Estate Planning

Friday, May 18, 2012

Do You Know Your Taxes Are Going Up?

Friday, April 13, 2012

Where Do You Keep Your Important Papers?

By Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho

         Who knows where you keep your important papers?  In an emergency situation, valuable time could be wasted tracking down important legal papers.  Make it a point to tell your children, successor trustee or personal representative where they can find your original documents.  If you store those documents in a safe deposit box, or a safe at home, make certain they have the ability to get into the box or safe. 

         We frequently receive calls from our clients’ family members who want to know where they can find these documents, and they need them “now” because there is a family crisis.   There are legal limitations that tie our hands so often we cannot provide our copies to the family. 

         You do not have to tell anyone about the contents of the papers, just let them know how they can access them in an emergency.

Friday, March 30, 2012

Why Is the City Digging Up Telephone Poles?

By Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho

I walk my dogs every day.  We cruise the neighborhood.  Of course making it safe, but also noticing any changes or new things.  For the last month I have noticed piles of dirt around the wooden telephone poles.  It seemed odd to me.  Yesterday, I saw a young man digging around a pole.  I asked him why and he told me the city decided it is much cheaper to dig the dirt from around the wooden poles, treat the wood with something to stop any rot or bug infestation, wrap it in a special cloth and then refill the dirt.  This saves them loads of money because it is cheaper to maintain the poles, than it is to replace them.  Of course, that makes sense.  We have limited resources, and it is cheaper to take care of what we have, rather than let it fall apart and only notice when it fails.

How does this relate to you?  If you have gone to the trouble and effort, and paid for, an estate plan to help protect you and those you care about if you are ill or die, why not make certain it still works.  When the telephone poles were installed they were the best, but as time goes by things change.  The City still wants them to be the best and can help that happen with maintenance.  You, too, need to maintain your plan so that it works when you need it   How can you do this?  Set up a review appointment with your estate planning attorney to review your existing plan to determine if it covers your current circumstances and what you want to happen when you become ill or die.  If not, it is easy to make changes now before there is a problem.  The City is saving money and headaches.  So can you.

Friday, March 23, 2012

Whitney Houston's Will Is Now Public - What Was She Thinking?

By Susan M. Graham, Certified Elder Attorney, Senior Edge Legal, Boise, Idaho

Whitney Houston’s Last Will and Testament is available on the internet and everyone can see the terms of her estate plan.  Her estate goes to her daughter and is managed until she is 30, with some assets going to her earlier.   Do you want your affairs made public?  There were similar news reports about the Last Will and Testament for Jackie Kennedy Onassis and Elvis Presley.   Every word of their Wills became public.

How does this happen?  When someone dies with a “Last Will and Testament,” their Estate must be probated in the local court.  This means the Will is filed with the court along with a petition requesting that the terms of the Will be followed and that someone nominated in the Will be appointed by the court to wind up the affairs of the deceased person.  All of these documents filed with the court become a public record and are available for anyone to view.  They just need to go to the courthouse and pay for copies.  

Maybe this is not a problem for some people.  But many of us would not be happy if the details of our personal lives were available for strangers to review.  It is none of their business.

If this is a concern of yours, you may want to consult with your lawyer about how to create an estate plan that keeps your affairs private and still accomplishes your planning goals.

Friday, March 16, 2012

Hope is not a plan. Is it OK to have two house fires?

By Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho 

I talked to a wife this week who has been a caregiver for her demented husband for years.  Recently he has taken to getting up in the night and using firewood stored by the fireplace to start fires on the hearth and in the firebox!  Fortunately, his wife noticed both times and put the fires out.  She is grateful for these miracles but sees no need to change how they live.  

Her desire is to continue to care for and keep him at home with no help.   This is a dangerous plan for both of them.

Fortunately, their children and doctor have taken notice and are working to make changes that will result in a safer environment for each of them with plenty of help.

Hope is not a plan.  That approach is living in a fantasyland unrelated to real world events associated with ageing.

Friday, March 02, 2012

Inheritance Trust

By Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho

Marie died and $400,000, which was all of her estate, went to her son, Chris.  Chris was married to Jane and they had three children.  Chris died two years later giving all of his assets, including those he inherited from his mother, to his wife.  After a few years, Jane married Tim, a widower with one child.  Jane and Tim did not have a prenuptial agreement, and they just decided to put all the assets each of them owned in joint names.  Jane died a year after marrying and everything she owned went to Tim.  When Tim died everything went to his child.  Nothing went to Chris and Jane’s children. 

Do you want your son’s widow to give your son’s inheritance to her new husband rather than your grandchildren?  If not, you may want an “Inheritance Trust.”

Some other names for this type of trust are “dynasty,” “heritage,” or “legacy” trusts.

This trust provides powerful protection for the individuals who inherit from you.  How does an inheritance trust work?  Upon your death, the monies a person inherits from you will be deposited directly into this trust rather than being given to them out right.   The funds that are placed in this trust will be protected from divorces, creditors, lawsuits, and bankruptcy.

Using an inheritance trust, we will rewrite the story about Chris.   When Marie died, $400,000 went to Chris. This time Marie has created an irrevocable inheritance trust naming Chris as the Trustee and the sole beneficiary during his lifetime.  When Chris dies, whatever remains in this Trust will go to his three children.  Marie dies, and Chris puts the $400,000 in this inheritance trust.  Chris decides how the funds will be invested, and he has the right to withdraw the money under certain circumstances. When Chris dies, those funds will go to his children and stay in Marie’s family. This trust provides extraordinary protection for Chris because the money will be protected should certain life tragedies occur, such as a serious illness, financial reversal or divorce.

Saturday, February 25, 2012

A Fresh Start - Seven Ways to Get Organized

By Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho

Life gets away from us with endless distractions every day.  Here are seven easy steps you can take to be certain some of the most important parts of your life stay organized.

