C19 UPDATE: Should You Bring Mom Home from the Nursing Home Now?

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If you have a loved one currently living in a nursing home, you’re probably worried about them right now. You may not be able to visit them or check in on their care. You may be afraid that the next COVID19 outbreak will strike their facility.

And … you may be struggling with the decision about whether it’s best for them to stay in the facility, or if you should bring them home.

These are all reasonable concerns. There have been more than 5,670 coronavirus deaths in long-term care facilities nationwide, according to state health data reported by NBC News on April 15.

But would Mom or Dad fare better, even with all due social distancing, in the family home?

Some issues to carefully consider if you are struggling with this question now:

  • Are you prepared to shoulder the entire burden of care for your loved one now? If not, are there other family or community resources that could help – and can you access them in the current situation?
  • What does your loved one want? Do the benefits of moving them out outweigh the stress of disruption and displacement?
  • Can you really keep your elderly loved one safer at home … especially if they have chronic conditions such as heart, lung, or kidney disease?
  • How long will you be able to keep up with your loved one’s care at home … and
  • Will your loved one be able to return to the facility if you cannot keep up … or after the danger has passed?
  • Will your loved one lose their Medicare or Medicaid benefits if they leave the nursing home?

These questions, and more, should be addressed before making the decision to remove your loved one from a nursing facility. Check with an elder law attorney who is familiar with your situation, state and federal laws, and nursing home policies who can explain your options and guide you to an informed decision.

Resources: NBC News, Coronavirus deaths in U.S. nursing homes soar to more than 5,500, April 15, 2020; March 18, 2020;

C19 UPDATE: CDC Recommends Care Plans for Both Older Adults and Caregivers

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Quick. You or your senior loved one is running a fever, coughing, and struggling to breathe. You suspect COVID-19 and a full-blown medical emergency starts to unfold. Medical professionals will need to quickly know the patient’s health conditions, medications, healthcare providers, and emergency contacts.

Are you ready?

The Centers for Disease (CDC) recommends developing a Care Plan now as part of your emergency preparedness.

What is a Care Plan?

A care plan is a document that summarizes a person’s health conditions and current treatments for their care. The CDC offers a handy form you can use, Complete Care Plan. This is a fill-able form you can complete on your computer or print and complete by hand.

How Do You Develop a Care Plan?

The CDC offers these tips

  • Start a conversation about care planning with the person you take care of.
  • Talk to the doctor of the person you care for or another health care provider.
  • Ask about what care options are relevant to the person you care for.
  • Discuss any needs you have as a caregiver.

And remember, care plans can reduce emergency room visits, hospitalizations, and improve overall medical management, especially during a medical emergency.

Resource: Centers for Disease Control, Coronavirus Disease 2019, https://www.cdc.gov/coronavirus/2019-ncov/need-extra-precautions/older-adults.html

C19 UPDATE: Delay Payroll Taxes OR Get Paycheck Protection?

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These are tough times for everyone, but if you are a business owner you have a few more tough decisions to make right now regarding payroll taxes and paycheck protection.

The Coronavirus Aid, Relief and Economic Security (CARES) Act, which passed on March 27, authorized a number of relief and aid programs for individuals and businesses. But figuring out how to move forward with applications and quickly getting needed relief is not easy.

Case in point – the CARES Act authorizes businesses to defer paying the employer contribution of payroll taxes (approximately 7 percent of payroll) through the end of this year with what is essentially a short-term, interest-free loan. This money must eventually be paid. Half is due on December 31st, 2021, and the other half on December 31st, 2022. While this sounds good and allows businesses to hang on to some cash during these difficult times, there is another program that may be more helpful … and you cannot use both. In other words, these offers cannot be combined.

The Paycheck Protection Program, also authorized in the CARES Act, allows small businesses to apply for a loan that can be partially or completely forgiven. The loan can be up to 2.5 times your average monthly payroll and associated costs.  The loan amount will be based upon 2019 expenses for wages paid by your business (up to $100,000 per employee), costs for retirement plans, health insurance, self-employment earnings (again capped at $100,000/year), and state or local taxes imposed on wages. There have been some concerns over the funding running out, but Congress has take additional action to increase the funding of this program, so contact your banks for more information.

