The Most Important Plan You’ll Make
March 2, 2010
Whether or not we do it regularly, all of us know how to plan ahead: We plan for travel and vacation, we plan weddings, and we plan for natural disasters, for retirement, or what to make for dinner tomorrow night. Why is it, then, that so few of us will create a plan to help our families and loved ones when we die, or –perhaps more importantly — when we become disabled or need care?
Part of the reason may certainly be fear and discomfort. Nobody likes to think about their own death, let alone talk about it with others; but neglecting to have this conversation now, while you are still alive and able to do so, means that you are leaving the conversation for your loved ones to have later, when they are hurt and grieving or burdened with care responsibilities. It also means that you are unfairly asking them to guess at what your wishes may have been, and make difficult decisions that should have been yours to make.
This article by Michael O’Mara lists 10 things to for your family before you die. 10 things may seem like a tall order, especially when the subject is “the great hereafter”; but it seems a whole lot easier when you consider that 7 of the things listed are generally addressed as part of your estate planning with our firm—and we can help you with the other 3 things if you so desire. We would actually add to that list a # 11 that is equally important: plan for the possibility of needing long term care. This could be by purchasing appropriate long term care insurance (if you can qualify and it is affordable) or by creating powers in your estate planning documents to enable you to qualify for a public benefits subsidy to both help defray those costs and preserve your assets for your family. Our firm is especially qualified to help with #11.
You wouldn’t leave it for your children to pack your suitcase after you’ve left on vacation—don’t leave it for them to make your difficult decisions after you’ve passed away or after you have become incapacitated. Take charge today.
The Question of Competence
February 15, 2010
One of the things estate planning attorneys have to deal with in their line of work (most often with elderly clients) is the question of whether or not a client is competent to sign their legal documents. Every principal (or person executing the documents) must be competent, and most attorneys—most people—can make this assessment based on observation, experience and instinct during the course of interaction; but every once in a while a situation arises that is not so clear, or a family member will express concern about the principal’s ability to understand and sign legal documents.
How can you tell if a person is competent? In her book Senior Moments author Jacqueline D. Byrd quotes law professor Peter Margulies’ six factors to determine capacity:
- Ability to articulate reasoning behind a decision
- Variability of the client’s state of mind
- Appreciation of the consequences of a decision
- Irreversibility of a decision
- Substantive fairness of a transaction
- Consistency with lifetime commitments
Byrd goes on to say that for the purposes of determining whether or not a person is competent to sign a will or trust, however, the requirements may be slightly different; more focused on whether or not the principal has a clear knowledge of his or her assets, has a full knowledge of the persons to whom the estate is being left, and is able to reasonably formulate and express a plan for the disposition of the estate.
The unfortunate truth about elderly illness is that competency in a person afflicted with the beginnings of Alzheimer’s or Dementia can often change from day to day or even hour to hour. If there will be any question at all about the competency of the principal the safest thing to do is to have mental examination performed by a doctor, and even perhaps include a video of the will signing. While the video is NOT a legal substitute for the Will or Trust, it can show mental competence at the time of signing if it is properly handled. Of course the very best way to ensure mental competence is to create your estate plan early, before age or dementia becomes a factor.
Portrait of A Caregiver: It May Be You!
December 27, 2009
If you are a Caucasian woman, aged 35 or older, possibly married, definitely working at least part-time—then there is a good chance that you are now or will soon be serving as a caregiver for an aging parent or relative; at least, this is according to the new report released by the National Alliance for Caregiving, AARP, and MetLife.
The entire report, entitled “Caregiving in the U.S., A Focused Look at Those Caring for Someone Aged 50 or Older” is 73 pages long, but you needn’t read the entire thing to get an insider’s peek at the state of caregiving today. And the report isn’t limited to caring for an aging relative; it includes statistics on those caring for special needs children, as well as family members of any age.
Some of the more interesting statistics listed in the report are:
- 40% of Caregivers are aged 50-64.
- 63% of those receiving care are over the age of 75.
- 67% of Caregivers are women.
- 76% of Caregivers are Caucasian.
- 89% are caring for a relative (36% of the time it is the caregiver’s mother.)
