Woburn, MA Estate Planning and Elder Law

Legal Planning for Aging Parents

Being prepared for a crisis as your parents get older is essential, but the conversations are tough and it’s hard to know where to start. In the end, taking these steps to prepare now will make life easier. 

Tip 1:  Ask about their financial, legal and insurance providers and professionals. Obtain the names and all contact information of each provider and professional and keep in one location. Share that location with both parents and your siblings. This doesn’t mean that your parents have to share how much money and property they have or the disposition of assets in their will.

Tip 2:  Be aware of current assets and how they are titled. Make a list of bank accounts, numbers, locations, type of account (checking, savings, money market, certificate of deposit, and annuity) and whether each account has any transfer on death (TOD) designations or beneficiary designations. Are there savings bonds, life insurance policies, retirement accounts (traditional IRA, Roth IRA, SEP IRA, 403(b), 401(k)), corporate accounts or family partnerships?

If your parents own real estate, locate the deeds, and determine if and how they share ownership with co-owners. There are three typical types of ownership:  tenants by the entireties, tenants in common and joint tenants with right of survivorship. Each ownership type determines how that real estate passes upon death or to whom and in what proportions sales proceeds are paid. There are also deeds with retained or granted life estates.

Have titles to all vehicles in one place as well. If there are loans or lines of credit on any asset or credit card debt, assemble that list along with account numbers and/or related paperwork.

Tip 3:  Find out where they keep their legal papers. Make sure they have key documents: Financial Power of Attorney (legal document naming an agent to handle financial dealings during lifetime), Health Care Directive (legal document appointing a health care decision maker when parent is unable to make decisions about treatment choices or end-of-life decisions), Will (legal document that determines the disposition of assets in the parent’s name alone when he or she passes on) and Trust (legal document set up during lifetime that is either revocable or irrevocable).

Do they have caregiver agreements? Caregiver agreements are necessary to obviate liability issues and clarify arrangements with caregiver children or a third-party or agency.

If they have the key documents, are the documents up to date? As a rule, a review every five (5) years or sooner if there is a significant change in health, wealth or status of the parents or a beneficiary, is appropriate. For example, if one parent has a long-term admission to a nursing facility, it may not be prudent for the will of the spouse at home to still give all assets to the nursing home spouse.

What role, if any, have your parents given you with respect to these legal documents? Are you able or willing to take on that role?

Tip 4:  Understand your parents’ strategy and options for long-term care. At age 65, more than 40% of individuals will require some type of long-term care during their remaining lifetime. Payment by Medicare is limited. At most, per spell of illness, Medicare and most supplemental insurance will pay for no more than 100 days in a skilled nursing facility.

Even if your parents meet the physical and resource limitations to receive Medicaid paid care in a nursing facility or at home, there can be a period of ineligibility if gifts were made to someone other than a spouse. This penalty is imposed when gifts are greater than $500.00 cumulative in a calendar month. The penalty applies to gifts made during the five (5) years prior to application for Medicaid in a long-term facility or five (5) years prior to assessment date for Medicaid under the Pennsylvania Department of Aging Waiver program.

In many cases, pre-planning by transferring assets from parents to a Family Asset Protection Trust is the safest and most effective planning. On the other hand, gifting or transferring one’s home to a child “for a dollar” is risky. The home or other asset gift is subject to the child’s personal circumstances. Should there be a death, divorce, bankruptcy,  or substance abuse issues, the parents’ hard-earned assets could go to the former in law or a child’s creditor. Typically, most parents want protection.

Tip 5:  Know your risks. Be careful of what you sign and how you sign it. If your parent needs to be admitted to a long-term care facility or a personal care home, have them personally sign the admission paperwork if at all possible. If you sign as a guarantor or responsible party, there is a real possibility that you have made a third-party contract to pay for your parent’s care. In addition, the body of Pennsylvania’s filial support law makes children financially responsible for their aging parents’ care costs. Nursing homes and other care providers can sue children to recover unpaid care-related bills. This is not the result that parents or children want.

Reference: Marshall, Jeff (Sep. 03, 2017) "Legal Planning for Aging Parents" 

 

No-Contest Clauses

One way to make people hesitate before challenging a will or trust, is to include a no-contest clause, which disinherits them, if they file a legal challenge.

