Capital District - NY Estate & Elder Law

Make Sure the Right People Have Access to Your Digital Accounts

 

 

The world is changing rapidly, thanks to fast-moving advances in technology, including the creation of digital assets. That means your estate plan may well need an update, according to Financial Advisor in “Unlocking Clients’ Digital Lives.”

As it turns out, if no one can access your digital assets, including accounts, many could be lost, stolen by a hacker or deleted.

Forty-one states and the U.S. Virgin Islands have passed laws that allow a financial planner or other fiduciary to access digital assets upon the death of a client, and four other states plus the District of Columbia are considering similar legislation.

In Missouri, the Fiduciary Access to Digital Assets Act allows a fiduciary to be granted access to a person’s electronic records or digital assets in a will, trust, power of attorney or another document.

The way we live our personal lives and the way we conduct our personal business and financial matters have changed, so we must address digital assets in our estate planning to reflect these changes.

Challenges are created if those digital assets are not addressed in the estate plan. Striking a balance between privacy rights and the need to settle an estate, can become an expensive and time-consuming issue. One family had to bring a lawsuit to access the emails of their son, a Marine who was killed while serving our country.

If you manage your bill paying and investments online, someone will need to be able to control bill payments, especially if they are on an autopayment schedule.

Start by preparing a complete inventory of all digital assets, including a description of each one and how it is accessed with names, passwords and security questions. Find out what each online platform requires, if a fiduciary or executor needs to access those accounts. Each platform, like each financial institution, has their own forms and procedures.

This information should be stored in a secure place. Some people prefer a password-protected digital location.

An estate planning attorney can help you create or update your estate plan that fits your unique circumstances and may include your digital assets.

Reference: Financial Advisor (Aug. 21, 2018) “Unlocking Clients’ Digital Lives”

 

Long-Term Care? The Discussion Should Not Be Avoided

 The older one gets, the more expensive the insurance becomes and that is, if it is still available.

The possibility of needing long-term care can be a thought that one would like to avoid. However, the truth is it should be discussed and taken into consideration in retirement planning, according to CNBC in “Plan ahead to protect your family and your fortune from this retirement risk.”

Consider this: in 2018, the national median annual cost of a semiprivate room in a nursing home was $85,775. A home health aide in 2017 cost $49,192. That’s not small change.

So how do you prepare for long-term care costs?

Start planning now. The earlier in your life that you purchase a long-term care insurance policy, the more likely you’ll be able to afford to buy one. As you get older, they get more expensive—if you can even purchase them at all.

Where would you want to receive care? If you have a choice, would you rather have someone come to the house for a few hours to help, or would you prefer to move to an assisted living facility? Both have costs.  However, figuring out which one you’d prefer (if you have a choice), will help in the planning process.

You can now purchase more than just the traditional long-term care program. There’s also a hybrid cash-value life insurance policy or you can self-insure, if you have the cash on hand.

Who will be making your medical decisions? Have your estate planning attorney put a healthcare directive in place—designating a trusted person who will make decisions about your medical care if you should become unable to do so.

Who will make your financial decisions? Your estate planning attorney will most likely also create a power of attorney for you. This must be someone who you trust, someone good with handling money and making decisions and who can take over paying bills and managing your household budget, if you can’t.

Both these people may never be called upon to act—but if they are, you and your family will be in much better shape. Make sure to discuss your choices for health care and finances with these individuals.

In some cases, particularly when it comes to the financial power of attorney, a bank or a professional advisor may be a good choice. They have certain reporting requirements and may be a less emotional choice than a family member.

An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances.

Reference: CNBC (Aug. 22, 2018) “Plan ahead to protect your family and your fortune from this retirement risk”

 

Children Can Contest Glen Campbell’s Will

 

Three of Glen Campbell’s children, who were intentionally left out of his will, have been given the right to contest the will by a judge, according to Wealth Management.com in “Glen Campbell’s Kids Come After the Rhinestone Cowboy’s Estate.”

