Posts Tagged ‘Estate Planning’

« Older Entries

Sometimes the Best Thing is to Do Nothing at All

Monday, March 15th, 2010

Clients came in a few months ago explaining that several years back, the mother had deeded her house into a trust and now she wanted to make a change to the trust. I said that I would review the trust to be sure that such a change would be permitted and would advise them on how to proceed.

As I dug into the trust, it turned out to be quite a doozy. It was poorly drafted. It was clearly put together by someone who didn’t understand the intersection of estate tax planning, Medicaid planning, property law, and fulfilling a mother’s wishes. It took me weeks of research, several pages of notes, and a lot of head-scratching to finally put together a 5-page letter to the client explaining her options for moving forward.

I often say that elder law and special needs planning involve juggling a lot of different balls and that we will never be able to get them all to land in a perfect line. It’s a matter of choosing which of the many issues are most important to you and letting the other ones slide into second place.

In this case, the clients and I reviewed the pros and cons of all of her options. Because of the poor drafting of the original trust, we were very limited in what we could do. If we did A, she would achieve B, but she would lose C. If we did B, we would achieve C, but lose A, and so on. The client weighed all the different things that she had hoped to accomplish and chose the one that was most important to her. And to accomplish that particular goal, the required action was to do nothing.

In the end, she walked out of my office with the same trust document she had when she came in - we didn’t change a thing. But she now has something else - knowledge. She now understands, much better than she did from the attorney who drafted the trust years ago - what will happen to her home if she wants to sell the house and move, what happens if she ever needs nursing home, and who in her family will inherit it after she passes away.

Sometimes, after examining all the angles, you realize that the best thing to do is to do nothing.

Tags:
Posted in Estate Planning | 4 Comments »

More Reasons to Write up a Caregiver Contract

Friday, November 13th, 2009

I’ve been writing a lot about caregiver contracts lately. That’s because they represent the ideal solution for so many families.

Many children become part-time or even full-time caregivers for their aging parents. Sometimes a child needs to be paid for this - usually that is the only way she can afford to leave her job in order to stay home and care for Mom. And in some families, the parent insists on paying the child, or at least contributing to groceries and utilities - because she doesn’t want to feel she is taking advantage of anyone or being a burden.

Earlier posts describe why a written caregiver contract is important to prepare for the possibility of a future MassHealth nursing home application, but here is something that would apply more immediately:  in addition to drafting a good contract, an elder law attorney will also set the family up with a payroll service that will make sure the child receives the benefits of an employee. Namely, the child will have two special protections.

The first is worker’s compensation coverage. Have you ever helped a frail elder with a shower? How easy is it to hurt your back? Very. With a proper caregiver contract arrangement, that child can collect worker’s comp from her injury.

The second protection is the unemployment benefit. Sometimes, no matter how good a job a child does of keeping Mom at home, there comes a time where the care Mom needs exceeds what the child can provide, and she must move to a nursing home. Now the child is unemployed.

For so many families, paying a child to care for the parent is the best solution. Having informal, unwritten understandings is typical, but leaves both the parent and child open to too many pitfalls. By working with an elder law attorney to craft a good caregiver contract and to set up a payroll service to take care of the deductions and taxes, both the parent and child will be much better protected in the long run.

Tags: , , , ,
Posted in Caregiver Issues, Living at Home, Uncategorized | 3 Comments »

Howard Gleckman’s Caring for Our Parents

Friday, October 23rd, 2009

I’ve been reading Howard Gleckman’s book, Caring for Our Parents, in which he examines the long-term care system of today and the future. Essentially, if we keep on doing things as we are now (expect people to use up their savings to stay at home or in assisted living, have Medicaid pay for nursing home – with a few other public programs thrown in here and there), then the elderly of the next few decades are in for quite a shock.

