 Written by Robert T. Nickerson
Estate planning doesn't just affect the people you want to address like your family; it can affect the family for generations in the long run. A good example of this is from the founding father and first president, George Washington. According to his will and last testament of 1799, George Washington granted "use, profit, and benefit" of his property to his "dearly beloved wife Martha Washington." He also set up to finance the creation of an orphan school, forgive many debts from family members, had set aside accounts for the creation of the Washington & Lee University and had arrangements made for those close to him to be cared for. It was the goal of Washington to use what he's built to provide for the people he cared for, deal with any business debts, and be charitable to the needy. Even after 200 years, Washington's estate plan holds up and can apply for the modern era in the way families should consider with their own plans. Washington was open about the displeasure of creating such a document, one that reads at over 5,500 words… which is about nine pages, single spaced. But it's still impressive to at least see how close modern estate plans cone to it. Admittedly, creating an estate plan is no Disneyland vacation; it can be expensive and time consuming. We can still take a history lesson from Washington, as he wrote it. This gives us a glimpse into his thoughts and where he wanted his legacy to go when he was gone. Every estate plan should cater to yourself and the people you care about. A good estate plan should be reflective about your own legacy and what it's going to mean to everyone else. This could mean setting something up for someone with special needs or even setting aside assets to go to your heirs. In order to ensure a lasting legacy and ease of mind, a good estate plan should consider three focal points in order to have something as effective as Washington had planned; Communication, clarity, and customization. The first involving communication is meant for your family. Don't get me wrong; a proper estate plan will have a lot of language that will come off as technical and is meant to follow the rule of the law and court, ensuring that on paper, things are going without trouble. But who is the estate plan for? Your lawyers or your family? If you answered family, your correct! Before walking into an office to declare you want an estate plan, its important for both spouses to have the right information about their families. Both people need to be involved in drafting the documents and being in contact with those that their responsible for. By talking to get all sides of the story, a family can understand what needs to be addressed and put within an estate plan before it's too late. Where does the role of clarity come in? For the second recommendation, I refer to the words "will" and "last testament". For some people, this is all their going to need to fufil their legacy needs. But what about families where things are not as clear? Are they going to need more? Probably. Clarity refers to the idea of having all areas that need addressing down on paper. This is when I would refer to other documents like "personal statement of intent" or "letter of wishes". While a will is a registered document under specific probate laws, a personal statement of intent can be accessible to the people set up under it. Something like a personal statement of intent can do a lot of things. For example, if your dividing your assets unequally, this can be a chance to clarify your not favoring one heir or the other, but rather have a good reason for doing so. This could prevent a family battle in court in probate. Another example could deal with vacation homes. A statement of intent could say that you want your family to continue using it for generations rather then selling it. Clarity is important for families with nontraditional structures or are involved in situations that could appear unfair. The last, which applies for everyone is customization. No estate plan is the same as each family is going to have several factors play a part; Your assets, your property, your family, any disabilities, and even the nature of your death. All of these things are yours and an estate plan will revolve around most of it. It's important to work with a lawyer or advisor who is experienced with such matters. Let's say you have someone in the family who has special needs. Their going to worry about whose going to care for that person once the parents are gone. If someone doesn't want the responsibility, then a fiduciary is usually hired to ensure the guardianship and their financial position. An estate plan needs to verify this kind of setup with a customization that a lawyer can take care of. George Washington was a founding father who was wise in a lot of things. His estate plan was one of them, and is something people in 2019 can take a lot of lessons from.
