Month: January 2019

Professional Guardian Preys on Elderly in Nevada

Several people described their personal grief, and they read letters from several others who lost thousands of dollars and expensive heirlooms that would never be replaced because a guardian stole from elderly victims for whom she was supposed to care.

The Las Vegas Journal-Review reported in a recent article, “Ex-Nevada guardian to serve up to 40 years behind bars,” that as victims wept and told their stories of suffering during a court hearing, a shackled and seated April Parks kept her head turned and never looked their way.

Karen Kelly, Clark County’s public guardian, read through a long list of names of seniors who were victimized and lived under “intense anxiety and anguish” for the final years of their lives because of Parks and those who worked closely with her. Parks’ business partner, Mark Simmons, and her husband, Gary Neal Taylor, also were ordered to serve time in prison. The judge also ordered the three defendants to pay more than $500,000 to their victims. Parks, 53, pleaded guilty last year to exploitation, theft and perjury charges.

One woman, Barbara Ann Neely, said Parks separated her from family and friends, saying, “She was not a guardian to me.”

Neely said. “She did not protect me. As each day passed, I felt like I was in a grave, buried alive.”

Another victim compared Parks to Hitler.

The 53-year-old Parks told the judge that she accepted responsibility “but never intended harm,” adding that “things could have been done better. … We were a group practice, and honestly, I think some things got ahead of us.”

She claimed that she had a “great passion” for guardianship and took “great care and concern” in her work.

Parks was one of the most active private professional guardians in Nevada, and she frequently acted as the surrogate decision-maker for as many as 50 to 100 elderly and mentally incapacitated people at a given time. As guardian, she had total control of their finances, estates and medical decisions.


Las Vegas Journal-Review (January 4, 2019) “Ex-Nevada guardian to serve up to 40 years behind bars”

Am I Too Young to Start Thinking About Estate Planning?

Many people believe they’re too young to begin thinking about estate planning. Others say they don’t have significant enough assets to make the process of planning worthwhile.

However, the truth is that everyone needs estate planning. If you have any assets, and you intend to give those assets to a loved one, you need to have a plan.

Forbes’s article, “Reviewing Your Financial And Estate Planning Checklist,” examines some important topics in estate planning.

The first of topic is a durable power of attorney for property, finances and health care. This document allows you to designate a trusted individual to make decisions and take action on your behalf with matters relating to each of the three areas above.

In addition to the importance of having all powers of attorney readily available, in case you become incapable of making decisions, beneficiary designations should also be looked at frequently to update any changes to family situations, like a birth or adoption, death, marriage or divorce.

Another topic to address is a living trust. A trust will give direction regarding where and how the assets are dispersed when you die. A great reason to use a living trust is that the assets in a trust do not pass through probate court, which can be an expensive and time-consuming process.

Another area is digital assets. It’s critical for your heirs to have access to digital files, passwords, and documents. Digital assets can be easy to overlook. Create a list of your digital assets, including social media accounts, online banking accounts and home utilities you manage online. Include all email and communications accounts, shopping accounts, photo and video sharing accounts, video gaming accounts, online storage accounts, and websites and blogs that you manage. This list should be clear and updated for your heirs to access.

If we fail to plan for these somewhat uncomfortable topics, the outcome will be stressful and expensive for our heirs. Our experienced estate planning attorneys can answer any questions you have and assist you with making sure your estate planning goals are met with positive outcomes.


Reference: Forbes (January 4, 2019) “Reviewing Your Financial And Estate Planning Checklist”

What Exactly is Long-Term Care Insurance?

Some people confuse Long-Term Care (LTC) with Long-Term Disability Insurance. The disability insurance coverage is designed to replace earned income in the event of a disability. Others think that LTC is a type of medical insurance.

nj.com’s recent article entitled “The benefits of long-term care insurance” explains that long-term care insurance isn’t meant to be disability income replacement, and it isn’t medical insurance. LTC insurance covers the varied personal needs of persons who are ill and (even temporarily) incapacitated. These needs include feeding, clothing, bathing, and driving to appointments and doing the extra washing.

