How Far Did a Phoenix Man Go to Get His Grandparents’ Trust Funds?

A 36-year-old Phoenix man stands accused of threatening to kill his brother to get his inheritance from his grandparents. Fox 10 (Phoenix) News’ recent article entitled “Lawyer details ‘murder,’ ‘kidnapping’ plan over an inheritance between brothers” says that Ross Emmick has been charged with extortion, stalking and conspiracy to commit murder.

There are three brothers in this case. Two, including the suspect, were adopted out of the family when they were small, and the other says he had no idea he had brothers. The trouble started when changes were made to their grandparent’s trust. Documents showed scratched out names and clear changes made to a trust created back in 1998 by James and Jacqueline Emmick, the grandparents.

They were diagnosed with dementia in 2019, a few weeks before changes were made. The beneficiaries were their sons, who died before they’d ever get the inheritance. That is when the changes were made by Ross.

Ross is said to have talked his grandparents into naming him as the successor trustee, which allows a person to manage the assets for the benefit of the beneficiaries. However, Ross’ only job was to provide information to the beneficiaries—his two brothers, Patrick and the victim (who asked to remain anonymous).

Ross thought he could simply change the names of the beneficiaries. Patrick claims that in addition to the changes to the will, Emmick allegedly stole thousands of dollars before his grandfather died in June 2019.

Ross actually stole a bunch of money from James before he died and then walked out with $50,000 after his death, Patrick said.

“He tried to get some forms notarized for Power of Attorney, and the witness on the original, which was a housekeeper, said that they were in a stable condition and mentally, they weren’t, and even the notary had said that,” said Patrick.

A large part of that was gambled away by Ross, an attorney for one of the brothers said. It wasn’t a well-administered trust, he said.

The brothers agreed to drop the case and divide the rest of the trust. However, that is when investigators say Ross began threatening the other two brothers.

Reference: Fox 10 (Phoenix) News (Aug. 22, 2020) “Lawyer details ‘murder,’ ‘kidnapping’ plan over an inheritance between brothers”

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Social Security Benefits: Timing Is Everything

Not knowing when you will be eligible to receive all of the benefits earned through your work history can hurt a retirement plan, says a recent article from CNBC.com titled “Here’s what to you need to know about claiming Social Security retirement benefits.” Equally problematic? It is letting fears of the program running out of money before you can get your fair share influence your decision.

If you get the timing right and use a combination of your retirement savings and Social Security benefits in the right time and the right order, your money may last as much as seven years longer. However, remember that there are many rules about Social Security and retirement fund withdrawals. Here are three big blind spots to avoid:

Not knowing when to take full benefits.

Age 62 is when you are first eligible to take Social Security benefits. Many people start taking them at this age because they don’t know better or because they have no alternative. If you start taking benefits at age 62, your monthly benefits will be reduced.

There is a difference between eligibility and Full Retirement Age, or FRA. When you reach FRA, which is usually 66 or 67, depending upon your birth year, then you are entitled to 100% of the benefits based on your work record. If you can manage without taking Social Security benefits a few more years after your FRA, those benefits will continue to grow—about 8% a year.

Most Americans simply don’t know this fact. If you can wait it out, it’s worth doing so. If you can’t, you can’t. However, the longer you can wait until when you reach your full amount, the bigger the monthly check.

How many ways can you claim benefits?

This is where people make the biggest number of mistakes. There are many different ways to take Social Security benefits. People just don’t always know which one to choose. First, once you start receiving benefits, you have up to a year to withdraw your application. Let’s say you need to start benefits but then you find a job. You can stop taking benefits, but you have to repay all the benefits you and your family members received. This option is a one-time only event.

Another way to increase benefits if you start taking them early, is to suspend them from the time you reach your FRA until age 70. However, you have to live without the Social Security income for those years.

Expecting the worst scenarios for Social Security.

Social Security headlines come in waves, and they can be disconcerting. However, a knee-jerk reaction is to take benefits early because of fear is not a good move for the long term. There are a number of proposals now on Capitol Hill to strengthen the program. Benefits may be reduced, but they will not go away entirely.

