Estate Planning Is a Gift and a Legacy for Loved Ones

Without an end of life plan, a doctor you’ve never even met might decide how you spend your last moments, and your loved ones may live with the burden of not knowing what you would have wished. These are just a few reasons why “End-Of-Life Planning is a ‘Lifetime Gift’ To Your Loved Ones,” as discussed in a recent article from npr.org.

It’s important to recognize that planning for the end of your life is actually not all about you. It’s about the ones you love: your parents, spouse, children, or your pets. They are the ones who will benefit from the decisions you make to prepare for the end of your life, and life after you are gone. It is a gift to those you love.

So, what should you do?

Start by preparing to have an estate plan created. If you have an estate plan but haven’t reviewed it in the last three or four years, find it and review it. If you can’t find it, then you definitely need a new one. An estate planning attorney can help you create an estate plan, including a will and other documents.

In the will, you name an executor, someone who you trust completely to carry out your directions. Some people choose a spouse or adult child to be their executor. It’s a lot of work, so pick someone who is smart, organized and trustworthy. They’ll be in charge of all of your financial assets and communicating how the estate is distributed to everyone in your will.

Create an inventory. This includes things that are of financial and sentimental value. People fight over sentimental things, so giving your family specific directions may avoid squabbles.

If you have children under age 18, name a guardian for them. This should be a person who knows your children and will raise them with same values as you would.

Pets are often overlooked in estate planning. If you want to protect your pet, in many states you can create a pet trust. It includes funds that are to be used specifically for care for your pet, and a trustee who will be responsible for ensuring that the funds are used as you intended.

Digital accounts are also part of your property, including social media, online photos, everything in your online cloud storage, credit card rewards, email, frequent flyer miles and digital assets.

Make sure your will is executed and in compliance with the laws of your state. If your will is found to be invalid, then it is as if you never made a will, and all your planning will be undone.

You also need an advance directive, a legal document that covers health care and protects your wishes at the end of life. One part of an advance directive gives a person medical power of attorney, so they can make decisions for you if you cannot. The other part is a living will, where you share how you want to be cared for and what interventions you do or don’t want if you are near death.

Reference: npr.org (June 30, 2020) “End-Of-Life Planning is a ‘Lifetime Gift’ To Your Loved Ones”

 

‘Siegfried & Roy’ Star Roy Horn Named Siegfried His Executor

Legal documents revealed that performer Roy Horn’s last will and testament was filed in the Las Vegas courts on June 18, 2020, according to the article “’Siegfried & Roy’ Star Roy Horn’s Will Names Siegfried As Executor Of His Multi-Million Dollar Estate” as reported in The Blast. The document gave Siegfried Fischbacher the power to administer and distribute Horn’s assets after his death. If Siegfried was not able to perform the tasks, Roy Horn had named Lynette G. Chappell as the alternate executor.

Lynette G. Chappell was the performer’s longtime assistant.

Roy Horn died at age 75 after contracting COVID-19. Siegfried had told an interviewer that he drove to the hospital with Lynette and was able to see his life partner one more time before he died.

Roy Horn also named Siegfried’s longtime lawyer, John Moran Jr., to be co-executor of his estate with Chappell, if Siegfried was unable or unwilling to be his executor.

The will, which was signed in 2016, also included directions that Roy Horn’s multi-million estate be distributed to beneficiaries, which were named in a private trust. The trust was not attached to the legal filing that included the last will and testament, so the names of his beneficiaries will remain private. The will does state that Roy Horn is unmarried and has no children. He was survived only by his brother, Werner Horn.

Siegfried was given broad powers to manage all of the financial issues of the estate, including paying for the funeral and any expenses regarding handling Horn’s remains. As the executor, the personal representative is empowered to perform any act necessary to administer the estate and any trust established under the will. The will also permits Siegfried to hold, retain, invest, sell or manage any real or personal property, distribute assets of the estate without requiring pro-rata distribution of specific assets, employ attorneys, accountants, custodians, and any other agents or assistants as the executor deems necessary and to pay them and pay for their expenses from income or principal.

According to reports, Siegfried and Roy had a combined estimated net worth of more than $100 million, after they had signed several highly lucrative contracts to perform their award-winning show on the Las Vegas Strip.

