Written by Robert T. Nickerson
Things can happen during the COVID-19 outbreak. But things can also happen anytime. Were in a time of uncertainty where people aren't sure whats going to happen in the next months or years. I can promise you that we'll return to a state of normality sooner then you think. Though even with this or not, people still need to plan for the best and worst case scenario.
Thinking about your own health and eventual death can be hard and even upsetting. This is probably why a lot of people don't think about their estate plan until its too late. I'm gonna give you some good news and inform you that it's never too late to change that as long as your alive. It can take the COVID-19 to inspire you to make a plan, but things like marriage, caring for elderly parents, being parents to children or any other medical event can also encourage you to take action. Every person should have four of the following documents to ensure a mind at ease for anything.
1. A Will or Revocable Trust
During any critical crisis, it's important to know whose going to receive your assets. I'll tell you now that going through Probate is no picnic. It's a red tape process that makes asset acquiring very complicated and more so if someone in your family tries to challenge that. A lot of people with modest or small estates have a will. This mainly tells your loved ones who is going to receive some or all assets. Its something that also requires returning to every now and then to ensure the family situation has not changed and is up to date.
2. Beneficiary Designations on Financial Accounts
You need to know that a simple will may not cover all of your assets. What beneficiary designations do, especially for IRAs, 401(K) accounts or life insurance policies, is name a person who will manage those accounts in the event of something happening to the original holder of the account. More often then not, many people wait too late to have a beneficiary set in place, forcing a lot of complication, hence it'll be back to court for the family. Your financial institution usually has the forms to set up a beneficiary. Like a will, this also needs to be looked at every few years to confirm everything in your life is the same. What's worse then not knowing your money wont go to the people you want after you die?
3. Healthcare Durable Power of Attorney
During an outbreak, I know your concerned about getting care should something happen. Of course I'd recommend getting health insurance or being on one of many federal or state programs should you qualify for that. I can advise on that as well, but I specifically want to talk about a durable power of attorney. What this does is designate someone to make your medical decisions in the event you can't. Your healthcare provider should have the right documents to set up someone in place. This will make the process a lot smoother as long as you know already who will respect your wishes.
4. Financial Durable Power of Attorney
Like a Healthcare durable power of attorney, you can set up similar for your financial accounts. The difference between this and a beneficiary designation is that while that set up someone to take over accounts when you die, a financial durable power of attorney names one if your medically unable to make decisions. It also allows them to make financial decisions such as transferring accounts and making purchases. The rules in place can cater to whatever you want. You can set it up to only pay bills or go as far to make investments. The financial durable power of attorney needs to sign for someone who you can really trust.
Getting ready for the worst doesn't have to upsetting or even hard. Our law office can help set you up with the proxies, accounts and power of attorneys depending on your situation or estate. It's not just a privilege for the wealthy and anyone can get something set up. I can help guide you through it all. Contact our office for more information on what you can do and what we can do to make it easier.
Written by Robert T. Nickerson
This is certainly a trying time. The COVID-19 has not only set off a lot of health, financial, economic, and child issues, but it has also set in social distasting as the new normal. The sudden change in life is going to understandably cause a lot of confusion, fear and even pain. This has also forced a lot of families to become closer as we're more encouraged to stay home. You'd think it would get boring after a while, but since we live in an era of instant entertainment, along with the consistent Netflix and Disney Plus marathons, this should also open you up to a lot of free information… including what you can do to protect your family for the future.
Since you'll be home more often, now's a good time to ask yourself "When was the last time I cleaned my closet?" This means a lot of things. Your closet, attic, garage, or storage is going to be filled with a lot of stuff from your past, most of it being your families. With each spaced filled, this should make you grateful that you have this kind of space.
Along with literally "cleaning your closet", I also mean to do so with your legal documents. To be fair, a lot of families want to think about their loved ones but because of life, planning for that may not be that high on the priority list. The COVID-19 changes everything, including this. I want to ask you when was the last time you looked over your estate planning documents…or even if you've drawn up any at all.
It's okay to admit if you haven't done so yet. It's said that tragedy tends to be the biggest reminder of these kinds of things. I receive emails and calls inquiries for information during these times. The office got a lot of contact when Kobe Bryant was killed in the unfortunate accident. The new outbreak will make a lot of people think about their current situation not just for themselves, but for their elderly parents who are at most risk.
At minimum, everyone should have a last will and testament, a power of attorney and a health care proxy. This is to ensure who will make medical decisions, legal decisions if the person in question cannot, and most importantly, how their estate will be divided. Without a will and testament, the state laws will determine how one's assets will be split. If you have children, then a judge would make the decision of who they'd live with.
