprofessional conduct with respect
to that decision.
(4) An individual designated pursuant to 50-9-103(l) or an
individual authorized to consent pursuant to 50-9-106, whose decision
is made or Consent is given in good faith pursuant to this chapter, is
not subject to criminal or civil liability or discipline for
unprofessional conduct with respect to that decision.
50-9-205 Effect on insurance -- patient's decision.
(1) Death resulting from the withholding or withdrawal of
life-sustaining treatment in accordance with this chapter does not
constitute, for any purpose, a suicide or homicide.
(2) The making of a declaration pursuant to 50-9-103 does not affect
the sale, procurement, or issuance of any policy of life insurance or
annuity, nor does it affect, impair, or modify the terms of an existing
policy of life insurance. A policy of life insurance is not legally
impaired or invalidated by the withholding or withdrawal of
life-sustaining treatment from an insured, notwithstanding any term of
the policy to the contrary.
(3) A person may not prohibit or require the execution of a
declaration as a condition for being insured for or receiving health
care services.
(4) This chapter creates no presumption concerning the intention of
an individual who has revoked or has not executed a declaration with
respect to the use, withholding, or withdrawal of life-sustaining
treatment in the event of a terminal condition.
(5) This chapter does not affect the right of a patient to make
decisions regarding use of life-sustaining treatment, so long as the
patient is able to do so, or impair or supersede a right or
responsibility that any person has to effect the withholding or
withdrawal of medical care.
(6) This chapter does not require a physician or other health care
provider to take action contrary to reasonable medical standards.
(7) This chapter does not condone, authorize, or approve mercy killing
or euthanasia.
DO NOT RESUSCITATE -- NOTIFICATION
Part 1 General
50-10-101 Definitions. As used in this part, unless the context clearly
requires otherwise, the following definitions apply:
(1) ``Advanced practice registered nurse'' means an individual who
is licensed under Title 37, Chapter 8, to practice professional nursing
in this state and who has fulfilled the requirements of the Board of
Nursing pursuant to 37-8-202 and 37-8-409
(2) ``Attending advanced practice registered nurse'' means the
advanced practice registered nurse who is selected by or who is assigned
to the patient and has primary responsibility for the treatment and care
of the patient.
(3) "Attending physician" has the meaning provided in 50-9-102.
(4) "Board" means the state board of medical examiners.
(5) "Department" means the department of public health and human
services provided for in 2-15-2201.
(6) ``DNR identification" means a standardized identification card,
form, necklace, bracelet of uniform size and design, approved by the
department, which signifies that the possessor is a qualified patient,
as defined in 50-9-102; or that the possessor's attending physician or
attending advanced practice registered nurse has issued a do not
resuscitate order for the possessor and has documented the grounds for
the order in the possessor's medical file.
(7) "Do not resuscitate order" means a directive from a licensed
physician or advanced practice registered nurse that emergency
life-sustaining procedures should not be administered to a particular
person.
(8) "Do not resuscitate protocol" means a standardized method of
procedure, approved by the board and adopted in the rules of the
department, for the withholding of emergency life-sustaining procedures
by physicians, advanced practice registered nurse and emergency medical
services personnel.
(9) "Emergency medical services personnel" has the meaning
provided in
50-9-102.
(11) "Life-sustaining procedure" means cardiopulmonary resuscitation
or a component of cardiopulmonary resuscitation.
(10) "Physician" means a person licensed under Title 37, chapter 3, to
Practice medicine in this state.
50-10-102. Immunities.
(1) The following are not subject to civil or criminal liability and
are not guilty of unprofessional conduct upon discovery of DNR
identification upon a person:
(a) a physician or advanced practice registered nurse who causes the
withholding or withdrawal of life-sustaining procedures from that
person;
(b) a person who participates in the withholding or withdrawal of
life-sustaining procedures under the direction or with the authorization
of a physician or advanced practice registered nurse;
(c) emergency medical services personnel who cause or participate in
the withholding or withdrawal of life-sustaining procedures from that
person;
(d) a health care facility in which withholding or withdrawal of
life-sustaining procedures from that person occurs;
(e) physicians, advanced practice registered nurse persons under the
direction or authorization of a physician or advanced practice
registered nurse, emergency medical services personnel, or health care
facilities that provide life-sustaining procedures pursuant to an oral
or written request communicated to them by a person who possesses DNR
identification.