People often get very upset when they think they have not received their fair share of a deceased family member's estate. They can often be so upset that they decide to issue a legal challenge to the estate plan, especially if there is a substantial money involved.

These challenges can take a lot money out of the estate, since lawyers have to be hired to defend the estate from the challenge.

A way around this problem is to include a no-contest clause in wills and trusts, as Press Enterprise discusses in "The Pros and cons of the no-contest clause."

A no-contest clause helps prevent these challenges. It simply states that anyone who challenges the will or trust will receive nothing from it.

 As a result, the document will be effectively rewritten to disinherit the challenger.

This is an easy way to stop many people from challenging an estate plan.

They might not be happy with what they received, but they do not want to risk getting nothing.

Some criticize these clauses as deterring people from challenging an estate plan when they have good reason to,  such as when there has been undue influence used by someone else to get more of the estate than he or she should.

However, most states will not enforce a no-contest clause, if the person challenging the will or trust has probable cause to do so.

If you want to make sure a no-contest clause is included in your will or trust, then visit an estate planning attorney and make sure the clause is included.

Reference: Press Enterprise (Aug. 5, 2017) "The Pros and cons of the no-contest clause."

A Large Bequest for Two Cats

A woman in New York left a large sum of money for her cats in her will.

It is becoming fashionable for wealthy people to leave large inheritances for the care of their pets, after the owner passes away. Every few months, another story makes the rounds in the media.

The latest incident comes out of New York, where a widow named Ellen Frey-Wouters left $300,000 for her cats.  She instructed that the money be used so the two cats, Troy and Tiger, would never be caged and would always receive good care.

Fox News reported on the story in "New York widow leaves $300G to her cats."

While there is an obvious tabloid appeal to stories of wealthy people leaving lavish gifts for their pets, there is a very serious side to these stories as well.

More and more people are viewing their pets as something more than mere animals they possess. Pets offer companionship and many people view them with as much love as they do human family members.

This leads to the desire to make sure that pets are taken care of, after the owner passes away.

You do not have to be wealthy to leave something behind for the care of your pets.

Estate planning attorneys can draw up plans for just about anyone to leave some money and instructions for how their pets should be treated.

It can be done through wills or through specially designed pet trusts.

See an estate planning attorney to ask about what you can do for your pets.

Reference: Fox News (Aug. 22, 2017) "New York widow leaves $300G to her cats."

Hidden Benefit to Physician-Assisted Death Law

California's new law to allow physician-assisted death continues to be controversial, but doctors are starting to see a hidden benefit to the law.

The recently enacted law that allows terminally ill patients in California to request lethal prescription medicine from their doctors, has caused a lot of controversy in the state and throughout the country. People are watching closely to see what effects the law will have, which patients will use it and what it will mean for doctors.

What happens in California will be cited by advocates in other states as they work to get similar laws passed or as they look to prevent similar laws from passing in their states.

The Los Angeles Times recently reported on one unexpected benefit of the law in "There's an unforeseen benefit to California's physician-assisted death law."

One thing the law does, is force physicians to talk to their patients about why they want to end their own lives.

That often leads to discussion about pain, quality of care and what the patient would prefer happen.

What doctors have found is that some of the assumptions they make about what is good for patients are inaccurate.

The patients would prefer that they be treated differently at the end of their lives.

Doctors and other health workers can use that information to better treat the patient.

Even if the individual patient still prefers to end his or her own life, the information can be used to improve treatment for other people.

Although it was not intended to do so, California's law has led to better quality care for all of the state's terminally ill patients. That is to be welcomed.

Reference: Los Angeles Times (Aug. 21, 2017) "There's an unforeseen benefit to California's physician-assisted death law."

If you would like to discuss setting up your Estate Plan with an experienced attorney at Simmons & Schiavo, LLP, call (781) 397-1700 or visit www.simmonsandschiavo.com

 

 

Spousal Election

A surviving spouse has the right to an inheritance, in almost all circumstances.

Most people do not want to cut their spouses out of their estate plan. However, there are some people who have built up a lifetime's worth of grievances, have not gotten a divorce and who do try to disinherit their spouses.