Having an estate plan in place can prevent the state and government from making those choices. Having a power of attorney will set someone in place to make legal decisions should you be too ill to do so. This would include filling taxes, banking, buying and selling real estate, and even applying for government benefits. A health care proxy will let someone of your choice make medical decisions for you, including end of life if needed.
As an estate planning attorney, I've a lot of experience in dealing with questions about the future, even within circumstances like COVID-19. My office is open with a limited staff and surfaces that are consistently cleaned. We even have hand sanitizer for your safety. If your worried, we can also arrange remote meetings through email, phone, Skype or however you want to proceed. We can help "clean your closet" and keep it clean well after this outbreak ends.
Written by Leonard Anderson Esq.
Supplemental Security Income (SSI) is a means-based federal program that provides money to individuals who have little or no income and who are aged, blind, or disabled, to meet their basic needs for food and shelter. Under the Social Security Administration’s (SSA) regulations, assistance an SSI recipient (“recipient”) receives in the form of food and shelter is known as in-kind support and maintenance (ISM). ISM is counted as income to a recipient when calculating the amount an SSI recipient will receive in his or her monthly payment. Anyone receiving SSI must report ISM they receive to the SSA. Failing to report ISM, will result in an overpayment of SSI benefits to a recipient, which overpayment must be repaid to the government.
The amount of SSI for 2020 is $783, which is very modest and provides for a very meager existence. A well-meaning family member or friend, who wants to help an SSI recipient, may allow the recipient to live rent-free in their home, or they may pay the recipient’s food or shelter expenses. In general, the SSA applies an offset against SSI benefits a person receives if someone else pays for that person’s food or shelter. So, it is important to understand the basic rules associated with the amount of ISM provided to a recipient.
Before exploring the impact of ISM on the amount an SSI recipient receives, it is important to understand that some exceptions apply to the general rule (that the gifting of food and shelter to an SSI recipient reduces their monthly SSI benefit). Food or shelter received under the following scenarios is not considered ISM by the SSA and does not trigger a reduction in a person’s SSI benefits:
As mentioned above, the gifting of food or shelter impacts the amount of a person’s monthly SSI benefits. The definition of food is fairly common sense, but the ISM definition of shelter includes nearly all aspects of a recipient’s housing expenses. Under the SSA regulations, shelter includes mortgage payments, rent, electricity, gas, heating oil, water, sewer, garbage, any required property insurance, and real estate taxes.
The amount by which a recipient’s SSI will be reduced by ISM is determined under either the Value of the One-Third Reduction (VTR) rule or the Presumed Maximum Value (PMV) rule. The VTR is calculated by taking the maximum amount of SSI a person can receive monthly (the “Federal Benefit Rate” or FBR) and reducing it by one-third. The FBR for 2020 is $783. So, the reduction in 2020 under the VTR rule is $261 and results in a recipient receiving $522 a month in SSI instead of $783. The PMV reduction is calculated by reducing the FBR by one-third and adding $20. The PMV reduction in 2020 will be $281 (1/3 x $783 = $261 + $20 = $281) and results in the recipient receiving $502 monthly in SSI ($783 - $281 = $502) payments. It is important to know when the VTR and PMV rules apply.
The VTR rule applies when a recipient lives in another person’s home and others in the household pay for both the recipient’s food and shelter. The VTR is an all or nothing rule, with the full one-third reduction being deducted from the recipient’s monthly SSI benefit, but no more, even if the value of food and shelter the recipient receives is more than one-third of the SSI benefit. Situations in which the VTR rule does not apply include the following:
The PMV rule is used whenever the criteria to apply the VTR rule are not met. The PMV rule is also designed to be the maximum amount of ISM that can be charged against a recipient’s monthly SSI benefit. A deduction calculated under the PMV rule is rebuttable. To challenge the PMV amount, a recipient must prove they received an amount less than the PVM of either (1) the current market value of ISM received, minus payments made by the recipient; or (2) the amount actually paid by someone else.
A person’s living arrangements and support can change rapidly or over time. It is important for an SSI recipient and his or her family to remember that any change needs to be reported promptly to the SSA. Any failure to do so could result in an overpayment of SSI benefits and a demand for repayment of the benefits improperly received.
Because the ISM rules for SSI are complicated, SSI recipients and their families are well advised to seek professional legal advice about how the VTR or PMV rules apply to their particular situation, accurately reporting ISM to the SSA, and possible ways to avoid or reduce ISM reductions.
Jeffrey C. Nickerson - Estate Planning Attorney - My Passion is Special Needs Planning!