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 Written by Robert Nickerson
Estate Planning becomes a greater challenge when a loved one like a spouse or an offspring has a chronic illness like Parkinson's, senile dementia or multiple sclerosis. Chronic Illness is Not a Rare Situation If we were to look at the numbers, there are over a 120 million Americans that suffer with a chronic illness. It's bound to go up even higher by 2030. In fact, over twenty-five percent of those over sixty five have had their lives changed by a chronic illness. As with new generations and increasing age, it's likely the number will continue to climb. Since this is essential to estate plans, it's not only important to have something in place, but something prepared that will handle potential chronic illness; something that that covers a large umbrella. Estate Plans for Those Already Living with Chronic Illness Though those with chronic illness will need similar documents in an estate plan that regular people use, the difference here is that they need to be modified to serve your needs. This is why it's important to get them done as soon as you get a prognosis. Putting off too long could result in the illness impairing your ability to understand or even sign the right papers. This is understandably a hard and difficult decision, perhaps as much as the medical diagnosis. This is an important note to think about when searching for an advisor that can empathize with what your going though and can help. Here are some documents that should be able to help you out when getting an estate plan together. HIPAA Releases HIPAA stands for Health Insurance Portability and Accountability Act of 1996. This law prevents an unauthorized person from altering with your personal healthcare plans and protects your confidentiality of your healthcare information and insurance. The purpose of a HIPAA Release is that it assigns someone your know (family member or friend) to have access to your private health information. This is important for whoever your going to trust when communicating with doctors and insurance companies. Let's say you've become too sick to make any decisions and cannot take your medicine. The person on the HIPAA Release will then take that responsibility as instructed. When making this decision, it needs to be in writing and that whoever is being assigned is doing so on a voluntary basis. It also needs to show how much medical information is available. Sometimes its everything and sometimes it's only what needs to be known. It should say where and what needs to be provided in order to care for an illness. It could be medical care professionals or the names of hospitals. It's doesn’t need to be specific, as it could just refer to a category. Does it make sense to have an expiration date for a HIPAA Release? Not if you have a progressive illness. What does make sense is having the right to revoke any access to prevent abuse. This could be an explanation for them to be replaced if needed. This is why this is only necessary if your electing someone that isn't as close. This is why you should probably look to a close family member or friend. Watch out for the standard form. Some law practices will simply hand you’re a "standard form" that looks like any typical document. You might be told it'll cover the loved one, even though there's no one better who understands their problem then you. Only look for a lawyer who will cater to ones specific needs and can get it all in writing. Living Wills and Chronic Illness A living will exemplifies one's health care requests. It's common for end of life wishes, but it can cover a lot of things. It's something that can be altered based on other medical requirements or religious beliefs that could affect them. It's language can be rewritten to suit about anything. But don't assume that just because you have one ailing illness doesn't mean you won't have another. Be sure to include similar instructions, but vague enough that more information can be put in later. But for the original illness, clarify what disease you have, what stage it's in and what course it's set to go in. Don't forget to add what and how it needs to be treated. Are you open to experimental treatments? Then you may want to add your more then willing to go through experimental treatments. But also add whether the one responsible for financial power of attorney is paying for this or if it's being covered with something else. Health Care Proxy and Chronic Illness What a health care proxy does is legally assigns a person to your medical power of attorney. This is called your "agent" who will make your medical decisions when your no longer in a position to do so. Be sure to discuss with them what you want even before you get it on paper. This also includes guardianship should you have children. Do you want them as guardians or someone else? That’s another matter that goes into ones estate plan. Physician Order for Life-Sustaining Treatment This is a specific document that's given to your doctor once completed by whoever is your agent in your health care power of attorney. This purpose is normally for end of life decisions, so this is not meant for broader medical information. This is also important for those that have no family to name. Revocable Trust and Chronic Illness This is one of the most common documents used in an estate plan. This is to prevent major trouble in probate court later on. This helps avoid those high costs and drawn out court proceedings. For someone with a chronic illness, this will help a lot when figuring out the successor and their management of finances. For example, if you want someone who will keep watch over the accounts, you can have them complete a review each year. You can even have an independent CPA to serve as a monitor, to at least have more protection and a safeguard.  This article examines the unique planning requirements of families with children, grandchildren or other family members (such as parents) with special needs. There are numerous misconceptions in this area that can result in costly mistakes when planning for special needs beneficiaries. Understanding the pitfalls associated with special needs planning is a must for all of us who assist families who have loved ones with special needs.