Some people consider LTC insurance as what was once called “Nursing Home Insurance.” This evolved to include either care at home or care in a rehab or nursing home facility.

Married couples are especially susceptible, when one spouse becomes ill or injured because the extra costs of long-term care can eat up all their savings and bankrupt the caregiver spouse. For that reason, those in their 50’s should start to look at LTC insurance for several reasons:

  1. Annual premiums are lower when acquired at younger ages; and
  2. Aging may bring health issues in the future, which may prohibit the opportunity to buy LTC insurance coverage altogether.

There are many ways to tailor LTC coverage to make it affordable. The most critical components of an LTC insurance policy include the following:

  • The average period of need for most is three years.
  • The daily amount of coverage varies by geographical area.
  • Home care should be the same as that for care in a facility.
  • The waiting period, which determines when the coverage actually starts after the date the incapacity began.
  • Married individuals can get a combined policy with a discount.
  • An inflation rider: The daily cost of coverage will naturally increase over time with inflation, selecting a rate of inflation will ensure keeping up with rising costs in the future.

Every family should have an open discussion about potential illness or incapacity of family members, and LTC should be a part of that.


Reference: nj.com (January 6, 2019) “The benefits of long-term care insurance”

New Year’s Resolutions: Start With Your Estate Plan

Recent studies show that about half of Americans still make resolutions, but fewer than 10% of us are successful in maintaining them, says The Sentinel in “Elder Care: New Year’s resolutions.” This year, try making your resolutions simpler and more time-sensitive, and maybe you’ll have more luck maintaining them. Start with your estate plan. A call to our estate planning attorneys to make an appointment won’t take a lot of time, and it will get the process started.

Getting your estate plan in order in 2019 will prevent your family from unnecessary stress and costs in the future. Here are a few examples of what can happen to families who don’t plan properly.

A married couple owns a home and some investments. To protect their assets, they create a Revocable Living Trust and transfer all their assets into the trust. They believed that by doing so, they’ll avoid probate and preserve assets from long-term care costs. However, while a revocable trust can avoid probate, if properly created and funded, it has limited other benefits.

When the husband needed nursing care, the couple was surprised to learn that putting their largest asset—their primary residence—in a revocable trust resulted in a situation where the home was counted as an asset for Medical Assistance to pay for care.

As Wisconsin residents, their principal residence may be excluded for consideration for eligibility—if certain conditions are met. However, federal law specifically directs that real estate in a revocable trust is a countable resource. Had they placed the residence in an Irrevocable Asset Protection Trust five years prior, or even kept the residence out of a trust, they would have had more options.

Not having a will is never a good idea. A local musician had a successful career that resulted in him having a good deal of wealth. He had a son from his first marriage and when his son was born, he told his wife that he wanted his assets to pass to his wife upon his death. If she died before him, he wanted his assets to go to his son. However, he never had a will made.

The first marriage ended in divorce, and he became estranged from his son. He had a daughter with a new partner and planned to leave everything to his new partner. If she passed before him, he intended to leave everything to his daughter. However, once again, he failed to have a will made.

With no will, state law governs who receives his assets. In the musician’s case, assets pass in the following order:

  1. Surviving Spouse
  2. Children
  3. Parents
  4. Siblings
  5. Issue of Siblings
  6. Grandparents
  7. Uncles and Aunts
  8. Cousins
  9. The State of Wisconsin

Notice that none of these is his current partner. The only way she could have inherited his assets would have been for him to have a will. While he had told his partner that he did not want his son to get anything, under his state’s law, his assets are to be split equally between his children.

With an estate that included songs that were copyrighted, both of his children (and any individuals claiming to be his children), may receive income streams. The court must first determine who his legal children are before any assets can be distributed. A will would have prevented this entire mess.

These are just two examples of what happens when planning is not done correctly, or not at all. Make it one of your New Year’s resolutions to call your estate planning attorney.


Reference: The Sentinel (Jan. 4, 2019) “Elder Care: New Year’s resolutions”

How Do I Include Retirement Accounts in Estate Planning?

