Posts By: Gene Osofsky

The hot and lazy days of summer are almost over; parents are thinking about back-to-school sales, kids are making the most of their final days of freedom, and college freshmen are getting ready to embark on their first year of adult-hood. Most of these college students have a list (whether mental or physical) of all the things they’ll need as they leave the nest for the first time, but most of these lists will be missing two key items: A Healthcare Directive and a HIPAA Form.

You may be wondering why a college student needs estate planning documents—aren’t those just for older, established people? Not at all.

Most incoming college students are now (or will soon be) 18, and considered adults under the law. This means that hospitals and medical personnel are no longer required to ask the parent’s permission before performing medical procedures. In fact, once your child is 18 health care providers are no longer required to share information with the parents at all.

Most college students (and parents) are unaware of this side-effect of turning 18, and parents and children alike can run into frustrating roadblocks should an accident occur. You can avoid these roadblocks by simply having your young adult execute the two simple documents mentioned in this blog post.

A Healthcare Directive can be an in depth document or a very simple one, but the most important part for your new 18 year old will be the nomination of a healthcare agent. A healthcare agent is the person who will make medical decisions for your child if he or she is unable to make them alone.

A HIPPA Authorization Form addresses the issue of security and privacy of health data. In a HIPAA form your child can list the people who have permission to receive information about his or her medical records and status.

For a fledgling 18 year old these two documents are of the utmost importance, and with the right help, they are very easy to execute. Don’t wait until it’s too late; make sure your young adult has these documents completed before they leave the nest.

Posts By: Gene Osofsky

In a recent article in the Huffington Post financial columnist Don McNay tells the frustrating, sad, and “unusual” story of how the greater part of his mother’s and his sister’s estates ended up in the hands of people they would never have chosen to receive it… all because neither of them had a will or estate plan when they died.

When McNay’s mother died unexpectedly in April 2006 neither he nor his sister really worried about her lack of a will. After all, “her only asset was our childhood home, and my sister and I were her only children. We would split the ownership of the house equally.” McNay paid for the funeral, and “advanced the estate money to pay delinquent property taxes, some outstanding bills, and the mortgage on Mom’s house,” and he and his sister worked out an informal deal to even things up financially once the estate was settled and the house was mortgaged.

Tragically, his sister fell down some steps and died in October 2006, also without a will, and this is when the real trouble began. Although his sister had left her husband years before, they had never formally divorced; which meant that McNay’s sister’s share of their mother’s estate now belonged to her ex-husband, her adult son, and her minor daughter—and none of it would be used to reimburse McNay for what he had lent the estate.

McNay writes honestly and persuasively about his experience, and we recommend reading the entire article, but the long and short of it is this: After several rounds in court, after the involvement of several attorneys, and after being forced to sell the family home for less than what it was worth, “the person who got the most money from my mother’s estate was my former brother-in-law.”

Unfortunately, McNay’s story is all too common. Situations such as this one could be easily (and inexpensively) avoided simply by consulting an attorney and drawing up a simple will; and yet more than 60 percent of Americans don’t have wills. Whether it’s because they’re uncomfortable thinking about their own death, think they’re too young to worry about it, or simply feel they don’t have enough assets to worry about it, more than half of Americans today refuse to take the one simple step that can protect their families from heartache and expense.

We suspect that most people believe (erroneously) that this kind of thing just won’t happen to them.  After all, as McNay writes in his article, “My family’s series of events was unusual,” but then again, “unusual things happen every day.”

Posts By: Gene Osofsky

All of our readers know just how important—how essential—a will or trust is to protecting your family after you pass away. Leaving clear and tangible instructions can prevent family infighting as well as hurt or unsettled feelings; and leaving a legally airtight will can prevent wasted time and money in unnecessarily long probate proceedings.  But for all of this, there are a few assets that your will may not be able to address.

This article in CNN Money describes three assets that could cause you to “unwittingly disinherit intended beneficiaries, including your children, from significant portions of your estate,” namely your 401(k) plan, your IRA account, and your life insurance.

You can name anybody you’d like as a beneficiary in your will or trust, but when it comes to 401(k) plans it’s your spouse who is entitled to the money when you die. “If you want to leave a 401(k) to someone else, your spouse must first file a written statement waiving rights to it.” Even a prenuptial agreement won’t help if you want to keep your 401(k) assets out of the communal pot, you’ll have to convince your spouse to sign a waiver after you’ve tied the knot. “A person can’t give up spousal rights to inherit a 401(k) until actually married. ‘A prenup by itself is not a valid waiver according to the rules governing 401(k) plans.’”

