Building Legacies that Last Estate Planning and Elder Law

Alan Thicke Estate Battle

MW-FB938_Thicke_ZG_20161214063245Alan Thicke's sons are fighting with their stepmother over their father's estate.

Two of deceased actor Alan Thicke's sons have entered the probate case to settle their father's estate with a unique claim. The have filed a claim suggesting that Thicke's third wife, Tanya Callau, is attempting to get more of the estate than she is entitled to receive and that she has threatened to go to the tabloids, if she does not get her way.

Thicke and Callau had a prenuptial agreement and she is already set to get a sizeable portion of his estate. Her take includes 25% of his personal assets, 40% of the remainder of the estate, a $500,000 life insurance payment and she can stay in the residence for the remainder of her life.

The sons have not stated what else Callau wants and it is not known what she would tell the tabloids, if she went to them.

TMZ reported this story in "Alan Thicke Sons Go To War With His Wife To Protect the Estate."

Other than the celebrity nature of this estate and the alleged threat to get the tabloids involved, this is, of course, not a particularly unusual estate battle.

Adult children are often at odds with a surviving step-parent and that battle often makes its way into probate court to fight over the estate. This is especially true when there are large sums of money involved.

Wealthy people who have remarried and who have children from previous relationships, need to understand how common these types of fight are. They then need to make estate plans with that in mind, if they hope to minimize the problems.

Reference: TMZ (May 16, 2017) "Alan Thicke Sons Go To War With His Wife To Protect the Estate." Estate Administration, Estate Litigation

Consider a SLAT for an Uncertain Future

MP900448482[1]It is currently difficult to know what the best possible estate planning method might be in the near future, since tax reform is uncertain. A spousal lifetime asset trust can be used as a way to plan around that uncertainty.

Given recent events in Washington, it is understandable if wealthy people are more than a little nervous about their estate plans. Just as it appeared that Congress was about to turn its attention to long-promised tax reform, President Trump has been distracted by ongoing investigations into his campaign.

While a special counsel has been appointed to oversee that investigation, a continuing steady stream of leaks has kept the pressure on lawmakers. This casts doubt over their plans for tax reform, since it is a contentious issue that has many in Congress deeply divided.

It is not clear what the President wants on some of the key items of reform.

All of this makes it difficult for many wealthy people to know how effective their estate plans might be and how to make changes to them.

Recently, Wealth Management offered a solution to the uncertainty in the form of a spousal lifetime asset trust in "SLATs Provide Flexible Plans for Many Clients."

Like any other trust, SLATs do not have to go through probate. They also offer estate tax and capital gains tax benefits.

They key thing about them, is that they are an extremely flexible form of trust. They are more adaptable to changing circumstances than many other trusts.

That makes them a great tool for uncertain times, when no one can be certain what the tax future will look like.

If you are interested in a SLAT or want to know what your other current estate planning options are, talk to an estate planning attorney.

 

 

Donor Advised Funds

Giving-to-charity2[1]There are many ways to leave a charitable legacy. One of the best is the increasingly popular donor advised fund.

Giving to charity is not as simple as writing a check and sending it in the mail. Sure, it can be done like that, but if you want to make sure you are getting the best possible tax benefit for the charitable gift, then you need to do more planning.

This is especially true for wealthy people, who would like to create a charitable legacy that will outlive them.

While you can create a charitable legacy through several different methods, donor advised funds are popular a good way to do so as the Wills, Trusts & Estates Prof Blog recently explained in "The Rise of Donor Advised Funds."

With a donor advised fund, you can invest money now that will be used for charity later. The donor gets an immediate tax benefit and can invest however much he or she wants.

Contributions can be made over time or all at once, whichever is more beneficial. The donor does not have to actually advise how the funds are invested, if not interested in doing so. However, they can, if they are interested.

If you are considering a donor advised fund or any other type of charitable legacy, it is important to seek out the advice of an estate planning attorney. That way you can make sure you are leaving your legacy in a way that makes the most sense for your personal situation and the type of legacy you want to leave.

Reference: Wills, Trusts & Estates Prof Blog (May 18, 2017) "The Rise of Donor Advised Funds."

 

Online Social Security Changes Again

MP900316845[1]The last attempt by the Social Security Administration to increase online security was a disaster that did not last long. The agency is about to try again.

It is relatively easy to log in to the Social Security Administration and get access to all of the information about your account. A few basic details are all that is required.

This has led to concerns about privacy and identity theft.