Reference: CNBC.com (Aug. 24, 2020) “Here’s what to you need to know about claiming Social Security retirement benefits”

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Estate Planning for Asset Distribution

Without proper planning, your will determines who inherits your property—everything from your home, car, bank accounts and personal possessions. Your spouse may not necessarily be your heir—and that’s just one of many reasons to have an estate plan.

An estate plan avoids a “default” distribution of your possessions, says the recent article “Asset distribution when we die” from LimaOhio.com.

Let’s say someone names a nephew as the beneficiary of his life insurance policy. The life insurance company has a contractual legal responsibility to pay the nephew, when the policy owner dies. In turn, the nephew will be required to provide a death certificate and prove that he is indeed the nephew. This is an example of an asset governed by a contract, also described as a named beneficiary.

Assets that are not governed by a contract are distributed to whoever a person directs to get the asset in their will, aka their last will and testament. If there is no will, the state law will determine who should get the assets in a process known as “intestate probate.”

In this process, when there is a last will, the executor is in charge of the assets. The executor is overseen by the probate court judge, who reviews the will and must give approval before assets can be distributed. However, the probate court’s involvement comes with a price, and it is not always a fast process. It is always faster and less costly to have an asset be distributed through a contract, like a trust or by having a beneficiary named to the asset.

If a will only provides limited instructions, the state’s law will fill in the gaps. Therefore, any assets that pass-through contracts will be distributed directly, assets noted in the will go through probate and anything else will go usually to the next of kin.

A better course of action is to have an estate attorney review all of your assets, determine who you want to receive your property and make up a plan to make this happen in a smooth, tax-efficient manner.

Reference: LimaOhio.com (Aug. 22, 2020) “Asset distribution when we die”

 

Planning for Nursing Home Expenses

The question raised in the article “Fact or Fiction: I Can Protect My Assets from a Nursing Home with a Revocable Trust” from New Hampshire Business Review is frequency asked, and the reason for it is understandable. Any form of long-term home care is costly and can quickly decimate a lifetime of savings. There are ways to protect assets, but a revocable trust is not one of them.

There are some reasons why a person might find a revocable trust attractive. For one thing, if the grantor (the person who creates the trust and is also the trustee (i.e., the person in charge of the trust)), there is no loss of control. It is as if you still own the assets that are in the trust. However, when you die, the assets in the trust don’t go through the probate process. Instead, they go directly to the beneficiaries named in the trust documents. A revocable trust also lets you make specific provisions for beneficiaries and beneficiaries with special needs.

There is a trust that can be used to protect assets from the cost of long-term care. It is the irrevocable trust, which must be properly prepared by an estate planning attorney and done in a timely fashion: five years before the person needs to go to a nursing home.

The difference is in the name: the irrevocable trust is irrevocable. Once it is created, you (the grantor) may not change it. Once an asset is placed in the trust, you don’t own it. The trust is the owner. You can’t change your mind. The grantor may also not serve as the trustee of the trust.

You have to be prepared to give up complete control of the assets that go into the trust.

Some people think simply by handing over their assets in the trust to their children, they’ve solved everything. However, there are problems. If your children are sued or run into debt problems, that lifetime of saving which is now in their control is also subject to creditors or claims. If you need to enter a nursing home within five years of your handing over the assets, you also won’t be eligible for Medicaid.

The best course of action is to meet with an estate planning attorney and discuss your overall estate plan. You should have a frank conversation about your wishes, what kind of a legacy you want to leave behind and your bigger picture for the world after you’ve passed. The attorney will help work out a plan that will protect you, your spouse, your assets and your family.

Remember that an estate plan is not a one-and-done document. Every three or four years, or as “life happens” and changes occur in your life, you should touch base with your attorney. A new family member by marriage, birth or adoption, may call for some changes to your estate plan. It might also be affected by the sadder events of life; death, divorce, or a significant health change. All require a phone call and a discussion to ensure that your estate plan still achieves your goals and protects those you love.

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Reference: New Hampshire Business Review (July 30, 2020) “Fact or Fiction: I Can Protect My Assets from a Nursing Home with a Revocable Trust”

Trusts: The Swiss Army Knife of Estate Planning

Trusts serve many different purposes in estate planning. They all have the intent to protect the assets placed within the trust. The type of trust determines what the protection is, and from whom it is protected, says the article “Trusts are powerful tools which can come in many forms,” from The News Enterprise. To understand how trusts protect, start with the roles involved in a trust.