You probably made beneficiary designations for your retirement accounts, when you opened them. Remember: who you designated can affect your overall estate planning objectives. Because of this, when including your retirement assets in your estate, ask yourself if anything has changed in your life since then that would affect their status as your beneficiaries, as well as how they’d receive the retirement assets.

Investopedia’s recent article, “Include Your Retirement Accounts in Your Estate,” gives us some things to consider in the New Year.

Beneficiary Designations. Review your beneficiary designations after major life changes. If you fail to make these designations, the funds will most likely go into your estate—a horrible outcome from a tax and planning perspective. If your estate is named a beneficiary, your heirs must wait until probate is finished to access your retirement accounts. It is usually better to name an individual or a retirement plan trust as your beneficiary.

Protecting Retirement Funds With a Trust. Another option is to include a retirement plan trust in your estate planning, instead of giving your retirement funds directly to named individuals. This allows you more control over the distribution while protecting your heirs from additional paperwork and taxes. Trust distributions keep a beneficiary from accessing and spending their inheritance all at once. It’s also a good idea if your beneficiaries include minor children who shouldn’t have direct access to the money until they are adults. Be sure to consult with an estate planning attorney, because there are tax and other complexities associated with designating a trust as beneficiary.

Required Minimum Distributions (RMDs). Your retirement plans have rules about when you are required to start taking distributions. For 401(k) accounts, you are required to start taking RMDs at age 70½. However, if you die and leave retirement plans and accounts to your heirs, these rules apply to them instead. A spousal beneficiary can roll over your retirement funds tax-free into their retirement plan and make their own distribution choices. However, other beneficiaries don’t have the same option. Tax treatment and distribution options vary, depending on who is receiving your retirement assets.

Tax Considerations. The biggest worry you need to address when designating retirement accounts as part of your estate plan, is how they’ll be taxed. Consider how to withdraw from these accounts while you’re alive and how to minimize tax consequences after you’ve passed.

Our estate planning attorneys have a strong understanding of retirement accounts and the tax and legal requirements of estate planning. By working with our attorneys, you can be certain your retirement assets are distributed to the proper beneficiaries with the least tax liability.


Reference: Investopedia (August 27, 2018) “Include Your Retirement Accounts in Your Estate”

How Do I Handle an Inherited IRA?

With an inherited IRA, in many cases, the parent is the original beneficiary and the children are the successor beneficiaries. Both the original owner and beneficiaries need to follow some strict rules.

nj.com’s recent article, “Inheriting an inherited IRA? Your payout choices will be limited,” explains that per IRS rules, if you die prior to withdrawing all the funds from an inherited IRA, then the beneficiaries are bound by the same Required Minimum Distribution (RMD) schedule that they’d chosen when they inherited it.

A person will typically choose either his own life expectancy or the life expectancy of the original plan participant, whichever’s longer. The successor beneficiaries must then keep withdrawing what’s left, according to that same schedule.

However, it’s different if you leave your own IRA to your children. In most circumstances, children who inherit an IRA would be able to withdraw the funds over their own life expectancies.

Note: this is the general rule. The IRA rules are quite complex, and there are many exceptions to the general rules. Ask the financial institution where the IRA is held, if they have any rules concerning their IRAs that may change the general rules.

With an inherited IRA, you need to take annual distributions no matter what age you are when you open the account. This doesn’t apply if you’ve simply transferred another IRA to your own IRA.

Again, as a general rule, you must take distributions during your lifetime or within five years after the original account holder passed away.

If you inherit a Traditional IRA, you’ll pay taxes on any distributions you take. Rollover, SEP, and SIMPLE IRAs become Inherited Traditional IRAs. In contrast, with an Inherited Roth IRA, you don’t pay taxes on distributions.

To evaluate the potential effect an inheritance might have on your overall tax situations, talk to our experienced estate planning attorneys.


Reference: nj.com (December 20, 2018) “Inheriting an inherited IRA? Your payout choices will be limited”

Baby Boomers Will Leave Trillions of Dollars to Their Heirs

During the next 25 years, Americans will transfer an estimated $68 trillion to their heirs and charities. Seventy percent of that amount, almost $48 trillion, will pass from baby boomers and most of that ($32 trillion) will go to members of Generation X. Although Americans who are currently between the ages of 50 and 70 will distribute some of their assets during their lifetimes, the remainder will get transferred through their estates after they die.