Since it does not take much for a legitimate user to log in, it does not take very much for thieves to log in either. The agency attempted to fix this problem in 2016, by requiring a two-step verification process before account access was granted.

That was short-lived, however, as many people were unable to log in to their accounts.

The agency is going to try again with a modified process, as Investment News reports in "Social Security Administration steps up online security."

In its last attempt, the agency sent users a code via cellphone to verify their accounts before they could log in. That was a problem, since many elderly people do not use cellphones.

This time around, the agency will let people choose to have the code sent by cellphone or email. It is assumed that if are trying to access their Social Security accounts online, then they will almost certainly have email accounts, even if they do not have cellphones.

This change is scheduled to take effect on June 10, 2017.

Anyone who has problems accessing their Social Security accounts online after that, should speak to the Social Security helpline.

Reference: Investment News (May 15, 2017) "Social Security Administration steps up online security."

 

Protect Your Digital Assets

Bigstock-Young-man-holding-a-trash-bin--26453660[1]Technology is changing so rapidly that people and the law are not keeping up. This creates problems in estate planning.

It was not that long ago when the Internet was new and primarily seen as nothing more than a source of entertainment for most people. That has changed dramatically.

More and more people are now conducting business online and our digital accounts have become a large part of our personal lives.  This has become a problem in estate planning because most people manage their finances online and after death their heirs cannot access these digital files, which are password protected.  A generation ago, heirs could discover financial information relatively easily through paper statements.

Laws have also not kept pace, as Investment News discusses in “Most estate plans aren’t dealing with digital assets properly.”

By default, what happens to digital accounts and assets after we pass away is a patchwork of the individual terms of services of the different websites that we use.

Every website has different rules about the accounts and whether they can be passed to heirs and under what circumstances they can be passed down.  And whether passwords and accounts can be accessed.

Some states have attempted to address this problem by adopting proposed uniform laws, but there is a long way to go for the law to catch up with technology.  Maryland and DC have passed new laws.

If you would like to make sure your heirs can access your digital financial information or have a say in what happens to your digital accounts after you pass away, it is important that you speak with an estate planning attorney about it, so you can make appropriate plans.

Reference: Investment News (May 11, 2017) “Most estate plans aren’t dealing with digital assets properly.”

 

Why Trusts Are Better Than Wills

Wills-trusts-and-estates-covered[1]Most estate planning attorneys believe that trusts are generally a better way to distribute an estate than wills. It is important to know the reasons why that is.

If you spend any time at all talking to estate planning attorneys or researching estate planning online, it will not be long before you hear that trusts are usually better than wills for estates. This has become such a truism, that even many non-attorneys instinctively suggest a trust when a friend asks them about estate plans.

While it should be noted that trusts are not always better, it is true that they almost always are. Particularly, in Maryland and the District of Columbia, which have Maryland estate taxes and DC estate taxes, which are lower than  federal estate taxes, trusts are especially helpful.

Recently, Wicked Local Norwood listed some reasons why that is the case in “Five Ways in which a trust is better than a will,” including:

  • With a trust you can avoid probate, which can be expensive and time-consuming. Most wills have to go through probate court.
  • A trust can be drafted that protects your beneficiaries from creditors. If you give heirs money outright in a will, then any creditors they have can go after that money. Trusts avoid this problem.
  • Special needs trusts can be used to give assets to people with disabilities without making them ineligible for government benefits.
  • Trusts can be used to reduce estate taxes in ways that are impossible to do with wills.
  • With a trust, you can leave assets for minor children that are managed by a third-party without the unnecessary intervention of probate courts.

All that noted, wills have the benefit of a neutral judge overseeing the process and “testamentary trusts” can be created under wills that accomplish the same ends as those available through a revocable living trust that avoids probate.

Regardless, consult with a qualified estate planning attorney to evaluate the best approach for your unique circumstances.

Reference: Wicked Local Norwood (May 14, 2017) “Five Ways in which a trust is better than a will.”

 

Massive Medicare Fraud Alleged

Stockbrokerarbitrationfraud4[1]A former insurance company executive has made public allegations that insurers have systematically overcharged Medicare and cost the government billions of dollars.

Every few years it seems the federal government needs to do something to fix Medicare or risk running out of available funds for the program. One attempt to fix Medicare was undertaken in the early 2000s.  It is now known as Medicare Advantage.

The program privatized parts of Medicare by turning things over to insurance companies. The idea was that insurers would do a better job of controlling costs in the program than the government.

