How to Stop the In-fighting Over Caring for Aging Parents

Remember when you were growing up and had constant squabbles with a sibling, sometimes escalating into wrestling matches? Even though we become adults, difficult sibling dynamics sometimes remain. If you and your close relatives have different opinions and ways of doing things and are not shy about vocalizing your differences, caring for your aging parents might be a challenge. Here are some suggestions about how to stop the in-fighting over caring for aging parents.

Why Siblings Disagree Over Caregiving of Parents

There are many reasons why siblings argue over the care of their aging parents. Some of these include:

  • Decades-old family dynamics. As silly as it sounds, an older sibling might give a younger sibling’s input no respect because, at an emotional level, the older sibling still sees the younger sibling as the “baby of the family.” It can be hard to change a mindset and see our relatives as who they are now, instead of who they were in our childhood.
  • Habit of conflict. Some siblings have always clashed. Their knee-jerk response to any interaction is to fight with each other. The best way to get one sibling to oppose an idea, is to tell him it was his sister’s idea. These adults will not be able to work together until they learn different ways to interact with each other.
  • Control issues. Some people (okay, many people) have control issues. They like to boss people around and tell others what to do. It must be “their way or the highway.” If they are not in charge and issuing orders, they are unhappy. It is difficult, if not impossible, to work with people like this on a collaborative level.

In these situations, there are three possible outcomes:

  1. The siblings will have constant arguments and bickering.
  2. One sibling will give up and let the other do whatever she wants.
  3. The siblings will change the way they interact and learn how to work together productively without squabbles.

In families with a lot of different opinions and disagreements, #1 and #2 are likely the standard ways they have interacted with each other all of their lives. Here are some ways people can put those unhealthy options behind them and achieve the third outcome. It can be useful to work with a counselor or psychologist, particularly early on in the process.

  • Common vision. All of the siblings need to realize this situation is not about them. The common goal is taking care of their parents. The aging parents will suffer if the siblings spend their time and energy fighting instead of making rational, collaborative decisions for the benefit of the parents. Every sibling needs immediate access to all the available information, like evaluations from medical professionals and information on things like assisted living facilities. No sibling should keep information from the others because all the siblings are working to take care of the parents. Keeping information to oneself is a control issue.
  • Rethink disagreements. Some people bristle when a sibling expresses an opinion, as if doing so is being critical or negative. Avoid the temptation to see conflict where there is none. Realize that brainstorming a variety of different alternatives can help your family come up with the best ideas for your parents. Set ground rules for the conversations, forbidding snarky comments and personal attacks.
  • Split up the work. Some people do work better independently. Some relatives will never be able to sit in a circle and sing kumbaya together. In these situations, it’s best to divide up the work and agree not to interfere with another sibling’s area. For example, one sibling might handle the finances, another the doctor appointments and another the assisted living center issues for the aging parents.

Reference: AARP. “Stop Competing for Caregiving Control.” (accessed May 30, 2019) https://www.aarp.org/caregiving/life-balance/info-2018/siblings-competing-for-control.html

ACHD’s and Dementia

It’s wise for anyone older than 55 to have an advance health care directive in place, should they become incapacitated, so a trusted agent can fulfill the patient’s wishes in a dignified manner. But what do you do if a loved one who may be incapacitated didn’t have the chance to plan ahead?

In the recent article, “What to do in absence of advance directive” by The Roanoke Times, a doctor advises readers to talk to an experienced elder care attorney to coordinate the necessary legal issues that may arise a parent or other loved one may be exhibiting symptoms of dementia with no advance health care directive in place. After consulting with an attorney, ask your physician for an evaluation consultation for your loved one with a board-certified geriatrician and a referral to a social worker to assist in navigating the medical system.

As a family’s planning starts, the issue of legal capacity (frequently referred to as “competency” by some physicians) must be defined. Dementia or a diagnosis of Alzheimer’s disease doesn’t necessarily indicate a lack of capacity. At this point, a patient still has the right to make his or her own financial and life decisions—despite family members disagreeing with it. A patient’s capacity should be evaluated after a number of poor choices or an especially serious choice that puts a patient or others at risk.

An evaluation will determine the patient’s factual understanding of concepts, decision-making and cogent expression of choices, the possible consequences of their choices and reasoning of the decision’s pros and cons. Healthcare professionals make the final determination, and these results are provided to the court.

If a patient passes the evaluation, they are deemed to have the mental capacity to make choices on their own. If they cannot demonstrate competency, an attorney can petition the court for a competency hearing, after which a trustee may be appointed to oversee their affairs.