1. Keep your important papers in one place and tell someone where they are located.  These papers may include some or all of the following:  birth certificates, marriage certificates, death certificates, divorce decree, military discharge papers, life insurance, car titles, deeds, your Last Will and Testament, a Revocable or Irrevocable Trust, financial power of attorney, health power of attorney, living will, Physician’s Order for Scope of Treatment (POST), funeral plans, health insurance, long-term care insurance, a list of your bank accounts, retirement accounts, and other investments, along with a list of your charge card numbers.

2. Sign a financial power of attorney, which allows the people you select to handle modest financial transactions for you if you are not able. 

3. In addition, sign a health power of attorney appointing someone to make health decisions on your behalf if you cannot communicate effectively.

4. Sign a “living will” to elect the type of care you want to receive when you are on your deathbed.  If you fail to have a “living will,” under Idaho law the legal and medical systems require at a minimum that you receive nutrition and hydration with tubes (nose or stomach tubes).  The other two choices are to use all the fancy machines to keep you going as long as possible, or skip the tubes and fancy machines, and just keep you comfortable and “let me go.”

5. Sign a Last Will and Testament or a revocable Trust so that your wishes will be followed when you die as to who will be in charge, and who will receive your “stuff” [the ring and gun] as well as who will receive your estate.

6. If you have a safe deposit box, or a safe at home, make certain someone else has the ability to access them if your are ill, out of town or die. 

7. If you have pets, make arrangements for their care if you are unable to care for them due to illness or death.

Lastly, mark your calendar for a year from now to review this list and up date your affairs.  That way you will stay organized and prepared which creates security for your future.

Friday, February 10, 2012

Wishing Does Not Make It So!

By Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho

My 69-year-old Cousin in Seattle called on Sunday to update me with his bad news.  His mother died on Thursday, his daughter was engaged to an unemployed plumber who has 2 young children, and my Cousin was diagnosed with diabetes.  I asked if he had paperwork in effect to help address some of these issues and, like most people, he said “No.”   He did tell me he is “thinking about” doing something. 

Are you over 65 with no plan for your future? 

Do you want to be in charge of your life for the rest of your life? 

Wishing does not make it so.  Put a plan in place to make that happen.

What “parts” does your plan need to take the mystery out of tomorrow and replace it with confidence and security?   Everyone needs to start with the basics.  First, decide and sign papers that set out who will handle your health decisions and finances if you are unable to help yourself.   Most of us do not plan to die tomorrow, but it is a guarantee it will happen some day and you get to elect who gets all your things, from a ring to a bank account.  At a minimum, you need a Last Will and Testament to fully accomplish your plan of who inherits from you when you are gone.

Get started on your plan now.  How?

Contact your Certified Elder Law Attorney to discuss where you are, what you want to accomplish with the rest of your life, and discover the best strategy to get where you want to go.

Stop wishing, and do something NOW!  Take the steps to help yourself have a more secure future.

Saturday, February 04, 2012

Want Advice From Those in the Last 1/3 of Their Lives?

By:  Susan M Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho 83702

Cornell University (my alma mater) created a Legacy Project to find out from those in the last third of their lives, what life experiences, both positive and negative, have taught them about living effectively.  There is a new book called "30 Lessons for Living", Hudson Street Press, by Dr. Karl Pillemer which gathers advice from more than 1,000 elders.¹

Here are some highlights:

1.  Marriage:  "A satisfying marriage that lasts a lifetime is more likely to result when partners are fundamentally similar and share the same basic values and goals."

2.  Careers:  Be involved in work that you absolutely love and look forward to doing every day.

3.  Parenting:  Spend more time with your kids.  Share in their interests and activities.

4.  Aging:  "Embrace it.  Don't fight it."  Most of the 1,000 people found old age had more opportunity than they thought.  If you are worrying about dying, then plan for it.  "Get things organized, let others know your wishes, tidy up to minimize the burden on your heirs."

5.  Regrets:  Take advantage of opportunities.  Say "yes" more.  Fill out your Bucket List and start checking off items once they are done.

6.  Happiness:  Happiness is a choice, not what life deals you.

"Even if their lives were nine decades long, the elders saw life as too short to waste on pessimism, boredom and disillusionment."

If you want to share your own wisdom and need help in getting started, on the web go to "New York Times."  Type in "Questions for Your Own Circle of Experts."  I bet your family and friends would be delighted to hear from you.

__________________________

¹"Advice From Life's Graying Edge on Finishing with No Regrets" by Jane E. Brody, The New York Times, January 10, 2012, page D7.

Friday, January 20, 2012

Want to Protect Your Children’s Inheritance?

By Susan M. Graham, Attorney at Law, Senior Edge Legal, Boise, Idaho

         Margaret Barkley, a retired first grade teacher, has been married for 45 years to Al, a machinist.  They lived in town and have one son, Lee, also a machinist who is married to Sally.  Lee and Sally have three children, Joe, Pete and Victoria. 

         Margaret and Al have been frugal all their lives and made a habit of putting money aside every paycheck.  Now they are in their seventies and plan to leave everything they have to their son Lee, when they both die.  They have not told Lee, but they never liked his wife.  The Barkleys want to make certain that Sally does not end up with Lee’s inheritance

         Margaret and Al have another worry--their grandson, Pete.  Pete is 17, spends all his free time fishing in the Boise River and rather than study, he is with his girlfriend.  His grades are so bad that he may not graduate from high school.  His grandparents are concerned that unless Pete changes his ways, he will not be able to support himself.

         What to do?  Margaret and Al talked to their estate-planning attorney and shared their concerns about Lee, Sally and the grandchildren.  They were honest in sharing their worries.  For certain they did not want to give everything to Lee, and have it go to Sally when he dies because, if she remarried, Sally’s second husband would end up with everything.   They want all their assets to pass to Lee and somehow be protected from Sally inheriting the balance.  In addition, they want to help and protect their grandchildren.  Their attorney suggests one planning method to accomplish their goals is to create an “Inheritance Trust.”

         How does an “Inheritance Trust” work?  Margaret and Al create the Inheritance Trust now, and they name the Trust as the recipient of their estate when they both die.  Lee manages the Trust and also has the use of the estate assets deposited in the Trust.  A big difference is when Lee dies the assets in the Trust go to his children, not his spouse.  In addition, the funds in the trust can be used to help provide an education for the grandchildren.  Pete can get the help he needs to be self-supporting, but he will not be able to freely waste the money in the Trust. 

