What Do I Need to Know About My Own Funeral Arrangements?

You’ve heard about death and taxes. While having a plan for your funeral may not be a big priority, creating a plan for your family when you pass is something everyone should do. WHNT’s recent article, “How to plan for life after death,” says the first step is having that conversation with someone you trust. It may be a close friend, a family member, or an attorney.

The National Institute on Aging has created a comprehensive list of considerations for those who are facing end of life decisions. It’s also a great resource for caretakers. This can help you think about some important considerations like what you want in terms of a funeral service, burial or cremation if you want life insurance to pay your last expenses, and how your estate should be handled. Advanced planning for things like this will may make the process easier for those you leave behind, especially if you work with an experienced estate planning attorney.

There are also some fundamental decisions that can ease the financial burden on your loved ones. The average North American traditional funeral costs between $7,000 and $10,000. This price range includes the services at the funeral home, burial in a cemetery and the installation of a headstone at the cemetery. The National Funeral Directors Association reports that the median cost to move the remains of a loved one to a funeral home in the U.S. is $325. Embalming can run about $725, and the average cost of a vault in the United States is $1,395, as of 2017.

According to the 2018 NFDA Cremation & Burial Report, the 2018 cremation rate is estimated to be 53.5%, and the burial rate is projected to be 40.5%. Forbes says that roughly 42% of people opt to be cremated because of the costs involved with a standard funeral in the United States.

When some people consider these costs, they may think differently about what they would like their family members to plan to commemorate their lives. Writing down what you would like your family members to do for your memorial service can save them significant strain and stress as they cope with losing you, and it can also save them significant costs.

Reference: WHNT (June 30, 2019) “How to plan for life after death”

How to Help Your Elderly Parent Without Ruining Your Relationship

If you have elderly parents, you might have to step in at some point and provide caregiving services. Whether that concept means hands-on personal assistance with things like bathing, dressing, grooming, and feeding, or handling their finances and making decisions for them, this change in your roles can be challenging for you and your parent. Here are some issues to consider about how to help your elderly parent without ruining your relationship.

It’s Usually Not “Leave It to Beaver”

Acknowledge and accept your family dynamics as they are. Many people grow up seeing fictional families on television and wish their parents and siblings got along better. Very few families measure up to the imaginary ones of fiction. You and your parent probably did not have the kind of relationship in which you would regularly get together for coffee or shopping. Quite a few people have strained interactions with their parents.

Relationships carry the baggage of the past. It is not helpful for people to tell you to forget about the past. Your parent is the same person with whom you have had conflict, which means they will continue to do things that upset you. If your parent was extremely authoritarian or independent, it will be difficult for them to accept someone telling them what to do – especially one of their children.

Patience versus Doormat

You should try to be understanding of what your parent is going through, such as losing independence and feeling less valuable or powerful. They might get confused and forget you already did things they now accuse you of not doing. They might also be dealing with chronic pain and other health issues.

You should, however, set boundaries. Getting old does not give your parent a right to be physically, verbally, or emotionally abusive. Be firm with your parent if any of these things happen. Being a dutiful and caring son or daughter does not include being a doormat. Calmly inform your parent of the behavior that is not acceptable. You might need to have someone in social services arrange for counseling to help your parent adjust to the reality of aging and the need for assistance.

The Silver Lining

For some people, this stage of life is a time to deal with unfinished business. For those that have had challenging relationships with your parents, now could be the opportunity where you can talk out problems or questions. You might be able to resolve conflicts that could have caused you regrets down the road. The best approach for this goal to tread lightly. Just because your parent is frail, you do not have the right to beat them up verbally with a long list of criticisms and complaints.

Address only one piece of a small issue in a visit, and do not dredge up unpleasant topics in every visit. You do not want your parent to dread seeing you. Be the kind of person you might wish your parent had been when you were a child – kind, compassionate and nurturing.

Those of you who have enjoyed a happy, healthy relationship with your parents can deepen your mutual affection and interaction. Since your parent is no longer rushing around to work and raise a family, you can have uninterrupted conversations and create memories to treasure. Even people who have had strained relationships might get to reach the point where they have pleasant times with their elderly parents.

