Estate Planning Blog Articles

Estate & Business Planning Law Firm Serving the Providence & Cranston, RI Areas

Is there a Blood Test for Alzheimer’s?

Independent experts are cautious of a new first blood test to help diagnose Alzheimer’s disease due to the fact that key test results haven’t been published, and the test has not been approved by the FDA. While it’s being sold under more general rules for commercial labs, they agree that a simple test that can be performed in a doctor’s office is long overdue.

NBC News’s recent article entitled “First blood test to help diagnose Alzheimer’s goes on sale” notes that more than five million people in the U.S. and millions more around the world have Alzheimer’s, the most common form of dementia. To be diagnosed with it, people will experience symptoms, such as memory loss plus evidence of a buildup of a protein in the brain called beta-amyloid.

Currently, the best way to measure beta-amyloid is a costly PET brain scan that usually is not covered by insurance. As a result, most people won’t get one and are left wondering if their problems are due to normal aging, Alzheimer’s, or another cause. However, this new blood test from C2N Diagnostics in St. Louis will try to fill that gap. The test isn’t designed for general screening or for people without symptoms. It is intended for those 60 and older, who are having thinking problems and are being evaluated for Alzheimer’s.

The test isn’t covered by insurance or Medicare, and C2N Diagnostics charges $1,250. However, it offers discounts based on income. Only a physician can order the test, and results come within 10 days. It’s sold in all but a handful of states in the U.S. and was just approved for sale in Europe.

The blood test measures two types of amyloid particles plus various forms of a protein that show if a person has a gene that increases risk for the disease. These factors are combined in a formula that includes age, and patients are given a score suggesting low, medium or high likelihood of having amyloid buildup in the brain. If the test scores the patient in the low category, it’s a good reason to look for other things besides Alzheimer’s. There are a number of things that can cause a person to be cognitively impaired, from vitamin deficiencies to medications.

The company has not published any data on the test’s accuracy, but the doctors have published on the amyloid research leading to the test. Company materials cite results comparing the test to PET brain scans, which is the current gold standard, in 686 people, ages 60-91, with cognitive impairment or dementia. If a PET scan showed amyloid buildup, the blood test also gave a high probability of that in 92% of cases and missed 8% of them, said the company’s CEO, Dr. Joel Braunstein. If the PET scan was negative, the blood test ruled out amyloid buildup 77% of the time. The other 23% got a positive result, but that doesn’t necessarily mean the blood test was wrong. The published research suggests it may see amyloid buildup before it’s noticeable on scans.

Braunstein said the company will seek FDA approval, and the agency has designated it for a faster review.

Reference: NBC News  (Nov. 30, 2020) “First blood test to help diagnose Alzheimer’s goes on sale”

Federal Court Decides for ‘Blue Water’ Navy Veterans

In November, the U.S. District Court for Northern California ruled in favor of thousands of “blue water” Navy veterans and their survivors, who argued that they’re being wrongly denied benefits as part of a deal reached by Congress last year.

Military Times’ recent article entitled “New court ruling could give thousands of Vietnam vets and survivors overdue disability payouts” reports that under that plan, the Department of Veterans Affairs was required to grant presumptive benefit status for chemical defoliant exposure to veterans who served on ships off the coast of Vietnam during that war.

Advocates for years had said that VA’s requirement of direct proof of exposure was hard to obtain, when it has been decades after veterans were in the service. However, more than 22,500 blue water veterans or survivors have received VA benefits payouts since the beginning of 2020.

The new law didn’t require VA officials to go back and review cases denied before 2020. Vets who reapplied for benefits could have their cases considered again, but advocates argue that all of the cases should be resurfaced and reviewed by the VA.

In an interview with Military Times, Under Secretary for Benefits Paul Lawrence said no decision has been made by VA and Department of Justice officials on an appeal. However, he did remark that the lawsuit was discussed as part of VA’s preparations for the new benefits processing at the start of this year.