Tip #1: Avoid disinheriting the special needs beneficiary. Many disabled persons receive Supplemental Security Income (“SSI”), Medicaid or other government benefits to provide food, shelter and/or medical care. The loved ones of the special needs beneficiaries may have been advised to disinherit them - beneficiaries who need their help most - to protect those beneficiaries' public benefits. But these benefits rarely provide more than basic needs. And this solution (which normally involves leaving the inheritance to another sibling) does not allow loved ones to help their special needs beneficiaries after they themselves become incapacitated or die. The best solution is for loved ones to create a special needs trust to hold the inheritance of a special needs beneficiary. Planning Note:It is unnecessary and in fact poor planning to disinherit special needs beneficiaries. Loved ones with special needs beneficiaries should consider a special needs trust to protect public benefits and care for those beneficiaries during their own incapacity or after their death. Tip #2: Procrastinating can be costly for a special needs beneficiary. None of us know when we may die or become incapacitated. It is important for loved ones with a special needs beneficiary to plan early, just as they should for other dependents such as minor children. However, unlike most other beneficiaries, special needs beneficiaries may never be able to compensate for a failure to plan. Minor beneficiaries without special needs can obtain more resources as they reach adulthood and can work to meet essential needs, but special needs beneficiaries may never have that ability. Planning Note:Parents, grandparents, or any other loved ones of a special needs beneficiary face unique planning challenges when it comes to that child. This is one area where families simply cannot afford to wait to plan. Tip #3: Don’t ignore the special needs of the beneficiary when planning. Planning that is not designed with the beneficiary's special needs in mind will probably render the beneficiary ineligible for essential government benefits. A properly designed special needs trust promotes the comfort and happiness of the special needs beneficiary 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 families now provide to their child or other special needs beneficiary. Planning Note: When planning for a beneficiary with special needs, it is critical that families utilize a properly drafted special needs trust as the vehicle to pass assets to that beneficiary. Otherwise, those assets may disqualify the beneficiary from public benefits and may be available to repay the state for the assistance provided. Tip #4: A special needs trust does not have to be inflexible. 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 beneficiary's public benefits, many trusts are not customized to the particular beneficiary's needs. Thus the beneficiary fails to receive the benefits that the parents or others 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 beneficiary. While these pay-back provisions are necessary in certain types of special needs trusts, an attorney who knows the difference can save family members and loved ones hundreds of thousand of dollars, or more. Planning Note: A special needs trust should be customized to meet the unique circumstances of the special needs beneficiary and should be drafted by a lawyer familiar with this area of the law. Tip #5: Use great caution in choosing a trustee. Loved ones or family members can manage the special needs trust while alive and well if they are willing to serve and have proper training and guidance. Once the family member or loved one is no longer able to serve as trustee, they can choose who will serve according to the instructions provided in the trust. Families or loved ones who create a special needs trust may choose a team of advisors and/or a professional trustee to serve. Whomever they choose, it is crucial that the trustee is financially savvy, well-organized and of course, ethical. Planning Note: The trustee of a special needs trust should understand the trustmaker’s objectives and be qualified to invest the assets in a manner most likely to meet those objectives. Tip #6: Invite others to contribute to the special needs 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. Unfortunately, many extended family members may not be aware that a trust exists, or that they could contribute money to the special needs trust now or as an inheritance later. Planning Note: 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. Tip #7: Relying on siblings to use their money for the benefit of a special needs child can have serious adverse effects. Many family members rely on their other children to provide, from their own inheritances, for a child with special needs. 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 a child with special needs after the death of the parents or when siblings have their own expenses and financial priorities. What if an 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 parents 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 Note: 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 a sibling) in a manner intended by the parents. Bonus Tip: Stay up to date on changes in the law. The rules applicable to special needs trusts are constantly changing. Most recently, the Social Security Administration changed the rules on special needs trusts that are created using assets of the special needs beneficiary (called a “self-settled special needs trust”). The new Social Security regulations require certain provisions to be present in any self-settled trust drafted after January 1, 2000 that allows for early termination of the trust (termination prior to the death of the special needs beneficiary). If these required provisions are not in the trust, the special needs beneficiary could lose SSI or Medicaid eligibility. The new regulations go into effect October 1, 2010. Please contact us if you have questions about the new regulations or if you would like more information on the changes. Planning Note: A recent change in the Social Security Administration regulations governing self-settled special needs trusts could render some existing trusts invalid for SSI or Medicaid purposes. It is imperative to stay up to date on changes in the rules that apply to special needs trusts to ensure the benefits received by a special needs beneficiary are not jeopardized as a result of changes in the law. Conclusion. Planning for a special needs beneficiary requires particular care and knowledge on the part of the planning team. A properly drafted and funded special needs trust can ensure that special needs beneficiary has sufficient assets to care for him or her, in a manner intended by loved ones, throughout the beneficiary's lifetime. Please contact us if you have any questions or would like to discuss any information in this newsletter further.  The benefits of a highly detailed, comprehensive power of attorney are numerous. Unfortunately, many powers of attorney are more general in nature and can actually cause more problems than they solve, especially for our senior population. This issue of theElderCounselore-newsletter is intended to highlight the benefits of a comprehensive, detailed power of attorney. A proper starting point is to emphasize that the proper use of a power of attorney as an estate planning and elder law document depends on the reliability and honesty of the appointed agent.