References: A Place for Mom. “Parenting the Parent: Caring for Elderly Parents.” (accessed August 21, 2019 ) https://www.aplaceformom.com/planning-and-advice/articles/caring-for-elderly-parents

Don’t Forget to Update Your Estate Plan

There are some people who sign their will once in their life and never change it. They may have executed their estate plan late in life, or after they were diagnosed with a serious disease. However, even if your family life and finances are pretty basic, there are still changes in the law that you may need to incorporate into your estate plan.  Some of the people that you named in your will could also have died or moved away.

Forbes’ recent article, “Why You Should Change Your Will Now,” warns us that if you’ve taken the “one and done” approach to your estate plan, think again. In addition to the reasons already mentioned, your assets may have changed dramatically since you signed your will and other estate plan documents. The plan you put in place years ago may not have considered new federal and state estate taxes. Now that you’ve accumulated significant wealth that will be passed on to your children, you might need to review your plans for that wealth for your children.

You may want to include grandchildren to help pay for their college education. It is also not uncommon for parents to want to protect their children from themselves. This can be because of addiction issues or a lack of financial literacy. If that’s an issue, some parents elect to hold monies in trust for adult children, as a way to ensure that the funds will be there throughout the child’s lifetime.

A person’s estate plan should grow with them over time. An estate plan for a twenty-something may be very basic, but a newly-married couple will want to include provisions for their spouse. Parents need to think about providing for and protecting their children. Adult children have another set of concerns and you need to prepare for the possibility of divorcing spouses, poor life choices, addiction issues, and just poor money management. There are many stages in life when you may need to readjust the provisions for your children in your estate planning documents.

If you haven’t looked at your estate plan in a while, do it now.

Reference: Forbes (August 27, 2019) “Why You Should Change Your Will Now”

What Do I Need to Do Financially, When We Have a Baby?

In addition to all the logistics involved with a new baby, new parents should also take care of financial and legal matters in the months leading up to the big day.

U.S. News & World Report’s recent article, “Financial Steps to Take When You’re Pregnant” reminds us that pregnancy is a terrific time to review your financial life. It’s a great time to assess your budget, emergency savings, estate planning documents, and insurance needs to see if anything needs to be refreshed.

Here are a few things to do to prepare for a new baby:

Employee Benefits. Take a look at your employee benefits or have a conversation with HR to determine how much time you can take off and whether you’ll be paid your salary while on parental leave. This is important because many families are faced with higher living costs by the presence of a new baby, which is often combined with taking parental leave that may cut their take-home pay. New parents may have to use the Family and Medical Leave Act (FMLA), which offers eligible employees 12 weeks of unpaid leave, or tap into short-term disability insurance, which typically only replaces a portion of your salary. The amount you receive in short-term disability will also be impacted by whether you pay premiums with pre-tax or post-tax dollars. If you pay with pretax, your benefit will be subject to taxes, which will decrease the overall amount received.

While reviewing these policies, look at your health insurance and see what kind of prenatal visits and pediatric care are covered. You should also look at the terms of your health insurance policy since you could be liable for health insurance premiums during periods where you are taking leave from work. Also, remember that you’ll need to add your baby to your medical insurance within 30 days of the birth.

Budget. Create a new budget that takes into account changes in your income from taking leave and new expenses from having a new baby. You may have to survive several weeks without your normal level of income, so be sure that you have enough saved up to get through that period. After that, create another budget that considers more long-term expenses associated with the new one, such as the cost of childcare, diapers, and formula, all of which can add up.

Life Insurance. Determine if your current life insurance will meet your needs. If you need more, look at term life insurance. It’s usually affordable and expires after a set term, typically anywhere from 10 to 30 years. This policy payout would help a surviving parent or guardian care for your child.

Estate Planning. Consider who would care for your child if both parents were to die before they turn 18. Talk to family or close friends about who you’d like as the guardian of the child. Talk to an estate planning attorney to update (or create) a will and guardianship choices. In addition, ask about formulating a plan for how inheritance, insurance, and other assets will be handled and disbursed if you die while the child is a minor. A revocable living trust can be one way to direct a future inheritance. You can designate your child as the beneficiary and a relative or close friend as the trustee. The trustee will help decide how the money is spent. This trust is usually included in the will and activates after the death of the person who created it.

