Facebook-f Twitter Linkedin-in Youtube Rss
estate planning and elder law
Book Your Free Call

Estate Planning Blog Articles

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

Did COVID Spark More Estate Planning?

Those who have had a serious bout with the coronavirus (COVID-19) are 66% more likely to have created a will than those who did not get as sick, according to Caring.com’s 2022 Wills and Estate Planning Study.

COVID has accounted for more than one million deaths in the United States thus far.

MSN’s recent article entitled “More Young Adults Are Making This Surprising and Smart Money Move” says that it may be even more surprising that the number of adults in the 18-to-34 age range who now have estate planning documents has jumped 50% in the pandemic era.

Nonetheless, many people of all ages continue to put off the process of creating this key estate planning document.

Two-thirds of Americans still don’t have a will.

Caring.com found that among those who don’t have a will, a third say they think they don’t have enough wealth to warrant one.

However, even if you don’t have an expensive home, a large IRA and other valuable assets to pass on, you can still benefit from creating a will.

There’s no minimum level of wealth needed to have an estate plan, and every adult should have a basic plan in place to care for their own needs and the needs of their family.

The Caring.com survey of more than 2,600 adults found that—you guessed it—good old-fashioned procrastination is the primary reason people don’t create a will. About 40% admit to this factor.

Not surprisingly, the survey also found that those with higher incomes are more likely to put off getting a will due to procrastination.

Those people with lower incomes don’t prioritize a will because they don’t feel they have the assets to justify this important legal document.

Reference: MSN (July 24, 2022) “More Young Adults Are Making This Surprising and Smart Money Move”

What’s the Latest in Legislation for Vets?

The leaders in the U.S. House and Senate had hoped to send the Promise to Address Comprehensive Toxics Act (or PACT Act) to President Joe Biden’s desk for final signature by the Fourth of July, after the Senate advanced the measure by a bipartisan 84-14. The measure would cost almost $280 billion over the next 10 years and provide new medical and disability benefits for as many as one in every five veterans living in America today.

Military Times’ recent article entitled “Major veterans toxic exposure legislation delayed again, but lawmakers insist it’s not defeat” explains that vets who served in Afghanistan, the first Gulf War, Vietnam and numerous other overseas locations could see new benefits under the plan. The bill would help many vets who are victims of on-duty toxic exposure injuries — in particular, smoke from burn pits used to dispose of waste in Iraq and Afghanistan.

The House passed the bill in March, but Senate leaders amended the bill to add phased-in implementation rules and more staff to help process claims in response to Republican concerns. However, the changes ran into trouble with rules that require new revenue requirements to start in the House, not in the Senate. A planned House vote to finalize the measure was postponed, and chamber leaders scrambled to make corrections to the measure before lawmakers began their two-week recess.

Senate Veterans’ Affairs Committee Chairman Jon Tester (D-MT) tried to push through a fix on the Senate floor late Thursday night, but the bid was blocked by Senator Pat Toomey (R-PA), one of the 14 senators to oppose the measure last week. Tester called that a disappointment.

“There is a [technical] issue and we have to fix it,” he said. “But in the process of our debates, we shouldn’t be denying health care to veterans, which is exactly what [Toomey] is doing today.”

However, the procedural issues aren’t fatal for the future of the PACT Act, but instead represent a temporary delay.

House Veterans’ Affairs Committee Chairman Rep. Mark Takano, D-Calif., said he still wants to get a House vote on the measure “once the Senate resolves this procedural speedbump.”

“House and Senate leadership are not shying away from passing the PACT Act,” he said in a statement. “This comprehensive package addressing toxic exposed veterans has been my number one legislative priority and I will continue to be unrelenting in getting it to President Biden’s desk.”

President Biden has already indicated he will sign the measure into law when it is finalized by Congress.