The agent under a power of attorney has traditionally been called an "attorney-in-fact" or sometimes just "attorney." However, confusion over these terms has encouraged the terminology to change so more recent state statutes tend to use the label "agent" for the person receiving power by the document. The "law of agency" governs the agent under a power of attorney. The law of agency is the body of statutes and common law court decisions built up over centuries that dictate how and to what degree an agent is authorized to act on behalf of the "principal"--the individual who has appointed the agent to represent him or her. Powers of attorney are a species of agency-creating document. In most states, powers of attorney can be and most often are unilateral contracts--that is, signed only by the principal, but accepted by the agent by the act of performance. Much has been written about financial exploitation of individuals, particularly seniors and other vulnerable people, by people who take advantage of them through undue influence, hidden transactions, identity theft, and the like. A prior issue of the ElderCounselor addressed guardianships and conservatorships and discussed the benefits of court supervision of care of vulnerable people in such contexts. Even though exploitation risks exist, there are great benefits to one individual (the principal) privately empowering another person (the agent) to act on the principal's behalf to perform certain financial functions. A comprehensive power of attorney may include a grant of power for the agent to represent and advocate for the principal in regard to health care decisions. Such health care powers are more commonly addressed in a separate "health care power of attorney," which may be a distinct document or combined with other health topics in an "advance health care directive." Another important preliminary consideration about powers of attorney is "durability." Powers of attorney are voluntary delegations of authority by the principal to the agent. The principal has not given up his or her own power to do these same functions but has granted legal authority to the agent to perform various tasks on the principal's behalf. All states have adopted a "durability" statute that allows principals to include in their powers of attorney a simple declaration that no power granted by the principal in this document will become invalid upon the subsequent mental incapacity of the principal. The result is a "durable power of attorney"--a document that continues to be valid until a stated termination date or event occurs, or the principal dies. Having covered the explanation of what a durable power of attorney is, let's look at the top 10 benefits of having a comprehensive durable power of attorney. 1. Provides the ability to choose who will make decisions for you (rather than a court). If someone has signed a power of attorney and later becomes incapacitated and unable to make decisions, the agent named can step into the shoes of the incapacitated person and make important financial decisions. Without a power of attorney, a guardianship or conservatorship may need to be established, and can be very expensive. 2. Avoids the necessity of a guardianship or conservatorship. Someone who does not have a comprehensive power of attorney at the time they become incapacitated would have no alternative than to have someone else petition the court to appoint a guardian or conservator. The court will choose who is appointed to manage the financial and/or health affairs of the incapacitated person, and the court will continue to monitor the situation as long as the incapacitated person is alive. While not only a costly process, another detriment is the fact that the incapacitated person has no input on who will be appointed to serve. 3. Provides family members a good opportunity to discuss wishes and desires. There is much thought and consideration that goes into the creation of a comprehensive power of attorney. One of the most important decisions is who will serve as the agent. When a parent or loved one makes the decision to sign a power of attorney, it is a good opportunity for the parent to discuss wishes and expectations with the family and, in particular, the person named as agent in the power of attorney. 4. The more comprehensive the power of attorney, the better. As people age, their needs change and their power of attorney should reflect that. Seniors have concerns about long term care, applying for government benefits to pay for care, as well as choosing the proper care providers. Without allowing the agent to perform these tasks and more, precious time and money may be wasted. 5. Prevents questions about principal's intent. Many of us have read about court battles over a person's intent once that person has become incapacitated. A well-drafted power of attorney, along with other health care directives, can eliminate the need for family members to argue or disagree over a loved one's wishes. Once written down, this document is excellent evidence of their intent and is difficult to dispute. 6. Prevents delays in asset protection planning. A comprehensive power of attorney should include all of the powers required to do effective asset protection planning. If the power of attorney does not include a specific power, it can greatly dampen the agent's ability to complete the planning and could result in thousands of dollars lost. While some powers of attorney seem long, it is necessary to include all of the powers necessary to carry out proper planning. 7. Protects the agent from claims of financial abuse. Comprehensive powers of attorney often allow the agent to make substantial gifts to self or others in order to carry out asset protection planning objectives. Without the power of attorney authorizing this, the agent (often a family member) could be at risk for financial abuse allegations. 8. Allows agents to talk to other agencies. An agent under a power of attorney is often in the position of trying to reconcile bank charges, make arrangements for health care, engage professionals for services to be provided to the principal, and much more. Without a comprehensive power of attorney giving authority to the agent, many companies will refuse to disclose any information or provide services to the incapacitated person. This can result in a great deal of frustration on the part of the family, as well as lost time and money. 