Who will inherit your IRA or your life insurance is a little easier to control than who will inherit your 401(k). In the case of IRA or life insurance accounts the person named as the beneficiary on the account will always take precedence over a beneficiary named in your will.  The most common inheritance issues we see with these accounts is when people forget to update their beneficiary forms after a significant life change such as a divorce or the birth of a child. In these cases it’s important to review and update your beneficiaries every 2-5 years to ensure there’s no confusion between your will and the designated beneficiary on the account.

Having a will or trust is important, but they are only a piece of a whole plan—a plan that likely includes many pieces. Being aware of all the pieces of your estate plan, and keeping those pieces working together and in harmony, is essential to ensuring that your family and your legacy is protected.

Posts By: Gene Osofsky

Although couples usually come into our office together to discuss their estate plans, quite often it’s the women who lead the discussion about planning for the guardianship of children, and the men who lead the discussion about financial planning.

Estate planning is a subject which has a significant impact on women—in fact, this article in Forbes suggests that estate planning may affect women even more than men because “Among Americans 65 and older, 42% of women, but just 14% of men are widowed. Women’s longer life expectancy, combined with their tendency to marry older mates and their lower lifetime earnings means they are far more likely to see their living standards compromised in retirement if proper estate planning isn’t done.”

How can women ensure that this doesn’t happen to them? The best answer is for women to be involved in the estate planning process—not just the issue of guardianship, but financial issues as well. Talk to your partner about what happens if (as is likely) your spouse passes away first leaving you a widow. Talk to your spouse and your family about how the remainder of your estate should be distributed upon your death. And don’t discuss the topic in vague terms, bring your estate planner or financial planner into the conversation and talk about cold, hard numbers.

Our firm understands that this is not the easiest conversation to begin. Talking about money in our culture has generally been considered a “dirty topic,” not to mention that nobody likes considering their own (or their spouse’s) mortality, but the consequences of avoiding the discussion can be disastrous.

If you’d like to start a conversation about estate planning with your family but aren’t quite sure how, the Forbes article mentioned above has quite a few excellent suggestions, including “start with current events or an anecdote about other people. Perhaps it’s a movie you saw, a book you read, a news report about someone your age who recently died or a sudden death in your community.” If you’re trying to bring up the subject with your parents as opposed to your spouse you may want to consider telling them “I just did my own estate plan. Don’t you think you should update yours?”

Alternatively, you may simply want to print out this blog post (or the Forbes article) bring it to your spouse/parent/children and read it together. Getting the conversation started is the hardest part, but it’s also the most important. If you can get the ball rolling, our firm can help with everything else.

Posts By: Gene Osofsky

Following the death of British singer Amy Winehouse there have been a number of news stories and blog posts about her turbulent career and the last few years of her life. In the midst of all this scrutiny, perhaps the most surprising discovery is the fact that Winehouse’s affairs were in incredibly good order, with a carefully crafted will leaving all of her sizeable estate to her parents and brother instead of to her incarcerated ex-husband.

This timely article in U.S. News and World Report remarks that “celebrities and non-celebrities alike often leave their estates in disarray when they die. That lack of awareness and planning can make death more stressful and more costly for family members as they struggle to quickly plan a funeral and think about dividing up family property while grieving.”

All too often our office is contacted by family members who are overwhelmed with the task of probating or administering a poorly planned estate. Sometimes these bereaved relatives are dealing with overwhelming and confusing debt, or terrible family infighting, but more often than not they are simply trying to make their way through the long and arduous process of probating an estate without the benefit of a will or trust.

One of the many things we can learn from the life and death of Amy Winehouse is that even in the midst of troubled times it is possible to think clearly about the future. If you’d like to start planning for your family’s future, please contact our office today.

Posts By: Gene Osofsky

One of the services Elder Law and Estate Planning attorneys often provide is helping clients navigate the application procedures and bureaucratic systems for the various state and federal medical insurance programs; and one thing that remains a surprise throughout the years is how many people forget about the VA Aid and Attendance Program for war veterans.

According to the Department of Veterans Affairs website, VA Aid and Attendance is “a benefit paid to wartime veterans [or their spouses] who have limited or no income, and who are age 65 or older, or, if under 65, who are permanently and totally disabled.” Unfortunately, too many veterans and their spouses are unaware that they qualify for this benefit, or even worse, have never been informed that the program exists.

An informative article in the Washington Post quotes the VA’s deputy undersecretary for disability assistance as saying that he believes they are only reaching “about one in four eligible veterans.” Part of the reason for this is that “there are a lot of veterans where it’s been 40 years or more since they’ve been on active duty. It just doesn’t occur to them there may be a benefit from the VA.”