         There are a number of additional benefits to leaving assets in Trust to Lee.  These include: (1) the assets will be protected from his spouse in the event of divorce, (2) the assets will be protected from Lee’s creditors in the event of a financial hardship, (3) on Lee’s death, the unused assets will go to his blood relatives (grandchildren) instead of in laws, and  (4) these assets are protected from lawsuits.   If the grandchildren are under age 30, the funds are held in Trust for them until 30, but the funds can be available to the grandchildren to help them get started in life.

         If you want to protect your children’s inheritances from divorce, lawsuits, creditors and bankruptcy, call and set up an appointment with me to see how this planning technique fits for your estate plan.

Friday, January 13, 2012

Wolf Tracks at My Farm

by Susan M. Graham, Attorney at Law, Senior Edge Legal, Boise, Idaho

There were wolf tracks in the snow by my farm house last week.  I have never seen wolf tracks before.  They are bigger than a big dog print.

I was excited, and disappointed I missed seeing the wolf.  At the same time, I was a little frightened and wondered what would have happened if my dogs were outside when the wolf came by.  I would put my money on the wolf.

I really did not need to worry.  I have done everything I can to make my farm safe.  The buildings are secure.  I carry a phone.  I have a loaded shot gun.  There is little cover for hiding.

I was glad to see the prints, but also glad to be reminded of the need to review whether I am prepared to actually see a wolf at my farm.

How does this relate to estate planning?  One of the primary purposes for setting up an estate plan is to make it easy to handle the unexpected bad days of sudden serious illness or death.  Usually there is no advance notice and the tragic event just happens.  There is less need to worry if a plan is in place to identify who will be making decisions for health and finances, and that plan gives sufficient legal rights to help out.  Are you prepared if the wolf comes into your world?

If so, great.  If not, take steps now so you don't have to worry.

Wednesday, January 04, 2012

2012 Resolutions

2012 resolutions

It's time again for New Year’s resolutions. According to Forbes, there are 12 resolutions we should all make – and “plan your estate” is number two:

1.            Set goals;

2.            Plan your estate;

3.            Check your credit;

4.            See where your money is going;

5.            See where you can cut back;

6.            Make sure you have the right amount of insurance;

7.            Build an emergency fund;

8.            See if you can refinance your debt;

9.            Pay down bad debt;

10.          Get on track for retirement;

11.          Consider saving for education;

12.          Make sure your investment portfolio is properly diversified.

As to plan your estate, the author recognizes that we never know when we might need estate planning documents, and that these are “notoriously easy to procrastinate so it’s good to get them out of the way.”

The full article, 12 Financial Resolutions for 2012, is available online at Forbes.

Saturday, December 17, 2011

There Go The Social Safety Nets (to help pay for catastrophic long-term care!!)

by Susan M. Graham, Attorney at Law, Senior Edge Legal, Boise, Idaho

We have no money in this country.  We all know that.  How does this impact on you if you need to pay for residential long-term care in a nursing home, assisted living or in your own home?

There are two government programs that are available to seniors to help pay for care - Medicare and Medicaid.

Medicare is a national health insurance program for people 65 and older.  Medicare will help pay for a maximum of 100 days of care.  To access this benefit a few requirements must be met.  First, a person must be admitted to a hospital and stay there at least three days.  Then, when they are discharged to a rehabilitative facility, such as the Boise Elks, if that person is improving, Medicare will pay 100% for the first 20 days of care.  If the person continues to improve, Medicare will pay part and the individual or their supplemental insurance will pay part of the expense for the next 80 days.

What are the holes in this "safety net"?  First, the Medicare recipient must be ADMITTED to the hospital and not there for OBSERVATION.  The difference is huge.  If a person is not admitted, Medicare will not pay a dime toward the rehabilitative care.  If Medicare does not pay, then in most cases the supplemental health insurance coverage will not pay for the care as well.  This problem is happening here in Idaho as well as nationwide.  The bills for the first 20 days that I've seen range from $6,000 to $30,000.  This is a huge bill for most individuals and families to absorb.

The next hole in the Medicare safety net requires that the person be "Improving" during their rehabilitative care.  My cousin, Kathie, at age 98, went to the hospital for three days.  She was admitted.  They discharged her back to her nursing home and I was called two days later saying Medicare would not pay for her care because she was not "improving."  She was old and could not follow instructions.  I was not surprised that she failed this second test.

Another "safety net" is the federal and state Medicaid program.  Part of this program helps to pay the long-term residential care expenses for people 65 and older who meet a list of criteria.  The cost for privately paying these bills ranges from $20 per hour for a bath aide to $8,000 per month for skilled nursing care.  To access this benefit, it is necessary to complete an application form and submit it to the Idaho Department of Health and Welfare.  The last two application forms we submitted on behalf of a married couple were approximately 400 pages each.

There were at least six more inches of back-up information.  It took hours and hours to sort out and complete the application and deal with the follow-up issues.  All of our Medicaid applications have been approved in the past 5 years, but remember I have a law office.  The process is onerous and next to impossible for regular families in crisis to complete on their own.  That is not fair, but it is the real world.

We have no money in this country to continue to provide the safety nets that have been available.

What can you do to protect yourself and your loved ones?

1. Make certain you have up-to-date legal documents that include your Living Will, Health Power of Attorney and Financial Power of Attorney.
2. Let the people you plan to rely upon in a crisis know you have nominated them to help.
3. If you need help, seek it out.  Your failure to make informed decisions may cost you and your family thousands of dollars and unnecessary worry.
4. Contact your government representatives and let them know you want honest safety nets that really work, not ones that exist on paper and are not really accessible to regular people.

Friday, November 04, 2011

How Do You Talk To Your Elderly Parents About Their Money? [And Not Sound Greedy?]

By Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho

Are you thinking about your elderly parents' finances and beginning to worry what you should do to help them in an emergency?