9. Allows an agent to perform planning and transactions to make the principal eligible for public benefits. One could argue that transferring assets from the principal to others in order to make the principal eligible for public benefits--Medicaid and/or non-service-connected Veterans Administration benefits--is not in the best interests of the principal, but rather in the best interests of the transferees. In fact, one reason that a comprehensive durable power of attorney is essential in elder law is that a Judge may not be willing to authorize a conservator to protect assets for others while enhancing the ward/protected person's eligibility for public benefits. However, that may have been the wish of the incapacitated person and one that would remain unfulfilled if a power of attorney were not in place. 10. Provides peace of mind for everyone involved. Taking the time to sign a power of attorney lessens the burden on family members who would otherwise have to go to court to get authority for performing basic tasks, like writing a check or arranging for home health services. Knowing this has been taken care of in advance is of great comfort to families. Conclusion This discussion of the Top 10 Benefits of a Comprehensive Power of Attorney could be expanded by many more. Which benefits are most important depends on the situation of the principal and their loved ones. This is why a comprehensive power of attorney is so essential: Nobody can predict exactly which powers will be needed in the future. The planning goal is to have a power of attorney in place that empowers a succession of trustworthy agents to do whatever needs to be done in the future. Please call us if we can be of assistance in any way or if you have any questions about durable powers of attorney.  Long-term care is becoming an important issue for our nation to address. We have 78 million aging baby boomers. The costs of long-term care to these baby boomers can be catastrophic and few people have sufficient resources to pay for needed long-term care. In an effort to deal with this growing concern, the Long-Term Care Financing Collaborative (the “Collaborative”) began meeting informally in 2012 for the purpose of finding a solution. They have since become a formalized group made up of a variety of national experts and stakeholders with varying ideological stances. Their common goal is to improve the way Americans pay and prepare for non-medical care (Long-term supports and services) needed by the elderly and those living with disabilities. On February 22, 2016, the Collaborative announced its third and final set of recommendations.[1] ABOUT THE COLLABORATIVE The diverse group[2]is made up of policy experts, consumer advocates and representatives from service providers and the insurance industry. In addition, the group consists of senior executive branch officials in both the Democratic and Republican administrations, former congressional aides, and former top state health officials. THE COSTS INVOLVED The statistics surrounding long-term care or long-term supports and services (“LTSS”) are eye opening. According to the Collaborative, there are between 10 and 12 million adults today who require LTSS and that number is expected to double by the year 2030. More than two-thirds of older adults will need some assistance before they die and nearly half will have a high enough need that they will be eligible for private long-term care insurance or Medicaid to pay the bill. More than 6 million older adults need that level of care today and nearly 16 million will need it in 50 years. The Collaborative defines Long-term supports and services (“LTSS”) as non-medical assistance. This would include help with such things as food preparation, personal hygiene, assistive devices and transportation, bathing, eating and the like. Cost to the Elderly or Disabled: The elderly or disabled persons who find themselves in need of LTSS try to pay for it out of their savings or income from their retirement along with help from family members. Often, this is insufficient to cover the costs and many people have to turn to Medicaid for help. The overall spending on LTSS is expected to double by 2050, which will cause even more people to depend on Medicaid to pay for it. Few people have saved sufficiently for LTSS. In fact, the Collaborative reports that a typical American between the ages of 65 and 74 has financial assets of $95,000 and about $81,000 in home equity. This does not include retirement savings, which vary widely across the country. To pay for one’s lifetime medical expenses with a 90% certainty requires savings of about $130,000 and an additional $69,500 for LTSS costs. With this in mind, it is easy to see how people are running out of money. Over all, individuals pay for about 55% of LTSS expenditures; Medicaid pays about 37%; and Private LTSS insurance pays for less than 5%. Cost to Family and Friends: In addition to the financial stress this places on the elderly and disabled, it also significantly affects their families. The Collaborative estimates that in 2013, family and friends provided 37 billion hours of uncompensated LTSS to adults. This care calculates to up to $470 billion, which is three times the amount Medicaid spent on LTSS the same year. When family members provide caregiving to a loved one, it often comes at the cost of their job or a portion of their job. On average, the Collaborative reports, a woman in her 50s who leaves a job to care for her aging parents does so at a cost of $300,000 of income over her lifetime. The Collaborative states that “unpaid family caregivers lose an estimated $3 trillion in lost lifetime wages and benefits.” Cost to Employers of Family and Friends: The Collaborative reports that employers experience a loss of $17.1 to $33 billion in productivity due to absenteeism alone. In addition, they state that “costs of turnover and schedule adjustments for caregiving workers add an additional $17.7 billion in costs.” THE COLLABORATIVE’S RECOMMENDATIONS The Collaborative was able to agree to five key recommendations in three key areas. This final set of recommendations focused significantly on: 1) A need for universal catastrophic insurance; 2) Private market initiatives and public policies to revitalize the insurance market to help address non-catastrophic LTSS risk; and 3) Enhanced Medicaid LTSS for those with lower lifetime incomes. The Collaborative calls for a strong government role in the solution. The group considered voluntary and universal insurance programs and came to the conclusion that universal was the only viable, long-term solution as it spread the risk across the entire population and avoided challenges of adverse selection. The Collaborative noted in the report, “As a result, universal insurance appears to offer broad-based insurance at a comparatively low lifetime cost.” In addition to recommending universal catastrophic insurance, the Collaborative also recommended taking some actions to revitalize the private insurance market. These included suggestions of employers offering long-term care insurance as part of their benefits packages. In addition, the