Written by Jill Roamer, J.D.
Dean and Patricia were married for more than 50 years. In early 2017, Dean entered a nursing home. Patricia, acting as Dean’s authorized representative, executed the residency agreement with the nursing home. About six months later, Patricia filed an application for Medicaid benefits on Dean’s behalf. It was denied and several more applications were submitted before one was eventually accepted.
Dean died about 3 months later. The nursing home filed suit against Patricia, seeking Dean’s unpaid balance and alleging breach of contract, unjust enrichment, and responsibility under Iowa Code Section 597.14. The trial court found for the nursing home under Section 597.14 and rejected all other claims from both sides. Patricia appealed and now we have the instant ruling out of the Court of Appeals of Iowa.
Iowa Code Section 597.14: “The reasonable and necessary expenses of the family and the education of the children are chargeable upon the property of both husband and wife, or either of them, and in relation thereto they may be sued jointly or separately.”
Patricia argued that nursing home expenses are not “reasonable and necessary expenses of the family.” The court here quoted a case that is more than 100 years old, McDaniels v. McClure, 120 N.W. 1031, 1032 (Iowa 1909), which stated: “The term ‘family expense’ has not been very clearly defined in our cases, and perhaps no definition should be attempted. Generally speaking, the only criterion which the statute furnishes is that the account must be for items of goods furnished for and on account of the family, and to be used therein. No limitation is put upon the expenditures, and it need not appear that they be ‘necessaries,’ as that term is generally used. It has been held that a cook stove and fixtures, wardrobes, bureaus, bedsteads, organs, watches, and other jewelry, medical services, wearing apparel, etc., are family expenses. It is essential, of course, that the expenditures be for property which was used or kept for use in the family. But a reaping machine or other agricultural implements, used by the husband in the prosecution of his business of farming, rent of a farm, medical assistance to a husband away from home, or money borrowed to pay for goods furnished the family, are not properly chargeable as family expenses.”
Subsequent case law cited by the nursing home reiterated that medical and hospital expenses are necessary family expenses and thus are recoverable. In turn, Patricia argued that part of the nursing home charges were for non-medical things, such as living quarters, cable, laundry, and maintenance. Of course, the nursing home responded that these other things were necessary to provide medical care to Dean. Patricia lost the argument and the appeals court rules that Dean’s nursing home expenses were reasonable and necessary family expenses. As such, Patricia is liable for the bill under Iowa Code Section 597.14.
As an attorney whose seen a lot of cases in California, its common that a lot of families will try and argue that medicaid expenses should be paid for my healthcare providers. These are very hard to justify and I'm not surprised by the various court rulings.
This is also why it's very important to figure out medicaid and long term health care expenses way before the time comes. Estate plans can help set everything up so that last minute decisions aren't necessary. The Nickerson Law Office can help look over old estate plans to see if they can still be used and even create a new one if needed. Click on the tab below for more information.
Written by Jill Roamer J.D.
Even in the beginning stages of the pandemic, advocates for nursing homes and other care facilities warned of staff shortages. And their trepidations have come true. Just last month, AARP reported that 30% of nursing homes they surveyed were experiencing staff shortages. Sadly, the report also showed that there were more than 4,000 deaths of residents from COVID-19 spanning the two months prior to mid-October. And there are seemingly endless news reports of staff shortages for companies who provide home health aide and in other care facilities, such as those for folks with intellectual or developmental disabilities.
What is causing the staff shortages? Some employees feared contracting the virus, and so found employment in places with less associated risk. Some facilities require employees to receive the vaccine and some employees didn’t want to comply. For many, it was a domino effect – the staff shortages caused the remaining employees to work even longer shifts and the employees got burned out. But probably the most significant contributing factor is the low wages in the industry. Salary.com reports that the average salary for a home health aide is $13/hour; payscale.com reports the average salary at only $11.84/hour. Payscale.com also reports the average pay for a Personal Care Assistant with disability support skills is only $11.91 per hour.