Instead of doing that, however, a whistle-blower alleges that insurers have used the program to make billions of dollars from Medicare they are not entitled to, as The New York Times reports in "A Whistle-Blower Tells of Health Insurers Bilking Medicare."

The alleged fraud is a relatively simple one.

Insurers are said to have used the medical coding system to make patients look sicker than they really are. As a result, the insurers easily collect more money from the government than they actually should.

The government has already announced plans to sue one insurer based on these allegations and more lawsuits against other companies are expected.

It is important for the government to stop this fraud, if true, and any other Medicare fraud.

The Medicare system is yet again close to running out of funds and in need of a fix. The government cannot afford to lose billions to fraud.

Reference: New York Times (May 15, 2017) "A Whistle-Blower Tells of Health Insurers Bilking Medicare."

 

Handling Death in the U.S.

Bigstock-Doctor-with-female-patient-21258332[1]Studies continue to show that the how and when Americans would prefer to pass away, is not how they actually pass away. That needs to change.

Most of the time, the medical profession treats its patients in keeping with what the patients want. If someone has a broken leg, for example, then doctors set the leg, put a cast on it and let it heal.

That is what people want.

When we get sick, doctors give us the best known treatment for whatever disease we have and everyone is satisfied. However, this does not necessarily hold true when people are at the end of their lives.

What medical professionals do at the end of their patients’ lives, is not what studies suggest patients necessarily want, as The New York Times reports in “We’re Bad at Death. Can We Talk?

The disconnect at the end of life between doctors and patients, stems from the fact that doctors are trained to do everything they can to sustain life. On the other hand, most patients would prefer to be let go with the least amount of pain and discomfort.

This leads to terminally ill patients being placed in intensive care units on artificial life support, when they would prefer to be placed in palliative care or return home so that they can pass away in peace.

This is something that needs to be addressed by the medical community.

There is something you can do about it for yourself. You can get advanced medical directives to let doctors know what you want, when you are terminally ill. At Profit Law Firm, we prepare Advanced Medical Directives as part of basic estate planning.

Reference: New York Times (May 10, 2017) “We’re Bad at Death. Can We Talk?

 

Just Living Together After 50

Bigstock-Senior-Couple-8161132[2]More and more elder Americans are choosing not to get married to their partners. Instead, they are just living together.

The trend over the last few decades has been for people to get remarried late in life. This has created  many issues for estate planning and the families of the people who do get remarried.

That trend is starting to reverse, but that does not mean people are not finding companionship in their retirement years.

Today, rather than getting married, many elderly people are just moving in together and foregoing a marriage certificate, according to The New York Times in "More Older Couples Are 'Shacking Up'."

While this might solve some problems, such as getting around the laws of intestate and spousal election to make sure that any assets go to the children and remain in the family, it does not solve all of the problems. Instead, it creates a different set of problems that need to be worked through in an estate plan.

If two elderly people are living together, it becomes important to create estate plans that do not leave one of them in a bad position when the other passes away.

You do not want to create a situation where a partner is unable to afford the rent after you pass away or gets kicked out of the property you own by your heirs.

These do not need to be major problems with proper estate planning, but they can be without that planning.

Reference: New York Times (May 8, 2017) "More Older Couples Are 'Shacking Up'."

 

Death Has Changed A Lot

MP900407501[1]How, when and where people pass away has changed in the last 100 years. Evidence suggests that people are not entirely happy about that.

A long time ago, most people passed away in their homes. There were not many hospitals or hospices for people to go to, when they were terminally ill.

There are now many of those places and most people pass away in some sort of facility.

That has been both good and bad.

People generally like that they do not die as young and from as many diseases as people used to, but most people would still rather die in their homes than in a facility, as the Economist reports in "How to have a better death."

In fact, the majority of people are not happy that they cannot choose when and where to die.  People are often given life-saving treatment by doctors that they do not want.

It is important that people take some matters they can control into their own hands.  Maryland, the District of Columbia and Virginia and other states allow people to choose living wills that specify when and what type of treatment, if any, they should receive, under different circumstances.  These states also allow people to designate a person who can make personal healthcare decisions for them, if they are unable to do so, for example if they are in a coma.

Everyone should have advanced medical directives, at a minimum, that dictate what procedures doctors can and cannot use to prolong their lives. Maryland living wills are called advance medical directives and they allow people to control healthcare decisions in catastrophic situations, where they can't communicate.

Reference: Economist (April 29, 2017) "How to have a better death."