If the decision stands — either upon further appeal or if the government opts to simply accept the latest ruling — Lawrence said he’s confident the VA can start reviewing those cases without any significant disruption to operations.

President Trump signed legislation granting presumptive status for disability benefits to about 90,000 Navy veterans who served in the seas around Vietnam during the war. This concludes a long battle to get disability benefits more quickly for up to 90,000 Navy veterans who served in Vietnam.

VA has already paid out about $700 million in retroactive benefits related to the “blue water” veterans benefits in 2020.

Reference: Military Times (Nov. 16, 2020) “New court ruling could give thousands of Vietnam vets and survivors overdue disability payouts”

Wills

Do I Really Need a Will?

No one enjoys pondering their own mortality, but we can all help unburden our loved ones after we’ve gone, by creating a will.

Bankrate’s recent article entitled “Why it’s important for every adult to get a will” explains why you need a will and how to protect what you most cherish after you pass away.

Many people think that a will must be a complicated document full of confusing legal jargon. However, the purpose of a will is really very simple despite its importance. A will is a legal document that disposes of your property at your death. In addition, wills address several issues required to be resolved after death, such as who will care for your children, who will make decisions about your estate and who will receive your assets? Every adult should have a will that speaks to these issues.

There are several types of wills which are customized based on your property and assets. Some people have specific instructions regarding special bequests at their death, and others pass everything to a surviving spouse and children.

Testamentary will. This will is prepared in advance and is signed in front of witnesses. This is the most common type of will.

Holographic will. This is a will that is written by hand and is frequently a last resort in emergency situations. It is not valid in all states.

Oral will. This is a verbal will that’s spoken in front of witnesses. However, most courts prefer instructions in writing. As a result, an oral will isn’t a form that is widely recognized or recommended.

Mutual will. A couple can create a joint will, so that when one spouse dies, the other remains bound by the existing will’s terms.

Pour-over will. This type of will is used when you plan to “pour” your assets into a previously established trust at your death.

There are many reasons why you should have a will. A will can:

  • Clearly identify ownership of your property
  • Name a legal guardian for your children
  • Shorten the legal process of assigning your assets
  • Make donations of assets to charitable organizations
  • Make specific gifts; and
  • Save on estate tax.

Speak to an experienced estate planning attorney about the right will for your situation.

Reference: Bankrate (Nov. 6, 2020) “Why it’s important for every adult to get a will”

debts after death

What Debts Must Be Paid after I Die?

When you pass away, your assets become your estate, and the process of dividing up debt after your death is part of probate. Creditors only have a certain amount of time to make a claim against the estate (usually three months to nine months).

Kiplinger’s recent article entitled “Debt After Death: What You Should Know” explains that beyond those basics, here are some situations where debts are forgiven after death, and some others where they still are required to be paid in some fashion:

  1. The beneficiaries’ money is partially protected if properly named. If you designated a beneficiary on an account — such as your life insurance policy and 401(k) — unsecured creditors typically can’t collect any money from those sources of funds. However, if beneficiaries weren’t determined before death, the funds would then go to the estate, which creditors tap.
  2. Credit card debt depends on what you signed. Most of the time, credit card debt doesn’t disappear when you die. The deceased’s estate will typically pay the credit card debt from the estate’s assets. Children won’t inherit the credit card debt, unless they’re a joint holder on the account. Likewise, a surviving spouse is responsible for their deceased spouse’s debt, if he or she is a joint borrower. Moreover, if you live in a community property state, you could be responsible for the credit card debt of a deceased spouse. This is not to be confused with being an authorized user on a credit card, which has different rules. Talk to an experienced estate planning attorney, if a creditor asks you to pay off a credit card. Don’t just assume you’re liable, just because someone says you are.
  3. Federal student loan forgiveness. This applies both to federal loans taken out by parents on behalf of their children and loans taken out by the students themselves. If the borrower dies, federal student loans are forgiven. If the student passes away, the loan is discharged. However, for private student loans, there’s no law requiring lenders to cancel a loan, so ask the loan servicer.
  4. Passing a mortgage to heirs. If you leave a mortgage behind for your children, under federal law, lenders must let family members assume a mortgage when they inherit residential property. This law prevents heirs from having to qualify for the mortgage. The heirs aren’t required to keep the mortgage, so they can refinance or pay off the debt entirely. For married couples who are joint borrowers on a mortgage, the surviving spouse can take over the loan, refinance, or pay it off.
  5. Marriage issues. If your spouse passes, you’re legally required to pay any joint tax owed to the state and federal government. In community property states, the surviving spouse must pay off any debt your partner acquired while you were married. However, in other states, you may only be responsible for a select amount of debt, like medical bills.