Resource: COVID-19 Emergency Legislation Offers Substantial Relief to Employers (CARES Act), https://www.adp.com/spark/articles/2020/03/covid-19-emergency-legislation-offers-substantial-relief-to-employers.aspx and US Department of the Treasury, Assistance for Small Businesses, https://home.treasury.gov/policy-issues/top-priorities/cares-act/assistance-for-small-businesses

Fixing an Estate Plan Mistake

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When an issue arises with your estate planning documents, you need to seek the assistance of a qualified and experienced estate planning attorney, who knows to fix the problems or find the strategy moving forward.

Generally speaking, an irrevocable trust can’t be revoked. However, in some circumstances, it can be modified or changed with a Court order. The trust may have been drafted to allow its trustees and beneficiaries the authority to make certain changes in specific circumstances, like a change in the tax law.

Those kinds of changes usually require the signatures from all trustees and beneficiaries, explains The Wilmington Business Journal’s recent article entitled “Repairing Estate Planning Mistakes: There Are Ways To Clean Up A Mess.”

Another change to an irrevocable trust may be contemplated if the trust’s purpose may have become outdated or its administration is too expensive. An estate planning attorney can petition a judge to modify the trust in these circumstances when the trust’s purposes can’t be achieved without the requested change. Remember that trusts are complex, and you really need the advice of an experienced trust attorney.

Another option is to create the trust to allow for a “trust protector.” This is a third party who’s appointed by the trustees, the beneficiaries, or a judge. The trust protector can decide if the proposed change to the trust is warranted. However, this is only available if the original trust was written to specify the trust protector.

A term can also be added to the trust to provide “power of appointment” to trustees or beneficiaries. This makes it easier to change the trust for the benefit of current or future beneficiaries.

There’s also decanting, in which the assets of an existing trust are “poured” into a new trust with different terms. This can include extending the trust’s life, changing trustees, fixing errors or ambiguities in the original language, and changing the legal jurisdiction. State trust laws vary, and some allow much more flexibility in how trusts are structured and administered.

The most drastic option is to end the trust. The assets would be distributed to the beneficiaries, and the trust would be dissolved. Approval must be obtained from all trustees and all beneficiaries. A frequent reason for “premature termination” is that a trust’s assets have diminished in value to the extent that administering it isn’t feasible or economical.

Again, be sure your estate plan is in solid shape from the start. Anticipating problems with the help of your lawyer, instead of trying to solve issues later is the best plan.

Reference: Wilmington Business Journal (Jan. 3, 2020) “Repairing Estate Planning Mistakes: There Are Ways To Clean Up A Mess”

What Estate Planning Documents Does My Child Need Now That She’s an Adult?

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Your child may graduate from high school and head off to college or start a full-time job or vocational training program.

Although they’re still your children, the law sees them as are adults. As a result, parents’ “rights” to protect their adult children or make decisions for them immediately becomes quite limited. This remains the same, even if they have moved back home with you during California’s Stay at Home orders.

The Tewksbury Town Crier’s recent article, “Is your child turning 18? Here’s what you need to know,” explains that people often have an estate planning attorney draft the appropriate documents, so they will be legal and binding. Let’s look at a list of documents to consider and discuss with your young adult:

  • HIPAA Authorization: if your 18-year-old has a job in another state or will be attending college and needs medical records or assistance making appointments, ask them to go to the doctor’s and dentist’s office and sign forms that designate agents to act on their behalf. Due to HIPAA laws, information can’t be released without the adult child’s permission.
  • Healthcare Proxy: Have your 18-year old complete this document, make a copy, put a copy on each parent or guardian’s phone and put a copy on your child’s phone. This is for an emergency, like when the child can’t speak for themself. However, don’t wait for an emergency. If your child is at college, the school will only contact you as the emergency contact, but the proxy is between you and the hospital and includes mental health issues. A healthcare proxy lets you to participate in life and death decisions, should your child not be able to advocate for herself.
  • Durable Power of Attorney: A general durable power of attorney or financial power of attorney must also be signed by the 18-year old, designating their parents, guardians, or others as agents authorized to act on their behalf. This allows the agent access to financial information so that they can participate in the financial issues with a university or business in the event that the child cannot.
  • FERPA: This is an educational records release, which allows the educational institution to share grades, transcripts and other related materials with parents or designated agents. Without it, the school will not provide you with access to any information.