(2) The provisions of subsections (1)(a) through (1)(d) apply when a
life-sustaining procedure is withheld or withdrawn in accordance with
the do not resuscitate protocol.
(3) Emergency medical services personnel who follow a do not
resuscitate order from a licensed physician or an advanced practice
registered nurse are not subject to civil or criminal liability and are
not guilty of unprofessional conduct.
50-10-103. Adherence to do not resuscitate protocol -- transfer of
patients. (1) Emergency medical services personnel other than
physicians or advanced practice registered nurse shall comply with the
do not resuscitate protocol when presented with, either do not
resuscitate identification, an oral do not resuscitate order issued
directly by a physician or an advanced practice registered nurse, or a
written do not resuscitate order entered on a form prescribed by the
department.
(2) An attending physician, an attending advanced practice
registered nurse or a health care facility unwilling or unable to comply
with the do not resuscitate protocol shall take all reasonable steps to
transfer a person possessing DNR identification to another physician or
advanced practice registered nurse or to a health care facility in which
the do not resuscitate protocol will be followed
50-10-104. Effect on insurance -- patient's decision.
(1) Death resulting from the withholding or withdrawal of emergency
life-sustaining procedures pursuant to the do not resuscitate protocol
and in accordance with this part is not, for any purpose, a suicide or
homicide.
(2) The possession of DNR identification pursuant to this part, does
not affect in any manner the sale, procurement, or issuance of any
policy of life insurance, nor does it modify the terms of an existing
policy of life insurance. A policy of life insurance is not legally
impaired or invalidated in any manner by the withholding or withdrawal
of emergency life-sustaining procedures from an insured person
possessing DNR identification, not withstanding any term of the policy
to the contrary.
(3) A physician, advanced practice registered nurse, advanced
practice registered nurse health care facility, or other health care
provider and a health care service plan, insurer issuing disability
insurance, self-insured employee welfare benefit plan, or nonprofit
hospital plan may not require a person to possess DNR identification as
a condition for being insured for or receiving health care.
(4) This part does not create a presumption concerning the intention
of an individual who does not possess DNR identification with respect to
the use, withholding, or withdrawal of life-sustaining treatment in the
event of a terminal condition.
(5) This part does not increase or decrease the right of a patient
to make decisions regarding use of life-sustaining procedures if the
patient is able to do so, nor does this part impair or supersede any
right or responsibility that a person has to effect the withholding or
withdrawal of medical care. In that respect the provisions of this part
are cumulative.
(7) This part does not authorize or approve mercy killing.
50-10-107. DNR form to be readily available. The department shall ensure
that the DNR identification form approved by the department is readily
available at no cost or at a nominal charge.
Guardianship
and
Conservatorship
GUARDIANSHIP & CONSERVATORSHIP
If an individual does not plan ahead regarding their personal care,
medical care, and financial matters, and that person becomes
incapacitated and unable to make decisions for themselves, then a court
must step in and appoint a guardian and/or conservator to make those
decisions and handle those matters. With proper planning, including
talking with family, friends, and physicians, and by utilizing durable
powers of attorney and/or living wills, guardianships can almost always
be avoided even when someone is completely incapacitated and unable to
care for themselves.
Conservatorship. A conservatorship is a court-ordered protective
relationship whereby an individual is appointed to manage another
person's (the ward's) financial affairs after that person has become
unable to do so. A petition must be filed with the court and a judge
must decide if the assets of the ward is at risk for mismanagement.
Under a conservatorship the ward retains their rights such as the right
to vote, to marry, or to write a will. The Conservator appointed by the
Court must act in the ward's best interests, and is responsible to the
court and must make an annual accounting. Upon being appointed, the
Conservator must take possession of, protect, and preserve the ward's
property. The Conservator must invest the ward's property prudently and
account for it. The Conservator's responsibilities and powers may be
limited by the court order.
