Sad End for Penn Treaty Insurance — Reblog

Jeff Marshall, a highly-respected colleague in Williamsport, Pennsylvania, documented the failure of Penn Treaty Insurance’s long-term care insurance products in “Sad End for Penn Treaty Insurance.”  The column is interesting and informative in describing the problems of the LTCI industry as the costs of long-term care steeply increased, while interest rates plunged and customers held on to their policies at much higher rates than expected.  Jeff’s column is also an excellent backgrounder to my post, “Long-Term Care Insurance — Smart Buy or Not?

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com

©2017 John B. Payne, Attorney

 

 

Michigan Designated Funeral Representative

A new law, 2016 Publ. Act 57, effective June 27, 2016, authorizes a person identified as the declarant, to designate a funeral representative to make decisions about postmortem funeral arrangements and the handling, cremation, disposition, or disinterment of the declarant’s body. MCLA 700.3206(2)(a).  The Act includes authority for cremation and determination of the right to possess the cremains, which is an important change. Under prior law, all persons with equal priority as next of kin had to approve cremation.

The Act revises the priority of persons who may decide on final arrangements and inserts a “designated funeral representative” ahead of spouses, family members and others. MCLA 700.3206(3). The only authority with higher priority is a person designated to direct the disposition of a service member’s remains under federal law or Department of Defense regulation, when the decedent was a service member at the time of death. Id

Historic reenactor Les Scott, dressed as the town mortician at the door of his funeral parlor at South Park City Museum, a collection of historic buildings in Fairplay, Colorado

Historic reenactor Les Scott, dressed as the town mortician at the door of his funeral parlor at South Park City Museum, a collection of historic buildings in Fairplay, Colorado

 

A funeral representative designation may be included in another estate-planning document, such as a will or designation of patient advocate, but it must be executed with two witnesses or be notarized. MCLA 700.3206(2)(b). Like a designation of patient advocate, a funeral representative designation may not appoint or be witnessed by a person associated with a declarant’s medical provider, and persons associated with a funeral establishment, cemetery, or crematory that would provide services for the declarant are also excluded. MCLA 700.3206(2)(c).

A funeral representative designation may be revoked by the declarant, or by the representative’s resignation, absence despite reasonable efforts to locate, or refusal act within 48 hours of receiving notice of the decedent’s death. Revocation by the declarant must be in writing and signed with the formalities of the original designation. MCLA 700.3206b.

The declarant may appoint a contingent representative. MCLA 700.3206a(1). The represtentative accepts the appointment by signing an acceptance or by acting as the funeral representative. MCLA 700.3206a(2).

mortuaryCircumstances that would bar an individual from inheriting from the declarant, such as divorce or annulment of marriage to the declarant, desertion disqualify the individual. MCLA 700.2801(2).  Being convicted of abuse or killing of the declarant, disqualifies the individual, MCLA 700.2802(2)(c), and being charged with the abuse or killing of the declarante bars the individual from acting as the designated funeral representative while the charges are pending. MCLA 700.3206(12).

A major concern for an individual nominated to act as designated funeral representative is personal liability for the declarant’s final arrangements. Unless he or she is a special fiduciary, the medical examiner, or the director of corrections in the case of a prisoner, a person who acts as designated funeral representative is personally liable for the costs of disposition to the extent that payment is not covered under a trust, prepaid funeral contract, or other “effective and binding means.” MCLA 700.3206(13). This is alarming because the statute includes no requirement for the funeral director or other provider of funeral or burial services to advise the nominated funeral representative that if he or she accepts the appointment and makes the necessary dispositions that there could be personal liability. The representative is not even required to sign an acceptance of appointment, if he or she accepts by performance.

Adapted with editorial changes from John B. Payne, “Michigan Probate, 2016-17 ed.,” Chapter 13, 125-27 (Thomson Reuters 2016).

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com

©2017 John B. Payne, Attorney

Judicial OCD in Tennessee

In Frustrating the Intent of the Testator, I observed that many appellate courts seem to delight in invalidating wills that were clearly executed by the testator.  If judges take pleasure in destroying the estate plans of the recently departed, Hon. Kenny Armstrong of the Tennessee Court of Appeals should be rapturous to the point of wetting his pants in having pulled the rug out from under an unfortunate deceased testator, his attorney, and two well-meaning, but displaced, witnesses.  It is the epitome of formalism over substance. morris bill 1

On October 10, 2008, Bill Morris (“Decedent”) executed his Last Will and Testament.  In re Estate of Morris, 2015 WL 557970, 1 (Tenn. Ct. App. February 9, 2015).  The last two pages of the document show that the drafting attorney went to great lengths to establish that the testator intended to sign his will and, in fact, signed it.  However, the Tennessee Court of Appeals managed to find grounds to throw out the will as out of conformity with the Tennessee wills statute.

As is typical in these cases, the court first said that it would “endeavor to effectuate a testator’s intent.”  Id. at 4.  The court then invalidated the will because the word “affidavit” appears between the testator’s signature and the witnesses’ attestation.  According to the court, by signing below the “affidavit,” but not above it, the witnesses signed the affidavit, which, of course, was part of the document, but not the will, itself.

