Posts By: Gene Osofsky

There seems to be some confusion nowadays about whether “a dog’s life” refers to a life of ease or toil, but for these wealthy canine heirs life is definitely the former! Whether it’s a wealthy eccentric leaving millions to a dear canine companion or whether it’s a lover of animals leaving a portion of their estate to charity, more and more dogs (and other animals) are being included in wills and trusts.

Naming your pet in your will or trust may seem odd, but it’s perfectly legitimate. Unfortunately, disinherited family members may not always agree. When Leona Helmsley passed away in 2007 she left $12 million to her dog, Trouble, but that amount was reduced by Judge Renee Roth of the Manhattan Surrogate Court to a mere $2 million. The current canine court battle is over the will of Miami heiress Gail Posner, which leaves $3 million to her dog Conchita, as well as $26 million split between seven of her bodyguards, housekeepers and other personal aides.

Naming your pet in your will may be perfectly legitimate, but the truth is that there is nothing to stop disgruntled family members from contesting your wishes. If you choose to do something “unusual” in your will or trust, or if you know of family members who are likely to make trouble, it may be necessary to take extra precautions to ensure your wishes are followed. For example, California permits the creation of a Pet Trust,  either as part of your “Living” Trust or as a stand-alone document.  Inform your estate planning attorney of the potential conflict and discuss what steps can be taken to prevent it. In some cases “no contest clauses” can be added to a will or trust to discourage court battles. In other cases a simple meeting of all family members with your attorney to explain your wishes and reasoning will do the trick. Talk to your attorney to find out what can be done to keep the peace in your family—canine or human.

Posts By: Gene Osofsky

Six months into 2010 and the estate tax repeal is still making news. This time it’s a story about Texas billionaire Dan L. Duncan who died in March, leaving all of his billions to his spouse, family and various charitable organizations… and none to the government:

“Had his life ended three months earlier, Mr. Duncan’s riches — Forbes magazine estimated his worth at $9 billion, ranking him as the 74th wealthiest in the world — would have been subject to a federal tax of at least 45 percent. If he had lived past Jan. 1, 2011, the rate would be even higher… Instead, because Congress allowed the tax to lapse for one year and gave all estates a free pass in 2010, Mr. Duncan’s four children and four grandchildren stand to collect billions that in any other year would have gone to the Treasury.”

According to the NY Times article this news is meeting with mixed reactions. Opponents of the estate tax (sometimes called the death tax) are hoping to make the repeal permanent. Others, however, don’t agree:

“’The ultrawealthy in this country will still be able to pass on enormous wealth to the next generation,’ said Chuck Collins, who studies income inequality and has worked with billionaires like Warren E. Buffett and Bill Gates to promote an estate tax. Mr. Collins argues that the tax is a ‘recycling program for economic opportunity.’”

Whatever happens in future years, considering that this year is already half over,  it can only be hoped that heirs and executors won’t have to worry about the tax being reinstated for persons dying in 2010, although Congress could still reinstate it retroactively;  this leaves us free to look ahead and plan for 2011 when the estate tax is now set to return at a whopping 55%.  If you’re wondering how all these changes will impact your estate planning,  we may be able to help with some answers and with some techniques to “hedge” against the return of the estate tax.

Posts By: Gene Osofsky

Serving as someone’s executor or personal representative under a Last Will and Testament can be a HUGE job, and may not be right for the faint of heart. Although nomination is commonly considered an honor, there is a lot of work involved, and an executor must have a great capacity for organization, attention to detail, the ability to meet deadlines, and more. You may be tempted to name your favorite sibling or eldest child just to keep from hurting any feelings, but your family and heirs will not be well served if you choose your executor based on emotion rather than ability.

