Posts By: Gene Osofsky

How often do you and your spouse talk about the financial aspect of your retirement?  For that matter, how often do you talk about finances in general? New Research by Fidelity has found that an alarmingly high number of couples barely communicate about their finances at all. In fact, “only 15 percent of couples feel confident that both of them could assume responsibility for their joint finances if necessary”.

Retirement planning is one of the leading areas in which spouses have a failure to communicate, according to the research. After the recent market turmoil, people have new and greater concerns about their ability to retire comfortably, but they aren’t talking about it.  And lack of communication means a lack of planning: “Although couples agree about their top financial concerns in retirement, they have not developed better planning habits. In fact, nearly 10 percent fewer couples report they had completed critical plans – be that a retirement plan, an estate plan, or a will — as compared to 2007.”

Although the temptation to bury your head in the sand may be strong, talking with your spouse—and then with a trusted professional—to create quality retirement and estate plans is essential, and will bring incredible comfort and security to you and the rest of your family.  If talking about finances is not something that comes naturally to you and your spouse, a good way to get started is to make an appointment with a professional who can lead you through the process together.

Talking about money doesn’t have to be scary. Learning together and making plans for the future will not only strengthen your financial situation, it can also strengthen your relationship.

Posts By: Gene Osofsky

If you provide care for an elderly relative or a special needs child you know how much work is involved in just getting away for an afternoon or evening, let alone planning for their care if you were to pass away.  First you have to find a caregiver qualified to handle your loved one’s more demanding needs, then there are lists upon lists of “what if” situations, a strict regimen of prescription medicines, and of course all of the little quirks and routines that must be strictly followed.  And after all that, just when you feel comfortable leaving your loved one in the care of someone else… your “babysitter” moves away and you have to go through it all again.

What if there was a way that you could not only keep a record of all details, regimens and instructions, but also an easy way to update and communicate that information to any and all caregivers when anything changed?  And would it be too much to ask to have this record somehow linked to all the latest research, resources and best-practice recommendations?  Apparently it is not too much to ask, because this is exactly what the new online service, CareGiver360®, claims to provide.

CareGiver360® is the brainchild of Ken Ziel, father of a special needs son, who worried about what kind of life his son would have if anything were to happen to Ken. After much research, Ken started CareGiver360®, “an easy to use, interactive Web service that lets you create a secure Personalized Care Guide to help you manage the care of your loved one. CareGiver360® provides a wealth of caregiving resources through its searchable online library. You can draw upon this valuable resource to supplement your personal experience to create a customized, comprehensive care guide.”

CareGiver360® is a fairly new tool, but it sounds so good one has to wonder why nobody came up with the idea before. We would love to provide our clients and readers with helpful reviews, so if you’ve used the service please leave a comment letting us know how it worked for you. And we ought to mention that the service isn’t free, but at just under $10/month it’s probably not going to break the bank either.

Posts By: Gene Osofsky

The decision to place a loved one in a nursing home (or the decision to leave your own home and move to a nursing facility, if you are making the decision yourself) can be one of the most difficult and harrowing decisions we ever make.  Stories about disreputable facilities where seniors are neglected or abused are all too common, and even if months of searching lead to the discovery of “the perfect” care facility—the shining grain of wheat among the chaff—it’s normal to be apprehensive about exchanging the comfort and independence of home for the unknown in the hands of strangers on the nursing staff.  This feeling is magnified if the senior being moved is essentially alone, with the next generation of friends and family scattered across the country.

To ease the transition, and to assure all involved that grandma will be well cared for, many families are opting to hire a Geriatric Care Manager.  Traditionally (although Geriatric Care Management is an emerging field, so the term must be used lightly) GCMs have been a resource for seniors and their families; someone on the inside who knows the system and can help navigate, finding the best care and services for each individual situation.  But some families are now asking the GCM to continue advising the family even after grandma has settled into the nursing home, to ensure that their loved one continues to receive the best care possible. At the very least the GCM may recommend hiring a professional caregiver to check in with grandma at the nursing home daily or weekly, to observe the quality of care she is receiving and keep family members informed.

If you are interested in learning more, or if you’d like to find a Geriatric Care Manager in your area, go to the National Association of Professional Geriatric Care Managers online. And if you are someone who doesn’t need a GCM quite yet, but would like your family to have help navigating the confusing field of nursing care when the time comes, call your attorney and ask to include a mention of it in your estate planning documents or other instructions.  Also, let your loved ones know of this option and your desire to use it.

Knowing you are not alone, and having help from someone on the inside, can bring a world of comfort to you and your family.

Posts By: Gene Osofsky

The realm of personal finance is in the midst of being revolutionized.  The crash on Wall Street has made many armchair investors mistrustful of professional financial advice, and many people are now taking the time to manage their own personal finances with the focus shifted from investing and earning to budgeting and saving. The problem is that after all the effort people put into learning how to spend and play the market from their laptops, many now don’t know how to budget and save responsibly.

This is where the revolution begins.