Don't expect your parents to be thrilled at the idea of discussing their finances if they have not been open about this in the past.

If you are lucky, they may bring up the topic.  When my Cousin Kathie was age 90, she called me one day to say she was going to be kicked out of her retirement home because she was two months behind in her rent.  She asked me to call and check.  I looked into it and she was indeed behind in the rent.  Right then and there she asked that I take over her finances, which I did, and I continued to handle her finances until she died at the age of 99.

If you are not so lucky to be asked for your help, you need to start the discussion.  Be careful that you don't come on too strong, because it may be perceived that you want to take their money.  One way to start is to express your concern about your role in an emergency if they should die or worse, they become unable to handle their affairs due to old age, dementia or illness.  If they share the information about what they own, the approximate value, and where their records are located, that would be a huge first step.  If they don't, be patient.  You have opened the door a crack and they may call you later to share this information.

An alternative approach is to suggest you go to a meeting with them at their attorney's office to get independent, unbiased information on alternative ways to handle the health and financial emergencies worrying you.

Of course, if they say no, you are stuck.  You did your best.

If everything goes wrong that could go wrong and there is no plan in place when your parents become mentally or physically unable to handle their affairs, you have the option to go to Court to be appointed as their conservator [the one who handles their finances] and guardian [the one who makes the health and housing decisions].

What can you do?  Start the discussion so everyone is prepared for the bad days in life, death or the possibiity of becoming incompetent.  Good Luck!

Friday, October 28, 2011

Too Many Fall Leaves

By Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho

Can you keep up with all the things you think you need to be doing?  No?  Well, NO is my answer!

The leaves are falling, I rake them every day, and in the morning they are back again.  Pooh - I didn't plan to spend the extra half hour each evening doing this chore, so something else had to slide.

How can you get a grip rather than chasing what calls for your attention this moment?

Take some time, even if just 10 minutes, and decide what is important in the big picture "to do" today, this month, this year to get you where you want to go.  Make a list.

In 2008, Congress took a look at the following statistics:

• It is estimated that more than 120 million Americans lack an up-to-date estate plan.
• Two thirds of Americans over age 65 believe they lack the necessary knowledge to plan adequately for retirement.
• Nearly one-half of all Americans are unfamiliar with basic retirement tools, such as a 401(k) plan.

The result was passage of HR 1499 declaring the third full week in October as National Estate Planning Awareness Week.

Now I am telling you this a week late, but even so, the information is a great reminder to focus on the big picture of the important steps to take to make certain you have the best and most secure future that preserves your independence, protects your family and protects your assets.

Check your own estate plan to be certain the documents you have are up to date with the current law and your changing circumstances.  That way you will accomplish your personal goals.

Happy Halloween and pretty Fall to you.

Saturday, October 22, 2011

Would You Want Your Enemy As Your Guardian?

By Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho

This happened for the heiress of L'Oreal, a French cosmetics company.  Liliane Bettencourt is 89.  She and her daughter, Francoise Bettencourt-Meyers, have been suing one another for oyears.  A French Court found the mother to have failing mental healtlh and to be showing signs of dementia.  The Court then appointed the daughter as her mother's guardian.  Now, the daughter can control when her mother can travel and how her money will be managed.¹

Could this happen to you?

A simple way to avoid this is sign a financial power of attorney and health power of attorney stating who you want to make financial and health decisions for you if you are not able to care for yourself.  That will be a great first step.

_________________________

¹Heiress Loses L'Oreal Family Fight.  The Wall Street Journal, Page B8, October 18, 2011.

Friday, October 07, 2011

What is an Incentive Trust?

By Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho

An inheritance of cash can be good or bad.  The "good" part is easy.  Someone receives the inheritance and uses the funds wisely to enhance their lives.  The "bad" part is often swept under the rug.

If someone inherits money and that person is young emerging into adulthood, likes to spend money freely with no sense of tomorrow, has an addiction problem or has trouble holding down a job, his or her inheritance is likely to evaporate.

An Incentive Trust may be the solution to help a child who is a reckless spender.  How does such a Trust work?  The parents need to sit down with their attorney and discuss the needs and abilities [and shortcomings] of their child.  Between them they can craft a Trust that will provide for the child's future in a constructive way.  Frequently a professional Corporate Trustee (such as a Bank Trust Department) will be the Trustee or co-Trustee with the child.  You don't want to make a family member a Trustee because that will poison the relationship between that person and the child.  Incentive Trusts frequently include a method to help educate the child to manage money responsibly so that he or she can develop the skills to take over their own finances in the future.  These trusts can work if they include objective standards and are transparent so the Trustee knows what the beneficiary is doing and the beneficiary knows the standards used for measurement.

Your other choice is to give the money outright with a "wish and a prayer" that it will all work out, knowing in your heart that result is unlikely.

Friday, September 30, 2011

You Have Been Nominated as Personal Representative! Lucky you?

By Susan M. Graham, Certified Elder Law Attorney, Senior Edge Legal, Boise, Idaho

You may be nominated by a family member or friend to handle their affairs when they die.  It is certainly a compliment and an honor, but also a huge job.  You may want to think twice before you accept, or consider hiring professionalsl to assist you.

There is a long list of steps that need to be taken and the time period to complete the process is easily a year or more.

Some steps are easy, such as changing the locks on the house and making sure the mail is redirected to your address.

Many steps can be more difficult, such as preparing a proper accounting, investing the assets appropriately during the period of administration so you don't lose money, settling family disputes and arranging for care for a dependent family member.  It is often difficult to get through this process and have family relationships remain on a good footing.

An important first step for the person signing a Last Will and Testament or Trust is to talk to the person they are appointing to handle their affairs to see if they are willing to take the job.  That too is a good time to bring up any special concerns that either person may have about the job and the process, which should help when the time comes.

Saturday, September 10, 2011

13 Steps To Maintain Your Independence, Protect Your Assets and Protect Your Family

By:  Susan M. Graham, Certified Elder Law Attorney

Do you want to protect your independence, assets and your family?  There are many steps you can take to make it easier for you and your loved ones when the bad days happen:  death or becoming unable to handle your affairs due to illness.  I encourage you to consult with an attorney to discuss many of the following topics to see which will best fit your needs.