Keeping this in mind, here are 4 things to consider when choosing your executor or personal representative:

  1. Your executor should be trustworthy. Your executor will be privy to all of your financial secrets: reviewing estate assets, determining your liabilities and paying off creditors, settling outstanding debts, and making distributions to heirs. Chances are you don’t want all that information spread throughout the family or community.
  2. Your executor should be organized. The person you choose will be in charge of a number of detailed tasks, both large and small. He or she will be making lists of assets, working with your attorney to meet court deadlines, making timely distributions for estate taxes, and more. Missing or being late for one of these many steps can draw out the entire process, costing your heirs both time and money.
  3. Your executor should be financially savvy. One of the responsibilities of executor is to keep the estate viable (making sure the mortgage and fees continue to be paid) during the probate process. If you have investment accounts you’ll want to ensure they won’t languish and lose their value before they can be distributed to your heirs.
  4. Your executor should have heart. Although probate is a can be a difficult and detailed process, it is at its core about the people you love. Your executor should have the ability to be caring and compassionate during this emotional time.

If you don’t know anybody you would trust with all of these responsibilities don’t lose faith, there are other options. For example, you can choose a bank or financial institution as your executor, or you can ask your estate planning attorney to recommend a professional fiduciary.  The goal is to find someone who will serve you well and work with your attorney to ensure a smooth probate for all involved. Another approach is to create and fund a trust, where the duties after your demise would be handled by your Successor Trustee.  However, many of the same concerns that apply to your Executor (if you only have a Will) also apply to your Trustee.  Talk to your attorney about choices and the difference between administering a probate estate created by a Last Will and Testament, on the one hand,  versus a trust estate created by a Trust, on the other.  You may find the talk very helpful.

Posts By: Gene Osofsky

As we age we become vulnerable. We begin to doubt our memories, our bodies are not as reliable as they used to be, and technological advances outstrip our abilities to keep up with them. With this vulnerability comes the opportunity for abuse.

Unfortunately, elder abuse is becoming more and more common, both physically and financially. Seniors are a growing class of individuals with money in savings or retirement, and there is no shortage of scam artists looking to take advantage of them financially. The truly sad fact is that most financial elder abuse is committed by someone close to the victim, a person in whom they have placed their trust. In such cases, the abuse may not be pre-meditated, but that in no way makes the abuse acceptable.

The good news is that there are ways to guard against elder abuse; and one of the best ways to guard against it is to be aware of it. June 15th is World Elder Abuse Awareness Day, and we urge our readers to participate and find out how they can learn more about this issue.

To learn more about the warning signs and risk factors, and what you can do to help prevent elder abuse, click here. If you think that someone you know may be the victim of elder abuse, either physically or financially, you can help. The National Center on Elder Abuse has a help hotline, as well as a list of warning signs, and community outreach opportunities.

Posts By: Gene Osofsky

Do you know how your retirement plan fits into your estate plan? Ideally you would never have to worry about this; you would spend the last penny of your savings on the day you die. But life rarely works out according to ideal circumstances, and the reality is that doing a little bit of estate planning for your retirement savings can save your heirs a whole lot of money and confusion.

The good news is that it’s fairly quick and easy to make arrangements for the distribution of your retirement assets after you die—that’s why you fill out all those beneficiary forms when you start a new job or open a new retirement account. The bad news is that it’s also fairly easy to forget about these forms as the years go by, which is how too many people end up inadvertently leaving their retirement assets to a divorced spouse or aging parents rather than to their current spouse or children. How can you ensure that your retirement savings will go to the right people?

  • First and foremost, you’ll want to review your beneficiary designation forms frequently: every 2-5 years, and whenever you experience a major life event.
  • Second, always name contingent beneficiaries! You may feel that if you name your spouse as the primary beneficiary you’ve done all you need to do, but in life you should always have a fallback plan, and your retirement assets are no exception.
  • Third, don’t count on your will to take care of everything. Your named beneficiaries on your retirement account will override the beneficiaries named in your will. If you are certain you want to leave your retirement assets to your estate, do so through a living trust and under the advice of an estate planning attorney.
  • Fourth, if you’ve named minor children as beneficiaries (either primary or contingent), make sure you name a guardian for your kids and a trustee for their assets. You may want to use those retirement funds to provide for the kids if anything happens to you, but minors cannot legally control assets, and they’ll need someone to manage their inheritance for them until they come of age.