The duo performed on the Las Vegas Strip for decades, until 2003, when their show abruptly ended when Roy was attacked on stage by a white tiger. He was dragged off the stage by the tiger and suffered severe injuries, including a severed spine, a stroke and massive blood loss.

Siegfried revealed in a recent interview with a German publication that Roy Horn had been cremated and his ashes are being kept in a chapel in their Las Vegas compound.

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Reference: The Blast (June 27, 2020) “’Siegfried & Roy’ Star Roy Horn’s Will Names Siegfried As Executor Of His Multi-Million Dollar Estate”

Don’t Neglect a Plan for Your Pet During the Pandemic

If you have a pet, chances are you have worried about what would happen to your furry companion if something were to happen to you. However, worrying and having an actual plan are two very different things, as discussed at a Council of Aging webinar. That’s the subject of the article “COA speakers urge pet owners to plan for their animal’s future” that appeared in The Harvard Press.

It’s stressful to worry about something happening, but it’s not that difficult to put something in place. After you’ve got a plan for yourself, your children and your property, add a plan for your pet.

Start by considering who would really commit to caring for your pet, if you had a long-term illness or in the event of your unexpected passing. Have a discussion with them. Don’t assume that they’ll take care of your pet. A casual agreement isn’t enough. The owner needs to be sure that the potential caretaker understands the degree of commitment and responsibility involved.

If you should need to receive home health care, don’t also assume that your health care provider will be willing to take care of your pet. It’s best to find a pet sitter or friend who can care for the pet before the need arises. Write down the pet’s information: the name and contact info for the vets, the brand of food, medication and any behavioral quirks.

There are legal documents that can be put into place to protect a pet. Your will can contain general directions about how the pet should be cared for, and a certain amount of money can be set aside in a will, although that method may not be legally enforceable. Owners cannot leave money directly to a pet, but a pet trust can be created to hold money to be used for the benefit of the pet, under the management of the trustee. The trust can also be accessed while the owner is still living. Therefore, if the owner becomes incapacitated, the pet’s care will not be interrupted.

An estate planning attorney will know the laws concerning pet trusts in your state. Not all states permit them, although many do. To find out about Utah’s pet trust laws, click here to set up a consultation with Calvin.

A pet trust is also preferable to a mention in a will, because the caretaker will have to wait until the will is probated to receive funds to care for your pet. The cost of veterinary services, food, medication, boarding or pet sitters can add up quickly, as pet owners know.

A durable power of attorney can also be used to make provisions for the care of a pet. The person in that role has the authority to access and use the owner’s financial resources to care for the animal.

The legal documents will not contain information about the pet, so it’s a good idea to provide info on the pet’s habits, medications, etc., in a separate document. Choose the caretaker wisely—your pet’s well-being will depend upon it!

Reference: The Harvard Press (May 14, 2020) “COA speakers urge pet owners to plan for their animal’s future”

How Do I Talk about End-Of-Life Decisions?

With the coronavirus pandemic motivating people to think about what they prioritize in their lives, experts say you should also take the time to determine your own end-of-life plans.

Queens News Service’s recent article entitled “How to have the hardest conversation: Making end-of-life decisions” reports that in this coronavirus pandemic, some people are getting scared and are realizing that they don’t have a will. They also haven’t considered what would happen, if they became extremely ill.

They now can realize that this is something that could have an impact upon them.

According to the U.S. Centers for Disease Control and Prevention (CDC), 70% of Americans say they’d prefer to die at home, while 70% of people die in a hospital, nursing home, or a long-term care facility. This emphasizes the importance of discussing end-of-life plans with family members.

According to a survey of Californians taken by the state Health Care Foundation, although 60% of people say that not burdening their loved ones with extremely tough decisions is important, 56% have failed to talk to them about their final wishes.

“Difficult as they may be, these conversations are essential,” says American Bar Foundation (ABF) Research Professor Susan P. Shapiro, who authored In Speaking for the Dying: Life-and-Death Decisions in Intensive Care.

“Now is a good time to provide loved ones with the information, reassurance and trust they need to make decisions,” Shapiro says.