1.  Health Power of Attorney.  Signing this document permits the people you rely upon to talk with your doctor when you can't.

2.  Living Will.  If your death is near, you have 3 choices for your end-of-life medical care:  (a) use all the fancy machines to keep you going, (b) have nutrition and hydration with tubes, or (c) "let me go."  If you fail to sign a "Living Will," the legal and medical rules require that you be on "tubes" at a minimum.

3.  Last Will and Testament.  This document declares how you want your property distributed when you die, and if you have minor children, who will be the guardian.  After a death, the Will is filed with the Probate Court to start the administration of the decedent's estate.

4.  Revocable Trust.  This is an other way to arrange for the management of your assets should you be unable to do so due to illness or when you die.  This document usually allows you to avoid probate or going to court.

5.  Financial Power of Attorney.  This document identifies those people whom you selected to handle some of your finances if you are unable to do so because of illness.

6.  Funeral Arrangements.  Pre-planning your funeral is a gift to your family.  Making your arrangements will assure that you will have what you want and save your family from the worry and burden of such decisions at an impossible time.

7.  Pet Care.  You have the opportunity to write down who you want to be the caretaker for your pet when you are gone, recovering from an illness, or in a rest home.

8.  Beneficiary Designation.  Make certain that the beneficiary designation on all life insurance, annuities and retirement accounts, such as IRAs and a 401(k), match your current estate plan.

9.  Professional Advisors.  List those professionals who know about your affairs.  Include your attorney, accountant, insurance persons, doctors, dentist and others you rely on.

10.  Important Records.  Where do you keep your papers?  Who knows where to look?  Do they have a key, or can they get into your safe deposit box?

11.  Family Information.  Do you have a list of contact information for the family and friends who are important to you?  This information is helpful in an emergency.

12.  The Key to Your House.  Who has one?  Do they know whom to contact in an emergency?

13.  Driving Instructions.  If the time comes that it is no longer safe for you to drive, you can arrange ahead of time how to give up your car and provide for alternate transportation.

Saturday, September 10, 2011

10 Steps to Take After the Death of a Loved One

By:  Susan M. Graham, Certified Elder Law Attorney

This checklist includes important steps to help manage the estate of someone who has died.

1.  Follow the specific funeral and burial instructions left by the decedent.  Contact your local funeral home or mortuary for assistance in making or following through with any prearranged funeral plan.

2.  Arrange for the care of any persons who were dependent on the decedent, such as minor or disabled children, an elderly spouse or the decedent's elderly relatives.

3.  Arrange for the care of any pets of the decedent.

4.  Secure the residence.  You may want to have some trusted friend stay at the house.  Change the locks.

5.  Arrange to receive several copies of the death certificate - ten is not too many in most cases.

6.  Keep track of your time.  Get receipts for all out-of-pocket expenses you pay related to the estate administration so you can be reimbursed.

7.  Notify the decedent's friends, family members and work associates of the death.

8.  Call the attorney who set up the estate plan to make an appointment and learn how to administer the decedent's estate.  The attorney can tell you who is legally responsible under a Last Will and Testament, Trust, or even if no documents were prepared.  Locate the original Last Will and Tesatment or Trust to take to the attorney if those documents exist.  It is important to talk with an attorney prior to making any decisions relating to the administration of the estate.  Sometimes the wrong decision, taken hastily, can be costly.

9.  Do not distribute any personal property items such as rings, guns, china and other household things until you speak to an attorney.  If you distribute such items and you did not have the legal authority to do so, you may be personally liable to others.

10.  Update your own estate plan to be certain you and your family are protected.  It is important that a surviving spouse make changes now that their spouse has died.  In most situations, it will be necessary to prepare a new financial power of attorney, new health power of attorney and new Last Will and Testament or Trust to reflect any changes to your plan.

Saturday, July 16, 2011

It Takes Work to Die

The Wall Street Journal listed 25 documents you need before you die.¹

Their subheading was "Design your death dossier soon - or you could be setting up your heirs for frustration and financial pain."

They are right.  If you don't take the time to create a plan  for your future and organize your documents, you are leaving a mess for your family.  If may be impossible for the people you rely upon to help you.  The distribution of your estate may be different than what you want because you may have failed to coordinate beneficiary designations on retirement accounts and life insurance with your total plan.

So what are those 25 documents that you should organize and put in one location so they are easy to find?  I will list them below and add a few items they forgot.

Personal Information:

• Birth Certificate
• Marriage LIcense
• Divorce Papers
• Military Discharge Papers
• Death certificates for other immediate family members (spouse, parents, children)

Health Care:

• Personal and family medical history
• Durable health care power of attorney
• LIving Will
• Physician's Order for Scope of Treatment (POST)
• List of doctors and prescription drugs

Proof of Ownership:

• Housing, land and cemetery deeds
• Mortgage papers
• Proof of loans made and debts owed
• Vehicle titles
• Stock certificates, savings bonds and brokerage accounts
• Partnership and corporate operating agreements
• Tax returns

Life Insurance/Retirement Accounts:

• Life insurance policies
• Individual Retirement Accounts
• 401(k) accounts
• Pension documents
• Annuity contracts

Bank Accounts:

• List of bank accounts
• List of all user names and passwords
• List of safe deposit boxes and keys

Estate Planning Documents:

• Will
• Financial Power of Attorney
• Trust
• Funeral Plan
• Pet Care Instructions
• List of who receives your "stuff" (e.g., ring and gun)

So get a box and start putting all these papers in that box.  If you put in copies, mark on the copy to indicate where the originals are located.

Does this seem too much to do?  Well, think about the people you care for and think about covering your back.  If you want your life to go as well as possible, even during the bad days, you have to do your part.

So take 30-60 minutes and gather up these documents.  Good for you if you do what I suggest!

P.S.  The total is 32 - not 25.

________________

¹The 25 Documents you Need Before You Die.  The Wall Street Journal, July 2, 2011, page B7.

