Category Archives: Current Events

Portrait of A Caregiver

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If you are a Caucasian woman, aged 35 or older, possibly married, definitely working at least part-time—then there is a good chance that you are now or will soon be serving as a caregiver for an aging parent or relative; at least, this is according to the new report released by the National Alliance for Caregiving, AARP, and MetLife.

The entire report, entitled “Caregiving in the U.S., A Focused Look at Those Caring for Someone Aged 50 or Older” is 73 pages long, but you needn’t read the entire thing to get an insider’s peek at the state of caregiving today.  And the report isn’t limited to caring for an aging relative; it includes statistics on those caring for special needs children, as well as family members of any age.

Some of the more interesting statistics listed in the report are:

  • 40% of Caregivers are aged 50-64.
  • 63% of those receiving care are over the age of 75.
  • 67% of Caregivers are women.
  • 76% of Caregivers are Caucasian.
  • 89% are caring for a relative (36% of the time it is the caregiver’s mother.)
  • Over half of caregivers are employed while caregiving; and…
  • Caregivers provide an average of 19 hours of caregiving per week (in addition to their regular employment.)

It is worthwhile to note that according to this study most of these caregivers are unpaid for the care they give, which makes sense if they are caring for a family member and are doing it voluntarily—but a full 43% said that they felt they did not have a choice to take on the role.

Our office can’t prevent you from one day needing a caregiver (or one day having to serve as a caregiver) but we can help you plan for when that day may come.  Thinking and planning ahead can keep you—and your loved ones—from ending up in a situation where you feel you have no choice.

New Developments in the Estate Tax

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The question on every estate planning attorney’s mind (and on the minds of our clients) is what will happen to the estate tax next year?  There is less than a month left before the estate tax expires, and although nobody expects our representatives in Washington to actually let that happen, as of yet there are no firm resolutions regarding the matter.  We are, however, getting closer. 

The House recently voted not to let the estate tax expire, but instead to let it continue indefinitely at the current rate. Unfortunately the legislation has yet to make it through the Senate, and considering the gridlock that body is experiencing over health care reform, holding our breath for a decision on the estate tax before year’s end isn’t recommended.

The issue that estate planners are most concerned about at this time is not actually what the final decision will be (although that certainly is important), but how long it will take our government representatives to reach that decision. It is generally assumed that any decision reached in 2010 regarding the estate tax will be retroactive, which means that any estates opened next year before the decision is made might at some point have to pay estate taxes retroactively. The possibility of retroactive estate taxes means that holding off on your estate planning until after the legislation has passed is not as wise a decision as you may think.

We know our lawmakers have a lot to think about as 2010 approaches, but so do you—the taxpayers.  Let us help you start the New Year off on the right foot: Making your own decisions about your estate planning, and keeping one step ahead in the game.

Tax Moves to Make Before the End of 2009

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Why do people give so many charitable gifts in December?  The holiday spirit may not be the only thing inspiring people to give to the less fortunate this month, it may also have something to do with lowering your 2009 tax bill. If it’s taxes you’re worried about, there are a few other moves you can make after you’ve done your charitable giving. Ashlea Ebeling of Forbes has a whole list of things you can do to lower your 2009 tax bill before year’s end, we’ll mention just a few of them here:

  • Fund those retirement savings accounts.  As the article above points out, you can fund your 2009 retirement accounts up until April of 2010, but if you have an employer who will match your investment it’s likely they’d like to know before the end of the year what amount they’ll be matching. If you’re self employed you’re on a tighter schedule because the deadline for setting up a solo 401(k) is December 31.
  • If have plans to receive any expensive medical procedures in the near future that won’t be covered by your insurance, you may want to consider having them done before January 1st. Unreimbursed medical expenses that exceed 7.5% of your adjusted gross income are deductable.
  • If you’re in the market for a new home, the homebuyer credit has been expanded from November 30th to May 1st 2010.  This credit used to be only for newcomers to the real estate market, but is now available for both new homebuyers and longtime homeowners looking to purchase a new home.
  • A different—but related—course of action is making upgrades to the home you already own. Certain energy efficient improvements to your home can also get you a credit on your taxes… if you get the improvements done before the end of the year.
  • One more way you may save money on your taxes this year that you won’t find mentioned in the Forbes article is to create an estate plan which includes a trust. To the extent that the legal planning services cover tax advice or regard income producing property, the fees you invest in establishing and operating a trust are deductible from your federal income taxes.

All of these are good ways to save money on your 2009 taxes, but action needs to be taken before the end of the year.  That gives you only… 24 days left to take action!

Imagine No Estate Tax

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The federal estate tax is scheduled to disappear next year (in 2010); and although most people expect lawmakers to pass legislation keeping the estate tax alive, they also vaguely hope that the estate tax (also sometimes called the “death tax”) does disappear—at least for a little while. But this article in the Wall Street Journal asserts that for all the noise that is sometimes made about the estate tax, we may actually be better off with the estate tax than without it.