Odds are the only person who knows your body as well as you do, is your doctor.

When thinking about your end-of-life plans, talk with your doctor and see what kind of insight she or he can provide. They’ve certainly had experience with other older patients.

If you want to make certain your wishes are carried out as you intend, detail all of your plans in writing. That way it will be very clear what your loved ones should do, if a decision needs to be made. This will eliminate some stress in a very stressful situation.

Even after the COVID-19 pandemic is over, everyone will still need a will.

Talk with an experienced elder law or estate planning attorney to make certain that you have all of the necessary legal documents for end-of-life decisions.

Reference: Queens News Service (May 22, 2020) “How to have the hardest conversation: Making end-of-life decisions”

Suggested Key Terms: Elder Law Attorney, Elder Care

Steps to Take When a Loved One Dies

This year, more families than usual are finding themselves grappling with the challenge of managing the affairs of a loved one who has died. Handling these tasks while mourning is hard, and often families do not have time to prepare, says the article “How to manage a loved one’s finances after they die” from Business Insider. The following are some tips to help get through this difficult time.

Someone has to be in charge. If there is a will, there should be a person named who is responsible for administering the estate, usually called the executor or personal representative. If there is no will, it will be best if one person has the necessary skills to take the lead.

When one member of a married couple dies, the surviving spouse is the usual choice. Otherwise, a family member who lives closest to the deceased is the next best choice. That person will need to get documents from the local court and take care of the residence until it is sold. Being physically nearby can make many tasks easier.

It is always better if these decisions are made before the person dies. Wills should be kept up to date, as should power of attorney documents, trusts and advance directives. When naming an executor or trustee, let them know what you are asking of them. For instance, don’t name someone who hates pets and children to be your children’s guardian or be responsible for your beloved dogs when you die.

Don’t delay. Grief is a powerful emotion, especially if the death was unexpected. It may be hard to get through the regular tasks of your day, never mind the additional work of managing an estate. However, there are risks to delaying, including becoming a target of scammers.

Get more death certificates than seems necessary. Make your life easier by getting at least a dozen certified copies, so you don’t have to keep going back to the source. Banks, brokerage houses, phone companies, utilities, credit card companies, etc., will all want to see the death certificate. While there are instances where a copy will be accepted, in many cases you will need an original, with a raised seal. In fact, in some states it is a crime to photocopy a death certificate.

Who to notify? The first call needs to be to the Social Security Administration. You may also want to send an email. If Social Security benefits continue to be paid, returning the money can turn into a time-consuming ordeal. If there are any other recurring payments, like VA benefits or a pension, those institutions need to be notified. The same is true when it comes to insurance companies, banks and credit card companies. Fraud on the credit cards of the deceased is quite common. When a notice of death is published, criminals look for the person’s credit card and Social Security numbers on the dark web. Act fast to prevent fraud.

Protect the physical property. Secure the home right away. Are there plants to be watered or pets that need care? Take pictures, create an inventory and consider changing locks. Take any valuables out of the house and place in a secure location. If the house is going to be empty, make sure to take care of the property to avoid any deterioration.

Paying the bills. Depending on the person’s level of organization, you’ll have to identify where the money is and if anything is being paid automatically. Old tax returns can be helpful to identify income sources. Figure out what accounts need payment, like utilities.

Some accounts are distributed directly to beneficiaries, like transfer-on-death accounts like 401(k)s, IRAs and life insurance policies. Joint bank accounts and real property held in joint tenancy will pass directly to the joint owner. The executor’s role is to inform the institutions of the death, but not to distribute funds.

File tax returns. You’ll have to do the final taxes, due on April 15 of the year after death. If taxes weren’t filed for any prior years, the executor has to do those as well.

Consider getting help. An estate planning lawyer can help with the administration of an estate, if it becomes overwhelming. Regardless of who handles this process, expect the tasks to take anywhere from six months to two years, depending on the complexity of the estate.