Saturday, May 21, 2011

My Irrigation Well is Fried - Why Is Life Difficult When I Did Everything Right?

I had my sprinklers turned on this spring.  That was the easy part.  One evening I was at my kitchen sink, washing dishes, listening to the radio and noticed my back yard had turned into a lake.  A hole the size of a basketball was gushing water from a sprinkler pipe.  After weeks of having my back yard dug up and pipes replaced by the sprinkler people, they told me it is not the sprinkler system that does not work.  It is the pump for my well.

Let me tell you the obvious.  I know nothing about water systems and do not really want to know.  I just want someone to fix it (and of course yesterday).

So, I called the well man.  He came and told me there was a small part that was frozen last winter.  He replaced it and everything now works.  I've had the pump for 10 years and no one ever told me I needed to do something special to keep it warm in the winter.  I had the part fixed and now I am ready for a hot summer and a green yard filled with flowers and vegetables.  That part I am happy about.  The "fix-it" part made me grumpy for a few moments.

How does this apply to you?

Well, when setting up an estate plan, you do everything you can think of at that time to have the best plan in place to help now, and most importantly during the bad days (should you be unable to handle your affairs or upon death).  The plans we set up for our clients focus on protecting their independence, assets and families.

Then some time passes, and that original plan does not work as well as it did originally.  Just like my pump, some part needs to be fixed and it is not your fault.  The law changes, your health changes, your relationships with people change and your money changes.  Usually one of these four things changes every 3 to 4 years.

What should you do?  I suggest you pull out your planning documents and review them.  Do they still reflect how you want your affairs handled?  Are all your assets titled properly and do you have the proper beneficiaries listed on your life insurance, retirement benefits and annuities?

If not, I encourage you to set up a review with your estate planning professional.  Do it now!  Or you can wait, have a mess that is harder and more expensive to fix, and only find out about it when you really need the plan to work (like the lake in my back yard).

Friday, April 01, 2011

It's Time for Spring Cleaning

Wednesday, February 16, 2011

Recent article in Investor's Business Daily, provides 10 steps for picking a financial advisor.

Investor Business Daily reports, "Choosing a financial advisor can be akin to a stroll through a minefield. If you don't prepare, your wealth could get blown up by a Bernie Madoff or wounded by someone whose skills are mediocre or simply not suited to your needs. But with proper preparation, chances are you'll find one of thousands of advisers who can help you set and achieve your goals."

Meeting with a prospective advisor to understand how they get compensated for their services as well as determine your comfort level with that individual is essential. Addition insight into an adviser can be found in promotional materials, websites and professional certifications. You may also look up an adviser's Form ADV, which lists complaints and disciplinary actions, online with the Securities and Exchange Commission or your state regulators.

A estate planning attorney would be a good referral source for a qualified financial advisor.

To view Investor's Daily article which also includes The Certified Financial Planners Board's list of ten recommended questions to ask when interviewing a financial advisor, click here.

Friday, February 11, 2011

"Nice" Lawyer Costs Family $300,000.00

by Michael Ettinger, Esq.

A couple came in to see me today for the husband's 88 year old father who is a nursing home in Florida. They now wish to bring him up to New York to be nearer to the family. He has about $600,000 in assets, including his home.

They told me about the very nice lawyer he has down on the west coast of Florida, who set up a revocable living trust for Dad and for Mom who died last year, in February of 2006, and amended it in March of 2010.

They had a great deal of confidence in the lawyer, especially since he had won an award as one of the top lawyers in the locality.

Regrettably, while the attorney prepared a fine estate plan, he was not an elder law attorney and took no steps to protect the couples' assets back in 2006, when they were well into their eighties.

Had the lawyer been knowledgeable in elder law, which unfortunately so many estate planning attorneys are not, he would have set up a Medicaid Asset Protection Trust (MAPT) and started the five year "look back" period running. It is now February, 2011, five years later. Had the MAPT been set up when it should have, in February 2006, instead of the revocable living trust, all of Dad's assets would now be protected and he would be eligible for Medicaid benefits to pay for the cost of his nursing home care.

Instead, the couple will only save half the assets by using the "gift and loan" strategy developed by elder law attorneys to save half the assets on the nursing home doorstep when the client has failed to set up the MAPT. The technique is also call "half a loaf" planning after the old expression.

Nevertheless, the "nice" lawyer ended up costing the family $300,000.00 and it is not the first time we have seen it happen. Indeed, it is the reason your writer published "Ettinger on Elder Law Estate Planning", available on Amazon.com. We believe that clients need a new york "elder law estate planning" attorney and not just an "estate planning" attorney so mistakes like this no longer happen to good people.

Friday, May 28, 2010

10 Tips for Helping Families with Special Needs

submitted by Peter G. Lennington, Esq., St. Paul, MN

This post, examines the unique planning requirements of families with children, grandchildren or other family members (such as parents) with special needs. There are many misconceptions in this area that result in costly mistakes in planning for these special needs beneficiaries. It is therefore incumbent upon us - the client's advisors - to ensure that clients understand all of their options.

COSTLY MISTAKE #1: Disinheriting the child.
Many disabled people rely on SSI, Medicaid or other government benefits to provide food and shelter. Your clients may have been advised to disinherit their disabled child - the child who needs their help most - to protect that child's public benefits. But these benefits rarely provide more than basic needs. And this "solution" does not allow your clients to help their child(ren) after the client becomes incapacitated or is gone. When a child requires, or is likely to require, governmental assistance to meet his or her basic needs, parents, grandparents and others who love the child should consider establishing a Special Needs Trust.

Planning Tip: It is unnecessary and in fact poor planning to disinherit a special needs child. Clients with special needs beneficiaries should consider a Special Needs Trust to protect public benefits and care for the child during the client's incapacity or after the client's death.

COSTLY MISTAKE #2: Procrastination.
Because none of us knows when we may die or become incapacitated, it is important that your clients plan for a beneficiary with special needs early, just as they should for other dependents such as minor children. However, unlike most other beneficiaries, a child with special needs may never be able to compensate for a failure to plan. A minor beneficiary without special needs can obtain more resources as he or she reaches adulthood and can work to meet essential needs, but a child with special needs may never have that ability.