A recent article in The Wall Street Journal has collected some of the best websites on the internet to help you keep track of and plan your finances.  These online tools run the gamut of personal finance categories; from budgeting your household expenses to creating a financial plan to managing personal loans between friends and family.  And these aren’t just educational resources, these are interactive tools to help you implement the processes you prefer—and many of these tools are free.

We hope our readers will find these resources helpful,  but if you are one of those who would still like the advice and services of a professional financial planner but aren’t sure who to call, please contact our office.  We would be happy to recommend one who would fit your family’s needs.

Posts By: Gene Osofsky

Americans love our technology; cell phone, laptop, wi-fi, Kindle, iPod—all of these things keep us socially connected, culturally informed, and satisfy our growing need for instant gratification. But there is an assumption that this technological savvy and appreciation stops once you reach a certain age.  We expect teens, twenty and thirty-somethings, and baby-boomers to be “plugged in”, but assume that Facebook and Wikipedia won’t be of interest to the elderly.

Turns out, we couldn’t be more wrong.

Stephanie Clifford of the New York Times writes that “among older people who went online last year, the number visiting social networks grew almost twice as fast as the overall rate of Internet use among that group.” For home-bound or wheelchair-bound seniors the internet and social networking sites can be a sanity-saver, keeping them from loneliness and isolation.

This growing trend is being helped along by social networking sites such as MyWay Village, designed specifically for seniors, their friends and families. These online senior networking groups allow members of the physically challenged elderly population to keep in touch with distant family members, meet people from their own cohort all over the country, and reconnect with old friends and co-workers—all at their own pace.  

These are the same things we all love about the social networking sites, young or old.  It turns out our aging parents aren’t so different from our teenage kids, or even from ourselves. If you think that your parents (or even you, yourself) are too old to catch on to the latest internet trend, reconsider. Everyone needs a community, even if that community is out in cyber-space.

Posts By: Gene Osofsky

If you’ve been weighing the pros and cons of setting up a trust for your young child, wondering if you really have enough assets to warrant such an expense, you must read Stacey L. Bradford’s recent article in the Wall Street Journal entitled “Deciding if Your Kid Is Trust-Worthy”. In her article Bradford explains why every parent should consider a trust for their minor child, even parents with small estates and few significant assets.

You see, legally, non-adult children cannot inherit large sums of money (and if you have a home or a life-insurance policy then you have “large sums of money” to pass on to your child); if a parent dies and leaves this money directly to a minor child the court will step in and appoint a guardian to manage your child’s money for him—and this guardian may not be the trusted friend or relative whom you might have preferred. A trust will prevent your child from having to grow up with the added level of bureaucracy required by such court-appointed guardianship, and allow you more control over how the money is managed and spent.

Bradford goes on to explain the other benefits of creating a trust for your minor child (paying for education, delaying the age at which your child has outright access to the money, reducing taxes, etc.),   She also gives helpful tips about how to choose a trustee, “The trustee holds the purse strings, so don’t delegate this job lightly. You need someone who is trustworthy, is good with money and has great attention to detail.”

Bradford’s article is a great introduction to trusts for parents of young children. And if you find this article helpful, you may want to check out the book from whence it came, The Wall Street Journal’s Financial Guidebook for New Parents.

Posts By: Gene Osofsky

Many people count on life insurance to pay their estate tax when they pass away (allowing their heirs to keep non-liquid assets such as real estate without having to sell immediately), and this has always been a fairly safe and reliable strategy—as long as you’re keeping track of your policy. Arden Dale’s article in the Wall Street Journal warns that current low interest rates are wreaking havoc on some insurance policies, leaving the owners without that safety net when the time comes to pay estate taxes.

“The policies are imploding because of low interest rates. An insurance plan issued years ago, when interest rates were higher, may no longer be earning the investment returns it needs to pay premiums as drafted. That shortfall leaves the owner on the hook for unexpected costs.

“If the worst happens and a policy collapses, its demise can even result in a big tax bill.”

If you aren’t sure of the status of your insurance policy talk to your financial planner or insurance representative to find out, then be sure to call your estate planning attorney to update your estate plan as needed to protect your heirs and family from the burden of unexpected estate taxes.

Posts By: Gene Osofsky

Imagine for a moment that you (or you and your spouse) are in a car accident, knocked on the head, and suffer brain injuries great enough to put you into a coma for 2 weeks and require a full seven months of nursing and rehabilitative care. Thankfully, you make a full recovery of all your cognitive powers; but in the meantime, who has been taking care of all of your responsibilities?  Have you lost your home because nobody was paying the bills?  Did you end up in a sub-standard recovery facility because nobody could sign the nursing home contract on your behalf? Do you have a living trust that addresses this situation but was never brought into play because it languished in a safe deposit box to which nobody had access but you?