You may want to purchase more life insurance to pay for your debts at death or pay off the debts while you’re alive.

Reference: Kiplinger (Nov. 2, 2020) “Debt After Death: What You Should Know”

transfer a house

Is Transferring House to Children a Good Idea?

Transferring your house to your children while you’re alive may avoid probate. However, gifting a home also can mean a rather large and unnecessary tax bill. It also may place your house at risk, if your children get sued or file for bankruptcy.

You also could be making a mistake, if you hope it will help keep the house from being consumed by nursing home bills.

There are better ways to transfer a house to your children, as well as a little-known potential fix that may help even if the giver has since died, says Considerable’s recent article entitled “Should you transfer your house to your adult kids?”

If a parent signs a quitclaim to give her son the house and then dies, it can potentially mean a tax bill of thousands of dollars for the son.

Families who see this error in time can undo the damage, by gifting the house back to the parent.

People will also transfer a home to try to qualify for Medicaid, but any gifts or transfers made within five years of applying for Medicaid can result in a penalty period when seniors are disqualified from receiving benefits.

In addition, transferring your home to another person can expose you to their financial problems because their creditors could file liens on your home and, depending on state law, take some or most of its value. If the child divorces, the house could become an asset that must be divided as part of the marital estate.

Section 2036 of the Internal Revenue Code says that if the parent were to retain a “life interest” in the property, which includes the right to continue living there, the home would remain in her estate rather than be considered a completed gift. However, there are rules for what constitutes a life interest, including the power to determine what happens to the property and liability for its bills.

There are other ways to avoid probate. Many states and DC permit “transfer on death” deeds that let homeowners transfer their homes at death without probate.

Another option is a living trust, which can ensure that all assets avoid probate.

Many states also have simplified probate procedures for smaller estates.

Reference: Considerable (Sep. 18) “Should you transfer your house to your adult kids?”

inheritance fighting

How Do You Stop Family Fights Over an Inheritance?

More than two-thirds of all advisors surveyed by Key Private Bank said the hardest part of estate planning is navigating family dynamics, according to a 2019 survey. The sensitivities of simply talking about estate planning often present emotional challenges to putting a plan in place, especially when the family includes multiple marriages and blended families.

Advice is offered in a recent news article from CNBC, “Executor of a Family Estate? Here’s How to Avoid Infighting Over Inherited Wealth.”

Much of the problem, experts say, stems from poor communication. A dialogue needs to be open between generations that is a two-way conversation. In most instances, the older generation needs to invite the younger generation to get the ball rolling.

A lack of clarity and transparency can lead to problems. One example is a father leaving the family farm to his children, with a plan that also included money to help run the farm and legal documents to help the transition go smoothly. However, the children didn’t want the farm. They wanted to sell. Disagreements broke out between siblings, and the family was bogged down in a big fight.

Clearly Dad needed to talk with the children, while his estate plan was being created. The children needed to be upfront and honest about their plans for the future, and the issue could have been solved before the father’s death. The lesson: talk about your wishes and your children’s wishes while you are living.

After someone dies, they may leave behind an entire estate, with a lifetime of personal items that they want to gift to family members. However, if these items are not listed in the will, the heirs have to decide amongst themselves who gets what. This is asking for trouble, whether the items have sentimental or financial value. In fact, sentimental items often generate the most controversy.

