Not a Festive Thought, But A Kind One: Planning for Your Own Funeral

Leaving instructions for your funeral and burial wishes relieves loved ones of the burden of making decisions and hoping they are following your wishes. In addition, says the article “Important to provide instructions for preferred funeral, burial wishes” from The Leader, it also prevents arguments between relatives and friends who have their own opinions about what they think you may have wanted.

What often happens is that people make this information part of their estate plan. However, the will is usually not looked at until after the funeral. If your loved ones don’t know where your will is, then they certainly won’t know what your wishes were for the funeral.

Without clear written directions, spiritual practices or cultural traditions that are important to you, may not be followed.

An estate planning attorney can help you create a document that outlines your wishes and will have suggestions for how to discuss this with your family and where it should be located. The documents are different in each state, so be sure to work with a local lawyer. In New York State, there is a form that allows you to name an agent who will be in charge of your remains. You can give your instructions to that person or you can leave them in charge to make arrangements in their discretion.

In New York State, if this form is not completed, the following people, in descending order, have the right to control your remains: spouse, domestic partner, children, other family members and others.

For funeral planning, one option is to go to the funeral home and arrange to pay for the funeral and go to the cemetery and purchase a plot. A pre-paid irrevocable funeral trust purchased at a funeral home can also protects assets from nursing home costs, when applying for Medicaid.

Some people wish to donate their organs, which can be done on a driver’s license or in another statement. Donating your body for medical research or education will require researching medical schools or other institutions and may require an application and other paperwork that confirms your intent to donate your body. When you pass, your family member or whoever is in charge will need to contact the organization and arrange for transport of your remains.

A comprehensive estate plan does more than distribute assets at death. It also includes what a person’s wishes are for their funeral and burial wishes. Think of it as a gift to loved ones.

Reference: The Leader (December 7, 2019) “Important to provide instructions for preferred funeral, burial wishes”

How Did Alzheimer’s Impact the Estate Planning of These Famous People?

Forbes’ recent article, “Top 7 Celebrity Estates Impacted By Alzheimer’s Disease” looks at seven celebrity estates that were affected by Alzheimer’s disease.

  1. Rosa Parks. The civil rights icon died at 92 in 2005. She was suffering from Alzheimer’s disease. Legal battles over her estate continue to this day. Her estate plan left her assets to a charitable institution she created. However, her nieces and nephews challenged the validity of her will and trust, due to her mental deficiencies and allegations of undue influence. That claim was settled, but there have been fights over broken deals and leaked secrets, claimed mismanagement of her estate and assets, allegations of bribery and corruption and a battle over Rosa’s missing coat that she wore at the time of her famous arrest at the Alabama bus stop in 1955.
  2. Gene Wilder. Wilder’s widow–his fourth wife, Karen–and his adopted daughter didn’t fight over Gene’s estate after he died, which shows good estate planning. Wilder makes the list because of how his widow used her husband’s struggle—which she kept private while he was alive—to bring attention to the terrible disease, including permitting his Willy Wonka character to be used in a campaign to raise awareness.
  3. Aaron Spelling. The Hollywood producer left behind a reported fortune worth $500 million. His death certificate listed Alzheimer’s disease as a contributing factor. Spelling changed his estate plan just two months before he died, reducing the share to his daughter, actress Tori, and his son, Randy, to $800,000 each.
  4. Etta James. Legendary blues singer Etta James passed away in 2012, at 73. Her family said she had been struggling with Alzheimer’s disease for several years, and her illness ignited an ugly court battle between her husband of more than 40 years and her son from a prior relationship, over the right to make her medical and financial decisions, including control of her $1 million account. Her husband, Artis Mills, alleged that the power of attorney she signed appointing her son as decision-maker was invalid, because she was incompetent when she signed it. Mills sued for control of the money to pay for Etta’s care. After some litigation, Etta’s leukemia was determined to be fatal, which led to a settlement. Mills was granted conservatorship and permitted to control sums up to $350,000 to pay for Etta’s care for the last few months of her life.
  5. Peter Falk. The Lieutenant Columbo actor died at 83 in 2011, after living with Alzheimer’s disease for years. His wife Shera and his adopted daughter Catherine fought in court for conservatorship to make his decisions. Shera argued that she had power of attorney and could already legally make Peter’s decisions for him, which included banning daughter Catherine from visits. The judge granted Shera conservatorship, but ordered a visitation schedule for Catherine. However, a doctor, who testified at the hearing, said that Falk’s memory was so bad that he probably wouldn’t even remember the visits.
  6. Tom Benson. The billionaire owner of the New Orleans Saints and Pelicans was the subject of a lengthy and bitter court battle over control of his professional sports franchises, and hundreds of millions of dollars of other assets. Prior trusts, that he and his late wife established, left the sports franchises and other business interests to his daughter and two grandchildren. One of granddaughters operated the Saints as lead owner, until she was fired by her grandfather. Tom decided to take the controlling stock of the teams out of the trust and substitute other assets in their place, taking over control of the teams. However, his daughter and grandchildren fought the move. A 2015 court ruling declared Benson to be competent, despite allegations he suffered from Alzheimer’s disease. Benson then changed his will and trust and left everything to his third wife, Gayle. They all settled the dispute in 2017, leaving other assets to the daughter and grandchildren—but ultimately leaving Gayle in control of the Saints and Pelicans, after Benson’s death in 2018 at age 90.
  7. Glen Campbell. Campbell’s 2007 estate plan left out three of his adult children. They sued to challenge their disinheritance after he died. They dropped the case in 2018, without receiving a settlement. The fact that Campbell’s final will was drafted several years prior to his Alzheimer’s diagnosis was a critical factor in the outcome of the lawsuit.

