Are You Prepared to Age in Place?

If aging in place is your goal, then long-term planning needs to be considered. Some things to think about include how the house will function as you age, whether there will be accommodations for the people who will care for you, and how to pay for the care that you might need, says the Record Online in the article “Start planning now so you can ‘age in place.’”

Many homes will need to be remodeled for aging in place, and those changes could be big or small. Some changes that almost everyone has to consider include installing ramps and adding a bathroom and bedroom on the first floor. Smaller changes include installing properly anchored grab bars in the shower, improving lighting, and changing or updating the floor covering to avoid problems with walkers, wheelchairs or unsteady seniors.

Choosing a caregiver and paying for care is sometimes difficult to think about, oftentimes because they are intertwined issues. Many adult children become caregivers for aging parents, and for the most part, they are unpaid. Family caregivers suffer enormous losses, including lost work, career advancement, income, and savings. Stress and neglect of their own health and family is a common byproduct.

You’ll want to speak with an estate planning eldercare attorney about how or if the parent may compensate the child for their caregiving. If the parent is applying for Medicaid and the payment is deemed to be a gift, it will cause a penalty period, when Medicaid won’t pay for care. A caregiver agreement drafted by an elder law estate planning attorney will allow the parents to pay the children that provide them care without having it be considered a gift or triggering a penalty period. Keep in mind, though, that the child will need to report this income on their tax returns.

The best way to plan ahead for aging in place is to purchase a long-term care insurance policy. If you qualify for a policy and can afford to pay for it, it is a good way to protect assets and income from going towards caregiver costs. You can also relieve the family caregiver from duties or pay them for caregiving out of the insurance proceeds.

Without long-term care insurance, the next option is to apply for community and in-home care through Medicaid to pay for care in the home, if available in your state. To qualify, a single applicant can keep $15,450 in assets plus the house, up to an equity limit of $878,000 and only $878 per month of income. For a married couple, when one spouse applies for community Medicaid, the couple may keep $22,800 in assets plus the house and $1,287 per month of income. If the applicant or spouse is on a managed care plan, the couple may keep even more assets and income.

Another option is spousal refusal, which may allow the couple to keep more assets and income. When an applicant has too much income, a pooled income trust may be used to shelter income from going towards the cost of care. This is a complicated process that requires working with an estate planning attorney to ensure that it is set up correctly.

Self-paying for home care is another option, but it is expensive. The average cost of home health care in some areas is $25 per hour or $600 per day for around-the-clock care. When you get to these costs, they are the same as an expensive nursing home.

Planning in advance with careful analysis of the different choices will give the individual and the family the best picture of what may come with aging in place. A better decision can be made, once all the information is clearly assessed.

Reference: Record Online (Aug. 31, 2019) “Start planning now so you can ‘age in place’”

Can I Keep a Loved One’s Inheritance From Their Spouse?

A recent nj.com article asks, “How do I protect my niece’s inheritance from her husband?” The article asks about a scenario where someone plans to leave most of her estate to her niece but wants to keep the niece’s estranged husband from getting his hands on the money. Although the default laws may vary state by state, no matter where she resides, she must be proactive and intentional about her gifting to make sure the funds go where she intends them to go.

First, there are tax consequences to consider and keep in mind. In states like New Jersey, the money may be subject to the New Jersey inheritance tax, which is assessed if the decedent is a New Jersey resident, regardless of where the beneficiary resides. The tax is levied based on the relationship of the deceased to the beneficiary. In this case, the niece’s inheritance would be subject to an inheritance tax of 15 to 16%.

Next, the aunt needs to decide the manner in which she wants to leave the assets. One option is for the aunt to leave the assets to the niece outright.

The laws in many states, like Missouri, South Carolina, and New Jersey, say that unless the parties otherwise agree, upon divorce there will be equitable distribution of their marital property. Marital property generally doesn’t include the property received by gift or inheritance, as long as that person didn’t commingle it (in other words, mix it up and combine it) with the marital property.

