Building Legacies that Last Estate Planning and Elder Law

Do You Want Your Child to Be Your Executor?

MP900448494[1]Without thinking about it too much, many people designate one of their children to be the executor of their estate. They should think about it carefully, before doing so.

The executor of your estate should be someone you trust to handle your estate just as you want it handled. You want to be certain that the executor will faithfully follow the instructions laid out in your will, including distributing your assets according to your wishes.

Many people trust one of their own children above all other potential candidates for this responsibility. They name that child as their executor, having put little thought into the consequences of doing so. It is not always a good idea, as Texas Lawyer discusses in "Mamas, Don't Let Your Babies Grow Up to be Executors."

Being an executor is not an easy job. If people do not know what they are doing, it is very easy for them to make mistakes. They can often be held personally liable for those mistakes.

An executor does more than just distribute the assets of the estate. He or she must be able to communicate with the court and with any heirs about the estate. If, for example, the executor and a sibling do not get along, there can be problems. In some cases, executors will need to invest assets for a period of time, before they can be distributed. The executors need to do that investing wisely.

Before naming one of your children to be the executor of your estate, think through whether it is a role you really want that child to have. It might be better, in some cases, to name a professional.

Reference: Texas Lawyer (March 6, 2018) "Mamas, Don't Let Your Babies Grow Up to be Executors."


Harper Lee’s Will Unveiled

Harper Lee valued her privacy while she was alive. Her will suggests that she also values it in death. MP900398819[1]

After writing To Kill a Mockingbird, Harper Lee mostly kept out of the public eye. She did not release another book for decades and made very few appearances.

She died in 2016. Journalists and literary historians have been attempting to piece together details of the author's life, but they have met with little success. She was a private person and those who knew her have not been willing to talk very much.

Lee’s will has been unsealed but it does not reveal very much either, as reports in "Harper Lee's will is unsealed but questions about the legend of American literature remain."

Lee's will directs that all of her assets, including literary property, be put into a previously created trust. Details about the trust are not publicly known. There does not appear to be a way to make them public. The trust's beneficiaries and trustee are not known.

What Lee created is known as a pour-over will. It is a simple way to have assets transferred to a trust, after someone passes away. Since trusts do not have to go through probate and are private, this is a great method to use for people who do not want the details of their estates known to the public, as Lee apparently did not.

Reference: (Feb. 27, 2018) "Harper Lee's will is unsealed but questions about the legend of American literature remain."

Suggested Key Words: Wills, Trusts

Real Estate Should Be Put in a Trust

MP900442456In most cases, real estate has to go through the probate process after the owner passes away. That can be avoided. There is a good way and a bad way to do so.

Many Americans could avoid having their estates go through probate, if they did not own their homes. For many people, their home is their most valuable asset. Without the home, their estate would be small enough to avoid probate.

In most places, all real estate must go through probate after the owners pass away.  Otherwise, the deed will not be properly changed and recorded. Some people seek to avoid this problem by adding someone else’s name to their deed before they pass away. This is usually a child or maybe a grandchild, but it is almost always a bad idea.

The Daily Republic discussed this matter in “All Things Real Estate: Living trust best way to pass house to children.”

Among other problems, adding someone’s name to your real estate deed makes it available to that person’s creditors. That sometimes does not become a problem.  However, when it does, it is normally a big one.

A much better way to avoid having real estate go through probate, is to create a revocable living trust. The real estate can be transferred to the trust and will not have to go through probate, after the owner passes away.

If you would like to create a trust for your home, contact an estate planning attorney about it and other probate avoidance ideas.

Reference: Daily Republic (March 3, 2018) “All Things Real Estate: Living trust best way to pass house to children.”


IRA Inheritance Options

Bigstock-Senior-Couple-8161132Deciding who should inherit your retirement account is an important part of estate planning. You have several options that are available.

When many people pass away, they will still have a lot of money in their individual retirement accounts for a beneficiary to inherit. It is important to decide who that beneficiary will be, in a way that fits your overall estate plan.  Contact an estate planning attorney to figure this out.

The IRA can be used to balance out other bequests and can be used to enhance other estate planning goals. Depending on what you decide to do, there are various tax implications, which Morningstar recently discussed in "Who Should Inherit Your IRA?"