This used to be a much bigger problem, when divorces were more difficult to obtain.  However, the issue still persists today.

Fortunately, for surviving spouses, people are not allowed to merely disinherit their spouses.

It is not a simple matter though, as the Times Herald-Record discusses in "A spouse's inheritance rights no simple matter."

The details vary by state, but a surviving spouse has the right to make what is known as a "spousal election." This allows a spouse to elect to receive whatever is or is not given to her in the estate plan or to receive a certain percentage of the total assets of the estate. Commonly, this election is for between one-third and one-half in most states.

The reason for the rule is that people felt there was a duty to care for one's own spouse and that it would be wrong to leave a widow destitute.

There are ways around the law, if the spouses have entered a pre-nuptial agreement, but they are not ironclad.

If you need help navigating the rules of spousal elections in your state, then schedule an appointment with an estate planning attorney who can assist you and make sure your estate plan leaves enough for your spouse.  You can also learn how to take the election, if you are a surviving spouse.

Reference: Times Herald-Record (Aug. 31, 2017) "A spouse's inheritance rights no simple matter."

If you would like to discuss setting up your Estate Plan with an experienced attorney at Simmons & Schiavo, LLP, call (781) 397-1700 or visit www.simmonsandschiavo.com

 

Estate Planning Mistakes

Some of the biggest estate planning mistakes that people make are not technically estate planning, but they can have a big effect on an estate.

When people are planning for their estates, they want to make sure they do not make any mistakes.

It is important that the plans can be carried so assets are distributed in the way they wanted and so taxes, court costs and attorneys' fees do not eat up a large portion of the estate.

Avoiding those types of mistakes is important in estate planning.

However, a potentially bigger mistake is not planning for end-of-life care while planning for an estate, as Forbes points out in "The Biggest Estate Planning Mistake People Make."

Some end-of-life documents you should get from your estate planning attorney include:

• A Durable Power of Attorney -- With this document you can appoint someone else to handle your financial responsibilities, if you are ever unable to do so due to incapacitation. This is important if you want to make sure that your bills get paid on time, for example.
• A Health Care Power of Attorney -- This document lets you appoint someone else to make medical decisions for you, if you are unable to do so. When doctors need to know what decision to make about your care, this is the person they will ask.
• A Living Will -- This document allows you to give advanced directives to medical professionals about what procedures to give you or to withhold in the event you are incapacitated, terminally ill and unable to communicate your wishes.

Reference: Forbes (August 16, 2017) "The Biggest Estate Planning Mistake People Make."

If you would like to discuss setting up your Estate Plan with an experienced attorney at Simmons & Schiavo, LLP, call (781) 397-1700 or visit www.simmonsandschiavo.com

 

Even without an Estate Tax, Trusts are Beneficial

 Many people get trusts as their primary estate planning instrument because of the estate tax, but trusts do have many other benefits.

With Congress taking up tax reform soon, one thing that many people are following is President Trump's desire to eliminate the estate tax.

It is important for many people because the estate tax can take a sizeable portion out of an estate.  Many people have designed their estate plans around not having to pay the tax.

If the estate tax is repealed, then people might have good reason to change their estate plans and they might decide to get rid of their trusts.

That is one of the main reasons people get trusts. They are a way to avoid the estate tax.

However, do not plan on scrapping your trust yet,  since there are other reasons to get trusts than the estate tax, as Elder Law Answers discusses in "Are Trusts Still Useful If the Estate Tax Is Repealed?"

One of the best things about trusts is that they do not have to go through the probate process, which can be very expensive and time-consuming, depending on the state in which you live.

Trusts can also be kept private so your estate plan is not shared with the general public, as is often the case with wills.

Trusts can be used to pass your assets to beneficiaries in a controlled way and only after certain conditions are met. The truth is that trusts are an extremely versatile estate planning tool and beneficial with or without an estate tax.

It is too soon to know if the estate tax will be repealed.

If it does happen, do not let it fool you into thinking you no longer need a trust.

Reference: Elder Law Answers (June 30, 2017) "Are Trusts Still Useful If the Estate Tax Is Repealed?"

 

Estate Planning With Few Assets

People who do not have very many assets, still need to get estate plans.  However, the best plans for them may not be the same as the best plans for wealthier people.