Reference: Military Times (June 24, 2022) “Major veterans toxic exposure legislation delayed again, but lawmakers insist it’s not defeat”

What are Mistakes to Avoid with Beneficiary Designations?

Many people don’t know that their will doesn’t control who inherits all of their assets when they die. Some assets pass by beneficiary designation. Assets like life insurance, annuities and retirement accounts all pass by beneficiary designation.

Kiplinger’s recent article entitled “Beneficiary Designations: 5 Critical Mistakes to Avoid” lists five critical mistakes to avoid when dealing with your beneficiary designations:

  1. Failing to designate any beneficiary at all. Many people forget to name a beneficiary for retirement accounts or life insurance. They may forget, didn’t know they had to, or just never got around to filling out the forms. If you don’t name a beneficiary for life insurance or retirement accounts, the company will apply its rules about where the assets will go after you die. For life insurance, the proceeds will typically be paid to your probate estate. For retirement benefits, if you’re married, your spouse will most likely receive the assets. However, if you’re unmarried, the retirement account will likely be paid to your probate estate, which has negative income tax ramifications.
  2. Failing to consider special circumstances. Not every family member should get an asset directly. This includes minor children, those with specials needs and people who can’t manage assets or with creditor issues.
  3. Misspelling a beneficiary’s name. Beneficiary designation forms can be filled out incorrectly and the beneficiary designation form may not be specific. People also change their names through marriage or divorce, or assumptions can be made about a person’s legal name that later prove incorrect. Failing to have names match exactly can cause delays in payouts, and in a worst-case scenario of two people with similar names, it can result in a court case.
  4. Forgetting to update your beneficiaries. Your choice of beneficiary may likely change over time as circumstances change. Naming a beneficiary is part of an overall estate plan, and just as life changes, so should your estate plan. Beneficiary designations are an important part of that plan—make certain that they’re updated regularly.
  5. Failing to review beneficiary choices with legal and financial advisers. How beneficiary designations should be completed is a component of an overall financial and estate plan. Involve your legal and financial advisers to determine what’s best for your circumstances. Note that beneficiary designations are designed to guarantee that you have the ultimate say over who will get your assets when you pass away. Taking the time to carefully (and correctly) choose your beneficiaries and then periodically reviewing those choices and making any necessary updates will allow you to remain in control of your money.

Reference: Kiplinger (June 6, 2022) “Beneficiary Designations: 5 Critical Mistakes to Avoid”

Why Do I Need a Will?

Perhaps getting hit by a cement truck is too blunt for some, but unexpected things happen all the time. An estate plan, including a will and other important documents, is good preparation, especially for caregivers of people with special needs. A recent article from Forbes titled “Where There is a Will, There is a Way” explains the steps everyone, especially caregivers, need to follow.

Creating a last will and testament

This is the foundation of an estate plan. Without a will, the court will distribute assets to children equally. If a disabled person receiving government benefits receives an inheritance, they will become ineligible and lose access to services. The court will also assign guardianship to minors or disabled individuals, if there is no will. A will, in tandem with proper estate planning, ensures protection for an individual with special needs, including naming a guardian of your choice.

Having a General Durable Power of Attorney for Finances

A POA allows you to name a person you trust to manage finances, real estate property, investments, or any aspect of your life, if you become incapacitated. A POA should be created for your needs, so you may decide in advance what you do and do not want your agent to be able to do for you.

Creating a Durable Power of Attorney for Healthcare

This important legal document, paired with a HIPAA release form, allows someone of your choice to take charge of your healthcare, talk with healthcare providers and make decisions based on your expressed wishes. You may name more than one person for this role but doing so could make it harder if the two people don’t agree on your care.

Naming a Guardian

This is a critical step if you are a caretaker for a person who will likely be unable to manage their own affairs, even after attaining legal age. By naming a guardian in your will, you can select the people who will be in charge of your special needs family member or minor children. Without a guardian named in your will, the courts will make this decision.