Within 90 days after appointment, a complete inventory must be filed by
the conservator with the court. This inventory should include any
property in the conservator's possession or of which there is knowledge.
The conservator must manage the ward's money and pay all the ward's
debts and taxes and the expenses of the guardianship. Annual reports to
the court are required. In the annual report, the conservator must give
the court a full and correct account of the receipts and disbursements
of all the ward's property and a statement of the ward's remaining
assets.
Guardianship. A guardianship is a court-ordered protective arrangement
for a person (called the ward) who has been found by Court to be
incapacitated and in need of someone to oversee his or her personal care
and decision-making to protect the ward's health and safety. A
guardianship may be used only as is necessary to promote and protect the
well-being of the incapacitated person.
Montana law defines an incapacitated person as "anyone who is impaired
by reason of mental illness, mental deficiency, physical illness or
disability, chronic use of drugs, chronic intoxication or other cause to
the extent he or she lacks sufficient understanding or capacity to make
or communicate responsible decisions concerning his/her person." The
Court may consider any evidence which pertains to the issue of capacity.
Normally the best evidence is the opinion of a qualified doctor who has
personally examined the potential ward.
In addition to the full guardianship, the Court may order a limited
guardianship instead. A full guardian of an incapacitated person has
the same powers, rights, and duties respecting his ward that a parent
has respecting his minor child. A limited guardian of an incapacitated
person has only those powers and duties that are specifically given to
the guardian by the Court.
QUESTIONS and ANSWERS
What is a guardian?
A guardian is a person, institution, or agency appointed by a court to
manage the affairs of another, called a ward. The guardian may manage
person and/or the estate matters. Each state has specific laws, which
govern guardianship proceedings and the guardian's activities. States
also separate guardianship for minors and for adults with disabilities
in the law. Your local court will be able to direct you to the
divisions, which oversee adult guardianship and/or minor guardianships.
Who may have a guardian appointed to manage his/her affairs?
In order to have a guardian appointed a person must be demonstrated by a
preponderance of the evidence to lack the capacity to make or
communicate rational decisions concerning personal or financial matters.
The law presumes that an adult 18 years of age or older is capable of
managing, or has the capacity to manage, his/her own affairs. There
must also be cause of the lack of capacity identified. Mental illness,
developmental disability, physical incapacity, chronic intoxication, and
advanced age can be the cause.
How is it determined that a person may need a guardian?
Normally a person's actions harming their own safety or welfare lead to
concerns that the person may need a guardian. Anyone may file a
Petition in Court to have a guardian appointed. The Montana Adult
Protective Services agency files for guardianships in order to protect
adults who may be incapacitated.
Who can act as a guardian?
The guardian must be over the age of 18 and must be capable of caring
for the ward. Individuals have priority for appointment as guardian
in-the following order: 1) The spouse of the incapacitated person; 2)
An adult child of the incapacitated person; 3) A parent of the
incapacitated person, including a person nominated by will or other
writing signed by a deceased parent; 4) Any relative of the
incapacitated person with whom he has resided for more than 6-months
prior to the filing of the petition; 5) A relative or friend who has
demonstrated a sincere, longstanding interest in the welfare of the
incapacitated person; 6) A private association or nonprofit corporation
with a guardianship program for incapacitated persons, a member of such
private association or nonprofit corporation; 7) A person nominated by
the person who is caring for him or paying benefits to him.
The parent of an unmarried incapacitated person may appoint a guardian
of the incapacitated person in his or her will or other writing that is
signed by the parent and attested by at least two witnesses. The spouse
of a married incapacitated person may appoint a guardian of the
incapacitated person by will or other writing signed by the spouse and
attested by at least two witnesses. The appointment of a guardian by a
spouse has priority over an appointment by a parent.
Who makes the decision to establish a guardianship and/or
conservatorship?
Upon the filing of a Guardianship Petition, the Court decides whether to
appoint a guardian and who to appoint. The Court also decides how much
authority to give to the guardian. The guardianship should be limited
to meet the specific needs of the ward.
Should I avoid a guardianship and/or conservatorship?