If you are a war veteran over the age of 65 it is very likely that you and/or your spouse qualify for Aid and Attendance Benefits. Eligibility requirements include:

  • You served at least 90 days of active military service 1 day of which was during a war time period. (If you entered active duty after September 7, 1980, generally you must have served at least 24 months, or the full period for which called or ordered to active duty.)
  • You were discharged from service under conditions other than dishonorable.
  • Your countable family income — after subtracting unreimbursed care and medical expenses — is below a yearly limit set by law (The yearly limit on income is set by Congress.). Basically, your NET family income–after subtracting unreimbursed care and medical expenses — must be less than the applicable VA Pension rate in order to receive the difference as pension.
  • Pension Rate:  A Vet qualifying for Aid & Attendance pension in 2020 would receive up to $1,911/month if single, and a married Vet would receive up to $2,266/month.
  • Your Net Worth of you and spouse, if any, is less than $129,094 (for 2020). Net Worth is defined as the sum of  (1) your savings and other non-exempt assets, PLUS (2) one year’s worth of your household income.
  • You must need help with at least one activity of daily living: dressing, eating, walking, bathing, adjusting prosthetic devices or using the toilet. Those who are blind, living in nursing homes or require in-home care may also be eligible.

For many veterans and their families the financial assistance they receive from their VA Aid and Attendance benefits can be an incredible help. This is especially so if the Veteran needs care at home or in an Assisted Living or Board and Care Facility, as in California the Medi-Cal program usually does not offer a subsidy for those care venues, but usually only for persons receiving care in a Nursing Home.

“Unfortunately, the application process required to receive the benefits can be daunting. It’s not a simple process. A&A applicants must mail the forms, copies of service records, marriage certificates, proof of insurance and medical records to the regional VA office. If a third party is making the application, an additional form, 21-22-a or 21-0845, must be completed”

If you think you may be eligible for VA Aid & Attendance Benefits, check out the information on VA Pension Benefits by clicking this link:  VA Pension Benefits. For the current Net Worth and Pension Benefit Rates effective 12/01/2019 and continuing to 11/30/2020, click here.

Updated 01/12/2020.

Posts By: Gene Osofsky

The hard part is done.  Your estate plan has been created, all the documents signed and witnessed and notarized. But wait, you’re not quite done yet—especially if your estate plan includes a trust. The task of funding that trust still remains. Without the completion of this crucial step all of your hard work could be for naught.

Funding is the process of putting all of your property into the trust. Your trust is more than just a piece of paper.  It works like a protective box, keeping its contents private and safe from probate,  and funding is the process of filling that box. Without funding, your trust is just an empty box and doesn’t provide much protection at all.

The first question you may ask is “what should go into the box”? The easy answer is almost  everything,  except retirement accounts such as IRA’s, 401K’s, and certain tax deferred items such as tax qualified annuities and insurance policies.  Start by asking your attorney to create a deed to help you put your home into your trust. For most people, their home is their greatest asset, and the first and most important item to put into the protective box.

The next step is to go to your bank and investment advisor and put your bank accounts and stocks or investments, and any other immediate assets into the name of your trust. To do this you will need your Certification of Trust, which is a short document proving the existence of your trust. Your attorney can provide you with copies of your Certification of Trust.

The third step is to look at all of your tax-deferred assets such as retirement accounts, 401(k) accounts, or life insurance policies. These tax-deferred assets cannot be owned by the trust, but to ensure that the proceeds of these assets are distributed according to your wishes you will need to make your trust either a primary or a contingent beneficiary of the accounts or policies, depending upon your circumstances. If you make the trust your primary beneficiary of these items, then you are arranging to funnel the proceeds of these assets into the protective box when the time comes. But keep in mind that not all tax-deferred assets are created equal—ask your advisor before designating your trust as the beneficiary of these items.

Your last step is to execute a comprehensive transfer document, a simple document stating your desire to put all small or tangible property such as furniture, artwork, antiques, etc., into that protective box, and be considered trust property, rather than subject to probate.

Of course every estate will be different; ask your attorney for a comprehensive list of assets to put into your trust. It is only once you’ve tucked all your assets away under the protection of your trust that you can finally breathe that final sigh of relief.

Posts By: Gene Osofsky

Quite often, an individual or couple’s decision to finally create an estate plan is motivated by a strong need to ensure that their minor children will be protected and provided for. This kind of planning for young children often begins with choosing the person or couple who will care for and raise the children if the parents pass away.  But what many parents find is that choosing people who will serve as guardians of their young children is not as easy as they first imagine. In fact, it can be the most difficult and most emotional part of creating an estate plan.