Finally, encourage your young adult family member to register to vote.

Reference: Tewksbury Town Crier (December 8, 2019) “Is your child turning 18? Here’s what you need to know”

Be Aware of Probate

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Probate is the legal process that happens after a person dies without a proper estate plan. The court accepts the deceased’s last will, and then the executor can carry out the instructions for the deceased’s estate. However, first he or she must pay any debts and sell assets before distributing any remaining property to the heirs.

If the deceased doesn’t have a will, the probate court will appoint an administrator to manage the probate process, and the court will supervise the process. The Million Acres article entitled asks, “Probate Explained: What Is Probate, and How Does It Work?”

When the will is proven to be legal, the probate judge will grant the executor legal rights to carry out the instructions in the will.

When there’s no will, the probate process can be complicated, because there’s no paper trail that shows what assets belong to what heirs. Tracking down heirs can also be challenging, especially if there’s no surviving spouse and the next of kin is located in a different state or outside the U.S.

Many executors will partner with a probate attorney to help them through the probate process, as well as to assist in filing the required paperwork, notifying creditors, filing taxes and distributing assets. The deceased’s assets must first be located and then formally appraised to determine their value.  Creditors must also be notified after death within a specified period of time.

After the creditors, taxes and fees have been paid on behalf of the estate, any leftover money or assets are distributed to the heirs.

The probate process can be lengthy. Things that can lengthen the process include the state when the deceased was a resident, whether there is a will and whether it is contested by the heirs. The more detailed the will, the simpler the probate process.

The probate process can be expensive, because of court filing fees, creditor notice fees, appraisal fees, tax preparation and filing fees and attorney fees. All of these fees are subtracted from the proceeds of the estate.

Estate planning with a qualified estate planning or elder law attorney involves taking the proper actions to avoid probate. This can reduce the burden for the surviving heir(s) and reduce costs, fees and taxes. Ask your attorney about some of the steps you can take before death to avoid probate.

Reference: Million Acres (Jan. 17, 2020) “Probate Explained: What Is Probate, and How Does It Work?”

The High Cost of Medicare Mistakes

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A 68-year-old woman knew that she had to sign up at age 65 for Medicare Part A for hospital care and Part B for outpatient care, since she did not have employer-provided health insurance from an employer with 20 or more employees. She knew also that if she did not have health insurance from an employer and didn’t sign up immediately, she’d face a penalty with higher Part B and Part D premiums for the rest of her life when eventually she did sign up, reports Forbes in the article “Beware Medicare’s Part B Premium Penalty And Surcharge Traps.”

Here’s where it got sticky: she thought that Medicare provided an eight-month special enrollment period after one job ended to apply penalty-free. She is employed on a sporadic basis, so she thought she had a window of time. Between the ages of 65 and 68, she had several jobs with large employers and was never out of work for more than eight months.

She was out of work for 25 months total between ages 65 and 68, when she was not enrolled in Medicare. She thought that since she was never out of work for more than eight months, she didn’t have to sign up until she officially stopped working and would then enroll penalty-free in traditional Medicare Parts A, B, and D.

She had read information on the Medicare website and her interpretation of the information was wrong. It was a costly mistake.

In determining whether you need to permanently pay a Medicare Part B penalty, Medicare counts up all the months between age 65 and the month you first enroll in Part B, even if you have a job with a large employer with no gaps in employment for more than eight months.