It is particularly ironic that the court stated, “There is no dispute that the testator properly signed his will at the end of the document.”  Id. at 2.  Thus, in a paroxysm of perversity, the court vitiated the testator’s signature by finding a hyper-technical error in the witnesses’ signatures intended to verify the testator’s signature.morris bill 2

In Frustrating the Intent of the Testator, I said:

An attorney should spend at least an hour gathering the facts for even the simplest estate, and at least an hour going over the documents with the client, before they are executed. Attorneys who rush through will executions do not serve their clients properly.

If only it were that simple.  It is clear that Bill Morris’s attorney, the witnesses, and Bill, himself, did their very best to execute his will correctly.  Sadly, best efforts are never enough when there is a judge determined to screw up the testator’s estate plan.

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com

©2015 John B. Payne, Attorney

Revocation of Powers of Attorney

Powers of attorney have been mentioned or discussed in this blog several times.  “Powers of Attorney
and “Weaknesses in Powers of Attorney,” in particular, explained the importance of a well-drafted power of attorney.  An aspect that has not been discussed is revocation.

The ability to revoke a power of attorney is a major advantage over court-ordered guardianship or conservatorship (guardianship of the person’s worldly estate).  A principal who signs a power of attorney may revoke it at any time.  A legally-incapacitated person, and even a person who consented to guardianship, cannot revoke the guardian’s appointment.  He or she must file a petition with the court to terminate the guardianship.  It can be very difficult to persuade the court to terminate a guardianship.  Many judges are very paternalistic and in many courts persons who are subject to the authority of a guardian or conservator have very few rights.

As long as the principal is competent, he or she may revoke the power of attorney at any time.  Whether or not the principal retains sufficient mental capacity may be a matter of dispute, but unless the principal has clearly lost the ability to make decisions the agent must immediately stop acting for the principal when notified that the power of attorney has been revoked.

A written revocation is not necessary, but it is important to communicate the revocation to the principal’s banks and other third parties with whom the agent may have been in contact.  Innocent third parties who continue to deal with the agent are not in the wrong if they have not been notified of the revocation.  Therefore, it is helpful to put the revocation in writing and distribute copies to persons and institutions the agent might transact business with.

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com

©2015 John B. Payne, Attorney

Vital Legislation for Persons with Disabilities

The Special Needs Trust Fairness Act has been re-introduced in this Congress as Senate Bill 349.  Please urge your federal legislators to vote for this bill.  Read about it here.

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com

Retirement of Mental Faculties

Jeff Marshall’s latest blog column, “Aging and Financial Decision Making – How to Protect Yourself,” is a well-written and enlightening discussion of the relationship between aging and cognition. Anyone who is aging or knows someone who is aging (not a vampire, werewolf or ghost) should read Jeff’s column. To summarize Jeff’s thesis in 25 words, he explains that everyone’s ability to process complicated concepts and understand sophisticated investments declines with age, but few recognize this progressive loss of cognitive ability.

In other words, our faculties may be retired and we think they are still on the job. Jeff recommends sound estate planning and sound relationships with trusted advisers. This helps to curb making risky decisions or falling prey to sharp dealers as our cognitive abilities inevitably go into eclipse.  Jeff’s column is well worth reading, as is the report on which it is based. Click here for the report summary.

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com

Michigan: Fast-Track Your Cremation

Michigan does not permit the present owner of a human body to direct its disposition after death – that would violate the due process rights of post-mortem owners of the body, as previously mentioned in this blog.  This is a problem for someone who wants to be cremated.  Unless a living spouse signs the authorization to have the body cremated, after death, cremation requires unanimous consent of the next of kin.  This usually means that all of the children have to approve.  If a son or daughter refuses, or cannot be contacted, cremation is out of the question.

There is a way for those who want to stymy the objectors and pre-arrange cremation – out-of-state arrangements.  Michigan’s neighboring states, Minnesota, Indiana, Ohio and Wisconsin, all permit the appointment of a personal representative to authorize or pre-authorize final arrangements.  These statutory forms are found at MS § 145C.16 in Minnesota, IC § 29-2-19 in Indiana, RC § 2108.70 in Ohio, and WS § 154.30 in Wisconsin.  An individual can fill out and execute the forms, then make arrangements with a Minnesota, Indiana, Ohio or Wisconsin cremation services provider.  A mortuary in these states can arrange for pick-up of the decedent in Michigan.

There is an interstate funeral services provider that can make this even easier.  Their toll-free number is 877 615 3030 and the cremation authorization form is on their website.

It is smart to think about final arrangements ahead of time to avoid additional stress for your survivors.  This is an item that your estate-planning attorney can discuss with you.  Your attorney can also facilitate your desired arrangements, particularly if there is a concern about Medicaid for nursing care.

 

John B. Payne, Attorney
Garrison LawHouse, PC
Dearborn, Michigan 313.563.4900
Pittsburgh, Pennsylvania 800.220.7200
law-business.com
 
©2013 John B. Payne, Attorney