The estate planning of these celebrities show the importance of proper estate planning, before it is too late. Wills and trusts that are created or changed after someone is diagnosed with Alzheimer’s disease, dementia, or similar conditions are more apt to be challenged in court.

Click here If you are interested in learning more about estate planning, elder law, or long-term care planning.

Reference: Forbes (November 25, 2019) “Top 7 Celebrity Estates Impacted By Alzheimer’s Disease”

How Estate Planning Keeps the Peace for Blended Families

With the IRS’s announcement that the first $11.58 million (in 2020) of a taxable estate is free from estate taxes, most people won’t have to worry about paying estate taxes. Therefore, what’s the biggest reason to have an estate plan?

Earlier this year, a survey was conducted at the 53rd annual Heckerling Institute of Estate Planning, a prestigious legal and financial conference that attracts leaders in the field of estate planning. For the second year in a row, family conflict was identified as the biggest threat to estate planning, reports Investment News in the article Reducing potential family conflicts.”

Statistics show that there are more blended families in the U.S. than ever before.

The increase in blended families has led to an increase in family conflicts. While open and honest communication is the key to any kind of conflict resolution, it’s particularly sticky when it comes to blended families. For most families, it’s a good idea to talk openly about estate plans, rather than waiting until one of the spouses has passed and explaining to the biological and stepchildren how the assets are being distributed. Discussing the estate plan before anyone dies, at the very least gives everyone a chance to voice their opinions, even if no changes to the spouse’s plans are made.

How do you minimize conflicts within blended families? One way is with a prenuptial agreement, which is executed before marriage and clarifies the financial rights of each spouse, in the event of divorce or death. This is especially useful, when there is a disparity in wealth or age between the couple.

However, not everyone is willing to have a prenup. And even if they do, family conflicts can still crop up. Let’s say Gary and Helen are married, each with children from a previous marriage. Gary wants to give his entire estate to Helen when he dies. If Gary dies first, there’s no legal reason for Helen to give any of Gary’s assets to his biological children.

There are any number of solutions. If Gary really wants to cut his children out of his will, he can talk with them and explain his thinking. He can also have an estate planning attorney include a “no contest” clause in his will. If any named beneficiary challenges the will, they will lose any inheritance and are treated legally, as if they have predeceased the decedent. Gary could also use a revocable living trust, which would avoid the estate being probated and deny the children an opportunity to challenge his will.

A better solution would be to craft an estate plan that benefits both Gary and Helen’s children. Harry’s children could receive a partial outright distribution when Gary dies, with the remaining estate passing to Helen. A trust could be created for Helen’s benefit, but the remaining trust assets could go to Gary’s children when Helen dies.

There are many different ways to resolve this issue with an eye to minimizing conflict among children in blended families. If the parents are truly invested in keeping their children together as a family, it is worth the effort to create an estate plan that cares for the spouses and all of the children. An estate planning attorney can create a plan to accomplish your goals for the entire blended family.

Reference: Investment News (December 9, 2019) Reducing potential family conflicts

The Many Responsibilities of Inheriting a Home

When you inherit a home, there are three key factors to consider: the financial and legal responsibilities of the home, the tax liabilities of the home and what you’ll eventually do with the home. All of these different things relate to each other, explains Million Acres in “A Guide to What Happens When You Inherit a House.”

