Elder Law

As a New Parent, Have You Updated (or Created) Your Estate Plan?

Will for New Parents
For new parents, the need for an estate plan is especially obvious.

You just had a baby. Now you’re sleep-deprived, overwhelmed, and frazzled. Having a child dramatically changes one’s legacy plan and makes having an estate plan all the more necessary, says ThinkAdvisor’s recent article, “5 Legacy Planning Basics for New Parents.”

Take time to talk through two high-priority items. Create a staggered checklist—starting with today—and set attainable dates to complete the rest of the tasks. Here are five things to put on that list:

  1. Will. This gives the probate court your instructions on who will care for your children, if something happens to both you and your spouse. A will also should name a guardian to be responsible for the children. Parents also should think about how they want to share their personal belongings and financial assets. Without a will, the state decides what goes to whom. Lastly, a will must name an executor.
  2. Beneficiaries. Review your beneficiary designations when you create your will, because you don’t want your will and designations (on life insurance policies and investments) telling two different stories. If there’s an issue, the beneficiary designation overrides the will. All accounts with a beneficiary listed automatically avoid probate court.
  3. Trust. Created by an experienced estate planning attorney, a trust has some excellent benefits, particularly if you have young children. Everything in a trust is shielded from probate court, including property. This avoids court fees and hassle. A trust also provides some flexibility and customization to your plan. You can instruct that your children get a sum of money at 18, 25 or 30, and you can say that the money is for school, among other conditions. The trustee will distribute funds, according to your instructions.
  4. Power of Attorney and Health Care Proxy. These are two separate documents, but they’re both used in the event of incapacitation. Their power of attorney and health care proxy designees can make important financial and medical decisions, when you’re incapable of doing so.
  5. Life Insurance. Most people don’t think about purchasing life insurance, until they have children. Therefore, if you haven’t thought about it, you’re not alone. If you are among the few who bought a policy pre-child, consider increasing the amount so your child is covered, if something should happen.

As a new parent, discussions about your estate plan, including incapacity and death aren’t particularly comfortable, but they are necessary. Our experienced Madison area estate planning attorneys will guild you though the process of making sure your loved ones are taken care of in the manner that you desire. We invite you to request a consultation to start the conversation.

Reference: ThinkAdvisor (March 7, 2019) “5 Legacy Planning Basics for New Parents”

Creating a Will: Estate Planning for Parents with Young Children

Estate planning for parents with young children
Make sure you have a plan in place for your children, should something happen to you.

It’s a very easy thing to forget, because it’s so unpleasant to consider. The idea of becoming seriously ill or even dying while your kids are young, is every parent’s worst fear. Having an estate plan with a will that prepares for this possibility is so important. Creating an estate plan if you have minor children will provide peace of mind, and a road forward for those who survive you, if your worst fears were to come true.

Attorneys who focus their practices on estate planning, know that not every story has a happy ending. For some of them, it’s a professional mission to make sure that young parents are prepared for the unthinkable, says KTVO in the article “Family 411: Thinking about estate planning while your kids are young.”

Start with a will. In a will, you’ll name a guardian, the person who would be in charge of rearing your children and have physical custody of them. Don’t assume that your parents will take over, or that your husband’s parents will. What if both sets of parents want to be the custodians? The last thing you want is for your in-laws and parents to end up in a court battle over custody of your children.

Another important document: a trust. You should have life insurance that will be the source for paying for the children’s education, including college, summer camps, after-school activities and their overall cost of living. In addition, proceeds from a life insurance policy cannot be given to a minor.

However, what if your son or daughter turned 18 and were suddenly awarded $500,000? At that age, would they know how to handle such a large sum of money? Many adults don’t. A trust allows you to give clear directions regarding how old the child must be, before receiving a set amount of money. You can also stipulate that the child must complete college before receiving funds or reach certain milestones.

An estate plan with young children in mind, must have a Power of Attorney for financial decisions and one for medical decisions. That allows a named person to make important financial and medical decisions on behalf of the child. You may not want to have their legal guardian in charge of their finances; by dividing up the responsibilities, a checks and balances system is set into place.