Because there will be no administrative costs, the most economical way to transfer the property to the niece is for the aunt to leave it to the niece in her will, with instructions for her to keep it separate and apart from her marital property. However, this may not be the best way to leave property to the niece, because once it is given to the niece, it is out of the aunt’s control and it may be mixed up with the marital property, in which case the niece’s husband may be able to have access to it.

If, however, the aunt leaves the inheritance in trust, she can make certain the property isn’t commingled with marital assets by drafting a trust that will keep it separate from the rest of the niece’s property. Further, if the trust is properly prepared by an experienced estate planning attorney, the income from the trust will likely not be used to decrease any spousal support to which the niece may otherwise be entitled from her spouse, in the event that they divorce down the road. The trust can also protect against other events, by instructing to whom funds should be paid upon the premature death of the niece. For instance, the trust can state specifically that the funds should then be held in trust for the niece’s children. That would further prevent her estranged husband from ever being able to make a claim against the funds.

If you are concerned about leaving property to someone you love, but that person is married to someone that you don’t, a trust can help you make sure that the inheritance goes to the actual person you want to receive it. Talk to an estate planning attorney who can provide you with some options.

Reference: nj.com (August 21, 2019) “How do I protect my niece’s inheritance from her husband?”

Portland Museum Wins $4.6 Million Lawsuit

Families are not the only ones embroiled in estate battles. The Portland Museum of Art won a $4.6 million court award after they convinced a jury that a caretaker of a wealthy woman had unduly influenced the woman to change her will and give the caretaker her entire estate. The museum said that an early version of the woman’s estate plan makes it quite clear that the museum was to receive an art collection and a major cash gift after she died.

Eleanor Potter signed an estate plan in 2014, in which she stated that she intended to give much of her estate to the museum, as reported in the Press Herald’s article “Portland Museum of Art wins $4.6 million in lawsuit over benefactor’s will.”

About six months later, said the museum’s attorney, a new will was signed that named her caretaker as the sole beneficiary.

The museum’s attorney said the caretaker coerced Potter into making the change, depriving the museum of the art and cash. The jury agreed and granted the museum a request for punitive damages, in addition to the originally intended gift to the museum. The museum said the punitive damages request was made as an effort to deter any others from trying to take similar actions.

It took the jury only one hour to come to a conclusion. They were unanimous in their finding. In Oregon state civil cases, six of nine jurors must agree on a verdict. This is unlike a criminal trial, where a unanimous verdict beyond a reasonable doubt is required for a conviction.

As part of her estate plan in March 2014, Potter made the museum a “remainder” benefactor of her estate, meaning that it would receive all of her art collection and money left over after fulfilling specific bequests to others. This is a commonly used strategy to give money to museums and nonprofits.

A few months later, she fired the attorneys who created that plan and in October 2014 had a new will created that named the caretaker as her sole heir. The woman had cared for Potter for many years and moved into her home after Potter broke a hip in 2012. The museum alleged that the caretaker conducted a “long, systematic and relentless” campaign of control, threatening Potter and telling her she would have to go to a nursing home. During phone calls with attorneys, the caretaker could actually be heard coaching Potter on what to tell the attorneys.

The caretaker’s attorney claimed that Potter simply wanted to take care of her. Her attorney said the museum acted as if it was “entitled to Eleanor’s estate.”

The museum issued a statement after the verdict was announced, acknowledging that Eleanor Potter had been a longtime supporter of the museum over many decades and expressed gratitude that her intent to promote art and culture could now be recognized.

Reference: Press Herald (July 22, 2019) “Portland Museum of Art wins $4.6 million in lawsuit over benefactor’s will.”

Happy Labor Day!

Happy Labor Day from the Law Office of Alexandria Goff, PC.

For many Americans, this holiday marks the official end of summer and a three-day weekend.

If you are interested to learn more about the origins of Labor day, read more about its history here.

Stay safe and enjoy the rest of your three day weekend!

What If My Beneficiary Isn’t Ready to Handle an Inheritance?