The time to address these types of issues is before the patient becomes incapacitated. The family should clearly define and explore the topics of advance health care directives, estate planning, and powers of attorney now with an experienced elder law attorney.

Taking these proactive actions can be one of the greatest gifts a person can bestow upon themselves and their loved ones. It can give a family peace of mind. If you put an advance health care directive in place, it can provide that gift when it’s needed the most.

Reference: Roanoke Times (June 17, 2019) “What to do in absence of advance directive”

A Love Letter to Your Family

For the 70% of Americans who do not have an estate plan, the article “Senior Spotlight: Composing the ‘family love letter’” from the Lockport Journal should help you understand why it is so important to set one up. One reason why people don’t take care of this seemingly simple task is because they don’t fully understand why estate planning is needed. They think it’s only for the wealthy, or that it’s only for old people, or that it’s only about death and taxes.

Consider this idea: an estate plan is actually about protecting yourself while you are alive, protecting your family when you have passed, and leaving a legacy for those you have left behind.

The main elements of an estate plan are: 1) create and execute documents that provide for incapacity and death, and 2) provide information about and guidance to help navigate your assets, liabilities and wishes.

You’ve spent a lifetime accumulating assets. It is now time to sit down with family members and have a heart-to-heart talk about the details of the estate and what your intentions are with respect to its distribution. The subject of death can be challenging for all. However, discussing your estate plan is vital if you want to protect your family from what might come after you are gone. Each family has its own goals, so it’s a good idea to talk about it frankly while you still can.

Even though these topics may be hard to bring up, not having those discussions significantly increases the chances of your family having conflict and choosing sides, assets not going where you had intended, and unnecessarily higher costs in taxes and legal fees.

If speaking about this is too hard, you may want to write your family a love letter. It would contain all the information that your family would need at the time of your death or your incapacity due to illness or injury. That includes a power of attorney, a health care directive, and maybe other documents depending on your situation.

Ideally, all this information will be located in one convenient place. Don’t put it on a computer where you use a password. If the family cannot access your computer, all your hard work will be useless to them. Put it in a folder or a notebook, that is clearly labeled and tell family members where it is.

They’ll need this information:

  • A list of your important contacts — your estate planning attorney, financial advisor, CPA, insurance broker and medical professionals.
  • Credit card information, frequent flier miles.
  • Insurance and benefits including all health, life, disability, long-term care, Medicare, property deeds, employment and any military benefits.
  • Documents including your trust, will, power of attorney, birth certificates, military papers, divorce decrees, and citizenship papers.

Think of these materials and discussions as your opportunity to make a statement for the future generation. If you don’t have an estate plan in place already or if you have not reviewed your estate plan in more than a few years, it’s time to make an appointment for a review. Your life may have not changed, but tax laws have, and you’ll want to be sure your estate is not entangled in old strategies that no longer benefit your family.

Reference: Lockport Journal (Feb. 16, 2019) “Senior Spotlight: Composing the ‘family love letter’”

What’s the Latest on Rapper Nipsey Hussle’s Estate?

Nipsey Hussle’s ex-wife, Tanisha Foster, may be set to request that she be appointed administrator, giving her access to Nipsey’s millions.

Hussle’s estate is estimated to be worth $2 million. Pursuant to California law, that money would be shared equally between his two children. They are 10-year-old Emani, whom he shared with Tanisha, and two-year-old Kross, whom he fathered with his longtime girlfriend Lauren London.

As previously reported, Samiel Asghedom, aka Blacc Sam, recently filed legal documents making a request to be designated as the administrator of his younger brother’s estate because Nipsey died without a will. A judge will make a ruling on this request early this summer.

iHeartRadio’s recent article, “Nipsey Hussle’s Ex Wants Access To His Money; Plans To Take Family To Court” notes that Tanisha is also fighting for custody of the daughter she shared with Nipsey. A judge recently ruled that Nipsey’s sister Samantha Smith would maintain custody of his 10-year-old daughter for the time being.

If Tanisha is someday awarded custody of Emani, she would have some say in the handling of the money the girl is set to receive from her father’s estate. Tanisha was recently seen storming out of the courtroom, after the judge’s ruling to give temporary custody to Samantha. In tears, she said that she was “pissed off” about this decision. There’s another court hearing to discuss the custody of Emani scheduled for July.

Nipsey’s ex-wife claimed Samantha took custody of Emani after the rapper was killed in late March and refused to return her. In court documents, Tanisha objected to Samantha’s earlier filing to be named guardian of the 10-year-old, arguing that her biological ties support the fact that she should be awarded custody.