Drafting a “Letter of Intent”

A letter of intent is a guide with important information only you know. It is especially important for caretakers. Explaining in detail your disabled individual’s preferences can make a huge difference in the quality of their lives when you are no longer available. What are their likes and likes, what people do they enjoy spending time with and what foods do they prefer, etc. If your children are minors, this letter is an opportunity to describe your preferences for how they should be raised, including religious preferences, vocational choices and even nighttime rituals.

Providing Financial Security

If your family includes a loved one with Special Needs, you can protect their ability to have funds for things not covered by government benefits through a Special Needs Trust. Your estate planning attorney will create an SNT with a trustee and a secondary trustee to oversee the funds and ensure that they are used for qualified expenses.

Reference: Forbes (July 6, 2022) “Where There is a Will, There is a Way,”

Why You Need a Digital Asset Estate Plan

Ajemian died in a bicycle accident at age 43. With no will, his estate passed to a surviving brother and sister. As the siblings began going through his assets, they realized that having Ajemian’s emails could make it easier to identify assets and accounts. They asked Yahoo for access to the email account and explained why. Yahoo said no, citing the Stored Communications Act, a 1986 federal law governing online privacy. Yahoo claimed sharing the emails would violate the federal law. The siblings sued, and the case went through the courts until arriving at the Massachusetts Supreme Court, which ruled in the Ajemians’ favor in 2017.

This scenario, discussed in the article “Your digital self will outlive you” from Morning Brew, is a perfect example of how difficult managing digital assets can be. It also raises another question: do you want your family members reading every email you’ve ever sent or seeing every post you’ve created?

We live digital lives today: photos are stored in the cloud, social media records our personal history, digital wallets contain cryptocurrency and creative works may be password protected. If there is no digital estate planning, those assets will live forever on the web, could easily be accessed by hackers and thieves, or be erased if platforms detect inactivity for an extended period of time.

Amid the rise of digital estate planning startups are ethical debates about what should happen to digital lives living on the cloud. These private and sometimes intimate exchanges will live on, long after their creators have passed. Do you want your descendants to get to know you through a chatbot created by using social media, messages and voice recordings? The technology exists already, although even Microsoft deemed it too creepy to bring to market. At least, for now.

Digital accounts are vulnerable to hackers, difficult to identify and easy to disappear. Executors trying to settle estates are often locked out of accounts by default. Forty-seven states have adopted some version of the Revised Uniform Fiduciary Access to Digital Assets Act, or RUFADAA, which provides a legal framework to allow people to designate someone to take over their digital assets when they die—but only if a person actively picks someone to do it.

Given how few Americans have an estate plan, the number who have made plans for online assets is even smaller. Some big tech companies have added features to allow a legacy contact to take over accounts when users die, but not many. Facebook allows a person to let a legacy contact see and download posts, but the contact cannot go into Messenger history.

Unless you make plans to address it, your digital life will outlive you. Not making digital assets part of your estate plans could also make your estate more vulnerable to scammers. A better way forward is to place your traditional and digital assets under the protection of a comprehensive estate plan, created by an experienced estate planning attorney.

Reference: Morning Brew (July 1, 2022) “Your digital self will outlive you”

When Should I Hire an Estate Planning Attorney?

Kiplinger’s recent article entitled “Should I Hire an Estate Planning Attorney Now That I Am a Widow?” describes some situations where an experienced estate planning attorney is really required:

Estates with many types of complicated assets. Hiring an experienced estate planning attorney is a must for more complicated estates. These are estates with multiple investments, numerous assets, cryptocurrency, hedge funds, private equity, or a business. Some estates also include significant real estate, including vacation homes, commercial properties and timeshares. Managing, appraising and selling a business, real estate and complex investments are all jobs that require some expertise and experience. In addition, valuing private equity investments and certain hedge funds is also not straightforward and can require the services of an expert.