Let’s look at taxes first. There’s no federal tax associated with inheriting a house, but some states have inheritance taxes. For most situations, this inheritance does not lead to an immediate tax liability. When a property is inherited, the IRS establishes a fair market value for the property, which is the new basis for the property. This is a step-up basis. It is the valuation that is used to set future taxes, when the property is sold.

Capital gains are a tax relating to the profits generated from selling an asset, in this case, a house. The step up in basis means the heir only has to pay capital gains taxes, if the home is sold. The taxes will be the difference between the fair market value set at the time of the inheritance and the selling price.

If the property has a mortgage, heirs will need to know what type of mortgage it is and if it is assumable or due on sale. Most mortgage companies allow heirs to take over the payments, according to the original loan terms. However, if there is a reverse mortgage on the home, the unpaid balance is due when the person who took out the reverse mortgage dies. This usually requires the heirs to sell the home to settle the debt.

The condition of the inherited home often determines what heirs decide to do with the house. If it hasn’t been maintained and needs major work, it may be easier to sell it as-is, rather than undertake renovations. Heirs are responsible for taxes, insurance and maintenance. However, if the house is in good shape, it may make sense to keep it.

What happens when siblings inherit a house together? That can get complicated, if each person has a different idea about what to do with the house. One may want to sell now for cash, while another may want to rent it out for income. What ultimately happens to the property, may depend on how well the siblings communicate and make decisions together.

Often the best option is to simply sell the home, especially if multiple heirs are involved. Note that there are costs associated with the sale of the house. This includes any outstanding debts, like a mortgage, the cost of fixing up the home to prepare it for sale, closing costs and fees and real estate agent commissions. If there is a profit on the sale of the home from the tax basis at the time of inheritance, the heirs may need to pay short-term or long-term capital gains tax, depending on how long they held the property.

Talk with an estate planning attorney about managing the sale of the family home. They will be able to guide you, advise you about taxes and keep the family moving through the process of settling the estate.

Reference: Million Acres (December 4, 2019) “A Guide to What Happens When You Inherit a House”

Fighting Elder Abuse in Iowa

The missing money came from years of work on the family’s farm. It was supposed to be passed to her father. ,However the money had gone to her half-sister’s bank account. As reported by Iowa Public Radio’s article “Elder Abuse Remains A Legal Challenge in Iowa,” it took months to figure it all out.

Morrison accuses her sister of forging documents and lying to their mother—who spoke little English—to get the money. However, it took nearly three years before the sister was charged with first degree theft for taking the money without authorization. It was a long, complex paper trail with a detective who kept putting her off, telling her that he had homicides and human trafficking to deal with.

Morrison had to fight tooth and nail the whole way. That doesn’t surprise Chantelle Smith, an assistant attorney general in Des Moines, who has worked on elder abuse cases for almost twenty years. She sees cases like this all the time, she said. They are challenging and time intensive for law enforcement, especially in rural areas. If there are only two officers and two detectives, they may not have the time to investigate an elder abuse case.

The National Council on Aging reports that one in ten adults over age 60 has experienced some form of abuse, whether it is financial, physical, or emotional. However, less than 5 percent of these cases actually reaches litigation after a complaint is made, according to a University of Iowa report. Numbers from the Department of Human Services have risen to nearly 5,300 for adults over 60, compared to 860 just five years ago.

The state attorney general’s office just completed a three-year program funded by a grant from the U.S. Department of Justice to combat elder abuse. 600 law enforcement agents, doctors, victim services providers and other professionals were trained on how to identify and investigate elder abuse.

The grant was also used to create a community response team, which puts people from different professions together for regular meetings on how to address these issues. The grant was also used to pilot a “Later in Life” program in Dallas County that trains specialists to find and provide services to victims over age 50.

Polk County, the most highly populated in Iowa, is the only county with a unit dedicated to elder and dependent adult abuse.

The executive director of the Crisis Intervention and Advocacy Center in Adel, Iowa, said that in the past 17 months, nearly 400 people have been helped in 12 mostly rural counties. The center has three elder abuse specialists, who help victims in moving out of abuser’s homes, get them to appointments and help them file police reports, if they wish to do so. Few victims are willing to file a police report, but in nearly all cases, the abuser is a family member. They are fearful of retaliation, and of getting family members in trouble with the law.