Tanisha also claimed that Emani was visiting her father Nipsey on the day he was murdered and said that Samantha “unlawfully took the minor and as of this date, despite objector’s demand, refused to return the minor to Objector.” She also said she believes “the best interests” of Emani are not being served by Samantha’s “act of removing the minor from her mother’s custody; and by refusing contact between minor and mother.”

Samantha submitted an emergency request to be appointed as temporary guardian to Emani in April. However, that motion was denied, after a judge said there was “No urgency demonstrated for granting this relief prior to the hearing on May 14th.”

Reference: iHeartRadio (May 22, 2019) “Nipsey Hussle’s Ex Wants Access To His Money; Plans To Take Family To Court”

A Lesson in Retirement from Pro Athletes

Preparing for retirement and avoiding the stress of strained budgets is something that everyone can relate to. Most people who are 65 and older rely on Social Security as their primary source of income, as reported in Money’s article “What Former Pro Athletes Can Teach Us About Preparing for Retirement.”

Staying financially healthy as you get older comes from following some core principles that apply whether you are running defense for the National Football League or working your way up the corporate ladder.

Here are a few good lessons from professional athletes that can help you to prepare for your own retirement:

Live Below Your Means. With an average salary of $1.9 million, it sounds like athletes have lots of spending cash. However, remember that they have a payroll of their own: an agent, a financial advisor and maybe personal trainers and nutritionists. They also have to pay substantial taxes on their income. Smart players, like Cincinnati Bengal’s Andrew Hawkins, waited to buy a luxury car until he had a nest egg secured.

The NFL has one of the best 401(k) programs around, with a two-to-one match. Hawkins makes sure to max that out and told his fellow players to do the same. Not taking advantage of any type of matching program is just like leaving money on the table. Investing in a retirement account is something we should all do, but particularly if your employer offers a matching program.

Contributing to 401(k) and IRAs may not be as sexy as driving a Lamborghini or investing in an IPO, but they offer a great deal more security.

Retired hockey player and assistant coach for the Tampa Bay Lightning, Jeff Halpern, said that when players go out to dinner with each other, they spend like crazy, picking up bar tabs, and paying for everyone’s meal. The tendency is to spend more when you earn more—it even has a name: “lifestyle inflation.” Steer clear, and you’ll save more.

Don’t Bank on Future Income. One of the biggest mistakes that athletes make is to spend the income they don’t have. They spend every dime of their first big contract and say they’ll save when they get a second contract. However, injuries are common, and if the second contract never comes, they’re left with nothing.

For the average worker, salary growth works differently. Average workers with college degrees peak around 40 for women, and 49 for men. The average NFL player? Age 21.

Although later than an athlete’s peak earnings, the average worker’s peak salary occurs earlier than people think. The years before retirement are the years when you should be saving most aggressively for retirement. However, many don’t have that option. More than half of all workers are laid off when they are 50 and older, or they leave jobs under financially difficult circumstances, according to an analysis by ProPublica and the Urban Institute.

If you wait until your 50s to start seriously saving for retirement, it may be too late.

Plan in Advance for Transitions. Not all NFL players are able to move to the broadcast booth with smooth success. Smart professional athletes start thinking about their second careers, while they are still playing.  This lets them take advantage of their name recognition and get meetings with people who might not otherwise know who they are.

Networking while successful is good for everyone, for both athletes and “regular” people. Most Americans hold an average of 12 jobs in their lifetime. Lay the groundwork for your next job, while you are well employed at your current job. Testing the waters is easier when you have the security of a regular paycheck.

Saving for retirement never really ends, up until the date that you stop working. You can never be too early, noted Hawkins, but you can definitely be too late.

Reference: Money (Feb. 17, 2019) “What Former Pro Athletes Can Teach Us About Preparing for Retirement”

No Matter How Young—Or Young at Heart—You Need an Estate Plan

Two out of every five people over 45 years old don’t have a prepared will. Many of them have not thought about estate planning. It doesn’t take that much to do the planning necessary to help family members who survive you, according to the Lebanon Democrat’s article “End-of-life planning beneficial no matter your age.”

The planning you do will also help your family avoid the nasty disagreements that so often happen, when no one has been told what is going to occur after a parent dies. It will help your loved ones who may not know what you would have wanted after you pass: a funeral, a big memorial service, graveside services only or even cremation.

If you die without a will, which is known as dying “intestate,” all of your assets, from bank accounts to your favorite table saw could be awarded to someone, based on the judgment of a court-appointed administrator. This person won’t know that you had a nephew who you’d promised your woodworking tools and that would include the table saw.