A recent Kiplinger article asks: “Is Your Beneficiary Ready to Receive Money?” In fact, not everyone will be mentally or emotionally prepared for the money you wish to leave them. What if your beneficiary isn’t ready to handle an inheritance? Here are some things to consider:

The Beneficiary’s Age. Children under 18 years old cannot sign legal contracts. Without some planning, the court will take custody of the funds on the child’s behalf. This usually occurs via custody accounts, protective orders or guardianships. If this happens, there’s little control over how the money will be used. The guardianship will usually end and the funds are paid to the child the second they turn 18. Giving significant financial resources to a young adult who’s not ready for the responsibility, often ends in disaster. Work with an estate planning attorney to find a solution to avoid this result.

The Beneficiary’s Lifestyle. There are many other circumstances for which you need to consider and plan. These include the following:

  • A beneficiary with a substance abuse or gambling problem;
  • A beneficiary and her inheritance winds up in an abusive relationship;
  • A beneficiary is sued;
  • A beneficiary is going through a divorce;
  • A beneficiary has a disability; and
  • A beneficiary who’s unable to manage assets.

All of these issues can be addressed, with the aid of an estate planning attorney. A testamentary trust can be created to make certain that minors (and adults who just may not be ready) don’t get money too soon, while also making sure they have funds available to help with school, health care, and living expenses.

Who Will Manage the Trust? Every trust must have a trustee. Find a person who is willing to do the work. You can also engage a professional trustee for larger trusts. The trustee will distribute funds, only in the ways you’ve instructed. Conditions can include getting an education, or using the money for a home or for substance abuse rehab.

Estate Plan Review. Review your estate plan after major life events or every few years. Talk to a qualified estate planning attorney to make the process easier and to be certain that your money goes to the right people at the right time.

Reference: Kiplinger (April 1, 2019) “Is Your Beneficiary Ready to Receive Money?”

How Do I Get My Mom’s Affairs in Order?

What can you do to make sure your mother’s financial affairs are in proper order?

The Monterey Herald’s recent article, “Financial planning: Making sure Mom is taken care of,” says to first make sure that she has her basic estate planning documents in place. She should have a will and an Advance Health Care Directive. Talk to an experienced estate planning attorney to make sure these documents fully reflect your mother’s desires. An Advance Health Care Directive lets her name a person to make health care decisions on her behalf, if she becomes incapacitated. This decision-making authority is called a Power of Attorney for Health Care, and the person receiving the authority is known as the agent.

Based on the way in which the form is written, the agent can have broad authority, including the ability to consent to or refuse medical treatment, surgical procedures and artificial nutrition or hydration. The form also allows a person to leave instructions for health care, such as whether or not to be resuscitated, have life prolonged artificially, or to receive treatment to alleviate pain, even if it hastens death. To limit these instructions in any specific way, talk to an attorney.

Another option is to create a living trust, if the value of her estate is significant. In some states, (including California) estates worth more than a certain amount are subject to probate—a costly, lengthy and public process. Smaller value estates usually can avoid probate. When calculating the value of an estate, you can exclude several types of assets, including joint tenancy property, property that passes outright to a surviving spouse, assets that pass outside of probate to named beneficiaries (such as pensions, IRAs, and life insurance), multiple party accounts or pay on death (POD) accounts and assets owned in trust, including a revocable trust.  You should also conduct a full inventory of your parent’s accounts, including where they’re held and how they’re titled. Your parents should update the named beneficiaries on IRAs, retirement plans and life insurance policies.

Some adult children will have their parent name them as a joint owner on their checking account. This allows you greater flexibility to settle outstanding obligations, when she passes away. But, it is important not to put a large account in joint tenancy for tax reasons. Also, a joint owner automatically becomes the owner, on the other joint tenant’s death. Remember that a financial power of attorney won’t work here, because it will lapse upon your mother’s death. However, note that any asset held by joint owners are subject to the creditors of each joint owner. Do not add your daughter as a joint owner, if she has current or potential marital, financial, or legal problems!

