General Legal

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

Do you have one child you can always rely upon and the rest never follow through?  Do you have one child who needs more financial and emotional help that you end up providing, perhaps not telling your other children?

Families and the relationships among family members are complex.  This week I talked with a mother, Sally, who has three sons.  One son, George, lives out of town, has millions of dollars and calls Mom once each month.  Another son, Sam, lives in town, receives Social Security disability benefits and is always short of money.  He sees his mother once a month when she takes him out to Sunday Brunch.  Mom provides $600 in cash to Sam each month out of her $1700 social security check and does not want her other kids to know.  Frank, the youngest son, has worked as a mechanic for 20 years and stops by weekly to visit and mow his mother’s lawn.   

Sally wants to set up her estate plan and is undecided about what to do.  She has a house and $500,000 in investments.  George does not need the money.  Frank is the most attentive, and Sam needs the money the most as he will have no retirement benefits.  She loves all of her sons, and does not regard any one of them as a “black sheep”.  She initially decided to give it all to Sam in a trust to provide a financial safety net for him for life.  Sally did not feel quite right about this, as she thought her other two sons would be insulted.

An inheritance is perceived as a “scorecard” of love and appreciation.  Sally wanted to be certain that her wishes would be “right” for her family.  She felt she had two choices:  1) Divide everything equally among her sons; or 2) Make the division unequal, and explain why in writing.  She finally elected to make an equal distribution among her sons. 

Each family is unique.  There is no universal answer.  Just remember the perception of the “scorecard” that reflects your appreciation of individuals after you die will leave a lasting statement of how you valued each of them being a part of your life.  

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

The U.S. Supreme Court decided on June 12, 2014 in Clark, et ux. v. Rameker, Trustee, et al., that an inherited Individual Retirement Account (IRA) does not share the same characteristics as a traditional IRA and, in a bankruptcy, is not a protected asset for the person who inherits the IRA.

IRAs are protected assets in bankruptcy, but only for the original owner of the IRA.  If an IRA is inherited by a child, the asset is no longer protected in bankruptcy.

What can be done for an inherited IRA to receive bankruptcy protection?  The owner of the IRA can name an “irrevocable, asset protection trust”, created for the benefit of a child, as beneficiary of the IRA after the owner’s death.  These special trusts are often referred to as dynasty, inheritance, legacy and heritage trusts.  A carefully drafted trust may provide that the child is the trustee, and the child has limited access to the funds for health, support, maintenance and education.  These special trusts are complex.  To take advantage of this technique, set up an appointment with your estate planning professional.  

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

Do you have too many passwords?  Who, other than you, knows what they are or where you keep them?

Passwords are now in the news every few weeks.  We learn they are stolen and used to access our private accounts.  Even the sophisticated, technology savvy companies such as eBay and Google cannot keep the passwords of their customers safe. 

Why does this matter to you?  What if you are sick, die or just forget a password - how can you or someone you trust get into your account? 

The solution – Take a piece of paper, and for each account, write down the: 

• Name of the account
• User name
• Password

Store the list in a safe place.  In addition, give a copy to someone you trust, or place a copy of the written list with your estate planning documents.  Lastly, create a reminder to update the list at least once each year.

If you take these steps to keep track of your passwords, it won’t stop hackers, but it will make it much simpler to access your accounts when necessary, should you be too ill to remember, or after you die.

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

There must have been a secret mark on the front of my father-in-law’s house only visible to scam artists.   He lived alone and one day bought a freezer full of fish.  A month later, the same sales person sold him another freezer load of fish along with a second freezer to hold it.   Then there was the man who knocked on the front door and offered to paint his peeling front steps.  That person used his tools and paint, was paid and stole all of the tools from Dad’s garage. 

My neighbor’s wife died and he decided to continue to hire the caregiver who helped during the last months of his wife’s illness.  He did not need the help, but he felt sorry for her because she told him she needed the work to pay her bills, so he hired her for two days a week.  Later she was sad one day.  He asked why and she said she was behind in her rent, so he hired her an additional day, that he did not need.

My client, Betty, was in her 70s and lived alone.  Her grandson, George, had a drug habit and came over frequently, giving her a sad story of how he was short of money.  When her son, Bruce, noticed  $5,000 disappeared from her bank account in one month, he asked Betty where it went.  She made up a story, because she was embarrassed to admit she gave it to George.   The only way to stop this was for Bruce to be appointed by the court as Betty’s Guardian and Conservator.

Undue influence of elder persons is becoming an increasingly severe problem.  Through fraud, duress, threat, intimidation, emotional manipulation, isolation and other techniques that foster helplessness and dependency, unscrupulous perpetrators cheat vulnerable older persons out of their life savings.  This trend is increasing because those older than age 50 now control at least 70% of the nation’s household net worth.  Wealthy, and even middle class, older persons have become frequent targets for criminals, including family members and care givers, who want to divest them of their assets.