The estate might owe federal or state estate tax. In some estates, there are time-sensitive decisions that require somewhat immediate attention. Even if all assets were held jointly and court involvement is unnecessary, hiring a knowledgeable trust and estate lawyer may have real tax benefits. There are many planning strategies from which testators and their heirs can benefit. For example, the will or an estate tax return may need to be filed to transfer the deceased spouse’s unused Federal Estate Unified Tax Credit to the surviving spouse. The decision whether to transfer to an unused unified tax credit to the surviving spouse is not obvious and requires guidance from an experienced estate planning attorney.

Many states also impose their own estate taxes, and many of these states impose taxes on an estate valued at $1 million or more. Therefore, when you add the value of a home, investments and life insurance proceeds, many Americans will find themselves on the wrong side of the state exemption and owe estate taxes.

The family is fighting. Family disputes often emerge after the death of a parent. It’s stressful, and emotions run high. No one is really operating at their best. If unhappy family members want to contest the will or are threatening a lawsuit, you’ll also need guidance from an experienced estate planning attorney. These fights can result in time-intensive and costly lawsuits. The sooner you get legal advice from a probate attorney, the better chance you have of avoiding this.

Complicated beneficiary plans. Some wills have tricky beneficiary designations that leave assets to one child but nothing to another. Others could include charitable bequests or leave assets to many beneficiaries.

Talk to an experienced attorney, whose primary focus is estate and trust law.

Reference: Kiplinger (July 5, 2022) “Should I Hire an Estate Planning Attorney Now That I Am a Widow?”

Did Former NFL Tackle and Fox Sports Commentator Tony Siragusa have an Estate Plan?

In June 2022, former NFL tackle and Fox Sports commentator Tony “The Goose” Siragusa died at the age of 55. The death of the popular athlete was confirmed to TMZ Sports by Siragusa’s former teammate Jamal Lewis. Lewis also played on the Baltimore Ravens Super Bowl winning team in 2001.

MSN’s recent article entitled “What Was NFL Legend Tony Siragusa’s Net Worth When He Died?” says that no cause of death was included with the announcement of Siragusa’s passing.

Siragusa was first drafted by Indianapolis and played a dozen years in the NFL before working more than 10 years on the sidelines for Fox Sports.

In a 2012 interview with Howard Stern, he revealed that his father died young from a heart attack at the age of 48, and that heart disease runs in the Siragusa family.

As a success both before and after his playing career, Tony left behind a sizable net worth when he died.

At the time that Siragusa died in 2022 his net worth was $6 million, according to Celebrity Net Worth. He also earned a $500,000 annual salary for his on-camera work with “Fox on Sunday.”

In addition to the money Siragusa made through football both in the game and on the sidelines, he was also an actor. Siragusa had a role in the hit HBO TV series “The Sopranos,” as well as other parts. Siragusa also hosted “Man Caves” on the DIY Network, as well as other TV appearances.

As news of Siragusa’s death spread, Indianapolis Colts owner Jim Irsay tweeted that Siragusa was the strongest player he’d ever seen in Irsay’s’ half-century in football. Siragusa was drafted by Indianapolis in 1990.

“I’m heartbroken as is all of Colts Nation,” Irsay also tweeted.

Siragusa is survived by his wife, Kathy Siragusa, and their three children.

Referring to the death of his former teammate, Jamal Lewis said, “It’s a sad day to be a Raven.”

Reference: MSN (June 22, 2022) “What Was NFL Legend Tony Siragusa’s Net Worth When He Died?”

Do I Need All Insurance after 65?

Seniors should be cautious about canceling their insurance policies. Consider your future insurability and your individual circumstances and life goals. There’s no one answer that fits everyone.

The primary purpose of life insurance is to replace lost income. Retirees may still want to keep their coverage because it can be an important tool in wealth transfer to the next generation.

US News’ recent article entitled “The Only Insurance Policies You Need After Retirement” advises that these guidelines can help determine which policies are essential and which could be a waste of money. Let’s look at how to decide which policies you need and which you can skip after age 65.

