Capital District - NY Estate & Elder Law

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”

 

Long Life? Expect Some Challenges along the Way

 

The life expectancy for Americans is getting longer and longer, with the concept that the longer you live the more likely you’ll have an even longer life span, according to Kiplinger, in “Are You Ready for Longevity? 4 Steps to Take Now.” 

Given the happy fact that you should expect to live a long time, what can you do to protect yourself and your family? Here are four steps:

Have a plan for long-term plan. For a married couple, it’s likely that one of the two will end up in a nursing home. Plan for how you’ll manage to pay for that, long before you’ll need it. If you can purchase a long-term care insurance policy, while you are still healthy enough to qualify, you won’t need to use up all the household’s money to pay for the care. Long-term care insurance usually pays for both skilled nursing home care and in-home health care aides.

Traditional long-term care policies can be expensive. However, insurance companies have created hybrid policies that combine long-term care benefits with life insurance. If you don’t use the long-term benefits, your loved ones receive the life insurance proceeds upon your death. That takes a way the worry that you will pay premiums and get nothing back.

Plan for incapacity. You’ll need to have a medical advance directive, including a health care proxy and health care powers of attorney, so you can name another person to make your decisions when you are no longer able to do so. Do not assume that because you are married, your spouse will be legally able to make those decisions.

If you become incompetent and don’t have a medical advance directive in place, your family will need to go to court to get legal authority to make those decisions. This is a guardianship proceeding, which is expensive, time-consuming and stressful.

The same holds true for financial decisions. You’ll want a power of attorney, so someone else can sign on your behalf and access your accounts. This should be a trusted individual who will look out for you and your family.

If you die and assets are solely in your name, your family will need to go to court before they can access any of your assets. This is a process known as probate. If you have an estate plan in place, your plan should include having some accounts that are POD or Payable on Death, so your loved ones are not left without assets. Your estate planning attorney will recommend the right planning tools, so that your family is protected.

Finally, do your tax planning as part of your estate plan. You likely won’t be paying federal estate tax.  However, there is a good chance that your state has an estate tax or an inheritance tax.

Reference: Kiplinger (August 13, 2018) “Are You Ready for Longevity? 4 Steps to Take Now”

 

Can You Customize Your Own Homecare?

 

There are many seniors and retired Americans that are not aware of options that help them remain in their own homes if that is what they prefer, according to Next Avenue in “Does Self-Directed Long-Term Home Care Make Sense for You?  

When one woman sought long-term care for her 83-year-old father, she knew the options because she was a long-term care researcher for AARP’s Public Policy Institute. She’s been examining how older Americans can “self-direct” their own care, choosing from several options they can receive in their own homes.

Several states now provide innovative strategies to provide long-term care at home. They involve “person-centered” choices to Medicaid patients. Each state has these programs, although they vary in quality and scope.

One Texas woman had relied on home health care agencies.  However, found them inflexible and unreliable. She switched to her state’s self-directed program and found that by scheduling and paying her home-care providers as she wished, the services were provided to her liking.

A study by Matematica Policy Research found that people who were able to take charge of their care were more satisfied and experienced equally good or better outcomes. The idea of choosing your own mode of long-term care is an evolving trend. There are now more than one million people in more than 200 self-directed Medicaid and Veteran directed programs nationwide. Enrollment in these services has increased by more than 40% since 2011.

Self-directed programs are not for everyone, because they require the ability to manage the care and vet caregivers. Someone who is too ill or suffering from mental incapacity may not be able to handle this.

You’ll need to know what services are available locally before making a choice. For example, when is adult day care an option? How do you find a home care specialist who can do anything from basic homemaking to providing in-home nursing care?

The other drawback is that self-directed services are typically offered only through veterans and state Medicaid programs for low-income participants.

Most Americans who need long-term services must still pay for it themselves. You’ll need a family member with the tenacity and time, or you can hire a geriatric care manager who will be able to determine needs and set up a care management plan. That person can help select the right professionals and coordinate services.

Reference: Next Avenue (Aug. 13, 2018) “Does Self-Directed Long-Term Home Care Make Sense for You?”

 

 

Have Young Children? Estate Plan Is a Priority

 

 

 

Many young families with small children do not have estate planning at the top of their list. However, it really should be a top priority, according to The Daily Sentinel’s in “What is missing from your estate plan?”

Some information in estate planning that should be known is a last will and testament. It is the document which parents need to legally nominate guardians to rear their children, if orphaned. While some people name one person to rear the children and handle the money, it’s a good idea to separate the two roles.

Without these instructions in a will, those left behind can have very different ideas about where the children should live and who should care for them. If the two parent’s families have very strong opinions, suddenly both families have hard choices to make about what will happen to the children.

No parent wants to leave a legacy of court battles and family division.  However, that’s what is likely to happen without a will.

There are other issues that estate plans address while you are alive.  It is also necessary to plan for incapacity. A living will, also known as an “advance directive,” is important because it helps pre-answer questions, regarding what treatment and care you would want if unable to speak for yourself. Do you want to be kept alive by artificial means? You do not want your loved ones making this decision during a time of great emotional stress, so this is an important document to have in your estate plan.

Finally, your estate plan should include a medical durable power of attorney to deal with all other medical decisions other than end of life. Without it, if you are not near death but not able to share your opinions about your care, your family and your medical providers are placed in a difficult position. In contrast, those who care enough about their family designate an agent and ensure that their wishes are made legally binding.

The big question everyone must face is “When should I start working on my estate plan?” If the answer is “Later,” then the real answer is “No time soon.” For young parents, that puts your minor children in a bad position, where a court may make the decision about who will rear them and how their lives will go on after you are gone.