This assertion is not based on what is best for the government, but what is best for the tax-payer, and has to do with something called the “step-up in cost basis”:

“Step-up means that the property heirs receive is valued as of the date of death. So if Grandma leaves a grandchild stock selling for $75 a share that was bought in 1970 for $2 per share, the heir’s “cost basis” in the stock is $75. If the grandchild then sells the stock for $80, the taxable gain is $5 per share.”

If the estate tax disappears it is likely that the step-up in cost basis will as well. This means that the stock Grandma leaves you would be valued at the original $2 per share rather than the stepped up $75 per share, and when that same stock is sold for $80 per share the taxable gain would be $78 instead of $5!

The disappearance of the step-up in cost basis is just one of the concerns people have about the possible elimination of the estate tax and Congress’s failure to act.  Other concerns mentioned in the Wall Street Journal article include:

  • A retroactive estate tax
  • A prohibition (or scaling back) of techniques used to trim estate taxes (such as family limited partnerships, grantor retained annuity trusts, and qualified personal residence trusts)

With all of these possible changes on the horizon, the time to take advantage of tax saving techniques offered by your estate planning attorney is now, while they are still available.

What To Do If You Suspect Foul Play

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The movies have given people certain expectations when it comes to a death in the family and probating a will; this Hollywood portrayal includes an attorney, a book-lined office, and the entire family assembled for a formal reading of the will which ends in shocked gasps as the entire fortune goes to an unknown and unlikely character. Inevitably, there is some intrigue surrounding a possible forgery of the will. 

This Hollywood portrayal may be completely off base, but the basic premise is based on the very real feelings that come with the death of a loved one: helplessness, confusion, familial bonds, and sometimes even betrayal. Forged or secret wills may not be as common as the movies may have us believe, but as recent events and this article in the Wall Street Journal reveal, they aren’t completely unheard of either.

So what should you do if you suspect that the will of a loved one has been forged or tampered with? First of all, don’t try to deal with the situation alone. Dealing with the death of a loved one is stressful and emotional, and everyone—including you—is likely to be quicker than usual to react without thinking. Instead, seek the advice of a trusted third party, someone who can help you distance yourself and look at the situation objectively.

As mentioned in the article above, will forgeries are very rare, but incidents of testators (especially elderly testators) being unduly influenced are sadly not rare enough.  If you suspect foul play was involved in the creation of a loved one’s will, make an appointment with an estate or probate specialist.  We can help you work through your suspicions in a safe environment and explore your options should you feel the need to take action.

Trust Mill Con-Men Fined $6.4M for Illegal Practice of Law

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The Ohio Supreme Court has recently taken strong action against two co-owners in a company participating in an illegal “trust mill” operation. According to this article from the Associated Press, the two owners, Jeffrey and Stanley Norman, have been permanently barred from marketing or selling their trust products in Ohio after they were found to have committed “more than 3,800 acts of unauthorized law practice.”

Unfortunately, Jeffrey and Stanley Norman are not the first unscrupulous characters to try to pull one over on the general public.  Trust mills exist in every state, and although seniors are often the main targets, anyone can fall victim if they aren’t careful.  These trust mills may offer inexpensive documents, but the cheap product is exactly that—cheap. At best these cheap documents are nothing but generic forms with your name slipped in, they do nothing to reflect your family’s needs or desires. At worst the documents delivered by Trust Mills won’t even adhere to the laws of your state.

So be wary of any will or trust that is offered at a price too good to be true.  Be wary of anybody who tries to sell you a trust or estate plan at a “great price” and at the same time tries to sell you other “related” products such as life insurance or annuities. Be wary of anybody who will come to your home or meet you at a restaurant, but has no local office or local phone number. And be wary of anybody who will have you fill out a form and sell you a trust online.

A good trust should be drafted by an experienced attorney who specializes in estate planning and who practices (and usually lives) in your state of residence.  A good trust is drafted after that attorney has met with you, interviewed you, and given you a chance to ask questions as well.

Don’t fall victim to con artists like Jeffrey and Stanley Norman.  Be wary, be aware, and be willing to pay for an estate plan that will legally protect your assets and your family.

What We Can Learn From the Kennedy Trusts

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The recent death of Senator Ted Kennedy has given us an opportunity to reflect on the unique nature of trusts not only as a tool to protect assets for future generations, but also as a way to leave a lasting legacy for your children and grandchildren.