An essential part of any trust or estate plan is the execution of a Durable Power of Attorney. This is the document that gives your nominated agent the power to do all of the things you would normally do: sign legal documents, write checks, access safe deposit boxes, and more. A Power of Attorney—if it’s done right—is an extremely comprehensive document (as described in this article in the New York Times), and as such can make many clients nervous about signing it.  Does this mean you should go without? Absolutely not!  Note:  the Times’ article is based upon New York law, but it does have a message for all:

“…Even if signing a power of attorney makes the client feel vulnerable, it’s far better than living without one. If you become incompetent, you lack the capacity to make legally binding commitments. Without a durable power of attorney, your family might have no choice but to ask a court to appoint a guardian to oversee your finances. This can be an expensive and sometimes embarrassing ordeal and can involve unpleasant, even acrimonious, exchanges.”

Trusting another person with such power may be difficult, but the alternative can be far worse. Executing a power of attorney doesn’t have to be a nerve-wracking ordeal; talk to your lawyer about your concerns, work with him or her to choose an agent with whom you feel comfortable, and discuss the circumstances in which a power of attorney might be necessary. The last thing you want is for your home and finances to deteriorate because you were out of commission for a couple of months, and this is exactly what a power of attorney is designed to prevent. And remember:  in California, it should be designated as “durable” , which means it survives your incapacity, as that is when you will need it most. If it is not created to be ‘durable’, your agent may have difficulty using it just when it is most needed, and its primary purpose will have been lost.

Posts By: Gene Osofsky

The process of creating a last will and testament hasn’t changed much over the centuries, and the requirements are few: Paper, pen, witnesses, and a testator who is of sound mind. This endurance and simplicity is one of the hallmarks of estate planning—and yet there are plenty of ways to incorporate technology into our practices and use it to our clients’ advantage.  One way to do this is with the use of video wills.

A video will is created when the testator reads his or her will in front of a video camera, and occasionally explains why certain gifts were granted and why some were not. It may include some discussion back and forth between the drafting attorney and the client,  in regard to selected provisions of the Will, some detail in regard to family members mentioned or omitted, and perhaps some general colloquy to show that the person making the Will was of sound mind.  The benefit of creating a video will is that it can be used to establish the mental competence of the testator.  As such, a video will can be especially helpful to elderly clients whose heirs might be inclined to contest the will on the grounds that the testator was not of sound mind, or was making the Will subject to the undue influence of others.

Although a video will can be a helpful addition to your estate plan, it can in no way replace an official paper copy, signed in the presence of witnesses. A physical writing of your will—drafted by a knowledgeable attorney and with your official signature made in the presence of the required witnesses—is the only valid legal evidence of your wishes for the distribution of your property. A video will by itself will not hold up in probate court. 

Technology brings great improvements to our lives, but adaptation takes time. Talk to your attorney first if you are considering incorporating a video will into your estate plan. Although it can be helpful, a video will is not always necessary, and could in some cases be detrimental if not done correctly.  You should only film under the advice and supervision of your trusted attorney.

Posts By: Gene Osofsky

You’re one of the smart ones: You already have an estate plan that you and your spouse created it back in 1996; it’s sitting snugly in a safety deposit box, gathering dust until the (hopefully) far-off day when it will be needed. You’re done, right?

Wrong.

Kudos to you if you’ve already created your estate plan, you are one step ahead of the rest of the pack; but people and families grow and change, and your estate plan should change as your life does. Your estate plan should be reviewed regularly (we recommend the tax season as a good time to review your plan), but listed here are some life changes that will definitely require you to update your estate plan:

The birth or death of a beneficiary or fiduciary. This includes the addition of new children or grandchildren, or the loss of a parent or sibling.

Your own marriage or divorce, or the marriage or divorce of one of your beneficiaries. If you named your daughter’s husband in your plan five years ago when they were happily married, you’ll want to be sure to remove him after they go through that messy divorce.

Moving to a new state. Tax, health care, and estate planning laws vary from state to state, and your estate plan will have to change accordingly. This is especially true if you are moving from a non-community property state to a community property state.

A significant change in your financial status, or the status of your business, (if you have one). For the most part, your estate plan is designed based on the size of your assets.  Different strategies are more effective for large estates than are for small; and if your financial status changes significantly, so should your estate planning strategy.

The simple passage of time. This may sound like the least important reason to update your estate plan, but it is actually the most common. Naming your parents as trustees when your children are minors is fine, but after fifteen years you may want to give your parents (who are now entering their 80s) a break and name your 37 year old son as trustee instead. In addition, there are some documents that should be re-executed from time to time to avoid them being construed as ‘stale”, e.g. your Advance Health Care Directive, your Nomination of Conservator, and your Nomination of Guardain for Minor Children?

Changes in the Tax Law: changes in the tax law can really require another look at your existing plans. For example, couples who prepared “Living Trusts” back in the 1990’s often used “A–B” trust splits on the first death in order to minimize estate tax.  With the increasing exemptions, those trust splits may now no longer be necessary for most couples’ estates, and may actually be a hindrance.  See our Article “Review Your Living Trust: Older Ones May Need Revision”.