- Over half of caregivers are employed while caregiving; and…
- Caregivers provide an average of 19 hours of caregiving per week (in addition to their regular employment.)
It is worthwhile to note that according to this study most of these caregivers are unpaid for the care they give, which makes sense if they are caring for a family member and are doing it voluntarily—but a full 43% said that they felt they did not have a choice to take on the role.
Our office can’t prevent you from one day needing a caregiver (or one day having to serve as a caregiver) but we can help you plan for when that day may come. Thinking and planning ahead can keep you—and your loved ones—from ending up in a situation where you feel you have no choice.
Talking About Elder Care
December 22, 2009
Do you know who will take care of you when you are too elderly to take care of yourself? According to the statistics your caregiver is likely to be a woman, and most likely to be your daughter or daughter-in-law. What this means is that unless you have a plan for your future long term care, the financial burden of caring for you will fall to her and her family.
“Financial burden” refers not just to the expense of paying for food and medical costs, but to loss of income incurred over years of care-giving. “Women take time away from their careers to care for family members,” writes George I. Connolly, “and… lose an average of $659,130 over a lifetime in reduced salary and retirement benefits.”
Many people think that government programs will pick up what they can’t pay for themselves, but relying on government programs can leave your family footing just as much of the bill as they would without them. You may want to consider other alternatives as well, such as investing in long-term-care insurance and setting up a Long Term Care Estate Plan. If you aren’t sure about your options, or how to start planning for the future, call our office for help.
If you are a daughter of aging parents, now is the time to talk to your parents about the future. Studies show that you are the one who is likely to shoulder the responsibility of caring for them as they age. Doing so will affect your family, your career, your finances, and even your health.
The subject of aging and elder care is a difficult one, but not one to be left to the last minute. Talk to your family about your wishes and plans for the future, then bring your Elder Law attorney into the discussion. Once you have an idea of your wishes, an expert can help you feel better about your options, and put you on the right path for keeping your family healthy, happy, and financially secure in the years to come.
Don’t Take That IRA Withdrawal Yet! New Options for Seniors in 2009
November 14, 2009
If you are a senior 70 ½ or older who owns an IRA we have good news for you. Last year Congress approved legislation that waives the minimum withdrawal requirement for seniors in 2009.
This leaves seniors with more options than usual regarding their IRAs. You can still choose to take the withdrawal, of course; but deferring the withdrawal has the double benefit of allowing your investment to continue to grow within your IRA and lowering your taxable income for 2009.
If you were unaware of this legislation and you’ve already taken your withdrawal for 2009 you’re still in luck—the IRS is allowing seniors who have already taken the withdrawal to change their minds and roll their money back into a retirement account.
Of course, all of this good news doesn’t come without restrictions and exceptions, the first of which is that the deadline for the rollover is November 30th, or 60 days after you receive your withdrawal, whichever is later. Sandra Block explains all of the rules and restrictions—and goes into further detail regarding the benefits to seniors—in her article in USA Today.
The bottom line is that seniors with IRAs have more options this year than usual. You’ll want to explore those options with a trusted advisor and take advantage in whatever way you can. Note: If you are receiving Medi-Cal nursing home benefits, be sure to check with your Elder Law attorney before you opt for this deferral.
The “Second Victims” of Alzheimer’s Disease
November 7, 2009
The “first victim” is the person who is actually diagnosed with Alzheimer’s disease; the person who finds their memory failing, their personality changing, their past and present fading into a sea of frightening and confusing fragments of recognition. But Alzheimer’s disease affects more than just its victims, it touches the lives of their families and friends as well… especially their spouses.
These are the “second victims”; the spouses and caregivers who find their own lives fading away as they sacrifice and struggle to do right by a person with whom they have spent many loving years, who recognizes them—and whom they recognize—with less and less frequency. These “second victims” can suffer from depression and health problems as well, often with tragic results. This article in the Wall Street Journal states that, “A 2006 study published in the New England Journal of Medicine found that spouses of people with dementia and psychiatric diseases were more likely to die themselves within a year of the afflicted spouse’s death, compared with similar cases involving colon cancer, fractures or heart problems.”