Start by meeting with an estate planning attorney in your community. The laws that govern estate planning are based on your state’s law, so an attorney from another state may not be familiar with the big or small differences in your state versus another state. The same goes for online wills: unless they are reviewed by an attorney in your state, you won’t know if they are valid. Your family will find out, after you have passed, and they can’t make changes. That’s probably not how you want to be remembered.

If there’s a senior citizen in the family, ask them if they have prepared any estate planning documents. It’s best to do this, while they are still competent. You never know what tomorrow might bring–and that holds true for people of all ages. Many people become incapacitated unexpectedly, at all ages and stages of life. Prior planning prevents a bad situation from becoming much worse.

Here’s what your estate planning attorney will speak with you about:

Who do you want to be in charge of your estate? It should be someone you trust without reservation. That person will become your executor or trustee, when you die.

Who do you want to receive certain possessions? We tend to think about who will inherit a house or a car, but many families argue over sentimental possessions, like jewelry or art. Epic battles have occurred over items with little monetary value.

Your estate planning attorney will ensure that you also have an advance health care directive (also known as a living will), since you’ll need this, if you have to go to the hospital or long-term care facility and are not able to speak up for yourself.

Update your estate plan as time goes on. Families grow and shrink, and your estate plan needs to reflect your changing life. What if the person you named as executor or trustee dies, or moves far away? You’ll want to make sure there are people who can carry out the responsibilities you want.

Don’t forget to tell your executors/trustees that they have been named and make sure they are up for the tasks. If you have an argumentative family, will your executor/trustee be able to stand up to them? Personality is as important as understanding legal and financial issues.

Your estate planning attorney will be able to guide you through any rough spots, or issues you might be struggling with. It is better for you and the ones you love to have an estate plan, regardless of your age or health. Life changes come quickly, and it’s best to be prepared.

Reference: The Lebanon Democrat (Jan. 18, 2019) “End-of-life planning beneficial no matter your age”

Stretch IRA May be Disappearing Soon

Short of calling your representatives in Congress and hollering, there’s not much any of us can do about a proposed change to the rules that govern stretch IRAs, reports nj.com in the article “Your kid’s inheritance could take a giant tax hit if these bills become law. Thanks, Congress.”

For years, non-spouse beneficiaries who inherit IRAs have had the ability to stretch out required distributions over their lifetimes. That meant that inherited IRAs could say safe and sound out of the IRS’s reach, except for annual distributions that were quite small. If a grandchild inherited the IRA, the wealth stretched even further.

Depending on the final details of the legislation, the only people who will be able to stretch an IRA will be spouses.

Current rules require non-spouse beneficiaries to take required minimum distributions (RMDs) every year over the course of their life expectancy, as per the IRS life expectancy tables. Because they are taken over the lifetime of a younger beneficiary, they can be small. This means the impact of the distribution on the individuals’ income taxes are minimal and the IRA can grow tax-deferred over a long period of time.

Congress is looking for revenue, and the wealth of Americans in IRA accounts is in their sight lines.

First, the House passed the SECURE Act, which says that beneficiaries must completely empty their inherited IRAs within 10 years of ownership. The Senate then passed the RESA Act, which is a little different. It would allow a stretch for the first $450,000 of aggregated IRAs, then anything over that would have to be distributed within five years.

Both bills call for changes to apply to inherited IRAs and inherited Roth IRAs for deaths after December 31, 2019. What’s the bottom line? The Joint Committee on Taxation expects that these changes, if they become law, will yield $15.7 billion—with a “B”—in additional tax revenue through 2029.

The government would eventually get this money anyway, but this speeds things up considerably.

Let’s compare and contrast. An 80-year old woman has a traditional IRA worth $1 million. She dies and her 55-year-old daughter is the primary beneficiary. Under the current rules, the daughter’s first RMD is roughly $35,000. If the 25-year-old granddaughter was the beneficiary, the RMD would be roughly $18,000.

If the account earns an average of 5% annually, under the current rule, the granddaughter would have distributions of some $220,000 over ten years. If she had ten years to take the money out, she’d have about $1.3 million in distribution. Under the current rule, the account would have a $1.3 million balance after ten years, since the principal would continue to appreciate. Under the proposed rules, after ten years, it would be zeroed out.

The forced larger distributions will push heirs into higher tax income brackets. That will be followed by increased Medicare premiums, as heirs retire with higher income. Add to that: higher capital gains rate, from as low to zero to as high as 20%. If that’s not bad enough, it could also trigger the 3.8% net Investment Income tax.

One option is to move funds from a regular IRA to a Roth IRA, assuming the investor meets all the requirements to do so. The Roth IRA distributions would not be taxable (unless those laws change) but that also requires the current owner to pay taxes on funds moved to the Roth IRA.