If you have more questions about fitting your retirement assets into your estate plan, more information is available in this article from InvestorGuide.com, or call our office  to arrange a more detailed and personalized review.

Posts By: Gene Osofsky

When it comes to living arrangements, senior citizens have far more options available to them today than they ever have in the past: independent retirement communities, assisted independent communities, at-home assisted living, at-home nursing care, live-in nursing homes… the list can go on and on. Having all these options available is almost certain to make it easier to eventually find the right living arrangement, but it doesn’t necessarily mean the search itself will be easier. In fact, having so many options and facilities to consider can often make the search that much more confusing.

The search for the right living arrangement—either for yourself or for an aging family member—can be much easier if you know ahead of time the right questions to ask and the important things to look for. This article in U.S. News and World Report shares 9 things to look for in your search for an assisted living facility, including:

  • Making sure the facility is licensed
  • Ensuring the facility’s financial stability
  • Getting referrals
  • Making visits to assess the facility’s staff
  • Asking what current residents have to say
  • Considering whether it can meet not only your current but also your future needs
  • Asking about payment options (including Medicaid, called “Medi-Cal” in California)
  • And more

Having so many different options these days means we can hope that finding the right senior living arrangement is a much more personal—and pleasurable—task than it has been in the past. Some of the best retirement communities or nursing homes have long waiting lists, so starting your search early will improve your chances of finding the place that’s right for you. But be careful, nursing home and assisted living contracts can contain surprises and should be carefully considered; or better yet, have an attorney look at the contract for you. And, if you are finding a place for your parent or other infirm family member, try to avoid signing the contract yourself unless you plan on being financially responsible for payment. It is often better to ask you parent or loved one to sign the contract and, if they are unable to do so, then sign only as their “agent” if you have valid agency authority.

With the many choices now available there’s no reason not to have exactly the senior living situation you want and need.

Posts By: Gene Osofsky

In many of our previous posts we’ve stressed the importance of keeping your estate planning documents up-to-date. Changes to the law, as well as changes to your own personal, medical and financial status can wreak havoc on a well-crafted estate plan if these changes aren’t addressed. A good rule of thumb is to have your attorney review your estate planning documents every 2-5 years, but are there other changes or life events that might necessitate a more immediate review or update? The answer to that question is YES!

Andrew Chan has written a short article for the Boston Globe in which he lists 13 significant life events that should have you reaching for the phone to call your attorney. To go to the article and read his list click here. To Mr. Chan’s list we would add just a few more life events that could have an effect on your estate plan:

The approaching need  to rely upon assistive living care from caregivers in the home, assisted living or nursing facility.

Concerns about the decline in cognitive mental abilities of yourself or your spouse.

A change in residence—especially if you move to a new state.

Children or grandchildren turning 18 or graduating from college—this may or may not change your estate plan, but at the very least your young adults will now need their own health care directives and privacy forms.

If you anticipate one of your relatives or heirs disagreeing with your wishes and challenging your will, trust or overall estate plan.

There are of course a great number of things which could impact your estate plan, not all of which can be named in one article or blog post; but if you stay aware—and stay in touch with your estate planner—you can rest easy that your plan will continue to function exactly as you intend.