My conclusions are these:

1. Write a Health Care Proxy and a Medical Directive, or Living Will.  My version of this is to give clients Your Way, a fantastic workbook that helps you spell out to your family what care you would want in various end of life situations. Long-term care is astonishingly expensive, as you know if you are currently coordinating at-home care or other support for your parents. If you don’t want that kind of money spent on you – if you don’t want certain procedures done or decisions made – tell your family now. During an emotional crisis, it will be very difficult for them to turn down a medical option without you having previously given them that moral permission.

2. Get thee to a financial advisor. The current long-term care system depends in large part on the consumer paying her own way. The Boomers are notorious for not saving money. Work with an advisor to see what kind of cushion you can build up.

3. Get involved in politics at the grass-roots level. As currently structured, the Social Security, Medicare, Medicaid, and long-term care insurance systems are projected to crash in on themselves. Additionally, Boomers don’t have the numbers of children that their parents do to share the workload. Your parents will be OK – an elder law attorney can help them stretch out their assets to stay at home for as long as possible. But the Boomers will not be OK. The system needs to be overhauled, dramatically. I don’t have answers, but Gleckman outlines the models that some other countries use. I’m sure there are other brilliant policy makers in the US coming up with excellent ideas, as well. But ideas become law only if the Boomers use their sheer numbers to push the system to provide the care they expect. Without big change, the Boomers will be in for quite the surprise in their frail old age.

Tags: , , , ,
Posted in Estate Planning, Living at Home | 3 Comments »

Howard Gleckman’s New Book: Caring for Our Parents

Tuesday, August 25th, 2009

Driving to work on Friday, I had the treat of listening to NPR’s Robin Young interview Howard Gleckman on his new book, Caring for Our Parents: Inspiring Stories of Families Seeking New Solutions to America’s Most Urgent Health Crisis. I only caught the end of the interview, but it was so reassuring to hear him close with this message: we should all have our health care proxies and end of life wishes in order.

This is what I talk about when I give presentations and when I meet with clients. I’ve blogged about it - read about health care proxies here and about end of life wishes here.  This is such an important message to get across to people. A health care proxy lets someone else make health care decisions for you when you cannot make or communicate them yourself - anesthetic fog? dementia? shock from an accident? Without a health care proxy in place, your family could very well be forced to go to court and waste a lot of money, time, and emotion.

And making your end of life wishes clear will save your family a tremendous amount of anxiety, guilt, grief, and arguments. Give your family the gift of peace by taking the burden off of their collective shoulders - tell them ahead of time what you would want in a difficult situation.

It gives me hope to hear Mr. Gleckman advising a national audience to get their health care proxies and end of life statements in order. So many families would have such an easier time caring for their loved ones with these documents in place.

Tags: , , , ,
Posted in Estate Planning | 3 Comments »

End of Life Wishes & Living Wills

Tuesday, August 25th, 2009

Clients are always asking about living wills. Massachusetts law does not recognize a living will, and it’s also impossible to write a thorough, well balanced statement of your end of life wishes in just a few paragraphs.

I provide clients with a solution to their goal, but in a much better form. I give my clients a workbook called Your Way. It is published by a nonprofit in California, H.E.L.P.: Helping People Meet Aging-Related Legal & Care Challenges.

This workbook is twelve pages long and very thoughtfully walks the reader through various scenarios you could confront in an end of life situation and what kind of comfort and care you would like to receive. For example, what matters to you the most - being with friends and family? Listening to music? Being able to help dress yourself? Under various scenarios, would you want curative care or to be kept comfortable? Who do you want with you as you are dying? Where would you want to be? A twelve-page work book written by heath care professionals does a much better job elucidating your wishes than an attorney can do in a one-page living will.

If you are not a client of this office, then log onto the Your Way website and order a workbook. If you are my client, then you already have a copy. Complete the exercises and give your family the gift of knowing exactly what you would want them to do in a crisis situation.

Tags: , , , , , ,
Posted in Estate Planning, Medical Care, Uncategorized | 1 Comment »

My Spouse Died - What Do I Need to Do to Protect Myself?