The staff shortages have become such an issue that the Wisconsin National Guard was called in to help staff four state facilities that provide care to people with disabilities. These particular facilities house people with behavioral health conditions. Some residents have been found not guilty of crimes based on their mental illness. While the service men and women will undergo 16 hours of Temporary Nursing Aid Training and a 59-hour CNA course, some advocates worry about the helpers keeping track of medications and participating in a seclusion and restraint processes. A seclusion and restraint tactic is invoked when a patient becomes beyond control. The aide worker locks the patient in a room and monitors their behavior. If the patient calms down, they are let out of the room. If the patient starts to harm themselves, they are restrained by their wrists and feet. This restraining process can be tricky, with potential harm to the staff or patient.
While there has been some legislation passed that aimed to prevent staff shortages and ensure vulnerable populations receive needed care, such as the American Rescue Plan Act, where is the end of the rabbit hole? With the pandemic lingering on, staff shortages may rise even further.
Written by Jill Roamer J.D.
Ride-share companies, such as Uber, have boomed in recent years. Anyone needing a ride can simply make a few clicks on their smartphone or computer and a car shows up to take them to their destination. Very convenient!
Folks with disabilities have also benefited from Uber’s services. A customer can order an Uber WAV and a wheelchair-accessible vehicle will be provided. The price of the Uber WAV vehicle is comparable to the cost for a basic ride option. The driver of an Uber WAV has undergone training to help the rider enter and exit the vehicle. Finally, Uber is an equal opportunity employer, and those with disabilities (with a valid driver’s license) can drive and make some cash. Uber purports that “Drivers who are deaf have collectively earned tens of millions of dollars—all by helping people get around their communities.”
However, Uber has come under fire and earlier this month was sued by the Department of Justice. The Compliant alleges that Uber has violated the Americans with Disabilities Act, which “prohibits discrimination based on disability by a private entity that is primarily engaged in the business of transporting people and whose operations affect commerce. 42 U.S.C. § 12184(a)”.
Back in 2016, Uber instituted a policy that charges passengers more if the time it took between the car’s arrival and the ride to start exceeded two minutes. The driver does not have discretion when starting the two-minute clock; the clock starts when GPS determines that the driver has arrived at the specified pick-up location. The issue is that passengers with disabilities may take longer than the allotted two minutes, as they may need to deal with wheelchairs, walkers, or other gear. Or, the disabled passenger may simply need more time to get from their home to the waiting car.
The suit alleges that Uber has failed to ensure that customers with disabilities have adequate time to board the vehicle without being charged unfairly. The suit cites two cases where a disabled person was charged for the extra time needed to get safely in the Uber vehicle. The first person is a quadriplegic and was taking Uber ten times per week to take her to and from rehabilitation appointments. She finally noticed that Uber had been charging her the time limit fee approximately ten times per week for almost a year and a half. She contacted Uber to request a refund of these fees and she was denied.
The second passenger was a man with cerebral palsy who uses a manual wheelchair. Unlike the first person, Uber actually refunded this man for some of the time limit fees but eventually stopped doing so. Declaratory relief, injunctive relief, monetary damages, and civil penalties are being sought.
It'll be intresting to see how this case goes. Our office is experienced in special needs trusts and in estate plans that ensures a smooth transition. We also provide families with a variety of resources that connects them with a larger community. Contact our office for more information is your interested.
Written by Robert T. Nickerson
The public notion on those with special needs that also have service animals is continuously evolving. Many businesses and even mobile apps like uber have become more friendly towards those that need a service animal with them at all times. The downside is that with more attention also leads to more confusion.
Let’s start at the Americans with Disabilities Act. Under the current law, it reads “any dog that is individually trained to do work or perform tasks for the benefit of an individual with a disability, including a physical, sensory, psychiatric, intellectual, or other mental disability. Other species of animals, whether wild or domestic, trained or untrained, are not service animals for the purposes of this definition.”. Many examples are animals that notify their owners if their deaf, being the seeing eyes for blind individuals or even as comfort animals in the event of anxiety attacks. Like many things related to disabilities, these animals need to be trained and certified to become service animals.