Reference: Business Insider (May 2, 2020) “How to manage a loved one’s finances after they die”

Elder Abuse Continues as a Billion-dollar Problem

Aging baby boomers are a giant target for scammers. A report issued last year from a federal agency, the Consumer Financial Protection Bureau highlighted the growth in banks and brokerage firms that reported suspicious activity in elderly clients’ accounts. The monthly filing of suspicious activity reports tied to elder financial exploitation increased four times from 2013 through 2017, according to a recent article from the Rome-News Tribune titled “Financial abuse steals billions from seniors each year.”

When the victim knew the other person, a family member or an acquaintance, the average loss was around $50,000. When the victim did not have a personal relationship with their scammer, the average loss was around $17,000.

What can you do to protect yourself, now and in the future, from becoming a victim? There are many ways to build a defense that will make it less likely that you or a loved one will become a victim of these scams.

First, don’t put off taking steps to protect yourself, while you are relatively young. Putting safeguards into place now can make you less vulnerable in the future. If you are diagnosed with Alzheimer’s or another form of dementia five or ten years from now, it may be too late.

Create a durable power of attorney as part of your estate plan. This is a trusted person you name as your legal representative or agent, who can manage your financial affairs if need be. While it is true that family members are often the ones who commit financial elder abuse, you’ll need to put your trust in someone. Usually this is an adult child or a relative. Make sure that the POA suits your needs and is properly notarized and witnessed. Don’t count on standard templates covering your unique needs.

Consider the guaranteed income approach to retirement planning. Figuring out how to generate a steady stream of income as you face the cognitive declines that occur in later years might be a challenge. Planning for this in advance will be better.

Social Security is one of the most valuable sources of guaranteed income. If you will receive a pension, try not to do a lump sum payout with the intent to invest the money on your own. That lump sum makes you a rich target for scammers.

Consider rolling over 401(k) accounts into Roth accounts, or simply into one account. If you have one or more workplace retirement plans, consolidating them will make it easier for you or your representative to manage investments and required minimum distributions.

Make sure that you have an estate plan in place, or that your estate plan is current. Over time, families grow and change, financial situations change and the intentions you had ten, twenty or even thirty years ago, may not be the same as they are today. An experienced estate planning attorney can ensure that your wishes today are followed, through the use of a will, trust and other estate planning strategies.

Resource: Rome News-Tribune (April 27, 2020) “Financial abuse steals billions from seniors each year.”

When Does the Fiduciary Duty Granted by a Power of Attorney Begin?

A recent case examined the issue of when the fiduciary duty begins for an agent who has been given Power of Attorney, as reported by the Chicago Daily Law Bulletin in the article “Presumed power of attorney fraud is main factor in joint-account fight.”

Soon after moving to Illinois from Florida to live with his eldest son, a man and that son opened multiple bank accounts, purchased certificates of deposit (CDs) from a bank where the son’s wife worked and transferred more than $60,000 from two of the man’s Florida bank accounts to Illinois banks. Soon after the man moved, his eldest son deposited more than $300,000 from the sale of his father’s Florida condominium into one of the father’s Illinois bank accounts.

The eldest son then withdrew money from the father’s accounts to pay for home improvement costs and other personal expenses. After the father died, the eldest son’s two brothers sued their older brother, accusing him of initiating numerous transfers of money that were not in their father’s or their best interests, and of exerting undue influence on their father, by convincing him to change his will after he moved in with the oldest brother.

The trial court ordered the older brother to repay more than $900,000 back to the estate, including almost $300,000 in prejudgment interest, and voided the revised estate planning documents that the older brother had his father sign. That included a revised will, trust and power of attorney that favored the older brother.

Once you are appointed as a power of attorney, you become a fiduciary—that’s how most state laws work. That means you must act first in the interest of the person who has appointed you. The law states that an agent owes a fiduciary duty to the principal. Period. Any transactions that favor the agent over the principal (or their estate) are deemed fraudulent, unless the agent is able to disprove the fraud with clear and convincing evidence that his or her actions were undertaken in good faith and did not betray the confidence and trust placed in the agent. If the agent can meet this burden, the challenged transaction may be upheld. But if it doesn’t, then the transaction is not valid.

Some of the facts the court look at when making this determination are: did the fiduciary make a full disclosure to the principal of key information, did the fiduciary pay the fair market value for the transfer and did the principal have competent and independent advice.