You also shouldn’t put your name as a joint owner of a brokerage account—especially one with low-cost basis investments. One of the benefits of transferring wealth, is the step-up in cost basis assets receive at time of death. Being named as the joint owner of an account will give you control over the assets in the account—but you won’t get the step up in basis, when your mother passes.

Reference: Monterey Herald (March 20, 2019) “Financial planning: Making sure Mom is taken care of”

Blue Water’ Vietnam Vets Can Now Get Agent Orange Benefits

Until now, the Veterans Administration (VA) has denied disability benefits for Agent Orange exposure to tens of thousands of Vietnam veterans who served on boats off the coast of Vietnam. A federal Court of Appeals has rejected that denial of benefits. The Department of Veteran Affairs is reviewing the decision. The department has not yet announced whether it will appeal the decision. As for now, ‘Blue Water’ Vietnam vets can now get Agent Orange benefits.

Historically, the VA has only allowed veterans who served on land or the inland waters of Vietnam to get compensation for illness after exposure to Agent Orange. The federal appeals court ruled that this interpretation is contrary to what Congress intended, when it passed the Agent Orange Act of 1991. The court stated that Congress intended to include Vietnam’s territorial sea in the Act, which would allow veterans who served on ships off the shore of Vietnam to get the same benefits as other Agent Orange-exposed veterans.

The Agent Orange Act contains a list of diseases. If a veteran who served in Vietnam develops any of those diseases, the Act creates the presumption that Agent Orange caused the illness. As a result, veterans can receive disability payments. The government used Agent Orange, a herbicide, to clear foliage in Vietnam. We now know that Agent Orange is a toxic chemical compound that causes significant health problems.

The specific diseases on the Agent Orange Act’s presumptive list include:

  • Parkinson’s disease
  • type II diabetes
  • soft tissue sarcomas
  • prostate cancer
  • respiratory cancers
  • coronary artery disease
  • Hodgkin’s disease
  • non-Hodgkin’s lymphoma
  • multiple myeloma
  • AL amyloidosis
  • early-onset peripheral neuropathy
  • porphyria cutanea tarda
  • chloracne

The VA reports that it is evaluating whether to add hypertension, bladder cancer, Parkinson’s-like symptoms and hypothyroidism to the list of presumptive diseases.

If a Vietnam veteran has a disease on the presumptive list, it is easier for that veteran to qualify for disability benefits. Once a veteran qualifies for disability, his or her survivors can also eventually receive death benefits.

Veterans advocates see this decision as a step in the right direction for the fair treatment of Vietnam veterans. They say this case rights an injustice that has been going on for decades. Some advocates are waiting to see if the VA will appeal the decision before they celebrate. Veterans groups are also asking for additional legislation to protect servicemembers who were in other situations, in addition to Agent Orange exposure.

The federal case took 10 years to make its way through the court system to the federal appeals court. The case, Procopio v. Wilkie, involved a veteran who developed diabetes and prostate cancer, after serving for three years on a military ship off the coast of Vietnam.

The VA denied his claim for disability benefits because he had served in the territorial waters of Vietnam, not on land or in the inland waters. The National Veterans Legal Services Program brought the lawsuit to have the courts rule on how the VA handles Agent Orange cases involving military personnel who had served on “Blue Water,” as opposed to on land or inland waters.

Your local elder law attorney can advise you on veterans’ disability issues and answer your questions about how your state’s laws might vary from the general law of this article.

References:

AARP. “Court Rules ‘Blue Water’ Vietnam Veterans Eligible for Agent Orange Benefits.” (accessed February 28, 2019) https://www.aarp.org/home-family/voices/veterans/info-2019/blue-water-vietnam-benefits.html

How to Keep Your Personal Information from Scammers

Seniors are frequent targets of scammers. Thousands of older Americans have lost their life savings to con artists. Victims are often astonished at how the crooks gathered so much personal data about them. The bad guys work full-time at devising new ways to steal your money right from under your nose. To help you know how to keep your personal information from scammers, here are the top six ways they get their hands on your details.