Under the Americans with Disabilities Act, any government or business (both profit and nonprofit) are required to accommodate for this, therefore allowing the use of service animals. The only times when exceptions can be made is if the animal shows to be hostile or if the addition of an animal prevents a safe operation of the business. This doesn’t apply on health codes in restaurants, so they can be allowed in as long as the dogs are leashed and tethered to the owner or someone with the owner.
If the animal does become a burden, the staff do have the right to ask about the animal; what it is and what he’s doing to accommodate a specific disability. What the staff CANNOT ask is about the person’s disability, require medical documentation, require a special identification card or training documentation for the dog, or ask that the dog demonstrate its ability to perform the work or task.
Travel with a service animal can be tough, but improvement has been made. On December 2 2020, the US Department of Transportation signed in new rules regarding airlines. First, I gave clear definition in which a service animal, “is a dog that is individually trained to do work or perform tasks for the benefit of a person with a disability and go further to require that the airlines, in most cases, allow the service animal to travel with the disabled individual”. In order to ensure that however, the animal now has a required form that shows certification, along with its health and behavior history.
What about emotional support animals? The rules have become stricter due to people whose have abused the system to bring aboard various animals regardless if they were even support animals. The airlines are under no obligation to allow a passenger to travel with an emotional support animal unless the passenger provides documentation one year old or less on letterhead of a licensed mental health professional, which states: (1) the passenger has a mental or emotional disability recognized by the DSM IV, (2) needs the emotional support animal as an accommodation for either the airline travel or an activity at the destination, (3) is under the care of the mental health professional, and (4) the professional licenses and the jurisdiction under which the license was granted.
Housing is another issue. While there are a lot of places that are welcoming to animals, many others are not, and that includes low income housing. The Fair Housing Act requires a housing provider to make a reasonable accommodation for an assistance animal where (1) a request is made by or for a person with a disability, (2) the request is supported by reliable disability-related information if the need is not readily apparent, and (3) there is no undue hardship on the housing provider such that it would impose an undue financial/administrative burden, alter the essential nature of the operations, pose a threat to health and safety of residents, or result in significant damage to the property. If someone believes that they have been denied an accommodation unreasonably they can file a complaint with HUD here.
There’s a large number of resources to turn to about service animals. This link here, which is very disabled friendly, has a wealth of information including legal rules and a network of links. Some include where and how to get an animal certified, acquiring a dog that’s already certified and even local divisions within your state.
Written by Jill Roamer J.D.
As a senior ages, they may no longer be able to look after their own affairs. This could be their medical affairs, financial affairs, or both. Hopefully, the senior planned early and had the appropriate powers of attorney in place. These documents allow another to act on the senior’s behalf in the event they are unable to do so.
If a senior did not plan and have the appropriate documents in place, then a guardianship or conservatorship may be necessary. Both entail a court process. In a guardianship, the court would grant someone, termed a guardian, to be in charge of the senior’s person. This means monitoring their day-to-day health, making doctor’s appointments, administering medication, and ensuring the senior has proper hygiene. A conservatorship means the court appoints a conservator to be in charge of the senior’s finances. In both cases, the senior would be termed a ward. A guardian and conservator must act in the ward’s best interests.
Oftentimes, a court might name the same person, say, a family member, as both guardian and conservator. In other cases, the guardian and conservator may be different people. And if there are no appropriate friends or family to be appointed, a professional may be appointed. While the professional must still act in the senior’s best interests, can a lawsuit be brought against the professional if they were acting in accordance with their duties as guardian?
This issue was recently litigated in Massachusetts. In this case, we have Kathleen who had dementia and became unable to take care of herself. Her son, Francis, lived with her and was supposed to be caring for her. After reports surfaced that Kathleen was being neglected and financially exploited by Francis, a court got involved. The court appointed attorney Cherilyn to act as Kathleen’s conservator. Kathleen’s other son, Kevin, was named as her guardian.