Friday, July 24th, 2009

After a spouse dies and the family gets through the funeral, the immediate concern is to square away the couple’s assets and make sure the surviving spouse has enough to live on. After that, there is one more step to take: protecting yourself.

One area where you need to be proactive is to consider who will be able to assist you with financial and health matters if you become ill or incapacitated. Before, you and your spouse relied on each other to serve in these roles. Now you need to legally appoint someone to be able to step in and help you. At this point, you definitely need to execute a Durable Power of Attorney and Health Care Proxy. And many people like to add a child to their bank account so she can easily help with paying bills. See my blog post on how to do this appropriately (don’t add her as a joint owner!).

If you go to see your elder law attorney after your spouse has passed away, in addition to helping you transfer your spouse’s assets to your name, she will also help you put in place these fundamental documents that will serve to protect you, should you ever become unable to handle your affairs or medical decisions yourself.

Tags: , , ,
Posted in Estate Planning, Probate | No Comments »

Don’t Add Your Child as a Joint Owner on Your Bank Account

Friday, May 22nd, 2009

So many clients tell me that they want to add a child to their bank account so that the child can help them pay bills and manage their finances, and also so someone will have access to the bank account should anything happen to the parent. I agree - but I don’t agree with the bank’s usual approach which is to just name a child as joint owner and send the customer on her way. 

Naming a child as a joint owner is dangerous. A joint owner has complete rights to the full amount of money in that account. If your daughter wants to withdraw it all, move to Aruba, and never speak to you again, she is well within her rights to do so - the bank can’t stop her. If she gets divorced, gets in a car accident, makes a bad business deal - that money is on the table and you had better believe the opposing attorney will chase after it. “Not fair,” you cry. Technically, there are laws to deal with these scenarios, but it is much easier to avoid them to begin with. 

Don’t let the bank tell you to name a joint owner. Instead, patiently explain your two goals: (1) someone should be able to help with your account while you are living, and (2) someone should have access to the account after your passing (ex. to pay final bills or for a funeral). To accomplish the first, the bank can add your child under a Durable Power of Attorney. I acted as Power of Attorney for a client who had no family, and his checks were printed: “George Clooney, Alexis Levitt, IFF.” I was on the account, but clearly as a Power of Attorney and not a joint owner.

As for the second goal of allowing access to the account after your passing, there are several ways to do this. Some banks list a “beneficiary,” others use “payable on death to,” some use “in trust for.” Note that if you name someone as Power of Attorney, their authority ends at your passing, so you need this second category listed on your account, as well. (And this has the added bonus of allowing this account to pass to a beneficiary without going through probate.)

This will take persistence on your part, and you may have to insist on working with a manager. Most customer service folks at the banks only know to offer you the option of joint ownership.

Tags: , , ,
Posted in Estate Planning | 2 Comments »

Putting Assets in Joint Names to Avoid Probate - Will It Work?

Thursday, May 21st, 2009

Lots of people want to avoid probate. That’s the court process that a family must go through to distribute anything that was in the decedent’s name alone upon her passing. Despite its bad reputation, probate isn’t the end of the world. Yes, it’s a hassle, and yes, there are hoops to go through, but you can hire an attorney to do most of the work for you.   

If you still want your family to avoid probate, many people opt to make all of their property into “nonprobate” assets. This is anything that has someone else’s name on it in addition to yours at your passing. For example, many people purchase homes together with the spouse. We name beneciaries on life insurance policies and IRA’s.  So why not just put someone else’s name on all of your assets and be done with it?

Because that quite likely will not result in the distribution that you would like. Let’s say Ophelia has an IRA valued at $100,000 and a life insurance policy with a death benefit of $100,000. She puts her son’s name on the IRA and her daughter on the life insurance. Easy, right? Not really. Her health care needs increase over the years and she taps into the IRA. By the time she passes away, her son inherits an IRA worth $50,000 and her daughter cashes in the life insurance policy for the full $100,000.