The person who creates the trust is called a “grantor” or “settlor.” The individuals or organizations receiving the benefit of the property or assets in the trust are the “beneficiaries.” There are two basic types of beneficiaries: present interest beneficiaries and “future interest” beneficiaries. The beneficiary, by the way, can be the same person as the grantor, for their lifetime, or it can be other people or entities.

The person who is responsible for the property within the trust is the “trustee.” This person is responsible for caring for the assets in the trust and following the instructions of the trust. The trustee can be the same person as the grantor, as long as a successor is in place when the grantor/initial trustee dies or becomes incapacitated. However, a grantor cannot gain asset protection through a trust, where the grantor controls the trust and is the principal recipient of the trust.

One way to establish asset protection during the lifetime of the grantor is with an irrevocable trust. Someone other than the grantor must be the trustee, and the grantor should not have any control over the trust. The less power a grantor retains, the greater the asset protection.

One additional example is if a grantor seeks lifetime asset protection but also wishes to retain the right to income from the trust property and provide a protected home for an adult child upon the grantor’s death. Very specific provisions within the trust document can be drafted to accomplish this particular task.

There are many other options that can be created to accomplish the specific goals of the grantor.

Some trusts are used to protect assets from taxes, while others ensure that an individual with special needs will be able to continue to receive needs-tested government benefits and still have access to funds for costs not covered by government benefits.

An estate planning attorney will have a thorough understanding of the many different types of trusts and which one would best suit each individual situation and goal.

Reference: The News Enterprise (July 25, 2020) “Trusts are powerful tools which can come in many forms”

 

What Is a Will Codicil?

There are a number of reasons for adding a codicil to an existing will. KAKE.com’s recent article entitled “Using a Codicil to Modify a Will” says it’s good to know when you might need one and how to add it.

A codicil is a way to change the terms of an existing will. A codicil allows you to modify a term in your will, without the need to rewrite the whole will. A codicil is used in cases where you only need to make relatively minor changes.

There are different situations that might require a codicil to be added to your will. Here are some examples:

  • You want to add or remove an heir
  • You’ve acquired or disposed of property you need to update in your will
  • You need to change the executor of your will
  • You want to change the person designated as a legal guardian for your minor children
  • You recently were married or divorced and need to change how your assets or property will be distributed; or
  • You want to make changes to how your assets and property will be divided for other reasons.

Adding a codicil to a will make certain that the will is current, as you go through different life events or if your financial circumstances change. This can help eliminate the chance that your will may be challenged after you die, because those named as beneficiaries disagree with the will’s terms. It can also help to avoid lengthy delays in probate associated with property you no longer own or property you haven’t addressed in the will.

Remember that a codicil allows you to change your will. However, revoking a will terminates it completely. Ask an experienced estate planning attorney about the laws for revoking a will in your state. Some states let you simply physically destroy the will, and in others, you may need to draft a written declaration stating that your will has been revoked or draft a new replacement.

If you need to make substantial changes to the terms of your will, then revoking it and creating a new will may be the better plan. A new will in place can avoid confusion during probate, if there are conflicting terms. You may also need to write a new will, if all copies of your existing will are unintentionally lost or destroyed.

Drafting a codicil to a will, is like writing a will itself. The codicil needs to follow the legal guidelines established in your state. Ask an experienced estate planning attorney for help.

Reference: KAKE.com (June 17, 2020) “Using a Codicil to Modify a Will”

How to Plan for Incapacity

Planning for incapacity is just as important as planning for death. One is certain, the other is extremely likely. Therefore, it makes sense to prepare in advance, advises the article “Planning ahead for incapacity helps you and family” from The Press-Enterprise.

Let’s start by defining capacity. Each state has its own language but for the most part, incapacity means that a person is incapable of making decisions or performing certain acts. A concerned adult child is usually the one trying to have a senior parent declared incapacitated.

A person who has a mental or physical disorder may still be capable of entering into a contract, getting married, making medical decisions, executing wills or trusts, or performing other actions. However, before a person is declared incapacitated by medical professionals or a court, having a plan in place makes a world of difference for the family or trusted person who will be caring for them. Certain legal documents are needed.