Kathleen owned a three-family home but was residing in a nursing home. Kevin came up with a plan to rent out the second and third floors of Kathleen’s home and to have Kathleen reside on the bottom level and receive around-the-clock care via Medicaid. Before that could happen, Francis must leave the premises due to his misconduct towards Kathleen.
Cherilyn attempted to evict Francis from Kathleen’s home, to no avail. Cherilyn motioned the court to get permission to evict Francis and sell the home. Both motions were granted and both tasks were eventually accomplished. Kathleen died a few years later, and her estate was required to reimburse Medicaid for any expenditures made for Kathleen’s care.
Kevin filed a Complaint against Cherilyn for breach of fiduciary duty, malpractice, conversion, and fraud. The trial court ruled in favor of Cherilyn, stating that the claims alleged were “paper-thin” and that Cherilyn, as a court-appointed conservator, had quasi-judicial immunity if she was acting within the scope of her duties. Kevin appealed and the Judicial Supreme Court took on the case.
In analyzing judicial immunity, the court quoted several cases as stating “A judge is entitled to judicial immunity and therefore is exempt from liability to an action for any judgment or decision rendered in the exercise of jurisdiction vested in him [or her] by law." Immunity would only be denied if the judge acted in “clear absence of all jurisdiction”. The court went on to explain that such immunity was not only limited to judges, but also extends to folks who perform quasi-judicial functions. For example, immunity could be extended to court-appointed psychiatrists, court clerks, guardians ad litem, and personal representatives of an estate.
In deciding if one is entitled to quasi-judicial immunity, the court looks to the function of that person and how close their actions are associated with the judicial process. However, immunity does not apply if the person is acting outside the scope of their duties. In this case, the court ruled that Cherilyn, as conservator and acting under a court order, was entitled to quasi-judicial immunity. The court stated that a conservator was like an arm of the court and was integral to the judicial process.
Importantly, the opinion clarified that if a conservator is acting in accordance with a judge’s order, then the conservator has quasi-judicial immunity as to those actions. However, if the conservator’s actions are not sanctioned by a court order, then those actions are being taken as a fiduciary of the ward and the conservator may be personally liable.
Our goal at the Nickerson Law Office is to ensure that trusted family or friends can be named conservators rather then the court. Contact our office today to learn more about how we can help for your families future.
Written by Jill Roamer J.D.
Federal law prohibits a nursing home from requiring that past-due expenses be paid as a condition for a resident to be admitted to or continue to stay at a facility. But what if someone volunteers such payment?
This issue was recently litigated in the Commonwealth of Kentucky Court of Appeals. In this case, Erma was in a nursing home and filed for Medicaid benefits about 6 months after her arrival. Erma’s application was approved and Medicaid paid 3-months retroactive benefits to the nursing home. During her private-pay tenure, Erma had accrued a balance of about $35,000.
Erma’s daughter, Christy, executed a promissory note to the nursing home that promised to pay for this balance. Christy made one payment under the note and then defaulted. The nursing home filed suit against her for payment. Christy argued that the nursing home could have sought payment from Medicaid.
The trial court ruled in favor of the nursing home and Christy appealed. We now have this case out of the appeals court. In her appellate brief, Christy raised new arguments. The appeals court allowed the introduction of new arguments, under the palpable error review rule. “A palpable error which affects the substantial rights of a party may be considered by the court on motion for a new trial or by an appellate court on appeal, even though insufficiently raised or preserved for review, and appropriate relief may be granted upon a determination that manifest injustice has resulted from the error.”
Christy’s new argument was that the promissory note was illegal under the Nursing Home Reform Act and other federal regulations. Such laws state that a nursing home cannot require a third-party guarantee of payment as a condition for a resident to be admitted to or continue to reside in a nursing home. Christy claimed that the nursing home’s bookkeeping department brought her in to sign the promissory note but she testified that she signed it voluntarily.