When conflicts arise, the presence of a third party who doesn’t have emotional attachments and is not embroiled in the family dynamics can be helpful.

If the issue is not addressed before death, there are a few ways to move forward. An estate planning attorney who has seen many families go through this process can offer suggestions while the will is being prepared. There are facilitators or mediators who can help, if things get really rocky.

Heirs may wish to create a list of items that they would like to be reviewed by the executor. This option works best, if the executor is not a sibling, otherwise charges of favoritism and “Mom always liked you best” can spiral into family spats.

Some families group items into buckets of equal value, others set up a lottery to determine who picks first, second, etc., and some families literally roll the dice to make decisions.

Reference: CNBC (Nov. 12, 2020) “Executor of a Family Estate? Here’s How to Avoid Infighting Over Inherited Wealth”

flu season

How Do I Tell Fact from Fiction with the Flu?

Flu season officially spans October to May. That makes now an opportune time to get the real facts about the virus that claims tens of thousands of lives — a majority of them older adults — every year.

AARP’s recent article entitled “7 Flu Myths Debunked” sets the record straight on seven common flu myths to help you strengthen your defenses.

Myth No. 1: Cold weather is the cause of the flu. Wrong. Viruses cause flu, not cold weather. However, the influenza virus survives better in colder environments. In colder weather, individuals also tend to gather inside with less air circulating, causing a higher risk of flu spread. Lower temperatures may also negatively impact the immune response, which makes us more susceptible to flu.  It spreads via droplets as people around us talk, sneeze, or cough.

Myth No. 2: Flu is merely a bad cold. Not every respiratory ailment is the flu. Influenza and the common cold can have similar symptoms, but they are caused by different viruses and each has distinct symptoms. A cold may give you a runny or stuffy nose, but the flu typically doesn’t. A cold can make you feel crummy, but the flu can make you feel like you were hit by a Mack truck. Colds also rarely lead to dangerous complications. However, a bad case of flu can move to the lungs and cause serious infections.

Myth No. 3: Antibiotics will help treat flu. Not true. The flu is a viral infection, and antibiotics only treat bacterial infections. Sometimes complications from flu, like pneumonia, are treated with antibiotics, but flu itself is not. To treat influenza, in addition to over-the-counter drugs for cough and stuffy nose, there are approved antiviral drugs, such as Tamiflu (which should be taken early in the onset of flu symptoms to be effective).

Myth No. 4: You don’t need a flu vaccine if you don’t get sick. Influenza is very contagious. Even healthy people can get it. A flu shot is the very best intervention we have to prevent flu infections and, sometimes, the serious complications it can cause. Everyone should get a flu shot every year—and in the middle of the pandemic, it becomes even more important. The flu virus can also mutate from season to season. As a result, if a strain circulates that your immune system doesn’t have experience fighting, you can be more susceptible to getting sick. Getting a flu shot will help because the shot will build immunity to the specific strains circulating in a given season.

Myth No. 5: A flu shot can make you sick. There’s no active virus in the flu vaccine, so it can’t cause the flu. Your body may hurt because it’s building up immunity. According to the Centers for Disease Control and Prevention (CDC), the flu vaccine stopped about 4.4 million influenza illnesses in the especially severe 2018-2019 flu season. It stopped 2.3 million flu-related medical visits, 58,000 flu-related hospital stays and approximately 3,500 deaths.

Myth No. 6: You might get a “stomach flu.” The word “flu” is often used incorrectly for several unrelated viruses and other illnesses. Although the flu can cause gastrointestinal symptoms, a stomach bug that causes nausea, vomiting, or diarrhea isn’t the flu.

Myth No. 7: If you get a flu shot, you won’t get the flu. After you get the shot, it can take up to two weeks for immunity to be built up in the body, but it’s not 100% effective at preventing the flu. That said, the flu shot will make any symptoms you do get less severe. It’s also especially important to help lessen the strain on the health care system during the COVID-19 pandemic.