However, for medical decisions, it is best to have one primary person named. In that way, any care decisions in an emergency can be made swiftly.

While you are creating an estate plan with your children in mind, make sure your estate plan has the same documents for you and your spouse: Power of Attorney, medical Power of Attorney, a HIPAA release form and a living will.

Speak with one of our local estate planning attorneys who are experienced in planning for young families.

Reference: KTVO.com (Feb. 6, 2019) “Family 411: Thinking about estate planning while your kids are young”

Why Is a Revocable Trust So Valuable in Estate Planning?

Revocable Trust
A revocable trust can do a lot to solve big estate planning and tax problems.

There’s quite a bit that a trust can do to solve big estate planning and tax problems for many families. As Forbes explains in its recent article, “Revocable Trusts: The Swiss Army Knife Of Financial Planning,” trusts are a critical component of a proper estate plan. There are three parties to a trust: the owner of some property (settler or grantor) turns it over to a trusted person or organization (trustee) under a trust arrangement to hold and manage for the benefit of someone (the beneficiary). A written trust document will spell out the terms of the arrangement.

One of the most useful trusts is a revocable living trust where the grantor creates a trust, funds it, manages it by herself, and has unrestricted rights to the trust assets (corpus). The grantor has the right at any point to revoke the trust, by simply tearing up the document and reclaiming the assets, or perhaps modifying the trust to accomplish other estate planning goals.

After discussing trusts with your attorney, he or she will draft the trust document and re-title property to the trust. The assets transferred to a revocable trust can be reclaimed at any time. The grantor has unrestricted rights to the property. During the life of the grantor, the trust provides protection and management, if and when it’s needed.

Let’s examine the potential lifetime and estate planning benefits that can be incorporated into the trust:

  • Lifetime Benefits. If the grantor is unable or uninterested in managing the trust, the grantor can hire an investment advisor to manage the account in one of the major discount brokerages, or he can appoint a trust company to act for him.
  • Incapacity. A trusted spouse, child, or friend can be named to care for and represent the needs of the grantor/beneficiary. She will manage the assets during incapacity, without having to declare the grantor incompetent and petitioning for a guardianship. After the grantor has recovered, she can resume the duties as trustee.
  • This can be a stressful legal proceeding that makes the grantor a ward of the state. This proceeding can be expensive, public, humiliating, restrictive and burdensome. However, a well-drafted trust (along with powers of attorney) avoids this.

The revocable trust is a great tool for estate planning because it bypasses probate, which can mean considerably less expense, stress and time.

In addition to a trust, ask your attorney about the rest of your estate plan: a will, powers of attorney, medical directives and other considerations.

Any trust should be created by a very competent trust attorney, after a discussion about what you want to accomplish. We invite you to start that discussion with one of our estate planning attorneys.

Reference: Forbes (February 20, 2019) “Revocable Trusts: The Swiss Army Knife Of Financial Planning”

What Are the New Rules for Veterans’ Benefits?

Veterans rejected for disability benefits will have new options for appeals. This is because federal officials are implementing an overhaul of the review process, with the objective of significantly reducing wait times for complicated cases.

The Department of Veterans Affairs announced last month that it will implement new appeals modernization rules starting in mid-February. The changes have been in the works for more than 18 months, since lawmakers passed sweeping reform legislation on the topic in the summer of 2017.

Veterans will now be provided with three streamlined options for their benefits appeals, reports the Military Times in the article “VA’s benefits appeals process will see a dramatic changeover next month.”

The VA is now hoping that the most difficult reviews can still be finished in less than a year in most cases. The target for cases that don’t go before the Board of Veterans Appeals is an average of about four months for a final decision.

A successful appeal can result in thousands of dollars in monthly benefits payouts for veterans who’ve previously been turned down, for what they believe are service-connected injuries and illnesses.

“(This) is the most significant reform in veterans’ appeals processing in a generation and promises to improve the timeliness and accuracy of decisions for our nation’s veterans,” said House Veterans’ Affairs Committee Chairman Mark Takano, D-Calif.

Veterans groups primarily support the appeals changes, but some have expressed concerns about the new system limiting veterans’ options for future reviews, in favor of getting faster resolutions.