group suggests that regulatory changes in the insurance industry, creating more standardization in policies, would save costs to consumers. The specifics of the regulatory change suggestions include increasing premiums and benefits as the individual ages. There is also a suggestion that this type of insurance be sold in conjunction with Medicare supplemental programs. Finally, the group suggests that policymakers continue to encourage and support efforts by the insurance industry to experiment with more hybrid products, combining long-term care insurance with other products. Another recommendation given by the Collaborative was to encourage increased private savings for retirement. This encouragement might come in the form of ease of enrollment through employers’ benefits programs, expanded retirement products, tax subsidies and education. Of note was a recommendation made by the Collaborative was to modernize Medicaid financing and eligibility. This recommendation is really one to expand Medicaid coverage to include more people, in more settings, for more care. Eligibility would be based on a functional assessment and a needs assessment rather than requiring an institutional level of care. CONCLUSION The Collaborative leaves us with a final recommendation to provide more education about LTSS. Many people are in denial about the possibility that they may need it some day and do not plan. While it is encouraging that the nationwide issue is being studied more and taken more seriously now, the problem is far from resolved. Until there is a firm solution, individuals must take responsibility and plan ahead. If you or someone you know has questions about how to plan for the costs of long-term care, please feel free to contact our office. ABOUT THE COLLABORATIVE The diverse group[3]is made up of policy experts, consumer advocates and representatives from service providers and the insurance industry. In addition, the group consists of senior executive branch.  Written by Robert Nickerson
In the case of wills, documents, and full estate plans, there have been plenty of sad, badly timed, and simply weird situations that have affected clients in ways that were not considered. The good news is that everyone makes mistakes. It's a matter of just not repeating those mistakes. Badly written estate documents & files can lead to a lot of missteps with the rest of the family including paying outrageous tax bills and accidently cutting a loved one out of a beneficiary. Here are ten things that people tend to do wrong with their estate plan. 1. Beneficiary Blunders Not being able to name a beneficiary to be responsible for retirement accounts and insurance policies or even reviewing old ones already signed before is the most common. With no one selected, then the default will usually mean the estate, which can be surrounded by probate, delays, complicated court matters and more. It’s a good idea to see where your beneficiary is now. A beneficiary can be stretched in expectancy, but an estate plan can last forever. This could lead into an ex-spouse as a beneficiary, even though you don't want them there now. 2. "Selling" Property for $1 This practice used to be very popular until the government stepped in and caught on with the theory. The idea is that a piece of land could be sold for a low price so that the taxes on the gain (whatever the land is worth compared to when the original person bought it) would not need to be paid and thus, be removed from the estate plan. It's a part of an idea that by doing this, taxes don't need to be paid, but the IRS will find it and still ask those doing this to pay even more. 3. Naming Specific Investments in your Will If the person who died no longer owns a specific investment, his estate might be forced to buy it back at a higher price, even if the beneficiaries are not interested. Check to see if the specific investments still belong to the original party. If not, and it's not updated, then a ton of the assets could be used to pay the higher price. 4. Not Thinking all the way Through for a Well-Intended Gift Let's say we had a father has three boys and he wanted to make sure his house became theirs after he died. What if it was stated that the home could not be sold unless everyone was also living in that town. It might be fine, but what if one of the sons did not have a home. Then the brothers would be stuck in court for a while before finally being able to sell the home. Check the estate plan to be sure that assets and their beneficiaries are set in stone to be transferred in a easy manner. 5. Leaving Assets Directly to a Minor Without Settling Guardianship Issues So grandpa wants to leave little Billy a Babe Ruth signed baseball and $90,000. Who's going to handle all of this? If this isn't figured out, there is a chance for financial abuse. 6. Not Planning for the Death of a Beneficiary What should happen if a beneficiary isn't alive when it's time for them to receive their benefit? Will it go the surviving heirs? Will it go into another account or foundation? There are a lot of people that will think of the future, but not everyone else's future. It may not be their fault, but anything is always possible. Consider having an alternate plan laid out just in case. 7. Ownership mistakes and Imbalances Who owns the house? Business? Collection that's worth a lot? This could be troubling if too many of these are under one spouses names rather then a joint. It leads to an increase in taxes, both in life and in death. A more balanced account of assets will appear equal and reduces a chance of owing too much in taxes. 8. Not Having a Residuary Clause What a Residuary Clause in an Estate Plan does is remembering everything else not stated in your will, which includes assets not owned yet, but eventually does, before death. This is common and people will not consider this. 9. Not Planning for Your Own Mortality Yep, we are all going to die someday. Whether you want to face that or not, it's going to happen. It's unfair to let your family deal with no plans just because you don't want to face the consequences. It's be better then litigation.  Most of us know of someone who has been diagnosed with dementia. It is a costly, heart-breaking and life-altering syndrome that is nearly doubling in numbers of people affected worldwide every 20 years[1]. Dementia has affected the likes of Norman Rockwell, E.B. White, Rita Hayworth, Charlton Heston, Ronald Reagan, Charles Bronson, Margaret Thatcher and many other well-known people. It does not discriminate based on station in life, and its effects are widely dispersed. This edition of the ElderCounselorTMwill focus on recent findings as to economic, financial and societal impacts of dementia as well as what an Elder Law attorney can do to help.