 Planning Tip: Parents, grandparents, or any other loved ones of a special needs child face unique planning challenges when it comes to that child. This is one area where the client simply cannot afford to wait to plan.

COSTLY MISTAKE #3: Failure to coordinate a planning team effort.
It is critical that the advisor assisting with special needs planning include in the planning team: an attorney who is experienced in this planning area; a life insurance agent who can ensure that there will be enough money to maintain the benefits for the special needs child; a CPA who can advise on the Special Needs Trust's tax return; an investment advisor who can ensure that the trust fund's resources will last for the child's lifetime; and any other key advisors that may support the goals of the trust going forward.

Planning Tip: Special needs planning dictates that the client's advisors work together to ensure that there are sufficient trust assets to care for the child throughout his or her lifetime.

COSTLY MISTAKE #4: Ignoring the special needs when planning for the child's benefit.
Planning that is not designed with the child's special needs in mind will probably render the child ineligible for essential government benefits. A properly designed Special Needs Trust promotes the special needs person's comfort and happiness without sacrificing eligibility.

Special needs can include medical and dental expenses, annual independent check-ups, necessary or desirable equipment (for example, a specially equipped van), training and education, insurance, transportation, and essential dietary needs. If the trust is sufficiently funded, the disabled person can also receive spending money, electronic equipment & appliances, computers, vacations, movies, payments for a companion, and other self-esteem and quality-of-life enhancing expenses: the sorts of things your clients now provide to their child or other special needs beneficiary.

Planning Tip: When planning for a child with special needs, it is critical that the client utilize a Special Needs Trust as the vehicle to pass assets to that child. Otherwise, those assets may disqualify the child from public benefits and may be available to repay the state for the assistance provided.

COSTLY MISTAKE #5: Creating a "generic" special needs trust that doesn't fit.
Even some "special needs trusts" are unnecessarily inflexible and generic. Although an attorney with some knowledge of the area can protect almost any trust from invalidating the child's public benefits, many trusts are not customized to the particular child's needs. Thus the child fails to receive the benefits that the parent provided when they were alive.

Another frequent mistake occurs when the Special Needs Trust includes a "pay-back" provision rather than allowing the remainder of the trust to go to others upon the death of the special needs child. While these "pay-back" provisions are necessary in certain types of special needs trusts, an attorney who knows the difference can save your clients hundreds of thousand of dollars, or more.

Planning Tip: A Special Needs Trust should be customized to meet the unique circumstances of the child and should be drafted by a lawyer familiar with this area of the law.

COSTLY MISTAKE #6: Failure to properly "fund" and maintain the plan.
When planning for children with special needs, it is absolutely critical that there are sufficient assets available for the special needs beneficiary throughout his or her lifetime. In many instances, this requires utilization of a funding vehicle that can ensure liquidity when necessary. Oftentimes permanent life insurance is the perfect vehicle for this purpose, particularly if the clients are young and healthy such that insurance rates are low.

Also, because this is an ever-changing area, it is also imperative that the clients revisit their plan frequently to ensure that it continues to meet the needs of the special needs beneficiary.

Planning Tip: Clients should consider permanent life insurance as the funding vehicle for special needs beneficiaries, particularly when the beneficiary is young given the often staggering costs anticipated over that beneficiary's lifetime.

If the client may be subject to estate tax, consider having an Irrevocable Life Insurance Trust own and be the beneficiary of the policy, naming the Special Needs Trust as a beneficiary. Alternatively, in a non-taxable situation, consider naming the client's revocable trust as the beneficiary to help equalize inheritances if that is the client's objective.

COSTLY MISTAKE #7: Choosing the wrong trustee.
During your client's life, he or she can manage the trust. When the client is no longer able to serve as trustee, they can choose who will serve according to the instructions that they have provided. They may choose a team of advisors and/or a professional trustee. Whomever they choose, it is crucial that the trustee is financially savvy, well-organized, and, of course, ethical.

Planning Tip: The trustee of a Special Needs Trust should understand the client's objectives and be qualified to invest the assets in a manner most likely to meet those objectives.

COSTLY MISTAKE #8: Failing to invite contributions from others to the trust.
A key benefit of creating a Special Needs Trust now is that the beneficiary's extended family and friends can make gifts to the trust or remember the trust as they plan their own estates. For example, these family members and friends can name the Special Needs Trust as the beneficiary of their own assets in their revocable trust or will, and they can also name the Special Needs Trust as a beneficiary of life insurance or retirement benefits.

Planning Tip: Creating a Special Needs Trust now allows others, such as grandparents and other family members, to name the trust as the beneficiary of their own estate planning.

COSTLY MISTAKE #9: Relying on siblings to use their money for the child with special needs' benefit.
Your client may be relying on their other children to provide for their child with special needs from their own inheritances. This can be a temporary solution for a brief time, such as during a brief incapacity if their other children are financially secure and have money to spare. However, it is not a solution that will protect the child with special needs after your client has died or when siblings have their own expenses and financial priorities.

What if the inheriting sibling divorces or loses a lawsuit? His or her spouse (or a judgment creditor) may be entitled to half of it and will likely not care for the child with special needs. What if the sibling dies or becomes incapacitated while the child with special needs is still living? Will his or her heirs care for the child with special needs as thoughtfully and completely as the sibling did?

Siblings of a child with special needs often feel a great responsibility for that child and have felt so all of their lives. When your clients provide clear instructions and a helpful structure, they lessen the burden on all their children and support a loving and involved relationship among them.

Planning Tip: Relying on siblings to care for a special needs beneficiary is a short-term solution at best. A Special Needs Trust ensures that the assets are available for the special needs beneficiary (and not the former spouse or judgment creditor of the sibling) in a manner intended by the client.