Parts of the new process were implemented as pilot programs at select sites in recent months. In the past, the cases involved a combination of all three options, with cases reset and repeating steps with every new submission of case evidence.

With the first of the three new appeals processes, veterans can file a supplemental claim where they introduce new evidence in support of their case. The appeal is handled by specialists at a regional office, who make a final decision.

The second option allows veterans to request their cases be reviewed by a senior claim adjudicator, instead of the regional office. Those reviews are for clear errors or mistaken interpretations of a statute. If they find mistakes, they can require corrections for the cases.

The third option allows veterans to appeal directly to the Board of Veterans’ Appeals. Those cases are anticipated to take the longest to process, due to the legal prep work. Veterans can obtain a direct decision or request a hearing before the board.

Veterans with cases currently pending in the system, can opt to go with the new processes or stay with the current system, if they think it will be better for them.

If you have questions about VA Pension Planning, we invite you to request a consultation with one of our experienced attorneys.


Reference: Military Times (January 22, 2019) “VA’s benefits appeals process will see a dramatic changeover next month”

Does TV Mogul Sumner Redstone Have the Mental Capacity to Change his Estate Plan?

The decision on TV mogul Sumner Redstone’s estate plans, follows the settlement of litigation with his former companion Manuela Herzer. The Hollywood Reporter explains, in the article “Sumner Redstone Had Capacity to Change Estate Plan, Judge Rules,” that after Herzer was thrown out of Redstone’s mansion and removed as the person in control of his health care directive in 2015, she sued and claimed he didn’t possess the mental capacity to make decisions for himself and his business.

The fight included allegations of elder abuse against Herzer and claims that his daughter Shari Redstone was manipulating her father, which have now been resolved. Herzer agreed to repay the $3.25 million she received in gifts and to state that she has no decision-making power concerning Redstone.

Los Angeles Superior Court Judge David Cowan formally concluded the fight over Redstone’s competence, by confirming the validity of Redstone’s current estate plan.

“Mr. Redstone had sufficient capacity to execute the Fortieth Amendment to and Restatement of the Sumner M. Redstone 2003 Trust dated July 23, 2003, and the Forty-First Partial Amendment thereto on their respective dates of execution, October 16, 2015, and May 20, 2016,” writes Cowan, adding the changes “were not the product of undue influence, fraud, duress or mistake.”

Judge Cowan’s decision is no guarantee that there won’t be further disputes over what happens to the billionaire’s estate after he dies, but it does lend support to Redstone in weathering future challenges. This is particularly important, because a guardian ad litem was appointed by the court in December to ensure that the proceedings were in Redstone’s best interest.

“After three years of litigation, Mr. Redstone is grateful for today’s court confirmation of his capacity to execute his estate plan, and of his free will in doing so,” his lawyer Gabrielle Vidal said in a statement to The Hollywood Reporter.


Reference: The Hollywood Reporter (January 23, 2019) “Sumner Redstone Had Capacity to Change Estate Plan, Judge Rules”

You Can Avoid Elder Financial Abuse, but How?

The prospect of a long, healthy and active life is a wonderful thing to consider. However, one in 10 seniors have suffered financial abuse, according to The Kansas City Star’s article “Five ways to avoid elder financial abuse.” The grandson of Brooke Astor spoke at a conference about how his grandmother’s last years were spent living in poverty, as a result of her son and guardian stealing from the estate and cutting the amount of money available for her care. The grandson and his brother sued their father to protect their beloved grandmother, a leading philanthropist and one of New York’s high-profile society figures.

However, elder financial abuse is not limited to the super wealthy or socially prominent. One report noted that one in ten seniors suffers some form of financial abuse.

Why does this happen?

As we age, our brain also ages making us more susceptible to making poor decisions. Even high-functioning retirees with no outward sign of dementia, find it harder to distinguish safe investments from risky ones. The probability of dementia also rises as we age: only 7% of people over 60 have dementia, but nearly 30% of people over age 85 have some degree of dementia.