Beneficiary Designations. Update any beneficiary designations on your retirement and insurance accounts to include your child, but make sure and ask about meeting requirements for how minors can own property.

529 College Savings Account. You should also look into funding a 529 college savings account but don’t feel pressure to contribute a lot. Making certain that your budget, estate, and insurance needs are tailored to meet your new family dynamic are more pressing concerns.

Reference: U.S. News & World Report (August 29, 2019) “Financial Steps to Take When You’re Pregnant”

Can the Golden Girls Model Work for Families?

Multi-generational living is not exactly new, and as people are living longer, it may start becoming more common. Shared households bring many benefits, including convenience. Why should a nurse’s daughter travel 20 miles a day to take her mom’s blood pressure when living together works better, asks The Mercury’s article “Do shared living arrangements make sense?”

There’s also the benefit of increased financial security. Two households merged into one can share expenses, including mortgages, property taxes, utilities and more.

Whether this works in each case depends upon the situation and the relationships of the individuals involved. If there is flexibility and the relationships are good, it can be a blessing. Imagine grandparents and grandchildren who are part of each other’s lives on a daily basis, rather than a twice-a-year visit. That’s a gift.

The arrangement needs to start with a lot of discussions and understanding the wants and needs of each participant. It needs to be based on reasonable expectations. A happy joint living arrangement can swiftly be derailed, for instance, if parents assume that grandparents are willing to be 24/7 babysitters, or if grandparents consider household chores something only for their children and grandchildren to do.

Joining living arrangements must also address financial considerations, estate planning and everyone’s personal experiences and convictions. What works for one family may not work at all for another. Each family must work through their own details.

Here are some examples where a joint living arrangement works.

Parents and children buy a house together. When parents and children live too far away, and the parent’s house would require too much modification for them to continue to live there, both sell their homes and buy a much bigger home that can be made handicapped accessible. The parents make most of the down payment. The house is titled in joint names. Titling is critical. One half is owned by the father and mother, the other half is owned by the adult child and their spouse. Each half would be tenants by entireties (in states where that form of ownership between spouses is available) as between the spouses, but joint tenants with rights of survivorship as to the whole.

Parent moves in with adult child. A widow or widower comes to live with a son or daughter and their family. The parent makes contributions to the monthly expenses. There is a written agreement, which is very important for Medicaid rules regarding gifting. If modifications need to be made to the house—a mother-in-law suite—a written agreement details who contributed what, so that it is not considered a “gift” by Medicaid.

Adult child moves in with parent. This is a “buy-in,” where an adult child obtains a home equity line of credit to purchase an interest as a joint tenant with right of survivorship. The house can be inherited by paying one-half of the value.

None of these strategies should be done without the help of an elder law attorney who is knowledgeable about Medicaid, estate planning and real estate ownership. When it works, this arrangement can benefit everyone in the family.

Reference: The Mercury (AuG. 28, 2019) “Do shared living arrangements make sense?”

Warnings About Supplement Scams for Dementia

Before you pull out your wallet to hand over your hard-earned money for products that claim to delay, prevent or manage Alzheimer’s disease and other forms of dementia, make sure you are not buying into a supplement scam. There is no established cure yet for Alzheimer’s or dementia, but con artists prey on the fear that people experience when they feel they are becoming forgetful, or the anxiety that fills them as they watch a loved one decline to the point of not recognizing them anymore.

The Journal of the American Medical Association (JAMA) warns that “pseudomedicine” related to dementia prevention and alleged cures has reached epidemic proportions. A recent article contained strongly-worded warnings about dementia supplement scams.

The Scope of the Problem

Americans spend more than $3 billion a year on over-the-counter supplements that claim to improve cognition and brain health. Many of these products use scientific-sounding terminology in their marketing campaigns, which deceive consumers into thinking that there is science behind the supplements.

It’s true that studies show that a couple of ingredients, like vitamin B or the spice curcumin, could possibly support brain health. Be warned, however, that the vast majority of the “fountain of youth” products that make bold claims about warding off dementia is at best placebos and rip-offs.