Options include:

  • Spouse – If your spouse is the beneficiary, he or she can roll your IRA into their own. However, it might not make sense to designate a spouse, if they are nearing the age of having to take required minimum distributions and will not need the money.
  • Child or Grandchild – If they inherit the IRA, then they can stretch the benefits out over their own lifetimes. However, as a practical matter, few do so because they need the money.
  • Charity – Your estate can get a tax deduction, if you leave your IRA to a charity. It can be complicated, so get expert advice before filing out a beneficiary designation form.
  • Your estate – There is not much benefit to naming your estate as the beneficiary. However, if you cannot decide on another option, you can do so.
  • A trust – Ordinarily, there is no benefit to leaving your IRA to a trust. However, if the beneficiary would otherwise be a minor child or unable to manage their finances, it might be necessary to do so.

Reference: Morningstar (March 2, 2018) "Who Should Inherit Your IRA?"



The Challenge of Digital Wills

Many legal documents can now be digitally created, signed and stored. Wills could be next.  However, there are some things that will need to be worked out. Bigstock-Young-man-holding-a-trash-bin--26453660

The basics of executing a proper will have not changed very much over time. To be certain that a will is valid, it must be a written document. It must be signed by the testator in front of witnesses, who also must sign the will. The original and not a copy of the signed will must be presented to the court at the appropriate time.

These rules were developed because when a will is presented to the court, the deceased cannot come forward and testify that the will is valid. The witnesses can testify that they did see the deceased sign the will, while he or she was competent and not under any duress.

Most writing is now done digitally, and many people would also like to make wills digital. That presents some challenges, as the New York Law Journal explains in "Wills in the Digital Age."

The first thing that must be figured out, is what counts as a digital signature for the purposes of a will. Digital signatures are allowed for things like contracts and taxes.  However, the signer of those documents can be asked if anyone needs to question whether the signature is valid.

That is not possible for a will, so it is likely that witnesses are still necessary. That leads to the question as to what constitutes witnessing a digital signature. If signing is the click of a button, must the witnesses just be present to see the button clicked?

Finally, it will need to be determined how the digital wills should be stored to make sure they are not edited after the fact.

Because of those difficulties, the introduction of digital wills is likely to be uneven in the different states.  The states will most likely have different answers for the challenges presented by digital wills.

Reference: New York Law Journal (March 6, 2018) "Wills in the Digital Age."



Elder Fraud Charges Brought

MP900202201[1]Federal law enforcement officials have announced actions against hundreds of scammers accused of defrauding the elderly.

One of the worst aspects of elder fraud is that it often seems like there is very little that can be done about the fraud. After a scammer has taken advantage of an elderly person, it is difficult for the elderly person to recover any lost money. Local law enforcement and elder law attorneys are sympathetic, but they are often unable to help very much.

This might lead some people to think there is little reason to even bother reporting minor incidents of elder fraud. Nothing could be further from the truth, as the recent FBI announcement explains. It is titled "Law Enforcement Action Aimed at Those Who Victimize Senior Citizens."

Federal law enforcement officials working with other agencies have announced massive actions taken against the perpetrators of elderly fraud. In fact, 250 people have been charged.

It is believed that those charged were responsible for victimizing 1 million elderly persons at a cost of approximately $600 million. This action comes on top of 200 cases filed against individuals for elder fraud issues last year.

It is important to report fraud against the elderly. Each report helps federal authorities develop these big cases that will eventually put the scammers out of business.

Reference: FBI (Feb. 22, 2018) "Law Enforcement Action Aimed at Those Who Victimize Senior Citizens."


Medicaid Planning

MP900442211[1]Americans who need long-term care assistance and cannot pay for it, can get help from Medicaid, if they plan ahead.

It seems almost cruel in a way that nursing homes are as expensive as they are. People who have saved well for their retirements and intended to leave something to their heirs in an estate plan, often face steep nursing home bills. If a stay in a nursing home is long enough, then all their savings can be wiped out and there will be nothing left for the heirs.

Many older Americans look around for other ways to pay for long-term care in a nursing home, if they ever need it. Some will be able to purchase insurance for it, but it is expensive and difficult to get. Other people might have to rely on Medicaid for their care as CNBC discusses in “Here’s a surprise source you can tap for long-term care services.”

The big catch with Medicaid is that it is only available for poor people. To be eligible for Medicaid to pay for nursing home care, the patient needs to have fewer than $2,000 in assets. To get around this problem, patients cannot just give all of their assets away to family members when they need to go into a facility. Any such transfers will be deemed fraudulently made and will disqualify them from receiving help.