COSTLY MISTAKE #10: Failing to protect the child with special needs from predators.
An inheritance from parents who fund their child's special needs trust by will rather than by revocable living trust is in the public record. Predators are particularly attracted to vulnerable beneficiaries, such as the young and those with limited self-protective capacities. When you plan with trusts rather than a will, your client decides who has access to the information about their children's inheritance. This protects their special needs child and other family members, who may be serving as trustees, from predators.

Planning Tip: A Special Needs Trust created outside of a will ensures that information about the inheritance is not in the public record, protecting the special needs beneficiary from predators.

Conclusion
Planning for special needs beneficiaries requires particular care and the participation of all of the client's wealth planning advisors. A properly drafted and funded Special Needs Trust can ensure that the beneficiary has sufficient assets to care for him or her, in a manner intended by the client, throughout the beneficiary's lifetime.

(Peter G. Lennington, Esq., is a wealth preservation and estate planning member attorney with offices in St. Paul, MN, Bloomington/Edina, MN, and Minnetonka, MN.  The Lennington Law Firm, PLLC website is located at www.lennington.com.  You can contact Peter G. Lennington via e-mail at peter@lennington.com)

Tuesday, October 20, 2009

Is Your Estate Plan Challenge-Proof?

Minimize postmortem disputes over your estate plan

Submitted by Peter G. Lennington, Esq., St. Paul, Minnesota

The goal of estate planning is to gain the peace of mind that comes with knowing your family will be provided for and your wishes will be carried out after you’re gone. Few things can disturb that peace of mind as quickly as the fear that someone will contest your plan.

No protection is absolute, but with thorough planning you can minimize the chances that an assault will pierce your armor. Let’s take a closer look at several tips for “bulletproofing” your estate plan.

Risk assessment

The first step is to evaluate your risk. There’s no reason to invest in protection you don’t really need. If your estate plan distributes your wealth to the “natural objects of your bounty” — such as your spouse and children — in roughly equal shares, you probably have little reason for concern. But if you plan to disinherit a family member or leave most of your assets to charity, you might want to shore up your defenses.

There also may be a heightened risk of litigation over your estate plan if you own a family business or have children from a previous marriage.

Protection for your estate plan generally falls into two categories: 1) strategies that discourage others from contesting your plan, and 2) those that make it more difficult for a challenge to succeed.

Conflict avoidance

There are several strategies you can use to avoid disputes over the terms of your estate plan:

Treat everyone fairly. It may seem obvious, but if your plan makes everyone happy, there’s no reason for anyone to contest it. Remember, though, that equal doesn’t necessarily mean fair. Suppose you have a young child from your current marriage and a financially independent adult child from a previous marriage. If you divide your wealth between them equally, the younger child — who likely needs more financial help — may perceive your plan as unfair.

Talk it over. If your estate plan is atypical, you can avoid misunderstandings and potential disputes by sitting down with your family and explaining your motives. Perhaps you’re leaving the bulk of your estate to a family-run private foundation to get your children involved in philanthropy. If so, the time for them to learn this is now, not at the time of your death.

If you own a family business, you might plan to leave equity interests to family members who work in the business and use other assets to provide for those who don’t. Or you might use voting and nonvoting shares to divide the business equally while preserving management control for family members who work in it. Whichever approach you use, it’s important to discuss your reasoning with those affected and solicit their input.

Create a revocable living trust. Using a will as your primary testamentary instrument guarantees that your estate will go through probate. That means your plan will become a matter of public record and your named beneficiaries — as well as anyone legally entitled to a share of your wealth — will be notified and given an opportunity to object in probate court.

In most states, you can avoid probate by using a revocable trust. Without probate, there’s no notice requirement or opportunity to be heard in court, so someone would have to file a lawsuit to challenge your estate plan. For a revocable trust to be effective, you must transfer title to all of your assets to the trust, including any assets you acquire after you establish the trust.

Use a no-contest clause. Consider making bequests that include a “no-contest” clause. Essentially, this clause says that, if a beneficiary challenges your will or trust, he or she forfeits the bequest. For a no-contest clause to work, the bequest must be large enough to deter the person from risking an unsuccessful challenge.

Strong defenses

If your estate plan is unconventional or you plan to disinherit one or more family members, it may be difficult to avoid a challenge. And even if your plan is the epitome of fairness, it’s not always easy to predict who might feel slighted.

Most wills that are contested involve claims of undue influence or lack of testamentary capacity (though fraud and invalid execution also may be grounds for a challenge). Strategies for thwarting these attacks include:

Have your head examined. Seriously, one of the best ways to establish your testamentary capacity is to undergo a “mini mental state examination” or have a medical practitioner attest to your competence. The examination should be conducted near the time you execute the will — on the same day, if possible.

Choose the right witnesses. Witnesses should be people you expect to still be alive and easily located years or even decades later — and they shouldn’t be beneficiaries of the will. Ideally, they will be familiar enough with you and your family that they can attest to your testamentary capacity and freedom from undue influence.

Put it on tape. Videotaping the execution of your will can be an effective way to demonstrate your competence. It also gives you an opportunity to discuss the reasoning or motives behind your estate plan and refute any potential claims of undue influence. Obviously, no one who stands to benefit from your will should be present.

Be sure to plan your statements carefully so that nothing you say can be misinterpreted. Also, for this strategy to work, you should be comfortable with the recording process. The last thing you want is viewers mistaking discomfort for duress or confusion.

Arm yourself

If you’re concerned that postmortem challenges might derail your estate plan, strategies like the ones described can provide the ammunition you need to fend off would-be attackers. Ask your estate planning professional which combination of techniques is right for your situation.

(Peter G. Lennington, Esq., is a wealth preservation and estate planning member attorney with offices in St. Paul, MN, Bloomington/Edina, MN, and Minnetonka, MN.  The Lennington Law Firm, PLLC, focuses on Minnesota estate planning, wills, trusts, estates, probate administration, asset protection, Medical Assistance planning, Medicaid planning & eligibility, elder law, business succession planning, family limited partnerships, real estate and transactional law.  The Lennington Law Firm, PLLC website is located at www.lennington.com.  You can contact Peter G. Lennington via e-mail at peter@lennington.com)