Why These Fake Treatments Are Dangerous

Let’s say you developed lightheadedness suddenly and there was a product on the market that claimed to treat your symptoms. You bought the product and used it as directed, which perhaps covers the time span of 7-10 days, but to your dismay, it did not relieve your lightheadedness. If you had gone to the doctor during that time instead, she could have discovered your symptoms were the result of a heart condition and given you the proper treatment and suggestions to address the core problem. But because you put false hope in a worthless product, you did not consult the doctor and instead find out about the cardiac condition only once you had a heart attack.

Many people experience signs they think indicate Alzheimer’s disease, but they are actually suffering from a different medical condition. Instead of getting legitimate treatment for their actual illness, they throw away their money on products that make misleading claims and risk a medical emergency for the underlying condition.

The “Pop a Pill” Culture in America

Because of the easy availability of prescription drugs in our country, a culture developed over the last few decades, you can practice all the unhealthy habits you want. If you end up having a disease from the behaviors, it’s easy to believe your doctor can prescribe a pill that will magically cure all your ills.

Instead of having a healthy lifestyle and protecting your brain from harm, quite a few Americans live recklessly, relying on modern medicine to undo all the damage they do to themselves. However, medical research shows that it is much more effective to eat a sustainable, healthy diet for maintaining your health throughout your life. And rather than rely on supplements or pills, you should focus on getting regular physical exercise, learning a foreign language, doing word puzzles and staying socially active to delay or prevent the onset of many diseases, including dementia.

A person might feel that it would be easier to do whatever they want throughout their life and just take a drug to treat any consequences of the damage that an unhealthy lifestyle inflicts on the body. They see supplements that claim to improve brain chemistry and function, so they think there is a safety net. Don’t fall into this trap.

References: AARP. “Don’t Be Taken in by Dementia ‘Pseudomedicine’.” (accessed September 23, 2019) https://www.aarp.org/health/dementia/info-2019/dementia-pseudomedicine.html 

Do It Yourself Estate Planning Leads to Bad Outcomes

While the attraction of simplicity and low cost is appealing for estate planning, the results are all too often disastrous, affirms Insurance News in the article “Mind Your Mouse Clicks: DIY Estate Planning War Stories.” The number of glitches that estate planning attorneys are seeing with clients’ plans and documents has increased, correlating with the uptick in the number of people using online estate planning forms. For estate planning attorneys who are concerned about their clients and their families, the disasters are troubling.

A few clumsy mouse clicks can derail an estate plan and adversely affect the family. Here are five real-life examples.

Details matter. One of the biggest and most routinely made mistakes in DIY estate planning goes hand-in-hand with simple wills, where both spouses want to leave everything to each other. Except this typical couple neglected something. See if you can figure out what they did wrong:

John’s will: I leave everything to my wife Phyllis.

Phyllis’ will: I leave everything to my wife Phyllis.

Unless John dies and Phyllis marries someone named Phyllis, these Wills are not going to work. It seems like a simple enough error, but the courts are not forgiving of errors.

Life insurance mistakes. Jeff owns a life insurance policy and has been using its cash value as a “rainy day” fund. He had intended to swap the life insurance into his irrevocable grantor trust in exchange for low-basis stock held in the trust. The swap would remove the life insurance from Jeff’s estate without exposure to the estate tax three-year rule, and the stock would receive a stepped-up basis at death, leading to tax savings on both sides of the swap.

However, Jeff had a stroke recently, and he’s incapacitated. He planned ahead though, or so he thought. He downloaded a free durable power of attorney form from a nonprofit that helps the elderly. The POA specifically included the power to change ownership of his life insurance.

Unfortunately, Jeff put his own name in the space designated for the agent, which means no agent is actually named with the authority to change his life insurance. As a result, the insurance company won’t accept the form, and the swap isn’t going to happen.

Incomplete documents. Ellen created an online will leaving her entire probate estate to her husband. It was fast, cheap, and she was delighted. However, she forgot to fill in the space where the executor is named. The form was set up so that the website address for the website company is the default information in the form. The court is not likely to appoint the website as her executor. Her heirs are stuck, unless she corrects this, hoping the court will understand. Hope is a terrible estate plan.