Interestingly, while other states have precedent that allows a voluntary payment of the past due amounts owed without incurring a violation of federal statutes, Kentucky had no precedent on the matter before the instant ruling. Other states’ precedents ruled that if the federal government had intended on forbidding third-party guarantee payments, they would have explicitly done so. However, the federal laws do not ban the payments in their entirety, but only if the payments are a condition on the resident staying at the nursing home. The Kentucky appeals court here jumped on the bandwagon with other states and ruled in favor of the nursing home. Christy executed the promissory note voluntarily so it wasn’t predicated as a condition before Erma was allowed to stay at the facility. As a result, Christy was on the hook for the amount of the note.
It's unfortunate that a lot of families have had to deal with red tape situations like these. Our law office has been able to help families navigate an estate plan around medicare and medicaid. If you want to learn more, don't be afraid to contact our office for more information.
Written by Robert T. Nickerson
October marks two occasions. First is national estate planning awareness month (we know it’s not the most recognized of celebrations). Second, October means it’s Halloween!
Some people are spending their time watching scary movies. Some are helping out their children getting their costumes ready for trick or treating. Some are just enjoying the autumn colors that really bloom in October. But we can’t deny that there’s a little bit of Halloween fright hanging in the air. But it’s also time to bring up another scary thought; that you may have not gotten around to having your family ready when your gone.
I would hope that you’ve taken the steps to have your estate plan all created and ready to go when the time comes. Afterall, there are a number of things that could happen so that you wouldn’t be able to act on your own behalf, mentally or physically. And when your dead, how is your family going to be able to go forward without proper instructions?
While it’s not a pleasant thought, the chances of us suffering from a dilemma, accident, illness, or something else that ends up making us disabled are higher then you think. In fact to quote from the Social Security Administration, a young person starting a career today has a one in three chance of dying or qualifying for Social Security Disability Income before reaching Social Security’s full retirement age. So the next time your out with two of your buddies, one of you has a good chance of being taken out of a normal life.
Our law office has received many phone calls over the years from people who say they’ve been named as an executor of someone’s estate or have suddenly found themselves in charge of a loved one. This is usually a result of the family not communicating enough about their future plans, thus creating more confusion then comfort. It’s a situation that’s really scary to see, especially since whatever decisions that person makes, the loved one will be the bearer of that consequence.
Most of the time, that person has a hard time finding all the necessary documents in order to proceed with the next step, whether it’s following one’s estate plan or the even tougher circumstance of having to go to probate to settle things. So how can we make sure we can streamline things better for our new executor of an estate plan? By creating a go to folder where they can find most of the information they need.
What we’re talking about is both a physical folder that can be placed in a safe and an electronic one that can be accessed. So what’s going to be in this folder? Here’s a comprehensive list of what should be included:
This is a lot of information and we’re aware of that. We told you that we were going to scare you this Halloween. We also hope this compels you to start some work on a folder so that your future won’t be as scary.
Click on the link below for more information on how we can help ensure this kind of this is set up to prepare for your families' future.
Written by Robert T. Nickerson
Have you ever seen an ad for estate planning and thought, “There’s no way I could ever afford something like that”? You’ve probably seen a lot of stories about the wealthy that’ve spent a lot on lawyers in order to have their assets prepared for their family. I’ll tell you immediately that you don’t need to be Jeff Bezos or Elon Musk to plan for your future. Estate planning is not just for the wealthy. What is important is having the right documents prepared so that your family will be ready when your gone. Not to sound downbeat, but at some point, we will die and we do need to make sure our loved ones don’t face problems with the court or government with what you’ve left behind. I’ve helped a lot of families navigate over what to do with properties, financial assets, and even the guardianships of their children. But rather then give you an entire course on the technical aspects of estate planning, I thought I would go through six essential documents every adult should have in order to help their loved ones get an idea with what you would want. While some don’t need to be touched until death, some of these could come in handy for medical emergencies.
Durable power of attorney
Here’s something that can be used for a lot of circumstances when your still alive. Should you become incapacitated for any reason, a durable power of attorney allows you to select someone you trust to make all legal and financial decisions in your name. They can pay bills. They can setup lawsuits. There’s a lot they can do to save a lot of time.