The best way to make sure people will inherit as you would like, while also helping them to avoid probate, is to work with an elder law attorney who can draw up the appropriate trust (if that is the right solution for you), help you properly list beneficiaries on your assets, and match you up with a qualified financial advisor who can make sure there will be enough in your estate to treat all the beneficiaries in the way you would like.

See tomorrow’s post on why it is dangerous to list a child as a joint owner of a bank account.

Tags: , , ,
Posted in Estate Planning | No Comments »

Do You Really Need a Will?

Wednesday, May 20th, 2009

If you want to have a say in who gets your possessions after you die, then yes.  If not, then the “laws of intestacy” govern what happens to an estate when a person dies without a Will. 

A typical scenario is one parent dies leaving his spouse and children.  Without a Will, anything that was in his name alone at his passing is divided equally - one half to his wife, one half split evenly among his children.  Most people would prefer to leave all of their assets to their spouse, and then after the spouse dies, to the children.  If that is what you prefer, then you need a Will.  

What happens if you don’t have a spouse, but you do have children?  Without a Will, anything in your name alone at your passing goes to your children, divided equally among them. Generally speaking, this is what most people want. But if you have a disabled child or grandchild, this scheme will cause problems.  

If you have a spouse and no children?  The spouse gets it all. Again, probably what most people would want under this scenario. But if, for example, there are certain possessions you would like to leave to a friend or niece or nephew, or if you want to make a gift to charity, then you need a Will. 

And if you are a single person - no spouse and no children?  It goes to your parents, and if they are no longer living, to your siblings.  If your parents are using public benefits to provide healthcare (ex. nursing home), then a direct inheritance from you could upset the apple cart.  

Remember that all of the above applies only to “probate property”  - that is, anything that has only your name on it. “Nonprobate property” has your name plus another, for example, naming someone as a beneficiary on your IRA or life insurance, or purchasing a home jointly (usually with your spouse). Nonprobate property passes right to the person you have named.  

So if you think that the laws of intestacy will achieve your goals, then you probably don’t need a Will.  But if you have any particular gifts you want to make, and especially if you have any disabled family members, then you need a Will.

Tags: , , ,
Posted in Estate Planning | No Comments »

Why Should My Elder Law Attorney Draft My Health Care Proxy? I Have the Form from the Hospital.

Sunday, May 10th, 2009

Massachusetts hospitals hand patients a two-page Health Care Proxy form that was developed in 1999 and does not accommodate for changes in the law since then or for issues pertinent to elders. 

You probably have signed a “HIPAA” form by now at your doctor’s office.  This form allows the doctor’s office to share your confidential information with anyone in particular you name, such as your spouse or children - while you are competent.  (The Health Care Proxy kicks in when you cannot make or communicate your own decisions.)  Without this form in place, your medical team is well within its rights to refuse to discuss your case with your family.  Many elders like to know that the doctor will speak with their child later in the day to review the results of the appointment.  A well drafted Health Care Proxy with your Elder Law Attorney will enable this.  The state form does not.

The hospital form can also lead to expensive guardianship proceedings, because it lacks several important items.  It does not allow the person you have named to authorize anti-psychotic medications, which can be critical to an elder with dementia, depression, or anxiety, or a combination of all three.   It does not allow the agent to sign for a nursing home admission, nor to permit extraordinary measures (ex. feeding tube).  If you have only the state form and you need any of these actions later, your family will have to commence a lengthy and time-consuming guardianship process.

Contact your elder law attorney today and ask to draft a new Health Care Proxy form and save your family considerable expense and headache later.

Tags: , , , ,
Posted in Estate Planning | No Comments »

« Older Entries
©Copyright 2009. Alexis Levitt. All rights reserved. Hingham, MA | 781.740.7269 | alexis@alexislevitt.com