Posts By: Gene Osofsky

One of the most important pieces of the recently enacted “Patient Protection and Affordable Care Act” is the “CLASS Act“, which stands for the Community Living Assistance Services and Supports program.  Authored by the late Senator Ted Kennedy and others, it creates — for the very first time — a long term care insurance plan to help those with functional impairments pay for necessary care at home or in their communities. While the daily benefit is limited, the CLASS Act will help many continue to live at home or in assisted living facilities, rather than be forced prematurely into a nursing home in order to qualify for government assistance.  Some key features of the program are: 

(1) enrollment is open to those who are employed and choose to make voluntary monthly contributions to the program, and there is no underwriting exclusion based on pre-existing conditions; enrollment will open January 1, 2011; (2) eligibility kicks in only after the individual has been enrolled in the voluntary payroll deduction program for 5 years, but the payout will not begin until 2017; (3) benefits will be a minimum of $50/day but be scaled up as high as $75/day, depending upon the degree of impairment, and there is no lifetime “cap” on payout; (4) benefits will coordinate with government assistance from the Medi-Cal program, such that CLASS benefits will have no effect on eligibility for Medi-Cal, Medicare, Social Security Retirement or Disability benefits, nor SSI. In fact, persons in nursing homes who qualify for CLASS benefits will be able to retain 5% of their daily or weekly cash benefit without seeing a reduction in their Medi-Cal subsidy.

Unfortunately, because of the 5 year vesting requirement and the companion requirement that the individual be employed for at least 3 out of those 5 years, most currently retired seniors will not see any direct benefit from the program.  However, seniors can, and should in our view, encourage their children and family members who are still employed to sign up.  That encouragement can be a part of the parents’  legacy to their own children, just as Senator Kennedy left his legacy to the nation.

For more on topic, see the following fact sheet prepared by the Kaiser Family Foundation.

Posts By: Gene Osofsky

“Too rich for most government-funded social programs and not rich enough to pay for full-time, long-term care services.”

Does this sound familiar? It is exactly the kind of financial situation most elderly find themselves in today, and one which requires many adult children who are still raising their own kids to also care for their parents. That is the situation in which Michelle Singletary, Washington Post staff writer, finds herself in today. In her W.P. article Prepare now for a future that might include caring for your elderly family, she describes the feelings of frustration, admiration, and obligation that come with caring for her elderly father-in-law.

Singletary writes movingly about the realities of caring for an aging relative, but what she seems most determined to convey is that it is never too early to start thinking about what your own parents’ future holds. “If you have even an inkling that you may become the caregiver for an aging parent or relative, start planning for it now. Ask questions about the person’s finances. Collect information from community and nonprofit organizations. Get your own finances in order because you’ll probably have to pitch in financially.”

Part of planning for your aging parent or relative is thinking about Medi-Cal (called “Medicaid” in most other states), Long-Term Care Insurance, and the best way to save and protect your assets. Many aging parents believe that they are “covered” if they have a Will or even a convential “Living Trust”.  Those legal documents may be fine for ‘death planning’, but may fall short for Long Term Care Planning.  Call our firm and let us help you—and help your aging parents.

Posts By: Gene Osofsky

This time of year often involves spring cleaning for many families: reorganizing the closets, clearing the weeds and brush from the yard, and getting rid of all those boxes in the garage or basement. Spring seems to be a time to take stock and start fresh… at least in the home. But what about with your health?

We’re not talking about the diet you vowed to follow in your New Year’s Resolution, or trying to look good in that new bathing suit for summer; what we’re talking about is your annual checkup—taking stock of your health with your primary care physician and making sure you’re both on the same page with your instructions for health care and your advanced healthcare directive or living will.

When clients come into our office for an estate plan, we ensure that their healthcare instructions are completed as well; but the job doesn’t end when the document is signed. Your health care providers need to be aware of your wishes as well. The best way to ensure that they know and understand your wishes is to take a copy of your advanced healthcare directive or living will with you to your next check up and talk to your physician about it, then ask them to keep the copy on file.

A rule of thumb with healthcare wishes is to give a copy of your living will or healthcare directive to each of your primary care physicians, give a copy to each of the healthcare agents you’ve nominated, AND keep a copy or two on file to take with you if you ever need to go to the hospital. And of course keep the signed original in a safe place with the rest of your estate planning documents.