Power of Attorney. This is the primary document needed in case of incapacity. There are several kinds, and an estate planning attorney will know which one will be best for your situation. A “springing” power of attorney becomes effective, only when a person is deemed incapacitated and continues throughout their incapacity. A POA can be general, broadly authorizing a named person to act on different matters, like finances, determining where you will live, entering into contracts, caring for pets, etc. A POA can also be drafted with limited and specific powers, like to sell a car within a certain timeframe.

The POA can be activated before you become incapacitated. Let’s say that you are diagnosed with early-stage dementia. You may still have legal capacity but might wish a trusted family member to help handle matters. For elderly people who feel more comfortable having someone else handle their finances or the sale of their home, a POA can be created to allow a trusted individual to act on their behalf for these specific tasks.

A POA is a powerful document. A POA gives another person control of your life. Yes, your named agent has a fiduciary duty to put your interests first and could be sued for mismanagement or abuse. However, the goal of a POA is to protect your interests, not put them at risk. Choosing a person to be your POA must be done with care. You should also be sure to name an alternate POA. A POA expires on your death, so the person will not be involved in any decisions regarding your estate, burial or funeral arrangements. That is the role of the executor, named in your will.

Advance health care directive, or living will, provides your instructions about medical care. This document is one that most people would rather not think about. However, it is very important if your wishes are to be followed. It explains what kind of medical care you do or do not want, in the event of dementia, a stroke, coma or brain injury. It gets into the details: do you want resuscitation, mechanical ventilation or feeding tubes to keep you alive? It can also be used for post-death wishes concerning autopsies, organ donation, cremation or burial.

The dramatic events of 2020 have taught us all that we don’t know what is coming in the near future. Planning in advance is a kindness to yourself and your family.

Reference: The Press-Enterprise (July 19, 2020) “Planning ahead for incapacity helps you and family”

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Don’t Overlook Key Parts of Estate Plan

The importance of having key estate planning documents cannot be overstated. That includes a will, an advance directive, powers of attorney for health care and financial matters and guardianships for minor children. Trusts may also be part of an estate plan, and they need to be created and funded in a timely manner. However,, according to the article “7 Things Your Client’s Estate Plan Might Be Missing: Morningstar” from Think Advisor, there are a number of frequently overlooked additional parts to an estate plan that make a difference.

Financial Overview. This gives a broad outline of your assets and can be a useful discussion starting point, when one spouse manages the money and the other needs to be brought up to speed. It includes information about larger assets, including the home, investments, cars and other valuables.

A Directory. Creating a complete master list of all accounts, including the account number, website addresses and the names of any individuals that you deal with on a regular basis, avoids sending loved ones on a scavenger hunt. Keep this document safe—either encrypt it or keep it in a locked, fireproof safe in your home.

Personal Property. Wills contain directions about property, but not everything gets included. Make a list of any tangible personal property that you want to go to specific people, like jewelry or artwork, and create a detailed memo. It won’t be part of the will, but most states consider such memos legally binding, as long as they are mentioned in the will. Your estate planning attorney will know what is best for your situation and in your state.

Plan for Pets. The best way to do this is with a pet trust, which is enforceable. You name a person to take care of your pets, and how much money they should use to care for the pet. The will can be used to specify who should be your pet’s caretaker. You can leave assets for the pet, but the designated person is not legally bound to use the money for the pet’s well-being.

Digital Estate Plan. Make a plan for your digital property, including tangible digital devices, like computers and phones and the data stored on devices in the cloud and online accounts, including social media, websites, emails, photos, videos, etc. Start by making an inventory of all digital accounts, which needs to be stored in the same way your directory is: under lock and key.

End of Life Plan. Advance directives are used to direct your wishes towards life-extending care, but they don’t always go into detail. Providing additional information to loved ones who might need to make health care decisions could alleviate a lifetime of guilt. Having conversations is a starting point but putting your wishes into a document is better.

Ethical Will. An ethical will in which the person hands down their belief system to loved ones is a gift and part of your legacy. What would you want the next generation to know about your beliefs? What life lessons do you want to share?