More importantly, they prevent families from arguing over who should be your voice. Without it, this would force families to go to court to have a conservator appointed, which along with being a very expensive and time consuming process, may not have your best interest. That’s not to say their all bad, but they go off from an idea of probably what you would want. These are the kind of decisions that are better suited for trusted love ones.
This is similar to a power of attorney, except this is in the case for potential medical decisions. Let’s say you’ve gotten into a bad accident are in a coma. You have no way to let the medical team of what you want to happen in any scenario. This document ensures that someone you trust will make those choices. It can even say whether or not you wanted your life to continue should something awful really happen.
Without this document, no one in the family may be allowed to step in, and in some states, may even require a guardian which is just as time consuming as acquiring a conservator.
There’s a lot of confusion with a lot of people assuming that a will can do whatever you want. While it’s sort of true, let’s clear some things and explain what it really is. A will actually dictates what is to happen with your owned assets. It doesn’t have anything to do with guardianship or special trusts.
With a will, you’ll need an executor that’ll take charge on how your assets are divided within the people you’ve selected. This person is also responsible for paying any bills, preparing a tax return and even preparing an estate plan return.
So you want to avoid probate court? Then a revocable trust is going to be key to do so. This does the same thing a will does, but with a lot more advantages. First, it remains a private document (while a legal will is publicly available). Second, if you own any out of state property, then a revocable trust would let you avoid the probate process in that state. Third, this would allow for an easier process for guardianship. This gives the subject more power on how their assets would be distributed to their children.
A revocable trust also makes things easier for a successor to step in to manage the trust rather then waiting for a financial institution to do so.
This is something that comes with a will or a revocable trust. A beneficiary designation is how a retirement account and life insurance is distributed. This is also something that needs to be reviewed at least once a year as a lot of circumstances can change this. Death, marriage and divorce are just some of the things that can cause course to change. There have been horror stories of ex-spouses that have sued, claiming an entitlement to ones assets.
Under the SECURE act, a beneficiary designations have changed. It varies, but in most cases, it’s no longer possible to distribute a retirement account asset over a lifetime.
Guidance Letter to Family
Though this isn’t necessarily a legal document, if you wanted to add a personal touch, a guidance letter is a great way to first give an idea of what you would want to happen. You can use the legal documents to fully iron out the details of your wishes, but a letter is a nice way to give out some guidance in your own language, giving your family more comfort in the way they remember.
Written by Jill Roamer J.D.
Undue Influence is when someone pressures another in such a way that the person being influenced is not acting by their own free will; they are being coerced into taking a certain action. The person being influenced does not understand the repercussions of their actions.
Recognizing undue influence is a job for many – lawyers, financial advisors, notaries, bankers, and family members. Due to the nature of undue influence, it is often carried out by loved ones and kept hidden from others. Undue influence often happens in the case of illness, where there is a deterioration in physical and mental abilities. The bad actor will take advantage of the ill person, and unduly influence them into taking actions to benefit the bad actor.
The issue of undue influence was recently litigated in Malousek v. Meyer. Here, we have Molly and Greg who began cohabitating in 2009. In 2015, Molly was diagnosed with cancer and began treatments. By 2017, her health had drastically deteriorated. In mid-October of 2017, the pair added Greg as a joint owner on Molly’s bank accounts, changed beneficiary designations in Greg’s favor, got married, and executed a quitclaim deed in order to have the home transfer to Greg upon Molly’s death. In addition, Molly executed a power of attorney naming Greg’s son, Mark, as agent.
By October 23, Molly passed away. Her adult children, A.J. and Courtney, filed a declaratory judgment action seeking to have all the property interest changes reversed and the marriage annulled. Their reasoning was that Molly lacked capacity to make these decisions, she had previously indicated that she did not want to get married and did not want Greg or Mark as beneficiaries, and thus was the victim of undue influence. The district court found in favor of A.J. and Courtney, declaring that the marriage was annulled and ordered that the property be conveyed to Molly’s estate. Greg and Mark appealed.