What is Dementia? Dementia is a general term for a decline in mental ability, severe enough to interfere with daily life. Memory loss is one such example. Alzheimer’s is the most common type of dementia. Symptoms of dementia can vary greatly, but is diagnosed when at least two of the following core mental functions are significantly impaired: memory, communication and language, ability to focus and pay attention, reasoning and judgment, and visual perception. These symptoms can be displayed when the person with dementia has problems with short-term memory, keeping track of his/her purse or wallet, paying bills, planning and preparing meals, remembering appointments, or travelling out of the neighborhood. These often progressive symptoms will likely eventually necessitate assistance with daily activities, resulting in increased expense and stress on the individual, their family members, and society at large. The RAND Study[2] The RAND Corporation recently concluded a nearly decade-long study on close to 11,000 people. The study sheds light on dementia statistics including rates of diagnosis and costs to society. The results of this study were recently published in the New England Journal of Medicinein early April 2013. The study’s reliability is significant—it was led by an independent, non-advocacy group and financed by the federal government. The Cost of Dementia to Society According to the RAND Corporation’s study, the cost of caring for those with dementia is projected to double by 2040 and is currently higher than caring for those with heart disease or cancer. The direct costs of dementia, including the cost of medicine and nursing homes, was $109 billion a year in 2010 compared to $102 billion for heart disease and $77 billion for cancer. This cost is pushed even higher, to $215 billion, when support from family members or other loved ones is given a cost value. This figure will rise to $511 billion by 2040. Information from the RAND study and from the Centers for Medicare & Medicaid Services indicates that, by 2020, dementia patients will account for about 10% of the elderly population while direct medical spending on them will equal about 17% of all spending projected for Medicare and Medicaid devoted to the aged[3]. The cost of dementia to society is great and is headed for a huge increase. In light of that, President Obama recently signed into law the National Alzheimer's Project Act, which calls for tracking of financial costs of dementia as well as increased efforts to find new treatments and better care for those with dementia. The Cost of Dementia to the Family While the cost to society is great and will likely have a substantial impact on all of us, the costs to individuals diagnosed with dementia and their loved ones is even more significant. As evidenced by the RAND study, each individual case of dementia costs between $41,000 and $56,000 a year. In addition to the financial drain on families, dementia increases the stress on the caregiver loved one. In fact, caregivers have been found to be at increased risk for depression and anxiety and long term medical problems, which impose a further financial burden on the family. Conclusion Dementia poses higher costs to society and individuals than heart disease or cancer and these costs are projected to continue rising. Most significant is the cost of care for the patient with dementia. The dementia-ridden person will progressively need more and more help with daily activities and this is the biggest cost of the debilitating syndrome. With the proper attention given to improvements in medicine with regards to dementia, society will be able to get a handle on this costly condition. And, with help from an Elder Law attorney, the family of those afflicted with dementia can obtain the support they need to care properly for their loved one. An Elder Law attorney can help clients prepare or deal with an immediate need to find appropriate resources in dealing with dementia. We can support the loved one in making sure the dementia patient has access to the care and medical attention they need. Please contact us if you have a client or their loved one who has been diagnosed with dementia or is at risk for developing this debilitating syndrome. We would be honored to help. *www.alz.co.uk ** http://www.rand.org/news/press/2013/04/03.html ***The Wall Street Journal, Dementia Will Take Toll on Health-Care Spending, April 8, 2013 [1]www.alz.co.uk [2]http://www.rand.org/news/press/2013/04/03.html [3]The Wall Street Journal, Dementia Will Take Toll on Health-Care Spending, April 8, 2013  Written by Robert T. Nickerson
On March 14, 2019, actor Luke Perry, whose original name was Coy Luthor Perry III, died surrounded by his loved ones. Though the actor was famous for playing a teenager on Beverly Hills 90210, he ended up suffering a stroke. A lot of people think that the only ones who can get strokes are "old people". Thankfully, Perry did the right thing by having his estate plan prepared in he event of something like this happened. He was only fifty-two when Perry had suffered a major stroke and was put under heavy sedation while hospitalized. It was his family who made the decision to discontinue life support five days later. After a second stroke, the family was told that he wouldn’t recover. This was set up through something called an Advance Healthcare Directive. We can’t deny that the decision to take Luke Perry off life support was difficult, especially knowing that he was healthy and still working on Riverdalejust a week beforehand. It shows if the hospital allowed Perry's family to end life support, then it means that the actor had the legal documents ready and signed so that the family can make the proper choice had he wanted it. In California, those health wishes are in writing, through an advance healthcare directive or power of attorney. Had he not had those legal documents, Perry's family would have had to gone to probate court in order to consider terminating life support, especially if someone in the family wanted to object to that. This information would have also been made public and would have made the process more emotional for the family. Imagine having all the news cameras on you when forced to make a life or death situation for a loved one. It was in 2015 when Luke Perry made his most recent will that had I'm leaving the