In this case, the trial judge found that the multiple transfers into the Illinois banks and the gift of $130,000 from the principal to the oldest brother occurred during the existence of the POA relationship. The oldest brother clearly benefitted from these transfers, which activated the presumption of fraud.

The trial court’s decision was appealed by the older brother, who along with his two younger brothers brought motions for summary judgment, that is, for the appeals court to disregard the decision of the trial court. However, the appeals court agreed with the trial judge that the older brother failed to prove that the transfers were in good faith.

The appeals court makes it clear: the power of attorney fiduciary relationship begins when the power of attorney agent signs the document and the agent has a legal responsibility to put the interests of the principal first.

Reference: Chicago Daily Law Bulletin (April 23, 2020) “Presumed power of attorney fraud is main factor in joint-account fight”

 

Hey Dad, Can I Get an Advance on My Inheritance?

Most parents want to divide their estate equally among their heirs, but sometimes things just don’t work out that way. That’s especially the case when one child needs more help than another. Therefore, what parents will often do is count the distributions they make during their lifetime as advances against the child’s future inheritance. This doesn’t always go smoothly, says the article “Lifetime advances of inheritances” from Lake County News.

Equalizing distributions to some children to offset any substantial distributions made to offset the total distribution can lead to trouble, if certain legal requirements are not addressed. In California, the Probate Code is very specific. There are three different approaches in which lifetime distributions are counted as advances of inheritances at death:

  1. The instrument provides for deduction of the lifetime gift from the at-death transfer
  2. The transferor declares in a contemporaneous writing that the gift is in satisfaction of the at-death transfer or that its value is to be deducted from the value of the at-death transfer and
  3. The transferee acknowledges in writing that the gift is in satisfaction of the at-death transfer or that its value is to be deducted from the value at the at-death transfer.

In the first example, the decedent’s will, or trust expressly says that lifetime distributions are to be counted against the future inheritance. This may state a specific dollar amount or may refer to a ledger that tracks ongoing lifetime gifting. The ledger approach is often used when a child is dependent upon a parent for ongoing support, paying off school loans or paying a mortgage.

The second example, which involves a written record of the gift, was the subject of a recent appellate court decision. The deceased father kept track of all monetary gifts to his children. The father’s bookkeeper maintained a spreadsheet and was told by the father that the list was important, so that the payments would be deducted from inheritances. At the father’s death, the son had received more than $450,000 more than the daughter. The son contested the daughter’s request for equalizing the inheritance based on the ledger. The appellate court stated that the ledger met the requirements to serve as a contemporaneous written record. The court also found that the permanent ledger was property authenticated and entered into evidence, based on the daughter’s testimony that she found the ledger among her father’s papers and that it was written in her father’s handwriting.

In the third scenario, where there was a written acknowledgment by the person receiving the “advance” that the money was in satisfaction of the at-death transfer, the court found that the requirement was satisfied and the son had acknowledged that the assets given to him were advances on his inheritance.

A better scenario, and one that would have prevented some, if not all, of the litigation described above, would be to have estate planning documents that clearly state whether any disproportionate lifetime gifting to beneficiaries is to be offset with equalizing payments to the other beneficiaries at death. Your estate planning attorney will be able to create the best plan if your heirs need financial support, following the laws of your state.

Reference: Lake County News (March 14, 2020) “Lifetime advances of inheritances”

Suggested Key Terms: Inheritance, Beneficiaries, Equalizing Payments, Advance Gifting, Permanent Ledger, Decedent, Will, Trust, Estate Planning Attorney, Heirs

C19 UPDATE: Keeping Ourselves and Our Elderly Loved Ones Safer

We have all been warned that our elderly loved ones are at heightened risk during the coronavirus pandemic. If you are a caregiver for someone in this high-risk population, here are some tips from Dr. Alicia Arbaje, who specializes in internal medicine and geriatrics at Johns Hopkins.

