July 1st saw a quiet, but sweeping change in Massachusetts law.  It was the day the Uniform Probate Code began to take effect.  I say “began” because July 1st marked the first phase of implementation.  Phase two takes effect in 2011.

The Durable Power of Attorney statute used by so many for so long to make it possible for loved ones or friends to handle financial decisions in the event of disability was repealed.  While the biggest impact this year is on guardianship and conservatorship proceedings, this one tiny piece of the puzzle is having really big implications.

Usually when laws change they are amended.  This has the effect of “grandfathering” prior written documents that reference the specific statute.  For example, if you say, “I incorporate the powers listed in Chapter 201B” you’re covered no matter how many times that chapter is amended.  It’s still Chapter 201B.  In this instance though, rather than amend the statute it was repealed and replaced with something with a completely different reference.  Essentially, Chapter 201B no longer exists.  So, if your Durable Power of Attorney references it, well, put bluntly, it’s probably now useless.

The new Durable Power of Attorney statute is located at Chapter 190B, Section 5-501 through 5-507.  Despite this change possibly invalidating a lot of existing Durable Powers of Attorney documents, it does do some really good things.  The most important is that it prohibits people and businesses from refusing to honor them unless they have a darn good reason. It has always been good customer service for banks and financial institutions to honor Durable Powers of Attorney.  That doesn’t mean that they always did though.  Some institutions that will remain nameless had internal policies of not honoring them—EVER!

I received an email from a client last week asking about a family situation in another state.  A sister has been acting as executor and trustee of an estate.  The siblings were trying to resolve what the sister could and should be paid for her services to the rest of the family.  I realized that my answer might be of interest to you.

Here in Massachusetts, people who act as fiduciaries, like executors or trustees, are entitled to a “reasonable” fee for their services.  The question then becomes the definition of “reasonable”.  It varies based upon the size of the estate, type of assets, issues involved, actual time necessary, skills used, and results accomplised.  It’s usually an hourly rate for the services actually performed.  For a lay-person, that is generally $25-75/hour.

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The National Academy of Elder Law Attorneys describes the elder law attorney in this way:

“ . . . The elder law practitioner handles general estate planning issues and counsels clients about planning for incapacity with alternative decision making documents. The attorney would also assist the client in planning for possible long-term care needs, including nursing home care.  Locating the appropriate type of care, coordinating private and public resources to finance the cost of care, and working to ensure the client’s right to quality care are all part of the elder law practice.”

Despite this, people continue to equate elder law with the preparation of legal documents and qualification for Medicaid.  It is so, so much more.  Engaging in asset protection planning in a vacuum will NOT fulfill the true goal of most families, namely enhancing the quality of life for the aging or ill family member, without sacrificing one’s own family, finances or health.

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Before hiring any kind of lawyer for any personal or business matters, you’ll want to be sure to review my free report “5 Things to Know Before Hiring Your Personal or Business Lawyer”.  This report gets a little more specific, focusing in on what you need to know before hiring a lawyer to help you with wills, trusts, your estate and your business.  Be sure you’ve considered the answers to these 7 questions.

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This article was shared with us by Mary Gill, the Worcester Program Manager for Caregiver Homes of Massachusetts.  Thanks Mary!

The Caregiver Homes Adult Foster Care program provides an alternative to nursing home care for frail older or disabled adults and is accepting both referrals for new clients and applications for caregivers. This MassHealth program pays family (or non-family) caregivers - with the exception of a spouse or legally responsible representative - to provide care at home.

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