Guardianship should be a last resort. When a guardian is appointed, you
lose your right to make basic decisions about your life and property.
The proceeding will be expensive and is emotionally difficult.
What is expected of me if I serve as a guardian/conservator?
If you are appointed as a guardian and/or conservator, the court's order
will tell you what decisions you are allowed to make. You may have just
a few powers or need to make most decisions on behalf of your ward. You
are required to make decisions and act in the ward's best interest. You
must try to make choices based on the ward's values and to involve the
ward in making decisions whenever possible.
What you can do depends on the court order and state law, but if you
have authority over property (i.e. as Conservator) you will at least
need to:
Find and protect the ward's assets
Set up separate accounts with the ward's funds
Spend the ward's money only for the ward's care and needs
Keep detailed records of all expenditures
Keep the ward's property in good repair and insured
Carefully invest the ward's resources
File inventories and accountings with the court
Get directions from the court before taking major actions
If you have authority over your ward's personal affairs (i.e. as
Guardian), the list of responsibilities can be quite long, depending on
your ward's needs and the court's order. You may need to:
Make sure the ward is living in the most appropriate location
Arrange for caregivers, social activities, transportation
Consent to medical treatment such as surgeries or medications
Supervise hygiene, meals, and clothing
Provide for any physical, speech, or occupational therapies
Frequently visit the ward and try to improve the ward's quality of life
Report to the court on the care you are providing
Can guardianship be used in an emergency?
Yes, there is the mechanism for an emergency appointment of a guardian
for a specific purpose. They are usually time-limited and not renewable
without a full guardianship proceeding. There is usually a cursory
hearing about the specific issue and a guardian's authority is only in
the areas of the issue presented. Usually this is not a full finding of
incapacity, and a full hearing on the guardianship must be scheduled or
the emergency/temporary guardianship expires.
Does guardianship ever end?
Guardianship is normally a long-term relationship. The court may modify,
revoke, or terminate the guardianship if the ward's ability to make and
communicate decisions is demonstrated to the court.
Are there alternatives to guardianship?
Guardianship is a highly intrusive form of advocacy and should be used
only as a last resort when all other alternatives have been examined.
Some of the alternatives to guardianship may be Powers of Attorney for
health care or financial management, Living Wills, trust, case/care
management services, Representative Payee and Health Care Surrogate
acts. Individuals may get additional information from the local bar
association, and local social service agencies, Legal Services Developer
with Aging
Services Bureau Senior & Long Term Care.
What is the procedure for pursuing a Guardianship?
The incapacitated person or any person interested in his welfare,
including the county attorney, may petition the district court for a
finding of incapacity and appointment of a guardian. Upon filing the
petition the court will set a date for a hearing on the issues of
incapacity. The allegedly incapacitated person may have counsel of his
own choice or the court may, in the interest of justice appoint an
appropriate official or attorney to represent him in the proceeding who
will serve as a guardian ad litem (a person who is appointed by the
court to represent a ward in legal proceedings).
The person alleged to be incapacitated will be examined by a physician
appointed by the court. The physician will submit his report in writing
to the court. A visitor, who is appointed by the court, will interview
the examining physician. The visitor will also interview the person who
filed the petition and the person who is nominated to serve as guardian
and will visit the residence of and the person alleged to be
incapacitated and the place it is proposed that he will be detained or
reside if the requested appointment is made. The visitor will then
submit his report in writing to the court.
The person alleged to be incapacitated is entitled to be present at the
hearing in person and to see or hear all evidence bearing upon his
condition. He is entitled to be represented by counsel, to present
evidence, to cross-examine witnesses, including the court-appointed
physician and the visitor, and is entitled to a trial by jury. However,
the issue may be determined at a closed hearing without a jury if the
person alleged to be incapacitated or his counsel so requests.
What rights of mine might be affected?
A good guardian will take into account the wishes and desires of the
ward when making decisions about residence, medical treatments, and
end-of life decisions. The guardianship should affect only those rights
that the proposed ward is incapable of handling.
Can someone file a Petition appointing themselves my guardian without my
knowledge and consent?