  • You throw out your mail without shredding it. Any mail you get that has your name and address on it (which is nearly everything that lands in your mailbox), any account numbers, or other personal data should not go into the trash in readable form. You can buy a shredder for $30 or less. You do not need an industrial-grade machine – just something that chops up the paper sufficiently.

Con artists are particularly fond of getting credit card offers out of the trash. They fill out a credit card in your name, but have it sent to the crook’s address. Those paper checks that your credit card company sends you with balance transfer offers, are pure gold to scammers. Shred them.

  • You post personal information on Facebook or other social media. Never post any personal details about yourself or your family on a public setting on Facebook. Better yet, do not post personal information at all on social media, regardless of the privacy setting. People are dumbfounded at how a con artist knew the names and ages of their grandchildren, the kind of pets they have and where they went on vacation. However, they posted it for the world to see on Facebook.
  • You fill out surveys. You cannot stay in a hotel or go out to eat, without someone wanting you to fill out a questionnaire about your experience. I’ll bet you did not know that many companies sell their survey data. Crooks can buy data to find out whether you own your home, how much annual income you get, the kind of car you drive and other survey details.
  • You send in warranty registration cards. It is rarely necessary to send in a warranty registration card to protect your rights in case a product fails. The registration cards are often a ruse to get personal information from you, like your total household income and your age. Companies sell that information, and you have no way of knowing who buys your personal data.
  • You enter contests. Companies reap massive benefits when they run contests. They cannot just give away prizes and money, without getting something in return. Many contests are a front for marketers to collect information about you and sell it on to others. At the very least, you could get pestering phone calls from telemarketers. However, if you are unlucky and a con artist buys your data, you could become a victim of identity theft or some other scam.
  • There has been a death in your family recently. Traditional obituaries provide a wealth of information for crooks, as they can construct a family tree from the information in most obits. Be extremely cautious about revealing relationships or other information about the family in an obituary. You can write a respectable piece, without feeding the con artists.

References:

AARP. “How Do Scammers Know So Much About Me? (accessed January 25, 2019) https://www.aarp.org/money/scams-fraud/info-2019/identity-mistakes.html

How Do I Incorporate Charitable Giving into My Estate Plan?

How Do I Incorporate Charitable Giving into My Estate Plan?
charity donate charitable giving

When looking into charitable giving, it can easily become overwhelming with all of the references to tax codes, regulations and forms. Talk to an experienced estate planning attorney to make this a simple part of your estate planning.

The Press & Guide’s recent article, “Estate planning and charitable giving,” explains that there are a number of ways to incorporate charitable giving into an estate plan.  It is something that almost anyone can do. Let’s look at some common ways to give:

Giving in your will. When hearing about charitable giving and estate planning, many people may get intimidated by estate taxes. They think their heirs will not get as much of their money, as they wanted. However, including a charitable contribution in your estate plan will reduce your estate tax liabilities—helping to maximize the final value of your estate for your heirs. Talk to your estate attorney and ensure that your donation is detailed properly in your will.

Donating your retirement account. You can name a charity as the beneficiary on your retirement account. Charities are exempt from both income and estate taxes, so going this route means the charity will receive 100% of the account’s value, when it’s liquidated.

Creating a charitable trust. A charitable trust is another way to give back through estate planning. You can ask your attorney about a split-interest trust that allows a person to donate their assets to a charity but keep some of the benefits of holding those assets. A split-interest trust funds a trust in the charity’s name. Those who open one, get a tax deduction any time money is transferred into the trust. However, the donors still control the assets in the trust, which is passed to the charity at the time of their deaths.

Charitable giving is an important component of many people’s estate plan. There are several options for charitable trusts, so speak to an experienced estate planning attorney to help you select the best one for you, your family and the charities you want to support.

Reference: (Southgate MI) Press & Guide (January 27, 2019) “Estate planning and charitable giving”