majority of his estate to his two children. It was also that same year that while undergoing a colonoscopy, that he had some precancerous growths. He then became outspoken about getting others like him screened. It was said that this scare was what got him into getting his estate settled. Had he only had a will, then Luke Perry's estate will have to go through Probate Court. However, given that his net worth was supposedly $10 million, then it is more likely that he had a revocable living trust created. A revocable trust is a specific account where his funds have been transferred into. This means that should his estate still claim his children as his successors, then the trust should be able to transfer to them without court interference. Let's hope that he had the same instinct to have his trust done at the same time as his end of life plans. One big question that's still up in the air is whether or not his fiancé, therapist Wendy Madison would receive anything from the trust. Since his will was done in 2015, then it's reasonable to assume that nothing was planned for a new girlfriend. Had the two been married before his death, then she would have been legally entitled to rights as in "pretermitted spouse". While doesn't guarantee anything, it does state that as long as it was in writing, then she would have received whatever inheritance was drawn for her. Even if nothing was stated, then by California law, then she would have been entitled to one third oh his estate had they been married. Because he died before any marriage happened, she will not be entitled to anything from his estate, unless the will was changed before. It's also possible that another form of inheritance was set up, such as a joint bank account or as a beneficiary of his life insurance. This should be a mind opener to anyone that it's not just cancer or illness that we need to be worried about. Luke Perry's death should be a reminder that a stroke could happen to anyone, even those that are middle age. It was published in the New York Times about the dangers of strokes in those younger then fifty. About ten percent of stroke victims have not reached fifty. Even if someone doesn't die, life and it's quality is impacted. Luke Perry's death should remind us that we shouldn't procrastinate with an estate plan if one can do it. Something like this can happen with loved ones and we don't want to spend years in probate court and thousands of dollars in legal fees and most importantly, causing more stress and heartache then needed.  We're proud to be a sponsor for the annual Rooted in Nature Crew Brew Festival in Wildomar, CA. The Temecula Valley has played a significant part in the history of the craft brewing renaissance, with some of the most high profile and famous craft brewers in the world being part of the community. Mitch Steele, formerly head brewmaster for Stone Brewing, and Vinnie Cilurzo, original founding owner/brewmaster of Blind Pig Brewing, and now owner of the famous Russian River Brewing Company, both have had roles in developing the Temecula area craft brew scene. Taking place in the heart of the burgeoning Inland Empire and overall craft beer revolution, this area also has one of the most robust HomeBrewing cultures. Homebrewers have contributed greatly to the growth and innovation that has spurred the spike in craft beer popularity, and we are proud to have the Temecula Valley Homebrewer’s Association and the Society of Barley Engineers participating in this year’s debut event. You will find us under a tent where we can answer any questions you have about estate planning, considering your loved one with special needs, and anything that you've wanted to know about planning after you go. You can buy tickets on site or on the webpage link (Click here) The event begins at 1:00 P.M. and will run through 5:00 P.M. in which afterward, there will be a concert featuring the acclaimed Journey tribute band, "Lights" which will begin at 6:30 P.M. The festival is located at the Marna O'Brian park off of Palomar Street   Written by Robert T. Nickerson
It's no surprise that the cost of living in California has risen to high levels. This has put some of the neediest people that rely on social security in a tough spot as they are no longer able to afford healthy meals. The good news is that it'll about to change. Starting in June, those that are on SSI or Supplemental Security Income, which is a federal program that provides monthly payments for poor seniors or people with disabilities, will now have access to a great program called CalFresh. This provides the ability to help people who want to inquire more healthy food into their meals. In fact, starting on May 1, people can start signing up for CalFresh in order to start using it in June. This could help 1.3 million become eligible that need it. This will provide a safety net for those that don't want to survive on candy bars, Twinkies, and soda pop. There are reports of seniors and disabled people that eat few meals a day or even a week, as their options are limited. What they are offered are usually not the best for survival and could even progress any mental problems they may have. Let's say someone had diabetes and high blood pressure. They may have access to meals on wheels, but may be limited to what they can eat due to an amount of carbs or gluten they can ingest. CalFresh will likely be able to let them have more options available, and more importantly, healthier. CalFresh will also allow those that want it, to purchase protein items like chicken and fish. How CalFresh works is that each registered person is issued a card, a lot like a credit or debt card, and funds are loaded every month and can only be redeemed for products that qualify as healthy. The following include fruits and vegetables, beans, fish, poultry and meat, rice, bread, tortillas and cereals, milk and cheese, and seeds and plants for growing food. CalFresh cardholders’ funds vary by the number of people in a qualifying household, as well as their incomes and expenses. A single person can receive up to $192 a month, while a family of four receives a monthly maximum of $642. The average household receives about $300 per month. |
AuthorJeffrey C. Nickerson - Estate Planning Attorney - My Passion is Special Needs Planning! Archives
July 2019
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