She got hit with a 20% lifetime Medicare Part B premium penalty. For every 12 months that you’re not covered by Medicare B after reaching 65 and before you enroll, the penalty is an additional 10%. And making things worse, she was hit with a Medicare Part B penalty based on the cumulative (not consecutive, which is an important difference) 25 months that she went without credible prescription drug coverage.

This is the sort of problem that does not self-resolve or get better over time. In this case, another mistake in timing is going to hurt her. She sold some assets and realized a capital gain in 2018, which increased her Modified Adjusted Gross Income (MAGI). In 2020, she’s going to have to pay the Income Related Monthly Adjustment Amount (IRMAA). If your MAGI, two years before the current year, is less than $87,000, you are exempt from IRMAA in the current year. Her cost: $1,735.20 more this year. Had she instead realized those capital gains over the course of several years, her 2018 MAGI might not have crossed the $87,000 threshold. Most people are not aware of the IRMAA and take capital gains in larger amounts than they need.

This is a harsh lesson to learn, at a time in life when there’s not a lot of flexibility or time to catch up. Talking with an estate planning lawyer about Medicare and about tax planning, as well as having an estate plan created, would have spared this woman, and countless others, from the harsh consequences of her mistakes.

Reference: Forbes (Jan. 29, 2020) “Beware Medicare’s Part B Premium Penalty And Surcharge Traps”

FREQUENTLY ASKED QUESTIONS

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1. Are you still open?

Yes!  We are open during our normal hours as follows:

Monday -Thursday                 9:00 am to 5:00 pm

Friday                                        9:00 am to 12:00 pm

Saturday-Sunday                    Closed

 

2. Is anyone in the office?

The majority of our staff are working from home, but we are still answering phones and conducting meetings virtually.  When it is necessary for our staff to be in the office, we are practicing social distancing and working hard to adapt and maintain best practices as we become informed.

Our goal is to keep providing you with excellent service while we all navigate the new circumstances with COVID-19.

 

3. Can I get my estate plan done?

Yes, we are still preparing estate plans and working on a signing procedure that will allow you to get your complete estate plan done from the comfort of your own home. There are options for how to still get your estate plan done and we can help you navigate the choices that work the best for you.

 

4. Do you have any availability?

Absolutely! If you call our office during regular business hours, we will return your call promptly. If you call after hours, we will return your call the next business day. The staff and attorney will continue to take consults and have meetings via phone as needed to help you get the legal services you need.

 

5. What documents do I need?

This is best answered by the attorney after you have a conversation about your goals. Everyone’s situation is personal to them, so we recommend reviewing our past blog posts on various types of documents available and speaking with one of our attorneys to discuss what may be ideal for you.

 

6. What should I be doing right now?

Information on best practices for COVID -19 is updated frequently.  To help you stay up to date on the latest information from local, state, and federal guidance we have created links to important websites below:

Placer County COVID-19 guidance

Sacramento County COVID-19 guidance

California COVID-19 information page

California Secretary of State information page

Center for Disease Control (CDC) COVID-19 information page

 

When you are ready you can request a consultation here.  Or call us at 916.625.6556.

Five Estate Planning Mistakes to Avoid

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While it’s true that no estate is completely bulletproof, there are mistakes that people make that are big enough to walk through, while others are more like a slow drip, draining retirement finances in a slow but steady process. There are mistakes that can be easily avoided, reports Comstock Magazine in the article “Five Mistakes to Avoid When Planning Your Estate.”