Because baby boomers will leave trillions of dollars to their heirs, they and their beneficiaries should learn about the financial consequences of this magnitude of wealth transfer. Prudent planning can prevent massive losses from unnecessary taxes and other negative financial outcomes. Every dollar that you legally avoid paying to the government, is a dollar you can one day give to charity or your loved ones.

Tax Traps

You might want to help your adult children or your grandchildren now, rather than having to wait until you die. Unfortunately, giving large amounts of money to them while you are alive, can trigger gift taxes. Depending on the amount of the gift, you might find that a large chunk of your money went to the government, instead of to your loved ones.

How you leave your assets can also impact the tax consequences for your heirs. For example, if you have a traditional individual retirement account (IRA) and you leave its proceeds to a beneficiary who is not your spouse, there can be a significant tax bill. In addition, some financial accounts have burdensome transfer fees, so you should check into this issue before deciding what to do with your assets.

One way to minimize taxes for your heirs is to set up a trust. The laws are different in every state, and the applicable federal laws can change at any time. Be sure to you talk with our elder law attorneys to set up your estate in a manner that takes tax consequences into consideration. This article does not give tax advice. You should talk with your tax advisor.

Talk with Your Beneficiaries

Open communication is essential when formulating a wealth transfer plan for your family. Some of your children might already have financial security and would prefer that you give the assets you would leave them to their children instead.

Surprises are seldom a good idea. When a sizeable inheritance drops into a person’s lap without warning, the recipient often lacks the money management skills to handle the assets. This fact is why many lottery winners go broke within a year or two of winning millions. Talking with your heirs can give them time to mentally prepare and educate themselves on investments and other financial issues.

When you talk with your beneficiaries, you can suggest a team of professionals who can advise them on how to safeguard the assets they will receive. If not handled properly, for example, your loved ones could lose a substantial portion of the inheritance in a divorce.

Our local elder law attorneys can advise you on the regulations in our state and how they may differ from the general law of this article.


References:
AARP. “Boomers Will Pass Along Trillions, Mostly to Gen Xers.” (accessed December 29, 2018) https://www.aarp.org/money/budgeting-saving/info-2018/generational-wealth-transfer.html

How Can I Protect a Loved One From Elder Abuse?

The (Lorain OH) Morning Journal’s recent article, “How to protect elder loved ones from abuse,” reports that the National Center on Elder Abuse says the 2010 census showed the largest number and proportion of people are 65 years old and older in the U.S. population with 40.3 million people, or about 13% of the population. By 2050, that number is expected to more than double to 83.7 million.

A 2010 national study found that financial abuse is the most commonly reported form of elder abuse followed by potential neglect, emotional mistreatment, physical mistreatment, and sexual mistreatment. With financial abuse and neglect, the courts often must get involved to limit the damage and try to get the elderly person the help they need.

When looking for elder abuse in family or friends, look for changes in their circumstances. A neighbor may become more isolated or is making decisions that are potentially harmful to themselves. There’s also self-neglect, where a senior isn’t taking good care of themselves. “New people” in their lives may also be a risk. They may want to assume control over the senior’s person’s life and exclude other people who have had longstanding relationships with the person.

Financial exploitation can take many different forms. Isolation is a critical component of financial exploitation. If a senior is isolated from the people who’ve helped them make financial decisions in the past, and then a new person comes along, that individual may try to make financial decisions for their own gain.

If you think a loved one or neighbor is suffering from elder abuse, start by just talking to them. Talk to them about some of the changes you’ve seen.

Some people are required by law to report elder abuse, and that list has recently expanded to include chiropractors, dentists, ambulance drivers, coroners and member of the clergy, among many others.

A judge can freeze a bank account and suspend powers of attorney. She can also order evaluations and require that Medicaid and Medicare applications be made for the adult. A judge can continue her orders up to six months and appoint guardians.

The best way to keep loved ones safe from this kind of elder abuse is to make sure that important legal documents like a will and powers of attorney are done while the person is still competent, and that people they trust are named to carry out those documents.