There are ways around this problem for people who plan ahead. An elder law attorney can help you develop a plan for your assets that will not make you ineligible for Medicaid. This planning must be done years in advance, so do not delay getting an appointment for long-term planning for Medicaid eligibility.  Medicaid crisis planning is also available.

Reference: CNBC (Feb. 27, 2018) “Here’s a surprise source you can tap for long-term care services.”


Hospital Discharge Planning

Bigstock-Doctor-with-female-patient-21258332[1]Before a Medicare patient can be discharged from the hospital, there must be a plan in place for any needed continual care. Patients and their families should double check some information in that plan.

When Medicare patients are ready to leave a hospital after an extended stay, they often are not ready to go home and resume their normal lives. They might need to be transferred to another facility, such as a nursing home or a rehabilitation center. It depends on the needs of the specific patient being discharged.

Medicare requires that a plan for care be developed with a social worker who can help the patient understand the plan. Just taking the word of the social worker about what options are available, is not always advisable as the Pittsburgh Post-Gazette points out in "Doublecheck when they say the rehab center doesn't have room."

Patients are sometimes told that their preferred facilities for care after being discharged from the hospital do not have room for them. Sometimes that is true, but it is not always true.

Hospitals that have financial interests in other facilities, all too often try to steer patients into those facilities and away from others. For that reason, it is a good idea for patients and families to call facilities for themselves to ask about availability.

If you think a hospital is not doing what Medicare requires it to do, then it is a good idea to contact an elder law attorney.

Reference: Pittsburgh Post-Gazette (Feb. 26, 2018) "Doublecheck when they say the rehab center doesn't have room."


Will Challenges in Canada

Bigstock-Family-Couple-Relationships-Cr-5604405[1]Contests over wills are increasing in Canada just as in the U.S. Despite there being several ways to successfully contest a will, it is not an easy thing to do.

Part of the population in the U.S. has seen continually rising wealth in the last few decades, while other parts of the population have not. In the process, one trend has emerged and that is that there are more wealthy estates that people deem worthy of fighting over.  As a result, more wills are being contested in court by those who do not believe they have been left the inheritances they deserve.

The U.S. is not alone in this trend. The same thing has been happening in Canada, as The Globe and Mail reports in "Left out of the will? Here are your options."

The options for challenging a will in Canada are very similar to those in the U.S. There needs to be a good reason why the court should disregard the will and distribute the estate differently.

A common reason is by citing undue influence. That is the allegation that someone has inappropriately influenced another who has diminished capacity of some sort to create a will for the benefit of the influencer. It is not an easy case to prove, but it is possible to do so.

In the U.S. and in Canada, not just anyone can challenge a will. Only people who have a financial interest of some sort in the estate can make the challenge.

If you want to challenge a will, the first thing you need to do is visit an estate attorney. The attorney can evaluate your claim and let you know whether it is a good idea to proceed with a challenge.

Reference: The Globe and Mail (Feb. 26, 2018) "Left out of the will? Here are your options."


A Big Myth Concerning Trusts

Wills-trusts-and-estates-covered[1]If you do too much reading online about the difference between wills and trusts, then you are likely to think of the two as something that you have one or the other. That is a myth.

One of the key concerns for people planning their estates today, is whether they should use a will or a trust. Everyone seems to have an opinion about which one of the two main estate planning vehicles is better for general purposes. The two are often discussed, as if they are oppositional.

If you do some research and decide you want to get a trust, then you might go to an online service, pay a fee and download a form to create a trust. The problem? Getting a trust does not mean you should not get a will. You still need a will, as Lake County News discusses in "The difference between a trust and a will."

It is likely that when you pass away you will have some assets that for one reason or another were never put into your trust. Those assets will need to be distributed by your estate and often under the guidance of the probate court. You need a will so what you want done with those assets can be done.

Often that will is only a “pour-over will” that directs that everything should be transferred to your trust. However, there are other things you might also need to accomplish with a will, such as directing who should be appointed as a proper guardian for your minor children. You also might have some assets you do not want to go through a trust for other reasons, for which a will would be appropriate.

The best way to make sure you have all the documents you need in your estate plan, is to hire an estate planning attorney to draft your plan.

Reference: Lake County News (Feb. 24, 2018) "The difference between a trust and a will."