Campbell, who recently passed away, left two wills from 2001 and 2006. The 2006 will names Campbell’s fourth wife Kimberly, who is the executor of the estate, and five of Campbell’s other children as his beneficiaries. Campbell went public with his Alzheimer’s diagnosis in 2011.  However, it’s not known how far back his illness began. The legal burden facing his children: prove that he lacked the needed capacity to execute both wills.

If the will is deemed invalid because of lack of capacity or undue influence, the immediately preceding will is resurrected, said one estate planning attorney who is not affiliated with the case. The previous will probably disinherited them also, which is why they must prove the invalidity of both wills.

Kimberly has told a local newspaper that she would not challenge the kid’s right to contest the wills and the judge’s decision noted the lack of opposition. She has also filed a claim seeking reimbursement from the estate for more than $500,000 to cover the cost of his medical care.

It was also reported that one of his daughters, Debbie Campbell-Cloyd, has filed for a complete accounting of all payments made by the estate, as well as payments to and from a previously undisclosed bank account. She alleges that royalties that should have been deposited into an account controlled by Campbell’s estate, were instead deposited into this account, which is now controlled by Kimberly. The singer’s former manager has power of attorney over the account.

An estate planning attorney can advise you in creating an estate plan that fits your unique circumstances and may include a blended family.

Resource: Wealth Management.com (Aug. 2, 2018) “Glen Campbell’s Kids Come After the Rhinestone Cowboy’s Estate”

 

 

Multigenerational Living on the Increase

 

There are a record number of multigenerational homes in the U.S. and that trend is expected to keep rising, according to a Pew Research Center analysis reported in Financial Advisor Magazine in “How to Address Multigenerational Estate Planning Issues.”  

For some families, it’s college students moving back with mom and dad while they pay off student loans or newly married couples living with one set of parents while they save money to purchase a home of their own. New parents are recruiting their own parents to combine households, so child care and a stronger sense of family is created. In other families, having elderly parents move into their children’s home helps the seniors with aging issues.

In many instances, families add separate living quarters to their existing homes. States are addressing zoning issues that prohibited this kind of construction in the past. 

Pressures created by rising housing costs, housing shortages and demographics have all contributed to this new trend. How to navigate this kind of family “merger” requires a lot of planning, including estate planning. How will the property pass to the next generation? What about siblings who are not involved in the shared housing space?  How should their portion of the inheritance be handled?

There are many ways to navigate the closer relationship with aging parents or childcare needs. Some elect to purchase a nearby condo where parents are living, so at some point the parents can move from their single-family home to an apartment. For others, the parents move to an apartment within the home, so their children and grandchildren can enjoy the larger living space. 

An estate planning attorney can advise you in creating an estate plan that fits your unique circumstances and may include a multigenerational home.

Resource: Financial Advisor Magazine (July 31, 2018) “How to Address Multigenerational Estate Planning Issues”

 

 

Cohousing Communities Wave of the Future?

 

 

 

The economic answer for retirees living in expensive cities, such as Seattle, may be cohousing communities, according to the Seattle Times in “Battling rising cost of living? Seeking a community? A look at the cohousing lifestyle.”

This past June, Charles Durrett, an architect who has been advocating for the cohousing lifestyle for years, presented a workshop for people who want to establish these types of communities. The idea is that everyone gets their own private home and living quarters, while sharing kitchens and other shared rooms. Neighbors share house items, meals, coordinate activities and make group decisions about how to manage their shared lives.

While he introduced the concept and phrase “cohousing” thirty years ago, he says he’s busier than ever before. The workshop was sold out.

The concept could be an ideal solution for seniors who don’t want to give up their privacy but would like to be part of a smaller community. Durrett recommends that each community have a caretaker unit, so someone who is able to take care of the residents, can live as part of the group.