  1. Misunderstanding Estate Law. Some people are so thrown by the idea of an estate plan, that they can’t get past the word “estate.” You don’t need a mansion to have an estate. The term is actually used to refer to any and all property that a person owns. Even modest people need a plan to help beneficiaries avoid unnecessary costs and stress. Talk with an estate planning attorney to learn what your needs are, from a will to trusts. Make sure that this is the attorney’s key practice area. A real estate or personal injury attorney won’t have the same knowledge and experience.
  2. Getting Bad Advice. It takes a team to create a strong estate plan. That means an estate planning attorney, a financial advisor and an accountant. Be wary of firms that focus entirely on selling trusts. There’s definitely a role for trusts in estate plans, but there are many other tools that are needed. Buying an insurance policy or an annuity is not an estate plan.
  3. Naming Yourself as a Sole Trustee. Naming yourself as a sole trustee puts you and your estate in a precarious position. What if you develop Alzheimer’s or are injured in an accident? A trusted individual, a family member, a longstanding friend or even a professional trustee, needs to be named as a backup trustee to protect your interests if you should become incapacitated.
  4. Losing Track of Assets. Without a complete list of all assets, it’s nearly impossible for someone to know what you own and who your heirs may be. Some assets, including retirement funds, life insurance policies, or investment accounts, have named beneficiaries. Those people will inherit these assets, regardless of what is in your will. If your heirs can’t find the assets, they may be lost. If you don’t update your beneficiaries, they may go to unintended heirs—like ex-spouses. Your attorney should help you compile that list to make sure that your successor agents and beneficiaries are informed.
  5. Deciding on Options Without Being Fully Informed. When it comes to estate planning, the natural tendency is to go with what we think is the right thing. However, unless you are an estate planning attorney, chances are you don’t know what the right thing is. For tax reasons, for instance, it may make sense to transfer assets, while you are still living. And for other reasons, it might be best to wait until you pass to transfer the assets. However, that might also be a terrible idea, if you choose the wrong person to hold your assets or don’t put them in the right kind of trust.

Estate planning is still a highly personal process that depends upon every person’s unique experience. Your family situation is different than anyone else’s. An experienced estate planning attorney will be able to create a plan and help you to avoid the big, most commonly made mistakes.

Reference: Comstock Magazine (Dec. 2019) “Five Mistakes to Avoid When Planning Your Estate” 

Aretha Franklin’s Niece Resign as Executor

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Sabrina Owens, the niece of soul singer Aretha Franklin, recently announced her resignation as executor in court filings, stating: “Given my aunt’s love of family and desire for privacy, this is not what she would have wanted for us, nor is it what I want … I hope that my departure will allow the business of the estate to continue, calm the rift in my family and allow me to return to my personal life.”

Rolling Stone’s recent article entitled “Aretha Franklin’s Niece Resigns as Estate Executor” reminds us that Franklin died in August of 2018, and, because she reportedly was intestate, Michigan law states that her assets are to be distributed equally among her four sons. Her sons agreed upon Owens as executor, but new family politics came up last May after three wills allegedly authored by Franklin were discovered in a notebook under some couch cushions.

“That is when relationships began to deteriorate with the heirs,” Owens wrote of the discovery of the wills. She added that she accepted the executor role on the condition that “no fractured relationships develop within the family” and that the family “did not end up in court disputes over disagreements with the Estate.” Both, Owens wrote, have happened.

Owens’ resignation, however, will not become effective immediately. Instead, she will keep serving as executor for the immediate future. It’s also unknown who will be appointed executor after she does leave.

Franklin’s youngest son, Kecalf, has attempted to gain control since one of the documents from 2014 appears to state that Franklin wanted him to take on that role (in August, a probate judge approved Kecalf’s request to have a handwriting expert analyze the documents that were found).

Although Kecalf has the support of his brother Edward, his plan is opposed by Franklin’s third son, Ted White, as well as the guardian for her eldest son, Clarence, who has special needs.

A hearing on the future of the estate is scheduled for early this spring.

The ongoing battles surrounding Franklin’s estate continue, as it gets ready for two significant posthumous projects: one is a biopic movie starring Jennifer Hudson, “Respect.” The other is an installment in the biographical anthology series, “Genius,” with Cynthia Erivo playing Franklin (both are currently in production).

In the last year, Owens, as executor, oversaw the release of the documentary, ‘Amazing Grace,” while at the same time managing the estate’s complicated finances, including $6.3 million owed to the IRS in back taxes.

Reference: Rolling Stone (Feb. 3, 2020) “Aretha Franklin’s Niece Resigns as Estate Executor”