Reference: Think Advisor (July 22, 2020) “7 Things Your Client’s Estate Plan Might Be Missing: Morningstar”

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Visiting Grandma at the Nursing Home

In spots where visits have resumed, they’re much changed from those before the pandemic. Nursing homes must take steps to minimize the chance of further transmission of COVID-19. The virus has been found in about 11,600 long-term care facilities, causing more than 56,000 deaths, according to data from the Kaiser Family Foundation.

AARP’s recent article entitled “When Can Visitors Return to Nursing Homes?” explains that the federal Centers for Medicare and Medicaid Services (CMS) has provided benchmarks for state and local officials to use, in deciding when visitors can return and how to safeguard against new outbreaks of COVID-19 when they do. The CMS guidelines are broad and nonbinding, and there will be differences, from state to state and nursing home to nursing home, regarding when visits resume and how they are handled. Here are some details about the next steps toward reuniting with family members in long-term care.

When will visits resume? As of mid-July, 30 states permitted nursing homes to proceed with outdoor visits with strict rules for distancing, monitoring and hygiene. The CMS guidelines suggest that nursing homes continue prohibiting any visitation, until they have gone at least 28 days without a new COVID-19 case originating on-site (as opposed to a facility admitting a coronavirus patient from a hospital). CMS says that these facilities should also meet several additional benchmarks, which include:

  • a decline in cases in the surrounding community
  • the ability to provide all residents with a baseline COVID-19 test and weekly tests for staff
  • enough supplies of personal protective equipment (PPE) and cleaning and disinfecting products; and
  • no staff shortages.

Where visits are permitted, it should be only by appointment and in specified hours. In some states, only one or two people can visit a particular resident at a time. Even those states allowing indoor visits are suggesting that families meet loved ones outdoors. Research has shown that the virus spreads less in open air.

Health checks on visitors. The federal guidelines call for everyone entering a facility to undergo 100% screening. However, the CMS recommendations don’t address testing visitors for COVID-19.

Masks. The federal guidelines say visitors should be required to “wear a cloth face covering or face mask for the duration of their visit,” and states that allow visitation are doing so. The guidelines also ask nursing homes to make certain that visitors practice hand hygiene. However, it doesn’t say whether facilities should provide masks or sanitizer.

Social distancing. The CMS guidelines call on nursing homes that allow visitors to ensure social distancing, but they don’t provide details. States that have permitted visits, state that facilities enforce the 6-foot rule.

Virtual visits. Another option is to make some visits virtual. Videoconferencing and chat platforms have become lifelines for residents and families during the pandemic. Continued use after the lockdowns can minimize opportunities for illness to spread.

Reference: AARP (July 22, 2020) “When Can Visitors Return to Nursing Homes?”

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How Do I Keep Up My Spirits in the Pandemic?

The coronavirus has created some stressful situations that can bring out the best or worst in us. We must hope that the pandemic will eventually be brought under control, and our loved ones will survive.

AARP’s recent article entitled “Keeping Caregiver Spirits High During the Coronavirus Outbreak” says that there’s no single way to find hope.

Many family caregivers draw on their faith, and others on rely on sheer determination. However, there some other ways to create hope for caregivers and their loved ones in this pandemic.

The article provides some psychological ideas:

Watch your temperament. Through our disposition and upbringing, each one of us is inclined to look at the world as a pessimist or an optimist. These tendencies become more pronounced under the stress of a crisis. To get a sense of your natural tendency, keep a daily journal and record your current preoccupying thoughts. Keep that document and review it in a week. Rereading those entries will quickly let you know where you stand psychologically and let you to see if you need to take steps to better deal with the current pandemic.

Change your mindset. Since optimism is better, make an effort to increase your optimistic thinking. You could bring your attention more fully to some of the unforeseen benefits of this change in our normally hectic lives. Keeping a gratitude journal is another way of heightening your awareness of the good things we still have.

Rearrange your activities. Directing your activities can result in a more hopeful outlook. Don’t watch hours of cable news shows, because it can have a negative effect on your psyche. Keep informed but balance news with engaging in fun activities.

Contact your positive-minded friends. It is more crucial than ever to virtually contact your friends and family members for support by sharing experiences, fears and good wishes. Reach out to those who can sustain a more balanced and realistic view, acknowledging these negative times but also the positive possibilities.

Reference: AARP (March 31, 2020) “Keeping Caregiver Spirits High During the Coronavirus Outbreak”

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