Legally, the concept of undue influence, particularly when it occurs to the competent elderly, is a difficult issue.  It should be suspected when significant others or caretakers develop trusting relationships that isolate the victim, foster a siege mentality, induce dependence, promote a sense of helplessness, hopelessness, or powerlessness, and manipulate the elderly person’s fears or instill new fears and vulnerabilities. 

We really are our brothers’ and sisters’ keepers and need to watch out for our seniors.  Early intervention and reporting can prevent devastating emotional and financial losses for older persons who have worked their entire lives to become financially independent.

__________________________

Source: 

Exploitation of the Elderly:  Undue Influence as a Form of Elder Abuse, by Ryan C. W. Hall, MD, Richard C. W. Hall, MC and Marcia J. Chapman.  Clinical Geriatrics, Vol. 13(2), 28-36; 2005

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

When was the last time you were asked if you are over 18?[1]

Why do I ask?  Every adult, even young adults, should sign a financial and health power of attorney.  The law states that a person becomes an adult once they reach age 18.  If you have children or grandchildren who are going off to school, it is important that they sign a financial power of attorney, a health power of attorney and a living will so someone has the legal authority to help out in an emergency.  If there is an accident, or a serious health issue, and no power of attorney is signed indicating who is to make decisions, it will be necessary for a parent, or someone else, to file a petition at court.  The petition will ask for a court order giving them the right to act on behalf of the incapacitated person.  This court proceeding, called a Conservatorship or Guardianship, is expensive and time consuming.

An easy, common sense solution for everyone age 18 and older is for each person to just sign the powers of attorney forms.   

We have them available for free on our website.

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.

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

If you’re over the age of 70½ — or if you reach that age this year — you may be planning to take required minimum distributions (RMDs) from your IRA, 401(k) plan or other retirement accounts later this year. But you may be better off taking advantage of a tax law change that lets you skip RMDs this year.

Leaving funds in your tax-deferred accounts as long as possible often can make sense from an estate planning perspective. The longer you allow your retirement funds to grow on a tax-deferred basis, potentially the more there will be for your heirs.

Normally you must take your first distribution by April 1 following the year you turn 70½. After that, annual distributions are required no later than Dec. 31. Many people take their first RMD during the year they turn 70½ to avoid taking two distributions the following year.

In the economic downturn, the value of many investments has declined, so it’s not the best time to make withdrawals from tax-deferred accounts. Lawmakers recognized this when they enacted the Worker, Retiree and Employer Recovery Act of 2008 late last year. The act suspended RMDs for 2009.

If you reached age 70½ before this year, you can skip the distribution that would have been required by Dec. 31, 2009. And if you turn 70½ during 2009, you can skip your first RMD — which would have been due by April 1, 2010 — so you won’t have to take an RMD until the end of 2010.

The act also provides relief for people with inherited retirement accounts. The rules are a bit complicated, though, so if you’re in that situation, consult your estate tax advisor to find out whether you’re entitled to skip this year’s RMD.

(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)

Wealthy Americans really struggle over how much inheritance their children should receive.  According to JPMorgan Private Bank, more than a quarter of all clients with over $25 Milion simply cannot decide how much is "too much"  Nearly 1/3rd of those interviewed feared that conflict would arise over the allocation/distribution of ivestable assets. And nearly 40% feared that their family would succumb to "financial predators."

Virtually none of those interviewed believed that children under 30 should receive a substantial outright inheritance.  But more than one-half said that they were leaving their wealth to multiple generations.

As reported in the N.Y. Times, an adoption designed to result in the adoptee qualifying as an heir to the I.B.M fortune was thrown out.  The Times reported:

"The adoption of a woman by her lesbian partner 17 years ago in Maine has been annulled, and the woman has filed an appeal in the State Supreme Court, according to recently unsealed documents. The case involves Olive F. Watson, 60, the granddaughter of the founder of I.B.M. and the daughter of Thomas J. Watson Jr., the company’s longtime chief executive. In 1991, Ms. Watson adopted Patricia Ann Spado, now 60, in Maine, where the women spent several weeks each summer at the Watson compound on the island of North Haven. The purpose of the adoption, Ms. Spado said in court documents, was to allow her to qualify as an heir to Ms. Watson’s fortune. A year after the adoption, the women broke up. Now, with both of Ms. Watson’s parents dead, Ms. Spado is seeking to qualify as Mr. Watson’s 19th grandchild and a beneficiary of his trusts. The Watson family, including Olive, is fighting Ms. Spado’s claim. In April, the probate judge who granted the adoption annulled it on the grounds that the women did not meet residency requirements. Ms. Spado’s lawyers filed an appeal on July 2."

For the full story, go to http://tiny.cc/annulled