The success of a cohousing community is not in the size or design of the house.  It is due to the enthusiasm of the people coming together, who believe their lives will be better, if they are living as part of a community. That’s the common denominator. The architect has lived in a cohousing community for 12 years with 30 adults—20 of them seniors—and 20 children.

Research has shown that people live longer, when they are socially engaged. However, social can also turn to drama, especially in small groups. Therefore, people must learn how to get along and cooperate.

Thinking of moving to a shared community? Do the research and, if still interested, meet with an estate planning attorney for the pros and cons of the decision and its potential impact on your estate plan.

Reference: Seattle Times (June 1, 2018) “Battling rising cost of living? Seeking a community? A look at the cohousing lifestyle”

 

SAFE Act May Come to Rescue in Elder Financial Abuse

 

Elder financial abuse is very costly, at billions of dollars annually, as well as the emotional toll on the elderly, as the scams become more sophisticated, according to Forbes in ““After SAFE Act Passage, The Battle Against Elder Financial Abuse Remains Far From Over.”

The aim of the Senior Safe Act is to encourage all types of financial institutions to play a larger role in fighting against elder financial abuse. The law, which was modeled after the Senior$afe program created in Maine, requires financial institutions to train employees on detecting activities that may indicate elder abuse is occurring. If the employees are trained, the Senior Safe Act also provides a reporting process and liability protection for those who report the possible abuse.  It is thought that the liability protection would make those individuals reporting the possible abuse more proactive.  However, there are still some problems with this.

Some advisors report being reluctant to report any client who seems to be suffering from mental deficiencies or elder abuse. The problem, advisors say, is that they are not trained and won’t feel confident in making a judgement about competency. Some court cases have put the onus on the advisor, when selling certain products or strategies but advisors lack both the training and the ability to make a medical diagnosis of senior clients. Without the ability to identify competency, it is very likely that any reporting will only take place well after the elder financial abuse has taken place.

Another issue is that family members or friends are typically the ones who commit elder financial abuse. The victim usually does not want to press charges, fearing that the person will become angry with them and withdraw their emotional support. Being dependent upon the same person who may have perpetrated financial abuse, puts the elderly person in a no-win situation.

Elder abuse prevention, financial and otherwise, should start years in advance, at the first signs of declining physical and mental health. It should begin with a plan for managing financial assets and having the proper legal documents in place, including a will, power of attorney, general durable power of attorney, healthcare directive and other estate planning documents.

An estate planning attorney can advise you in creating an estate plan that fits your unique circumstances and protects all members of your family.

Reference: Forbes (July 23, 2018) “After SAFE Act Passage, The Battle Against Elder Financial Abuse Remains Far From Over”

 

 

Family Meetings Can Be Helpful and Productive

 

 

An elder member of the family sometimes needs caregiving. If it is a family project, it can be easier, according to aPlaceforMom.com  in “Guide to Elder Care Planning & Family Meetings.” That effort will take a family meeting, as well as including paid caregivers in the planning process.

Sharing information and airing different ideas can be productive. One family member might feel like they are carrying the whole load, while others feel like they want to do more but aren’t sure what. It’s typical for siblings or others to feel like they are doing more than their share: talk it out, so everyone is taking some part of the responsibility.

These roles are often influenced by culture or gender. Caring for a frail older person is not easy.  However, the same strong person who could easily mow mom’s lawn, will be uncomfortable helping with bathing and toileting.

At least three and at most 10 people should be invited to the meeting. We have some cultural taboos, such as discussing death and dying in front of a person.  However, respecting their desire to be part of that conversation is very important. If they don’t want to be involved, respect that as well.

Direct caregivers should be included. The woman who comes to clean weekly may be aware of certain behavioral changes that an every-other-week visitor would not. Family members might also want to include a spiritual advisor, if the person is a member of a faith-based community.

Every family is unique, and some may benefit from the services of a social worker or gerontologist.