  1. Keep Yourself Well
    Be sure to follow all the guidelines and precautions about social distancing, hand washing, and cleaning to keep yourself well.
  2. Limit In-Person Visits
    It may be emotionally challenging but keeping in-person visits to a minimum is the best way to reduce the risk of infection. When you can’t be there in-person, use technology to stay in touch. Teach your older loved ones how to use video chat applications. Remember to add captions to your videos if they are hearing-impaired. Also, encourage others to telephone or send cards or notes as well.
  3. Be Creative About Home-Based Projects
    Now may be a great time to encourage your loved ones to record their personal stories, organize family photos or reconnect with old friends online.
  4. Decide on a Plan
    Discuss now your emergency response plan. Who will be the emergency contact? Do you know where the estate planning documents are and can you quickly access them, especially health care directives?

If you or your loved one do not have an updated will or trust and health care documents, please reach out to our office. We can help get planning in place quickly and easily and are even offering virtual meetings now to keep everyone safe.

What if your elder loved one starts to develop symptoms?

If you or your loved one learn that you might have been exposed to someone diagnosed with COVID-19 or if anyone in your household develops symptoms such as cough, fever or shortness of breath, call your family doctor, nurse helpline or urgent care facility. For a medical emergency such as severe shortness of breath or high fever, call 911.

Resource: Johns Hopkins Medicine, Coronavirus and COVID-19: Caregiving for the Elderly, https://www.hopkinsmedicine.org/health/conditions-and-diseases/coronavirus/coronavirus-caregiving-for-the-elderly

Common Myths about Your Estate When You Die

There are many misconceptions about the law in general and about estate planning in particular. There are also many opportunities to use the law to protect those we love, when it comes to helping families navigate life and the legal processes that happen after the death or disability of a loved one. The best option is to plan ahead, reports the article “I’m dead, now what? Myths about deaths in Georgia” from the Cherokee Tribune & Ledger-News. Here are the top four myths about what happens when someone dies.

A Will. If there’s no will, my spouse gets everything. Well, no. While you are a team, and you may want your spouse to get everything, if there’s no will, the laws of your state will determine who gets what. Your spouse in some states will split your possessions with your children. Your spouse in some states will get no less than a third of your assets. If you want your spouse to inherit everything, you need a will.

You also need a will if you want your spouse to receive everything so they can take care of your children, if something unexpected happens to you. Without it, your spouse will have to create a budget for your children’s needs and present that to the court before they can spend any of the children’s money. That’s how it works in Georgia. Check with a local estate planning attorney to make sure that’s what you’re prepared to leave for your spouse to do, or what your state’s laws say.

Having a will allows you to determine who you want to inherit what.

A will means there’s no need for probate court. Wrong again! Having a will does not mean you avoid probate court and the legal process known as probate. A will is not legally effective, until the nominated executor presents your will to the probate court and the court accepts the will and declares it to be valid. This is a longer process in some jurisdictions. However, there are potential problems. If there’s a disgruntled family member or a need for privacy, the probate process creates a public record and information can and often is obtained by family members. To avoid making your life a public matter, you need an estate plan that includes trusts, which do not go through the probate process and do not become public records.

If I don’t have a will, the state will take it all. It’s very rare that any state will take everything, even if there is no will. The state only does that if absolutely no family members can be found, or if the state’s Medicaid program has an aggressive claw back policy that seeks to recover the cost of nursing home care provided to the decedent. If the person who died did not need Medicaid services, then it’s unlikely that the state will take the assets. More likely? A family member, determined by degree of kinship, will be entitled to inherit. Again, the law varies by state, so check with an experienced estate planning lawyer in your state.

The family gets stuck with the debts. That’s a yes and no answer. The debts of family members do not have to be paid by the family. However, they are paid by the deceased’s estate, which will be decreased by the amount of debt owed. Therefore, the family members will inherit less, but it’s not coming out of their own pockets. The debts of the deceased are to be paid by whatever assets he or she owned at the time of death. If there’s not enough in the estate, the family is not obligated to pay the debt. The exception is if the spouse was a joint borrower or otherwise legally obligated to pay the debt.

What you know and don’t know about estate planning can hurt you and your family. An easy way to address this: meet with an experienced estate planning attorney and make a plan that will distribute your assets according to your wishes.

Reference: Cherokee Tribune & Ledger-News (Feb. 1, 2020) “I’m dead, now what? Myths about deaths in Georgia”