The WSJ article details the diminished existence of “second victims”, and exposes the controversy around how some of them are choosing to protect their mental health and find companionship again. Although this is at heart a very personal issue, it touches on some legal issues as well:
- How can you prepare financially for the full-time nursing care a late stage Alzheimer’s victim often needs? How does government assistance fit into the equation?
- How can you ensure that you or your spouse have a loving and trustworthy conservator caring for you when you are unable to understand and make your own medical and financial decisions?
- Is there a way to ensure that the wealth and assets you accumulated during your life together will pass to your children and grandchildren if your spouse chooses to one day remarry?
If someone you love is dealing with Alzheimer’s disease please don’t hesitate to let us help by taking the legal questions off your plate. Alzheimer’s disease creates enough loss and confusion without the added uncertainty that comes with these legal issues; and when you’re living day by day, every little bit helps.
The IRS Provides One More Reason to Consider Long-Term Care Insurance
October 23, 2009
In the estate planning business we help people plan for the future, not only for their children and heirs but for themselves as well; which is why we are pleased to share the news that it just got a little bit easier to plan for your own financial future, because according to this article on Emax Health the IRS has just approved higher tax deductions for long-term care insurance.
Advancements in health care and our standard of living mean that Americans are living longer than ever before, but that doesn’t mean they’re living better in their old age. Very few of us are able to remain healthy and hearty until our dying days; rather, most aging Americans will experience a slow decline in their mental and physical health, and require some kind of nursing care, either at home or in a nursing facility. Unfortunately, the cost of that care is prohibitively expensive, and once a patient’s own financial resources have been exhausted the burden then falls on their family, or they end up relying on government benefits.
Long-term care insurance is one way of planning ahead to pay for the nursing care that most of us will almost assuredly need. The higher tax deductions approved by the IRS offer one more reason to consider long-term care insurance: by planning for your future you can save on your taxes right now. But do your research and consult with a professional before you jump in, because the deductions are available only on “qualified” policies, and there are limits on the amount of the premium deduction, depending on the age of the taxpayer at the end of the year.
Alzheimer’s Disease Can Take Your Memory AND Your Financial Security
October 18, 2009
Alzheimer’s disease affects as many as 5.3 million people in the United States; which means it affects as many as 5.3 million families, because Alzheimer’s is a disease that affects everybody it touches—husbands, wives, children and grandchildren—they all bear witness to their loved one’s slow demise.
Sadly, emotional stress is not the only stress that accompanies Alzheimer’s disease; those loved ones serving as caretakers may carry a huge amount of financial stress as well. According to this article by Denise Bonilla the cost of caring for an Alzheimer’s patient can run anywhere from $64 a day to $77,380 a year, and because Alzheimer’s disease can be such a long-lasting disease (a person can suffer from Alzheimer’s for up to 20 years) the costs of care can end up being astronomical. It’s obvious that people can’t do it alone.
Some of the options to help Alzheimer’s patients pay for medical expenses are long-term care insurance or Medicaid [Medi-Cal in California] (Medicare doesn’t cover the cost of long-term care). Long-term care insurance can be very helpful… if you’ve thought ahead and purchased the policy before you or your spouse began suffering from symptoms of Alzheimer’s. As for the government programs, those also can be helpful… if you fall in the right category and know how to navigate the complex system.
Unfortunately, learning how to navigate the system is not something you can do in an hour or two. Because your experience will depend on a number of unique factors, we cannot give you an easy set of instructions to follow. The best advice we can give is to say that right now, the best way to navigate the Medicaid/Medi-Cal system is to find someone who knows the system to assist you. It is in this endeavor that Elder Law attorneys help their clients on a regular basis. If you wish to ensure that you and your loved ones will be cared for no matter what the future may bring, seek out the advice and counsel of an experienced Elder Law attorney. In doing so, you may just find that your financial security can be secured and a payment source for your loved one’s care expenses found. Free of financial worry, you may then relax and devote more of your energies to supporting your family and loved one. If you wish more information, we invite you to download your own copy of our “Consumer’s Guide To Medi-Cal Planning”.
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