Reference: The (Lorain OH) Morning Journal (December 26, 2018) “How to protect elder loved ones from abuse”

Here’s Why You Need a Will

Many celebrities die without wills. This past year saw a host of celebrity estate snafus. It’s as if they were sending a message from beyond that they didn’t care about how much turmoil and family fights would take place over their money and assets. Some of these battles go on for decades. However, as reported in Press Republican’s article “The Law and You: Important to make a will,” even if you think you don’t have enough property to make it necessary to have a will, you’re wrong. It’s not just wealthy or famous people who need wills.

Do you really want other people making those decisions on your behalf? Would you want the laws of your state making these decisions? Your family will do better if you have a will and an estate plan.

For example, in Wisconsin, if you don’t have a will, and since Wisconsin is a community property state, your surviving spouse will receive all of your property. However, if you have children from a previous relationship, then they will inherit an interest in some of your property.

If you have a spouse but no children, your spouse will inherit everything. If you have children and no spouse, then the children get everything, divided equally.

If you have no spouse, no children and your parents are living; then your parents will inherit everything you own.

If your parents are not alive, your siblings will get it all.

Adopted children are treated by the courts the same as biological children when there is no will. Stepchildren and foster children do not inherit unless they are explicitly named in the will.

If you have been in a long-term relationship with someone and never married, even if they qualify for health care benefits from your employer under the “domestic partner” provision, they are not considered a spouse when it comes to inheritance. At the same time, if you are not legally married and your partner dies, you have no legal right to inherit from your partner’s estate. No matter how long you have been together, how many children you have together if you are not legally married, you have no inheritance rights.

Wisconsin does not recognize “common law marriages;” as a legal union.

If you want someone who is not your legal spouse to receive your assets, you need to meet with our estate planning attorneys and, at the very minimum, have a will drawn up that meets the requirements of the laws of your state. Our estate planning attorneys can explain how state laws work and what provisions are and are not acceptable in your estate.

Our estate planning attorneys will also help you consider other issues. Do you want to leave anything to a charity that matters to you? Do you want anyone else besides your children to receive something after you pass? Is there anyone who needs a trust, because they are unable to manage their finances, or you are concerned about their marriage ending in divorce? Making these decisions in a properly prepared will, can protect your family and lessen the chances of your wishes being challenged.


Reference: Press Republican (Dec. 18, 2018) “The Law and You: Important to make a will”

How Do I Contest a Will?

The ways that children of a first marriage can contest a will fall into several scenarios. However, in order to do so, a person must have “standing.” Typically, a person has standing in two situations, explains nj.com in its recent article, “Can children from a first marriage contest a will?”

One way is when the individual is the decedent’s heir by law and would inherit under the laws of intestacy if the will were declared invalid. Another way a person could have standing is if there were a prior will in which the person is a named beneficiary, and the prior will would be reinstated, if the subsequent will were set aside.

For example, in New Jersey, probate laws take blended families into consideration. If a person dies without a will and has descendants, like children or grandchildren who are not descendants of the surviving spouse, then several things would happen. The surviving spouse would inherit 25% of the estate (not less than $50,000 nor more than $200,000), plus one-half of the remaining balance. The descendants from outside the marriage would then inherit the remainder of the estate.

Let’s say George and Gracie were married and had baby Benny. After George and Gracie divorce, George marries Phyllis. If George dies intestate—without a will—then Benny would inherit a portion of his estate. If George dies with a will, Benny has standing to challenge the validity of the will.

As a practical matter, Benny should only challenge the will, if he’d stand to inherit more under intestacy than under the will, and he has a valid challenge justifying that the will be set aside.

The four most common considerations to contest a will are lack of capacity, improper execution, fraud, and undue influence/duress.

It’s not uncommon for someone to successfully contest a will. However, it really depends on the facts and circumstances of each specific case. For example, Benny would have a much tougher time proving undue influence, if John and Phyllis were similar in age and married for 30 years prior to George’s death, than if Phyllis was 50 years younger than George, and he had some level of dementia.


Reference: nj.com (December 11, 2018) “Can children from a first marriage contest a will?”
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