Here are some suggestions to minimize the likelihood of financial elder abuse:

Communicate. Talk with your loved ones regularly, so you know how their health is and what they are doing. If they don’t want to talk about money, you can start the conversation by sharing something about your own situation. Remind them about safe practices like shredding receipts, bills and account statements. Remind them not to open emails from people they don’t know and not to give their Social Security number or account numbers on the phone or online to people they don’t know.

Stay involved. Know how your loved ones are spending their time and money, by staying involved in their lives. If they are hiring people to do work on or in the house, know who those people are and check their backgrounds. Get to know their home healthcare aides. Review their bank statements to ensure no unusual activity is taking place. If you see that they are starting to decline, offer to take over tasks for them.

Check and balance. Make sure that the correct estate planning documents are in place to allow trusted family members to help, if the need arises, such as power of attorney and medical directive. Divide up responsibilities; consider having one person in charge of bank accounts and another in charge of investment accounts. Trade responsibilities every few months.

Have a relationship with their professionals. Attend meetings with their estate planning attorney and their financial advisor. If there is any hesitation on the part of the professional, push back: any qualified estate planning attorney or financial advisor or CPA should welcome family involvement.

Streamline accounts. Fraud is harder to see when there’s money in multiple financial institutions with various advisors and life insurance policies from several different brokers. Spend the time to do a complete inventory of all accounts. If you can, consolidate accounts.


Reference: The Kansas City Star (Sep. 8, 2018) “Five ways to avoid elder financial abuse”

How Caregiving Can Impact Older Women

When an older woman takes care of a loved one, it can be at the expense of the caregiver’s physical, emotional, and financial health. Many women end up in poverty in retirement because they had to leave the workforce at the peak of their careers to care for someone. With more than 40 million people in America serving as unpaid caregivers for family members and most of the caregivers being women, we need to understand how caregiving can impact older women.

Caregiving Affects Our Entire Economy

When you have tens of millions of workers or former workers who have to reduce their hours or drop out of the workforce because a family member needs care, the caregivers face poverty, but our overall economy suffers as well. Whenever significant numbers of people are unemployed or under-employed, the economy loses those wages, the income taxes and everything that the person would have bought, if fully employed.

Caregivers Take a Hit on Social Security Benefits

The amount you receive in monthly Social Security retirement benefits will depend on several factors, including:

  • Your average wages for your 35 highest-earning years. Making less money a year because of caregiving will lower your Social Security check when you retire. If you have to quit work to take care of a family member before working for 35 years, those missed years will count as zero earnings, which can slash the amount of your average wages. Since our last working years tend to be when we make the most money, missing out on these years will leave you with a check based on things like your jobs during college.
  • When you retire. If you start collecting benefits early, your monthly Social Security check will be much smaller than if you can wait until full retirement age. If you can wait beyond your full retirement age, you will get a bonus added to every Social Security check you ever receive. The bonus gets larger the longer you wait to start collecting benefits, until age 70, when there is no additional bonus. You will still collect the bonuses for the rest of your life, but they will not increase in size, except for things like cost-of-living adjustments (COLA).

The Physical and Emotional Toll of Caregiving

Being responsible for someone with fragile health puts a mountain of stress on your shoulders.  Unless you have a large, involved family nearby, you might be carrying this responsibility by yourself. Imagine what would happen to an ICU nurse who was on duty 24 hours a day, seven days a week, 365 days a year. Before long, her health would suffer.

The physical and emotional exhaustion would be unbearable, yet millions of Americans call that description everyday life. When a caregiver who had to leave her job gets sick, she often does not have health insurance. Her medical bills then add to her already overwhelming stress.

Are There Solutions to the Caregiver Problem?

Most developed countries offer better supports to families, who have a person with care needs. As a result, women can stay in their labor force in much higher numbers, which helps the family’s income and the country’s overall economy. Without additional supports, American caregivers face a bleak future.

Talk with our elder law attorneys to see if your state’s regulations differ from the general law of this article.


References:
AARP. “The Trickle-Down Effect of Caregiving on Women.” (accessed January 8, 2019) https://www.aarp.org/caregiving/basics/info-2018/women-caregiving-trickle-down-effect.html

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”

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”
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