Because establishing guardianship is a legal process that involves the
removal of the individual's rights, there are many procedural
protections established by the law. They include:
* Notice to the individual of all proceedings.
* Representation of the individual by counsel.
* Attendance of the individual at all hearings/court proceedings.
* Ability of the individual to compel, confront and cross examine all
witnesses.
* Allowance of the individual to present evidence.
* Appeal of the individual to the determination of the court.
* Presentation of a clear and convincing standard of proof.
* The right of the individual to a jury trial.
In any type of guardianship the court may limit the guardian's
authority. The guiding principle in all guardianship is that of least
intrusive measures to assure as much autonomy as possible. The
guardian's authority is defined by the court and the guardian may not
operate outside that authority. A guardian may be a family member or
friend or a public or private entity appointed by the court.
What are the rights of the ward?
In general, the ward keeps all legal and civil rights guaranteed to all
residents under the states' and the United States' Constitution, except
those rights which the court grants to the guardian.
The court should specifically state which rights it is taking from the
ward. The ward keeps all rights that the court has not specifically
given to the guardian. The ward, however, has the right to the least
restrictive guardianship suitable to his or her needs and conditions.
The guardian also has the affirmative duty to advise the ward of his or
her rights and to attempt to maximize the ward's self reliance and
independence. These rights include, but are not limited to:
1. The right to be treated with dignity and respect.
2. The right to privacy, which includes the right to privacy of the
body, and the right to private, and uncensored communication with others
by mail, telephone, or personal visits.
3. The right to exercise control over all aspects of life that the court
has not delegated to the guardian.
4. The right to appropriate services suited to the ward's needs and
conditions, including mental health services.
5. The right to have the guardian consider the ward's personal desires,
preferences, and opinions.
6. The right to safe, sanitary, and humane living conditions within the
least restrictive environment that meets the ward's needs.
7. The right to procreate.
8. The right to marry.
9. The right to equal treatment under the law, regardless of race,
religion, creed, sex, age, marital status, sexual orientation, or
political affiliations.
10. The right to have explanations of any medical procedures or
treatment. This includes information about the benefits, risks, and side
effects of the treatment, and any alternative procedures or medications
available.
11. The right to have personal information kept confidential. This may
include withholding certain information the ward may not want his or her
family to know. The guardian may have to provide personal information to
apply for benefits or in emergency situations where the ward or others
may be in danger, or if the information is required by law to be shared
with agencies or health departments. Personal information may also be
contained in the reports the guardian makes to the court, and which may
be available for others to see.
12. The right to review personal records, including medical, financial,
and treatment records.
13. The right to speak privately with an attorney, ombudsman, or other
advocate.
14. The right to petition the court to modify or terminate the
guardianship. This includes the right to meet privately with an attorney
or other advocate to assist with this legal procedure.
15. The right to bring a grievance against the guardian, request the
court to review the guardian's actions, request removal and replacement
of the guardian, or request that the court restore rights if it can be
shown that the ward has regained capacity to make some or all decisions.
The guardian also has a responsibility to request that the ward's rights
be restored when there is evidence that the ward has regained capacity.
What is a temporary Guardianship?
If an incapacitated person has no guardian and an emergency exists, the
court may appoint a temporary guardian without first holding a complete
guardianship hearing. If a temporary guardian is appointed in such a
case, a complete hearing following full notice to all interested persons
must be held within six months to determine if a permanent guardian
should be appointed.
When does a Guardianship terminate?
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petitions the court to remove a guardian, the court will hold a hearing
and may remove the guardian if it is in the best interests of the ward.
The court may also accept the guardian's resignation after holding a
hearing when petitioned to do so by the guardian.
PAGE
PAGE 42
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Free 2007-8 Legal Guide to Long Term Care Planning - Montana
| File Size: | 516.5 kB |
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| State: | Montana |
| Category: | Power of Attorney |
| Word Count: | 21,071 Words, 149,770 Characters |
| URL |
http://www.dphhs.mt.gov/sltc/services/aging/legal/documents/legalguide2008.doc |
| Download 2007-8 Legal Guide to Long Term Care Planning ( 516.5 kB) |
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