Much of the estate planning advice you can find online is written with the idea that the person receiving the advice has some wealth built up.

It is estate planning for people who are rich or those who will become rich.

However, most people in the U.S. are not rich.

Millions of people have very little wealth built up, but they still need to plan for the assets they do have and that they want to protect.

That can be different than what the wealthy need to do, as the Napa Valley Register points out in "New dad wonders about estate planning."

One thing people with limited assets should understand, is that they might not need a trust to avoid probate.

Most states have a law that provides for the simple transfer of assets, if the estate is below a certain total amount. In such instances, even a will does not have to be entered into probate.

The amount varies from state to state, so you will want to check with an estate planning attorney in your state.

Nevertheless, just because you might not need to worry about probate, does not mean you should not get an estate plan.

If you have minor children, for example, then you will definitely want a will so you can choose who would be your child's guardian, if anything happens to you.

Estate planning attorneys work with all kinds of clients from every income level. Do not think that a lack of assets disqualifies you from seeking their services.

Reference: Napa Valley Register (August 24, 2017) "New dad wonders about estate planning."

If you would like to discuss setting up your Estate Plan with an experienced attorney at Simmons & Schiavo, LLP, call (781) 397-1700 or visit www.simmonsandschiavo.com

 

Preparing for Alzheimer's

Everyone needs to prepare for Alzheimer's Disease. They should do so long before they think that they might get it, because it is not just the elderly who suffer from the disease.

The typical view of people with Alzheimer's Disease is of an elderly person in a nursing home who cannot remember very much. That is probably true for the average Alzheimer's patient.

Most people who get the disease are elderly and many of them do have to go to a nursing home.

However, those are not the only people who get it.

Although the reasons are not understood, there are some people who get the disease long before they reach retirement age.

It is called Early-Onset Alzheimer's, as the Massillon Independent reports in "Alzheimer's not limited to elderly."

Because it is possible for you to get the disease and it could happen much sooner than you think, you need to prepare for it. You need to do something now that you will have difficulty doing after you get the disease.

You need to plan for your estate.

That does not just mean you should plan for who gets your possessions, which you should do, it also means that you should plan for who will help you, when you can no longer handle things on your own.

You need a general durable power of attorney, so someone can handle your finances.

You also need a health care power of attorney, so someone can make medical decisions when you are unable to do so.

Both of those legal documents are routinely provided by estate planning attorneys.

 It is not likely that you get Alzheimer's before you retire. However, you should always prepare as if you will want to be on the safe side.

Reference: Massillon Independent (August 22, 2017) "Alzheimer's not limited to elderly."

If you would like to discuss setting up your Estate Plan with an experienced attorney at Simmons & Schiavo, LLP, call (781) 397-1700 or visit www.simmonsandschiavo.com

 

 

Before You Have a Baby

If you are expecting your first child, there are a few things that you need to do before the due date to make sure that you are financially prepared.

Having your first child is an exciting time in anyone's life.

People make all kinds of plans about the child. Names are picked out. Nurseries are built. Detailed plans about how to get to the hospital on the big day are decided. Plans to have grandparents come out to help take care of the new baby are often made.

All of those things are important.

In the frenzy of making those plans, people often forget that they need to make some financial arrangements before the baby is born, as Business Insider points out in "The first 3 things to do with your money before you have a baby are easy to overlook."

Things that you should do include:

• Make sure that you understand health insurance and how to get your new child on your plan as soon as you possibly can. If your employer provides your insurance, then speak to your HR representative about what you will need to do.
• Make sure that you have plenty of access to cash. Children often require parents to spend cash in emergencies. You will need to have liquid assets, so you can do that. A financial advisor should be able to assist you in getting those liquid assets.
• Think about who you would want to be the guardian of your child, if anything should happen to you. You should then go to an estate planning attorney and get a will, so the person you want to be guardian will be appointed by the court.

Reference: Business Insider (August 22, 2017) "The first 3 things to do with your money before you have a baby are easy to overlook."

If you would like to discuss setting up your Estate Plan with an experienced attorney at Simmons & Schiavo, LLP, call (781) 397-1700 or visit www.simmonsandschiavo.com