Another option is to consider a Charitable Remainder Trust (CRT) that names a charity as the IRA beneficiary. Upon the death of the owner, the IRA is distributed to the CRT, and the IRA owner’s heir would receive a fixed percentage of the CRT’s value for the remainder of their lives. When the heir dies, the money in the CRT goes to a charity or charities designated by the IRA owner, when the trust was created.

For now, these are proposed pieces of legislation, but chances are good they will be passed soon. Now is a good time to meet with your estate planning attorney to do what you can to protect your IRA and the stretch IRA of your children’s inheritance.

Reference: nj.com (June 10, 2019) “Your kid’s inheritance could take a giant tax hit if these bills become law. Thanks, Congress”

What Will Anderson Cooper Inherit From his Mother Gloria Vanderbilt?

The 95-year-old Gloria Vanderbilt was “a vestige of another era, reminiscent of Brooke Astor in her longevity and tangible connection to the Gilded Age of railroad and oil barons, who left their mark on New York society,” said Trust Advisor in its recent article, “Does A Long Island Landscaper (And Not Anderson Cooper) Inherit Gloria Vanderbilt’s Fortune?”

However, unlike Brooke Astor, Vanderbilt was born in the limelight. Her long life started in the center of dynastic politics that got both messy and public. She and her trust fund became commodities in her parents’ divorce.

It’s reported that she had to sell off a few houses to pay the tax bills. Anything left behind is well-hidden in some estate planning documents. With her family fortune dwindling over time, Vanderbilt’s fashion empire came and went. However, the distributions kept coming to fill the holes. The old Vanderbilt fortune may be gone.

Her children and grandchildren built the careers they wanted, investing their inheritances into passion projects, with little or no immediate payday. Some are novelists, filmmakers, and TV journalists. Gloria built a fashion empire of her own.

As the baby, Anderson was closest to his mother. He has probably accumulated the most personal wealth after years on CNN, so he doesn’t need his mom’s money. Her oldest son Stan probably doesn’t need the money either.

Stan has a successful landscaping business in Long Island. Any Vanderbilt money he inherited along the way, is probably well invested.

There’s also a third son, Stan’s brother Chris. He walked out years ago and never really came back, at least publicly. It’s assumed that he was disinherited at the time. Now, no one is sure if Gloria wrote him out of the will. She may have written him back in. There was allegedly a bit of a thaw in the last few years.

But the moral of the story is, with a well-crafted estate plan, the public may (and likely should) never know what she left her children and in what amounts.

Reference: Trust Advisor (June 17, 2019) “Does A Long Island Landscaper (And Not Anderson Cooper) Inherit Gloria Vanderbilt’s Fortune?”

Business Owners Need Estate Plan and a Succession Plan

Business owners get so caught up in working in their business, that they don’t take the time to consider their future—and that of the business—when sometime in the future they’ll want to retire. Many business owners insist they’ll never retire, but that time does eventually come. The question The Gardner News article asks of business owners is this: “Do you have a business succession strategy?”

It takes a very long time to create a succession plan that works. Therefore, planning for such a plan should begin long before retirement is on the horizon. That’s because there are as many different ways to map out a succession plan, as there are types of business. A business owner could sell the business to a family member, an outsider, a key employee or to all the employees. The plan could be implemented while the business owner is still alive and well and working, or it could be set up to take effect, only after the owner passes.

The decision of how to handle a succession plan needs to be made with a number of issues in mind: family dynamics and interest in the business (or lack of interest), the nature of the business, the success of the business and the owner’s overall financial situation.

Here are a few of the more popular strategies:

Selling the business outright. There are business owners who don’t need the money and feel that no one else will care as much as they do about their business. Therefore, they sell it. There needs to be a lot of planning to minimize tax liability, when this is the choice.

Using a buy-sell arrangement to transfer the business. This can be structured in whatever way works best for both parties. It allows a slower transition to new ownership. Some families use the proceeds of a life insurance policy to fund the buy-sell agreement, so family owners could use the death benefit to buy the owner’s stake.

Buying a private annuity. This permits the owner to transfer the business to family members, or someone else, who then makes payments to the owner for the rest of their life, or maybe their life and another person, like a surviving spouse. It has the potential to provide a lifetime stream of income and removes assets from the owner’s estate, without triggering gift or estate taxes.

The plan for succession needs to align with the business owner’s estate plan. This is something that many estate planning attorneys who work with business owners have experience with. They can help facilitate the succession planning process. Talk with your estate planning attorney when you have your regular meeting to review your estate plan about what the future holds for your business.

Reference: The Gardener News (June 4, 2019) “Do you have a business succession strategy?”