Must-Have Policies for Seniors. These two types of insurance are necessary for seniors.

  • Medical Insurance. The increasing cost of health care that comes with advanced age is a big reason to buy medical insurance. The Affordable Care Act requires everyone to maintain coverage. Most seniors 65+ are eligible for Medicare, and those still working may have benefits through their job. Note that Medicare doesn’t cover all medical costs, so look at buying a supplemental plan, such as Medigap and Part D coverage, to help pay for services not fully covered by Original Medicare. A Medicare Advantage Plan offered by private insurers is another way to fill in coverage gaps.
  • Homeowners or Renters Insurance. Seniors with valuable jewelry or other items may need to add a rider to their policy to fully insure these possessions. Mortgage lenders require homeowners to maintain coverage, but once the loan is paid off, it’s not required. It may be tempting to save money by canceling the policy, but that could be a costly mistake. That’s because a big loss would have to be replaced with savings.

Some Smart Options. There are other types of insurance that could be helpful to seniors.

  • Travel Insurance. Those who plan to travel extensively may want to buy travel insurance. Find a policy that includes features, such as emergency medical and medical evacuation services along with trip delay or cancellation insurance.
  • Auto Insurance. Auto insurance is required in almost every state. Any senior who is still driving and owns a vehicle should insure it properly.
  • Umbrella Insurance. This insurance provides additional liability coverage above and beyond what’s included in homeowner and car insurance. Your volunteer activities could put you at risk for a liability claim and warrant added insurance coverage.
  • An immediate annuity can help guard against outliving savings by providing a guaranteed source of income. Annuities can be purchased for a lump sum amount and provide monthly payments that are based on a person’s age and the purchase price.
  • Long-Term Care Insurance. Medicare won’t pay for ongoing custodial care in a nursing home or assisted living facility, and Medicaid is only available after a person has depleted almost all their assets.

One Type of Insurance to Cancel. Seniors who aren’t working don’t have a need for disability insurance.

Reference: US News (Feb. 27, 2020) “The Only Insurance Policies You Need After Retirement”

How to Plan in a Time of Uncertainty

There’s a saying in estate planning circles that the only people who pay estate taxes are those who don’t plan not to pay estate taxes. While this doesn’t cover every situation, there is a lot of truth to it. A recent article from Financial Advisor entitled “Estate Planning In This Particular Time of Uncertainty” offers strategies and estate planning techniques to be considered during these volatile times.

Gifting Assets into Irrevocable Trusts to Benefit Family Members. If done correctly, this serves to remove the current value and all future appreciation of these assets from your estate. With the federal estate tax exemption ending at the end of 2025, the exemption will drop from $12.06 million per person to nearly half that amount.

Combine this with a time of volatile asset prices and it becomes fairly obvious: this would be a good time to take investments with a lowered value out of the individual owner’s hands and gift them into an irrevocable trust. The lower the value of the asset at the time of the gift, the less the amount of the lifetime exemption that needs to be used. If assets are expected to recover and appreciate, this strategy makes even more sense.

Spousal Limited Access Trust (SLAT). This may be a good time for a related technique, the SLAT, an irrevocable trust created by one spouse to benefit the other and often, the couple’s children. Access to income and principal is created during the spouse’s lifetime. It can even be drafted as a dynasty trust. Assets can be gifted out of the estate to the trust and while the grantor (the person creating the trust) cannot be a beneficiary, their family can. Couples may also create reciprocating SLATs, where each is the beneficiary of the other’s trust, as long as they are careful not to create duplicate trusts, which have been found invalid by courts. Talk with an experienced estate planning attorney about how a SLAT may work for you and your spouse.