For some families choosing guardians is easy—they simply pick a sibling or parent who is close to their children and who shares a similar parenting philosophy, but for other families the choice is not as clear. The following questions may be helpful ones to keep in mind when considering who may be in the best position to serve as guardian for your young children.

  1. Is the person someone your child already knows and with whom he or she  feels comfortable?
  2. Does the person live in the same state as you and your child, or will your guardian or child have to relocate?
  3. Does the person share a similar parenting philosophy with you?
  4. Is the person married? Does he or she have children already? Are they in a position to welcome another child into their lives?
  5. Does your potential guardian work or stay home? Would this change if they were to accept guardianship of your child?
  6. If family is important to you, would your guardian ensure that your child had opportunities to spend time with your extended family?
  7. Would this person serve as both guardian and trustee until your child came of age, or would you choose two people for these roles—one as guardian and one as trustee?

These are just a few of the many questions you may want to keep in mind when considering a guardian for your child.

In rare circumstances there may be a person you want to explicitly bar from ever gaining custody of your child—an abusive aunt or uncle, or a sibling with a dangerous addiction. In these cases it may be prudent to create an anti-nomination of guardians, a document in which you name the person or couple who should under no circumstances receive guardianship of your children.

We know that these plans concerning the future and care of your children are possibly the most important you will ever make; and we know you’ll want to ensure you make them with the best information and most trusted guidance available.  Give these comments thought when you prepare your estate plan.

Posts By: Gene Osofsky

Thus far our “Estate Planning Basics” series has focused primarily on financial documents, but the documents pertaining to your health care are an equally important part of any estate plan.

The most important healthcare document in your estate plan will be your healthcare directive.  Depending on where you live, this document naming a healthcare agent and detailing your wishes for decisions made on your behalf and end of life treatment,  may also be called a living will, an advance healthcare directive, healthcare power of attorney, or a personal directive.

Perhaps the most important part of a healthcare directive is the nomination of your healthcare agent.  This is the person who will be making decisions (potentially life-and-death decisions) about your medical treatment in the event that you are unable to do so, yourself. The person you choose should be trustworthy, sensitive to the concerns of your other loved ones, and have the strength to ensure that your wishes are followed—even if those wishes are difficult or unpopular.

Like a financial power of attorney, the advance healthcare directive can be very general or very specific in its instructions. In addition to a nomination of agent, most healthcare directives also include (but are not limited to):

  • Instructions for life-saving treatment (or your desire for a Do Not Resusicate (“DNR”) order)
  • Any existing medical conditions
  • Your preferences for alternative medical treatment, if any
  • The name of your primary care physician
  • Your instructions for the final disposition of your remains

While some people have very specific preferences for medical treatment and end-of-life care, others prefer to leave these decisions in the hands of their loved ones, letting those who care about them make the choices that will bring the most comfort.  Whether you choose to leave detailed instructions for care or leave the decision-making to others, your healthcare directive should reflect your choice. We all know the tale of Terry Schiavo, whose lack of a living will resulted in a seven year court battle between her husband and her parents over her end of life care… Don’t let the same thing happen to you or your family.

Posts By: Gene Osofsky

Once you are secure in the knowledge that you’ve provided for your family and ensured that your wishes for the distribution of your hard-earned fortune are clear, it’s time to take steps to ensure that YOU will be protected and financially secure during your lifetime. It is not uncommon for seniors to need help with the finer details of their finances as they age, or in rarer circumstances for someone who is injured or incapacitated to require an agent to make financial decisions for them. A Power Of Attorney is the document that gives your chosen agent permission to make choices on your behalf, as well as giving instructions as to how those choices should be made.

Here are some of the most important things you should know about your Power of Attorney:

  • A Power of Attorney is only effective during your lifetime; it gives your agent (or attorney-in-fact) the power to act for you while you are alive.
  • A Power of Attorney can be created to go into effect immediately or only become effective when you become incapacitated.  This latter Power of Attorney is called a Springing Power of Attorney because it “springs” into effect once it is proven that the predetermined conditions (generally incapacity of  you, the principal) have been met.
  • A Power of Attorney can be revoked at any time so long as you have mental capacity.
  • A Power of Attorney is for financial and legal issues only.  A health care agent is appointed in a separate document (to be discussed in our next blog post.)

Because your Power of Attorney grants your agent-in-fact such broad powers it is of the utmost importance to choose an agent who will not only be able to make wise decisions for you,  but who will also have your best interests at heart. While a Power of Attorney does grant an agent very broad powers, there are ways to build a system of checks and balances into the document; some of these include requiring your agent to keep detailed records and present these records to the principal (you) or other named individuals, or using restrictive language in the document itself which sets limits on the agent’s power.