Reference: AARP (Oct. 22, 2020) “7 Flu Myths Debunked”

tax planning

Is a Tax Change a Good Time to Check My Will?

A last will and testament can make certain that your goals for legacy and asset disposition are satisfied and carried out. However, what most people fail to grasp is that a will needs regular review—especially if the document was written or involved the creation of a trust prior to passage of tax reform, the Tax Cuts and Jobs Act (TCJA), in 2017, says Financial Advisor’s recent article entitled “Tax Changes Make This A Good Time To Revise A Will.”

Wills can pass on assets, but taxes have come to greatly impact how much money is passed on. People usually understand the primary components, including the tax implications, of their wills.

These include:

  • The unlimited marital deduction
  • Applying current rules to make non-taxable gifts of up to $15,000 per person
  • The current estate tax exemption of $11.58 million
  • Health care directives
  • Naming trustees and executors; and
  • Creating long-term trusts with non-taxable asset transfers.

Wills and trusts were created prior to the passage of the TCJA may not consider that reform changed the amount which can be exempted from estate taxes.

The law more than doubled the amount that can be exempted from estate taxes. The potential tax changes could cause many more Americans to have a taxable estate, and it’s important to have a full understanding of your assets and carefully decide who you want to receive them. You must also decide if you want them passed outright or through a trust.

Privacy is a good reason why some people often prefer trusts. They also like the quick processing and avoiding probate.

Estate plans should be reviewed every few years, and wills should be reviewed more frequently because life changes are the biggest reason for trouble in revising wills.

Divorce, separation or marriage; the birth or adoption of children, as well as a child reaching adulthood; and changes to finances, location and health all can play important roles.

Reference: Financial Advisor (Nov. 9, 2020) “Tax Changes Make This A Good Time To Revise A Will”

executor selection

How Does Court Choose an Executor if a Will Isn’t Available?

An executor is the person who’ll manage your estate by protecting your assets, paying your debts and distributing the remaining property according to the terms in the will. But Programming Insider’s recent article, “Role of the Court When There is No Will For an Estate, asks “what would happen if someone dies without a will and, therefore, without appointing a personal representative?”

This is known as dying “intestate.” When it happens, the probate court must decide who will act as the estate’s administrator or personal representative. The judge’s decision will be based on state law, which will say how to prioritize potential fiduciaries in an administrator’s appointment. Every state has a prioritized list of preferred executors, and some states offer detailed guidance, like Oklahoma, which has a prioritized list. If more than one person is equally entitled to be appointed, a court has the option to appoint one or more executors.

The probate court has the final decision as to who will serve as the estate’s administrator or personal representative, even including a person who is named as executor in a will or is entitled to be chosen as a valid executor. The court will award authority to an administrator and will issue letters of administration or letters of testamentary. This authorizes the person to serve as an estate’s personal representative. Some people who might otherwise be entitled to serve as an executor may be disqualified based on state law. Here are some of the factors that a judge may consider when disqualifying a potential executor:

  • An executor must be an adult, who is at least 18 years old. However, some states require the minimum age of 21.
  • Criminal History. Some states don’t permit someone who’s been convicted of a serious crime to serve as the fiduciary representative of a decedent’s estate. Other states only require a potential executor to notify the court of any felony convictions.
  • Residency. This may be a factor in a person’s ability to serve as a personal representative. Some states let nonresidents serve in some circumstances. Some let nonresidents serve, if it’s a close relative. Finally, some other states require a nonresident executor to post a bond or use an agent within the state to process services and the court’s communication.
  • Business Relationship. There may be state laws as to who may be an executor if the decedent was an active member of a partnership; and
  • It also may be difficult for a noncitizen to serve as an estate’s personal representative.

Generally, probate judges have a lot of latitude and discretion on this selection.

Reference: Programming Insider (Nov. 9, 2020) “Role of the Court When There is No Will For an Estate