What about interest rates? A Grantor Retained Annuity Trust (GRAT), where the grantor contributes assets and enjoys a fixed annuity stream for the life of the trust, may be advantageous now. At the end of the trust term, remaining assets are distributed to family members or a trust for their benefit. To avoid a gift tax on the calculated remainder, due when the trust is created, most GRATs are “zeroed out,” that is, the present value of the annuity stream to the grantor is equal to the amount of the initial funding of the trust. Since you get back what’s been put in, no taxable gift occurs. The lower the interest rate, the higher the value of the income stream. The grantor can take a lower annuity amount and with decent appreciation of assets in the trust, there will be a larger amount as a remainder for heirs. Interest rates need to be considered when looking into GRATs.

Qualified Personal Residence Trust (QPRT) is a trust used to transfer a primary residence to beneficiaries with minimal gift tax consequences. The grantor retains the right to live in the house at no charge for a certain period of time. After the time period ends, the property and any appreciation in value passes to beneficiaries. The valuation for the value of the initial transfer into the trust for gift tax purposes is determined by a calculation relying heavily on interest rates. In this case, a higher interest rate results in a lower present value of the remainder and a lower gift value when the trust is created.

Reference: Financial Advisor (July 8, 2022) “Estate Planning In This Particular Time of Uncertainty”

How to Make Home Caregiving Easier

New tools and techniques can improve the safety of a home, which can make caregiving a little easier. AARP’s recent article entitled “9 Items That Make Home Caregiving Easier” provides us with some tools designed to help caregivers ease the burden of daily challenges.

  1. Sit-to-stand toilet. A quarter of falls happen in the bathroom, so assistive toilet seats with adjustable handlebars and seat heights — for safe and stable toilet transfers — are great for those with weakness and instability issues.
  2. Adjustable beds. Although pricey, they’re a real investment in helping to adjust comfort levels with the push of a button. These beds can help create an upright position for eating and are a good tool for preventing bedsores. They also allow for fast repositioning, and safer and faster transfers in and out of bed.
  3. Walk-in shower with handrails. These make it easier for caregivers to get someone with dementia or other challenges to bathe. Walk-in showers have more room for a seat or bench and grab bars. Anti-slip flooring and faucets that regulate water flow and temperature to prevent scalding should also be added.
  4. Motion-sensor lights. Wireless motion-sensor lights can illuminate dim areas, such as stairs and long hallways. These lights are battery-operated, have built-in magnets and double-sided adhesives and shut off after a short amount of inactive time, usually from 15 to 30 seconds.
  5. In-home cameras. Cameras can prevent a loved one from leaving a home or wandering off without a caregiver’s knowledge.
  6. GPS trackers. These devices let loved ones live an independent life, while letting caregivers know exactly where they are. This technology allows for real-time tracking, the setup of safe zones and custom alerts to let caregivers know someone has wandered off. They also may have two-way communication and the ability to give others, like additional family members, access to the same information.
  7. Monitoring apps. There are many digital apps that can be used as monitors, reminders and providers of useful information.
  8. Customizable digital clocks. Choose clocks with large, easy-to-read displays, or voice capabilities. Some clocks let caregivers set reminders, such as “It is now Saturday afternoon.” Caregivers can program alarms, events, birthdays and holidays. Models with personalized voice reminders — for medication, appointments, and tasks — let the person being cared for hear the comforting voice of the caregiver.
  9. Large erasable whiteboards and calendars. Place these in commonly frequented parts of the house, like the kitchen and family room. These can be easier to use and more legible for people with dementia.

Reference: AARP (Dec. 21, 2021) “9 Items That Make Home Caregiving Easier”

Suggested Key Terms: Disability, Caregiving, Dementia, Senior Health, Aging at Home

Search
Join Our eNewsletter

Recent Posts
Categories
estate planning and elder law
Email/Social Media
Facebook-square Twitter-square Linkedin Youtube Blog
Quick Links
Powered By

Copyright © Lambros Law Office LLC. All rights reserved. Some artwork provided under license agreement.