The program is in limbo, since the federal grant ended in September and the agency is waiting for news about an extension.

Reference: Iowa Public Radio (November 19, 2019) “Elder Abuse Remains A Legal Challenge in Iowa”

Q & A – Medicaid for Nursing Home Care

As we approach our third act, new terminology comes into our daily lives that we may have heard before, but maybe never gave much thought to. Terms like Medicare, Medicaid, Social Security, Long-Term Care, and so on, can become sources of anxiety, if we don’t truly understand them. Therefore, today we’re answering some of the fundamental questions about Medicaid for nursing home care, in the hopes that we can alleviate at least one source of anxiety for you.

Question #1 – What is Medicaid?

Medicaid is a state and federal government-funded program that provides medical services to financially eligible individuals. Unlike Medicare, you do not have to be elderly to qualify for Medicaid, and many elderly individuals receive Medicaid benefits, including nursing home care. Every state administers its own version of Medicaid. For more information on Medicaid programs in your state, visit the Medicaid website, and select your state.

Question #2 – What are Medicaid’s basic financial eligibility requirements for nursing home care?

To determine your eligibility for nursing home benefits under Medicaid, the government will look at your income and resources in a given month to ensure you are within the legal limits for Medicaid benefits. To qualify for Medicaid, your monthly income must be less than the Medicaid rate for nursing home care, plus your typical monthly healthcare expenses. If you are eligible, you are allowed to keep $70 of your income for personal use. The rest is taken to pay for your care.

Question #3 – What is the Medically Needy Program under Medicaid?

For individuals that may exceed the financial limits to receive Medicaid, they may still qualify to receive Medicaid benefits under the medically needy program. This program allows individuals with medical needs to “spend down” their income to acceptable rates, by paying for medical care for which they have no insurance. For individuals over the age of 65, states are required to allow you to spend down your income regardless of medical necessity.

Question #4 – What resources can we have if my spouse is applying for Medicaid?

When a married couple applies for Medicaid, both spouses’ income and resources are included in the qualifying calculations. You may have all of the “exempt” resources, like an automobile and a house, along with one non-exempt item that does not exceed a set value (currently just over $58,000), such as cash or investments. Once your spouse qualifies for Medicaid, after one year, all excess income and resources must be transferred to the non-Medicaid-benefitted individual. That spouse may also accrue income and resources over and above the limits that Medicaid imposes on the benefitted spouse.

More information can be found on the Medicaid website, including requirements and benefits information for the state in which you reside. If you are interested in more information about long term care planning, speak with a qualified elder law attorney.

References:

Medicaid.gov. (Accessed November 28, 2019) https://www.medicaid.gov/medicaid/index.html

Holiday Gatherings Often Reveal Changes in Aging Family Members

A look in the refrigerator finds expired foods and an elderly relative is asking the same questions repeatedly. The same person who would never let you walk into the house with your shoes on now, is living in a mess. The children agree, Mom or Dad can’t live on their own anymore. It’s time to look into other options like assisted living or home care.

One of the biggest questions, according to the Cherokee Tribune & Ledger-News’ article is “How to pay for long-term care.”

The first question involves the types of facilities. There are many different options but the distinctions between them are often misunderstood. Assisted living facilities provide lodging, meals, assistance with eating, bathing, toileting, dressing, medication management and transportation. However, a skilled nursing facility adds more comprehensive health care services. There’s also the personal care home, which provides assisted-living type accommodations, but on a smaller scale.

The next question is how to pay for the residential care of an elderly family. This weighs heavily on the family. That elderly person is often the one who did the caregiving for so many years. The reversal of roles can also be emotionally difficult.

There are a few different ways people pay for care for an elderly family member.

Long-term care insurance, or LTC insurance. Few elderly people have the insurance to cover their residential facility stay, but some do. Ask if such a policy exists, or go through the piles of paperwork to see if there is such a policy. It will be worth the search.

Veteran’s benefits. If your loved one or their spouse served during certain times of war, is over 65 or is disabled and received an honorable discharge, he or she may be entitled to certain programs that pay for care through the Department of Veterans Affairs.

Private pay. If your loved one has financial accounts or other assets, they may need to pay the cost of their residential facility from these assets. If they don’t have assets, the family may wish to contribute to their care.

Another route is to apply for Medicaid. An elder law attorney in their state of residence will be able to help the individual and their family navigate the Medicaid application, explore if there are any options to preserving assets like the family home, and help with the necessary legal strategy and documents that need to be prepared.