The Kennedy trust—or Kennedy trusts, we should say—are some of the best examples of how comprehensive and versatile trusts can be, as this article by Gerald Posner illustrates. The trusts were first established by Joe Kennedy; one in 1926, another in 1936, and another in 1949. Each trust had its own unique purpose: the trust established in 1926 was for Rose and the children, whereas the trust established in 1949 was intended for his grandchildren. Furthermore, each trust was set up as a blind trust, designed to act independently from any other trust.

The Kennedy trusts were built to last, with each successive trustee working to provide for the beneficiaries while protecting the principal for future generations as well. And last they have, to the extent that today—even taking the recent economic downturn into account—the trusts have survived… and even flourished in some cases.

You don’t have to be a Kennedy to leave a legacy for your children or grandchildren. The Kennedys certainly had a financial head start, but trusts can be designed to protect and build on even a modest estate. Whether your desire is to provide for your immediate heirs, or leave a legacy that lasts far into the future, a trust can help you accomplish your goal.

Finances Are A Family Affair

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We’ve all been learning a lot more lately about economics and investment practices than we ever thought we would… but do these lessons from the global economy transfer to the family circle?

Studies have shown that most families have one person who takes care of all the finances: paying the bills, setting aside money for investment and savings, planning the family budget, etc. This may be convenient in the short term, but it can create long term problems. If both partners aren’t aware of the family budget and financial status there can be a tremendous disconnect in spending habits, leading to resentment and often a slow decline into debt. Furthermore, what happens to the family finances if the “accountant spouse” dies or becomes incapacitated? The surviving spouse often has no idea what the family financial status is, or even where accounts or investments are located and how to access that money. The best solution is for couples to talk about their finances often, or take turns being the family CFO.

Even children benefit from a certain amount of involvement in the family financial planning. Having a regular allowance or earning pocket money for chores not only teaches kids about money management, but also helps them understand when they have to wait to get that new video game, or when the family may have to cut back on certain luxuries. Including children in certain financial decisions, such as which charities to support or how to spend surplus cash, teaches them accountability, and that the choices they make can have a lasting impact.

Many of us look upon our finances with dread; but it doesn’t have to be that way. Skill with money matters can bring us just as much pride and joy as skill with a paintbrush, tennis racquet, or any other skill that must be acquired with practice and hard work. With a little education, and the involvement of the entire family, we can all become the masters of our own financial futures.

In the News: What Does it Mean to Have a Health Care Directive?

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There seems to be a lot of fear around President Obama’s proposed healthcare reforms, most of that fear centering on the end-of-life planning included in the proposal. As a firm that deals with elder law issues, it is important to us that our clients be informed about their health care and choices. As a firm that counsels people (elderly or not) about the wisdom of including end-of-life planning in their health care directive, we feel it’s in your (and our) best interest to clear up a few details about exactly what that planning entails.

One of the fears currently sweeping the nation is that the current administration’s healthcare reforms are about euthanasia; or denying someone lifesaving medical treatment simply because they are elderly. Republican Senator Johnny Isakson explains in this article in the Washington Post that this is simply not true. Rather, Senator Isakson explains, thinking about your end-of-life healthcare options, talking about them with your doctor and family, and including them in your health care directive is responsible. It is about controlling your own destiny in your final days; whether that means you choose to forgo invasive procedures, or want every heroic measure taken—the decision is yours. But there is no way for your family or your doctor to know what your wishes are unless you’ve had the conversation and specified those wishes in your health care directive.

Our firm has no political leanings or agenda. We know that there is certainly much debate to be had about the pros and cons of the proposed health care reforms, but as regards end-of-life decisions and health care directives, we hope we have been able to clear up some confusion and ease your mind. If you still have questions about what it means to have a health care directive please don’t hesitate to call our office.

A Living Will Is Good For You, Good For The Country

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President Obama’s pet project of health care reform seems to have a lot of people worried. His talk of living wills encouraging people to specify their end-of-life wishes in particular are the topics bandied about most often in tense (or downright frightened) conversations. Some people seem to think that the very act of specifying your wishes in a living will is going to put you on the Do Not Resuscitate list. We’re here to tell you that nothing could be further from the truth.

In fact, creating a living will is a smart idea, one that can save no small amount of expense, suffering and confusion on the part of your family and your medical care providers, and we aren’t the only ones who think so. Robert Powell of The Wall Street Journal’s MarketWatch agrees with us, and has written an excellent article answering the frequently asked questions about living wills, explaining the differences between a living will and a health care directive, and outlining why each and every adult should have one of these documents.

If you still aren’t convinced you should have a document specifying your wishes for end-of-life treatment, call our office and we’ll be happy to answer any further questions you have. For those of you who need no convincing, we can help you execute the documents you need to get the care you want when you aren’t able to care for yourself. A living will or health care directive is a standard document in any estate plan, so if you’ve been considering creating an estate plan this may be a good time to take the plunge. Apparently executing a living will or health care directive is no longer beneficial only to you and your family; it’s also good for your country.