An estate planning attorney can advise you in creating an estate plan that fits your unique circumstances, including families with young children.

Resource: The Daily Sentinel (Aug. 12, 2018) “What is missing from your estate plan?”

 

 

Just What Is a Power of Attorney?

 

While most people are familiar with a will in an estate plan, a power of attorney draws a lot of misconceptions, according to the article in A Place For Mom “5 Misconceptions About a Power of Attorney.”

Misconception #1–You can sign a power of attorney, even if you are legally incompetent.

Not true. This is one of the most common misconceptions. In fact, if you have a document from a medical doctor that says a person is not competent, that person is no longer able to sign any legal documents. Many people generally think about what they need to do, i.e., accessing a bank account when an elderly parent can no longer do so.  However, if Dad lost his legal capacity just before a power of attorney or living trust was signed, that’s no longer an option. You’ll have to go through a guardianship or conservatorship proceeding through the court to have any control over Dad’s assets.

Misconception #2—You can find a power of attorney document online.

You might find such a document online but it most likely will not be suited to your circumstances. You need to have a power of attorney custom drafted, so it is legal in your state and addresses your family’s needs. Many online documents end up being useless. It’s a big risk to take.

Misconception #3—A power of attorney lets the agent do whatever they want.

The agent under a power of attorney has a legal and fiduciary duty to make decisions in the best interests of the person who named them as power of attorney. They have not been handed a free pass; on the contrary, they have a big responsibility to do the right thing.

Misconception #4—There is one power of attorney.

This is why an estate planning attorney is needed for the power of attorney. There are two main types: a general power of attorney and a limited or special power of attorney. They are named correctly: a general power of attorney allows for buying or selling property or managing assets. A limited or special power of attorney refers to a specific transaction or task. Which one you need, depends on the laws of your state and the circumstances.

Misconception #5—A power of attorney survives death.

All powers of attorney terminate on death. Once a person has passed, so has the authority for their agent to act on their behalf. A durable power of attorney allows the agent to act, in the event of incapacity but not death.

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

Resource: A Place For Mom (July 11, 2018) “5 Misconceptions About a Power of Attorney”

 

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”

 

 

There are Many Reasons and Uses for an Estate Plan

 

Why should you have an estate plan? There are many reasons and many goals, including providing for your spouse and children, as well as dealing with a family business, minimizing tax liabilities and naming the people you want to act on your behalf when you’re gone, according to the Brainerd Dispatch in “Wealth Column: Estate Planning Basics,”

So, what do you need? First, you’ll need a will, which is the basic tool for estate planning. It prevents two very expensive and stressful issues: managing your wishes for your estate and possibly losing hefty sums through unnecessary taxes.  However, that’s just the start.

You may also need trusts, depending on your family’s situation. You’ll want to have life insurance policies with beneficiaries. Life insurance proceeds are not governed by the will, so your heirs will receive any funds directly. Benefits from retirement funds fall into this same category. That’s why making sure that your beneficiary designations are up-to-date, is so important.

Working with a team of trusted advisors, is productive for most people. Remember that your estate plan touches on taxes and investments as well as your will, power of attorney and medical directive. Consider these steps to get your entire estate plan in order:

• Gather personal data about yourself and your family,
• Create a balance sheet of your assets and liabilities,
• Review your will and any existing trusts,
• Evaluate all estate tax options, such as the best method of disposing of your share of community property—considering the unlimited marital deduction and the use of tax-sheltered trusts,
• Consider the optimal way to distribute your retirement plan benefits,
• Calculate potential estate, gift and income tax liabilities,
• Determine the availability of liquid assets to meet potential estate expenses and taxes.

An estate planning attorney can work with the information you have gathered to create an estate plan that fits your unique circumstances.

Resource: Brainerd Dispatch (Aug. 3, 2018) “Wealth Column: Estate Planning Basics”

 

 

Going Off to College? Documents are Helpful

 

If your child is heading off to college you have prepared them already with background education and the ability to live away from home. However, are they prepared with the documents that an adult needs? They should be, according to the Monterey Herald in “Liza Horvath, Senior Advocate: Off to College.”

When college students go to off to a world of dorm living, classes and increased independence, many are on their own for the first time. If they are 18 or older, they are legally considered adults. If they become sick or injured while away, the rules of HIPAA, the Health Insurance Portability and Accountability Act, prohibit anyone from speaking with a doctor, gaining access to medical records or being informed of their status–even their own parents!

If your college admissions package did not include an Advance Health Care Directive and a HIPAA release form giving you permission to speak on behalf of your student, speak to doctors and to be part of any medical decisions. Your estate planning attorney will be able to draft those documents for you.

Make sure that your college-bound student also has a list of who they should contact in an emergency, including cell, home and work numbers and email addresses. This list should include their primary treating physician and a history of their immunizations, chronic conditions, medications and  other relevant medical issues.

This information can be stored in the cloud or on their phones.  However, if the phone is stolen or lost, so is a lot of sensitive data. Write it down on an old-fashioned piece of paper and keep a hard copy at home and one on your own computer, so it can be easily sent if necessary.

You should also consider having a power of attorney for finances and a directive to the college, so information on your student can be released to you. This will allow you to see the academic records and act on your child’s behalf on any legal matters.

If you have adult children, even those who graduated long ago, you may also to wish to have some of these documents prepared.  

Resource: Monterey Herald (July 28, 2018) “Liza Horvath, Senior Advocate: Off to College”

 

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”

 

 

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”