Set an agenda and stick with it. Topics will depend on the situation, such as moving to a different residential setting, the use of alert systems and health care transportation.

An elder law attorney can guide you through the process.

Reference: aPlaceforMom.com (January 2018) “Guide to Elder Care Planning & Family Meetings”

 

 

 

 

 

Healthcare Costs Can Be Shocking in Retirement

 

 

The fear of huge medical bills causes worry to many a retiree.  However, there is hope of solving the situation.

Retirees generally fear that a medical expense shock will decimate their savings.  However, there are ways to make the shock less stressful, according to Reuters in “How to shockproof your retirement healthcare costs.”

Brightwork Partners discovered in a national survey that as many as four out of five boomers agreed that they are worried about this.  However, they are too confused by all the details to actively plan for medical costs during retirement.

Help is on the way from national retirement researchers and investment companies. While most retirement healthcare research focuses on the big picture, like Fidelity’s recent estimate that a couple is likely to spend $280,000 on healthcare costs in retirement, a new study from Mercer Health and Benefits and Vanguard Research got a lot more granular.

The goal of the study is to develop a model that can be used by people before they retire, so they can create a budget that includes this admittedly staggering number. This model will be able to help set necessary saving goals and plan on how to achieve the goal.

An average 65-year-old woman retiring and using Medicare in 2018 will need $5,200 to pay for medical expenses. That’s including Medicare, additional health insurance and out-of-pocket costs. By 85, the cost jumps to $10,100 annually, or, for a less healthy person, $14,000. As they age, people need more health care and researchers say we should consider “healthcare inflation” as starting at 6.6% annually, with a rate of 4.5% over time.

Before retiring, experts say people need to be honest with themselves about their health and the costs that will ensue. If they have chronic illnesses like diabetes, cancer, heart disease or arthritis, they need to expect to spend more than the average amount.

The biggest medical care shock to retirement savings is long-term nursing home care.  However, these researchers found that only one in seven will face those costs for two years or more.

Think about these issues in advance and prepare for the costs. 

Reference: Reuters (July 11, 2018) “How to shockproof your retirement healthcare costs”

 

 

 

Deferring Taxes Can Backfire on Heirs

 

To avoid the problem of its elderly residents keeping up with tax payments, Massachusetts created a program that lets seniors defer property taxes, until after they pass away. The taxes are then owed by the estate and about 1,000 people are currently enrolled.  However, the program can have unintended consequences, according to the Wills, Trusts & Estates Prof Blog in "An Inheritance Damaged by Delayed Property Taxes.".

A woman named Frances Arntz applied for the program in 1989 and continued to do so, until she moved in with her daughter in 2008. Her son then moved into Arntz's old home and began paying the property tax regularly.

Arntz passed away in 2018 but the town had been charging interest on the deferred property tax. The son inherited the property and received an unexpected bill for $120,000 for the back-property taxes, plus interest.

An elder law attorney can advise you on signing up for such a program.

Reference: Wills, Trusts & Estates Prof Blog (June 21, 2018) "An Inheritance Damaged by Delayed Property Taxes."

 

 

Social Security Is Not Going to Disappear

 

A recent government report is being used by opponents of Social Security and government spending, as ammunition to charge that if something is not done, then Social Security will go broke in 2022. The claim is not true, according to Forbes in "Fake News: Why Social Security Isn't Going Broke."

Social Security currently takes in more money every year than it pays out in benefits. That has created a surplus in the Social Security Trust Fund. What will happen in 2022 is that, due to demographic changes, Social Security will start paying out more than it takes in. However, since there is a surplus, current benefits will not have to change. The surplus can be spent down. It will not run out until 2034. When that happens, Social Security will not disappear. Instead benefits will be cut slightly, as the program will only be able to pay out as much money as it takes in.

Reference: Forbes (June 18, 2018) "Fake News: Why Social Security Isn't Going Broke."