Meet with an elder law estate planning attorney to learn what the steps are to help your elderly loved one enjoy their quality of life, as they move into this next phase of their life.

Reference: Cherokee Tribune & Ledger-News (November 30, 2019) “How to pay for longterm care.”

Tips for Seniors Who Are Moving to Assisted Living

When you are planning your move into assisted living, you can quickly get overwhelmed with the endless list of things you need to do. If you are moving out of a home where you have lived for many years, the thought of having to downsize and get rid of most of your possessions can produce anxiety. If thinking about all the work ahead of you makes you feel sad or tired, it can help to have a roadmap. Here are some organizational tips for seniors who are moving to assisted living.

You will be dealing with two situations – your current house and your new home. Each one needs a tailored game plan.

How to Minimize the Stress of Packing Up Your House

When you move from a large home to a smaller environment, the logistics dictate that everything will not fit into the new space. You will have to part with some of your items.

Rule #1 is you should be the one to decide what you keep and take with you to your new home. No one should dictate what you can have. These strategies can help:

  • Some of the bulk of your items will be a simple matter, because you will have no use for some things in assisted living. For example, since the facility will likely take care of the yard work, all the lawn and gardening equipment can go to a new home. You can save someone a lot of money, by giving them these items when they buy a house.
  • If you move to a warmer part of the country, you might not need your winter gear anymore. Donating those things can help keep someone in need from being cold and reduce how much you have to move.
  • Walk into one of your rooms and make a list of the three or four things you love the most in that room. If you only keep your favorite things, when you are in your new home, everything you see will bring you joy.

Changing how you think about the process, can make it less emotional for you. Instead of thinking about losing most of your belongings, imagine how liberating it will be when you are not tied down by so many things. Most people discover a lightness and freedom, when they get rid of the clutter and things that do not matter.

Settling into Your New Home

When you pack up at your previous house, visualize how the items you keep will fit into the new space. Make sure you hold on to the things that will make you feel comfortable and at home. Arrange your favorite things, so you can see familiar items from every angle throughout your space. With a little planning, you can recreate the feel of your old home environment. Keepsakes matter. While you do not want to be crowded by clutter or create tripping hazards, a cherished clock, photographs, books and artwork can help you feel as if you belong from the first day.

If you are planning to move to an assisted living facility, reach out to your qualified elder law attorney. They may be able to help you with government benefits and are familiar with the process of transitioning.

References:

A Place for Mom. “Moving Seniors: Settling in to Senior Care.” (accessed November 21, 2019) https://www.aplaceformom.com/planning-and-advice/articles/moving-seniors

What Estate Planning Documents Do You Need?

Wouldn’t your children be relieved to learn that you’ve done all the necessary advance planning so that if you should become incapacitated, someone has been properly appointed to help with health care and financial decisions? The Tennessean suggests that you “Give your loved ones peace of mind with legal documents” so that your spouse and your family will be able to take the necessary steps to give you the care and dignity you (and they) deserve.

Here’s a checklist of the documents that everyone should have in place:

Power of Attorney for Health Care. When you have mental capacity, you can make your own decisions. When you do not, you need someone to be appointed who knows your beliefs and wishes and has the ability to advocate for you. Ideally, you should name one person to be your agent to minimize arguments. Talk with your family to explain who has been named your power of attorney for health care, and if need be, explain why that person was chosen.

Power of Attorney for Finances. There are different kinds of POA for finances. The goal of the POA for finances is so they can make decisions on your behalf, when you become incapacitated. Some states use “springing” POA—but that may mean your family has to go through a process to prove you are incapacitated. Check with an estate planning elder law attorney in your state to see what the laws are.

Advance Directive. This describes what kind of life sustaining treatment you do or do not want if you are in a coma, are terminally ill or have dementia. You can direct whether you want CPR, tube feeding, and other life-sustaining procedures to be withheld, if your quality of life is diminished and there is no hope of improvement. This will help your family to know what you want in a time when emotions are running high.

Last Will and Testament. Have a will created, if you don’t already have one. This directs distribution of your assets to your wishes and does not leave them to the laws of your state. Not having a will means your family will have to go through many more court proceedings and people you may not want to receive your worldly possessions may get them.

Trusts. Talk with your estate planning attorney about placing assets in trust, so they are not subject to the public process of probate. Your wishes will be followed, and they will remain private.

Reference: Tennessean (Nov. 16, 2019) “Give your loved ones peace of mind with legal documents”