The instant case is out of the Nebraska Supreme Court. The court reviewed the evidence in the case. Plaintiffs’ arguments and evidence were as follows:
The Defendants’ arguments and evidence were as follows:
The court quoted Miller v Westwood and gave the elements of proving a claim of undue influence: “(1) that the person who executed the instrument was subject to undue influence, (2) that there was opportunity to exercise undue influence, (3) that there was a disposition to exercise undue influence for an improper purpose, and (4) that the result was clearly the effect of such undue influence.” The court further went on to state that undue influence is sometimes difficult to prove with direct evidence and other factors may need to be inferred.
In the end, the Supreme Court ruled for Molly’s children. The court stated that as Molly’s health deteriorated, there was a sequence of events carried out to transfer her property to Greg, it was done in secret, contact with Molly’s friend and family was controlled, and the effect of the transactions was contrary to her prior stated wishes. Importantly, the Supreme Court noted that witness credibility is an issue for the trier of fact, giving the district court deference since that court had the opportunity to observe and question the witnesses. The district court obviously found the Plaintiffs’ witnesses to be more credible than those called by the Defendants.
There are a few lessons from this case. The first is to plan early, while still healthy. This way, the likelihood of an argument for undue influence can be decreased. The second lesson is that practitioners need to be aware of undue influence and have a procedure to analyze each case for its presence. Talk to clients and their families about undue influence and the warning signs. Finally, it might be best to encourage clients to talk on their friends and family about their estate plan, so everyone is aware and on the same page before the client’s death.
Nickerson Law will spot out any cases of undue influence within one's estate plan and help you determine what needs to be done to fox that. Click on the button before to contact us for more information with no obligation.
Written by Robert T. Nickerson
Whenever a family completes or updates their estate plan, the immediately feel a sense of accomplishment. Happiness and security are other thoughts and emotions that probably come with it too. The whole point of an estate plan is to give families ease of mind by having their assets, property and potential trust funds all set up legally on paper so that complications don’t arise later on. Does that mean once you sign that last signature, your out of the woods? That depends on how another question is answer; does your estate plan pass the multigenerational test?
You’d be shocked to learn that many estate plans wouldn’t pass that test. That’s because of one thing; a lack of communication. I’ve seen this happen a lot because no matter how big or small a family is, each generation tends to have their own plans created. Your parents may have had one created years ago or maybe you have an offspring that talks about having a plan created without talking to you first. On top of that, it only takes a few years for many estate plans to become dated. One thing that can never be fully planned is life. Things happen. New Children are born. Potential successors may not be as reliable as before. A divorce might have happened. This is why communication between your family is very important. You need to stay on top of what going on in everyone’s lives. Parents, grandparents, children, grandchildren and even great-grandchildren all have things could alter an estate plan.
Let’s look into one thing that could call for big changes to an estate plan; new children or grandchildren born.
When families expand and bring new children in the mix, there’s a lot of joy and excitement. The parents have probably received tons of gifts for the new baby, but what about gifts in the form of money? Because parents are concerned about their child’s future college education, they know they want to accept money, but their also aware of the tax and even legal consequences. So what are more suitable options then just handing a check over?
A UTMA or a UGMA savings account is a very simple to open up and many banks offer this option. The downside is that these account types aren’t the most optimal if family wealth continues to expand.
But what if the child gets a scholarship or even decides not to attend college? These are possible scenarios that can also raise questions about a larger family estate.
Another good solution is a gift trust. As long as the writing is solid, the grantor can create a gift trust and pay the taxes on their behalf.
A good multigenerational estate plan can help answer those questions and set it in stone. Of course the real answer in how to have a better understanding in a large family is communication. There’s plenty of excuses that people will come up with including feeling like they’ll offend if they ask a parent how much money they make. One thing that people don’t have on their side is time. It only takes ten years for generations to change and the amount of wealth were passing on is only increasing.
Nickerson Law has built years of experience in helping various families and creating estate plans that are transparent and easy to understand. We also note specific time frames when they need to be reexamined. We even look at old plans to see if their still valid. Contact us below to learn more about what can be done for your families future with no obligation.
Jeffrey C. Nickerson - Estate Planning Attorney - My Passion is Special Needs Planning!