Letting the form define the estate plan. Single parent Joan has a 6-year-old son. Her will includes a standard trust for minors, providing income and principal for her son until he turns 21, at which point he inherits everything. Joan met with a life insurance advisor and applied for a $1 million convertible 20-year term life insurance policy and designated that it be payable to the trust. However, her son has autism, and receives government benefits. There are no special needs provisions in her will, so her son is at risk of losing any benefits if, and when, he inherits the policy proceeds.

Don’t set it and forget it. One couple who had a blended family created online wills when the estate tax exclusion was $2 million. They opted for the credit shelter trust (also known as a bypass trust) to reduce their estate taxes, by allowing each of them to use their estate tax exclusion amount. However, the federal estate tax exclusion today is $11.4 million per person. With $4 million in separate assets and a $2 million life insurance policy payable to children from a previous marriage, the husband’s separate assets will go into the bypass trust. None of it will go to his current wife.

An experienced estate planning attorney who is licensed to practice in your state is the best source for creating and updating estate plans, preparing for incapacity, and ensuring that tax planning is done efficiently.

Reference: Insurance News Net (Sep. 9, 2019) “Mind Your Mouse Clicks: DIY Estate Planning War Stories” 

Does Your Family Include A Hoarder?

We all know someone who can’t bear to throw anything out, no matter how small or valueless the item is. When they pass, the family has the dreadful task of cleaning away the mess while grieving. It’s not easy, says Next Avenue in the article 6 Tips for Dealing with the Aftermath of a Family Hoarder.”

For one woman, whose grandmother lived in a one-bedroom apartment only ten miles away from her, the idea of cleaning out her grandmother’s apartment wasn’t bad.

It was terrible.

The grandmother’s spending and hoarding had led to a foreclosure on the home six years after her husband had passed away. Her possessions overflowed from every closet, drawer, and surface. She had 30 large bins filled with craft supplies in the small living room. There were notes and pictures shoved into boxes, with fast-food napkins and outdated receipts.

The apartment was rented, so everything had to be cleared out in thirty days unless the family wanted to pay another month’s rent.

Three weeks and three garage sales later, the apartment was cleaned out. Five large bags of clothing were donated to a local charity. A junk removal service was paid $250 to remove a mattress, couch, and TV. Most of it went to the trash.

Here are six tips for anyone confronted with this difficult task:

  1. If you can help it, don’t do it by yourself. Ask friends or family members to help. If you can afford it, consider a clean-out service.
  2. Find out if there are any instructions in the will. If there are specific directions about possessions, follow them. If not, let close family members make requests before the cleanout starts.
  3. Limit what you keep. You don’t need a full dining room set or a box of costume jewelry to remember a loved one.
  4. Look for easy items to discard first. As soon as possible, get rid of any trash, old food in the pantry, junk mail, etc.
  5. Don’t pinch pennies in a garage sale. Yes, some stuff may be worth top dollar, but your goal is to sell as much stuff as possible. Accept any reasonable offers.
  6. Make “let it go” your personal anthem. Remember that just because you are getting rid of stuff, does not mean you are getting rid of the person or your memories. Handle items fast, get the task done, and move on. It’s like yanking off a bandage–the faster you do it, the better.

Reference: Next Avenue (August 12, 2019) 6 Tips for Dealing with the Aftermath of a Family Hoarder”

Why the Change in Britney Spears’ Conservatorship?

“[Montgomery] shall have the power to communicate with treating and other expert medical personnel regarding [Britney], and to have access to any and all records regarding [Britney’s] medical treatment, diagnosis and testing,” the documents state. “[Montgomery] shall have access to any and all records regarding [Britney’s] psychiatric treatment, diagnosis, and testing.”

MSN reports in its article, “Britney Spears’ Father Jamie Steps Down as Her Conservator After Alleged Altercation with Her Son,” that a Los Angeles court named Britney’s father as the permanent conservator of his daughter’s affairs in 2008. The court also designated permanent co-conservator of her estate, along with an attorney.

During the recent court hearing about Jamie’s removal as conservator, Britney’s attorneys were there on her behalf in court. Also attending were attorneys for ex-husband Kevin Federline, as well as Britney’s mother Lynne, according to The Blast.

As far as the change in conservatorship, a source close to Britney previously told PEOPLE Magazine, “Nothing will change in Britney’s life. Jamie will still get updates about Britney and Jamie will make sure that she is protected against people who want to take advantage of her. [Her mom] Lynne will also be around if Britney needs her.”

The move follows a few days after Jamie filed legal documents to “temporarily relinquish the powers of conservatorship … due to personal health reasons,” according to TMZ.

A source close to the 37-year-old pop star also commented that Jamie “decided to temporarily step down” as his daughter’s conservator after Federline filed a police report accusing him of physically abusing Britney’s 13-year-old son, Sean.

Jamie was told that it would be best to step down temporarily because of the police report. Jamie was hospitalized in late 2018 after a life-threatening colon rupture. When Jamie became ill, Britney took a break to help care for her father. She also entered a wellness facility in April to focus on her own mental health.

On August 24, Jamie reportedly “got very angry” with his grandson, according to The Blast. He allegedly broke down a door to reach Sean. “There was physical contact that made Sean scared and upset,” a source previously told PEOPLE. “Britney got upset as well and ended their visit with Jamie.”

Britney shares 10% of custody of her kids with Federline. She said that she “can’t believe that her dad would jeopardize her relationship with her boys. She’s afraid that she’ll lose custody.”

Reference: MSN (September 9, 2019) “Britney Spears’ Father Jamie Steps Down as Her Conservator After Alleged Altercation with Her Son”

Dividing Property for Married or Maybe-Not-So-Married Spouses

When a marriage doesn’t work out, the couple that wishes to become “un-married” must undergo the legal process of divorce. While a legal separation and divorce can sever the legal ties that bind a couple, very often couples neglect to tidy up and make the separation or divorce final. In that case, says The Pasadena / San Gabriel Valley Journal’s article “Ties that Bind,” they are still married.

The couple may be married in name only, or even estranged from each other, but legally, they are still married, which means that the law still sees them as a married couple as it relates to their rights and obligations towards each other and their property.

Surprisingly, there are many instances where a person dies and after the funeral, when the estate is being settled, it is revealed that the couple was still married. The decedent may have separated from his or her spouse years ago, but they never got legally divorced. Sometimes this is because neither party really wants to bring things to a conclusion. In other instances, they may not want to devote the time or resources to the divorce process, which can be both expensive and painful.

Many of us have also heard of cases where the couple was contemplating divorce, after recognizing that the marriage was no longer working, and one of the spouses died before the legal separation or divorce was obtained.

It is important to remember that marriage is a key factor when it comes to inheritance rights.

The law does not make a distinction between couples who been have separated for decades and those who are happily married. The only question that matters in the eyes of the courts is what the deceased spouse’s status was on the day that she or he died. There are only three answers to that question:

  • Married
  • Divorced
  • Legally Separated

Unless a person has done estate planning and has a will and trust, the spouse is entitled to receive a certain amount of their property. If the decedent lived in a state with community property, like California, the spouse is entitled to receive all the community property (which includes anything earned or acquired during the course of the marriage) and a portion of the separate property.

One of the first things a couple contemplating divorce should do immediately is have their estate plan done, especially in a community property state. This will allow them to make decisions about inheritance, just in case one of them dies before the proceedings are completed.

Marital status is also something that matters in the case of life and death decisions. If a person has a serious accident or becomes ill, a not-yet-divorced spouse may be the only person that the medical team will speak with. When divorce is on the horizon, part of estate plan concerning incapacity must also be addressed: an Advanced Care Directive, also known as a Living Will.

It often takes years to complete a divorce, and many things can happen in the interim. Unless you want your estranged spouse or someday-to-be ex-spouse making decisions and sharing property with you, sit down with an estate planning attorney to outline your wishes and make sure you are protected, even before the divorce is finalized.

Reference: The Pasadena / San Gabriel Valley Journal (Aug. 7, 2019) “Ties that Bind”