The Care Circles of Westchester is a new program to provide family caregivers with help from a group of volunteers who can assist with caregiving tasks.
A care circle is a group of volunteers who are willing to help a person who needs care – such as an elderly person – with the tasks of daily living, such as doing laundry, walking the dog, or giving the senior a ride to a doctor’s appointment.
The Care Circles are part of Westchester’s Livable Communities Initiative, one of the goals of which is to help seniors age in place, in their homes and communities, rather than in a facility. Having a community of volunteers to help with daily living tasks can advance that goal.
To learn more about the program, contact Colette Phipps at firstname.lastname@example.org or 914-813-6441.
James Gandolfini, the actor who played mafioso Tony Soprano on HBO’s The Sopranos, died on June 19 of a sudden heart attack. Gandolfini had a reported net worth of $70 million. He had executed a new will in December of 2012 and had created at least one trust, for his son Michael. Although the actor clearly put some thought into estate planning, his estate will end up paying millions of dollars in federal and state estate taxes, much of which could have been delayed or reduced through the proper use of trusts and other estate planning tools.
More than 80 percent of Gandolfini’s estate will be subject to federal estate taxes, at a rate of 40 percent for all assets above $5.25 million. The federal tax bill will be more than $20 million. The State of New York will also tax Gandolfini’s estate, at a rate of about 5 percent on the amount over $1 million and 16 percent on the amount over $10 million. State taxes could amount to about $10 million.
Gandolfini’s estate will pay more than was necessary in part because he chose to leave less than 20 percent of his assets to his wife. The estate tax does not apply to assets left to one’s spouse, until the spouse’s death, at which point the spouse can use both spouses’ estate tax exemptions. Gandolfini indicated that he had provided for his wife financially in other ways outside of his estate.
However, Gandolfini also left a will that subjects most of his estate to the probate process, rather than setting up trusts which could have provided more sophisticated estate planning and reduced the estate tax bill. Trusts also would have kept his affairs private and made them easier to administer.
The poor planning of Gandolfini’s estate is a lesson in the additional tax burden and other complications that can arise when someone relies too heavily on a will rather than properly-funded trusts.
For more information about our estate planning services, visit www.littmankrooks.com.
Scammers and con artists often target older people, and elders may be more likely to fall victim to fraud, either because they are unfamiliar with some common scams or because the effects of early Alzheimer’s or other dementia allow them to be more easily taken advantage of.
Of course, when older loved ones are no longer able to make financial decisions for themselves, then a power of attorney is appropriate. But when elderly parents are living independently, but potentially at risk of being taken advantage of, knowing how to protect them can be tricky.
When talking to one’s parents about the risk of fraud, it is important to avoid shaming or blaming them. This can lead them to become defensive and resistant to sharing information. Also the simplistic solution of “just hang up the phone” is not likely to be convincing. Instead, have a conversation about what kinds of calls, letters, or emails come in, and the facts about common scams. Are your parents aware that government agencies will never make unsolicited calls and ask for personal information? Do they know that notices to pay a fee to collect contest winnings are fraudulent? You can also appeal to your parents’ natural desire to protect others. Ask them whether they see certain things to watch out for, and this can reinforce their own healthy skepticism.
There is a lesson to be learned from AMC’s “The Walking Dead”: advance preparation for the unexpected will prove beneficial. Surviving a zombie apocalypse requires planning: identifying a network of people you can trust, a safe place to hide, food, water and lots of firepower
And that is what estate planning is all about. While you do not need to worry about improving your zombie-fighting skills, you cannot ignore the need to plan for circumstances that they may not want to think about because that can lead to real problems.
Many people put off basic estate planning tasks such as preparing a will. Without a will, important issues such as distribution of your assets and guardianship of your minor children will be left up to the state. The absence of a will can also result in confusion and unnecessary costs for one’s heirs. Trusts are also a valuable tool to ease the distribution of assets and reduce costs. Reviewing your will and any trusts is just as important as creating them, particularly after major changes in life circumstances such as the birth of a child or a change in marital status.
Incapacity from an accident or illness is a very real possibility, though difficult to consider. It is simply good common sense to make it known what your medical wishes would be in such a situation. A living will does just that, documenting your wishes in certain medical situations. In addition, a power of attorney or health care proxy designates a person to make decisions on your behalf if you are incapacitated.
Working on your zombie bunker can probably wait. Good estate planning cannot.
Please join us in celebrating, supporting and participating in the 5th anniversary of National Estate Planning Awareness Week, October 21-27, 2013. To register for our webinar about Estate Planning for Snowbirds, click here. To learn more, visit the Financial Awareness Foundation. For more information about our estate planning services, visit www.littmankrooks.com.
In support of National Estate Planning Awareness Week (3rd week in October) the following estate planning article contains a very important message:
Estate planning is a financial process that can protect you and your family and is a very important component of your overall financial planning. The 3rd week of October is National Estate Planning Awareness Week and the perfect time to put your estate planning house in order. If you don’t have an up-to-date estate plan and you happen to get hurt or sick and cannot manage your financial affairs, the courts will have to appoint someone to manage them for you. The person they appoint might not be the one you would want to perform those tasks.
Without an estate plan, when you pass away, your affairs will be settled by default through a complex legal system called “probate.” The handling of your financial affairs can turn into a costly and frustrating ordeal for your family and heirs.
The crafting of a good estate plan starts with planning, followed by the proper drafting and signing of appropriate legal documents such as wills, trusts, buy-sell agreements, durable powers of attorney for asset management, and an advanced health-care directive or health-care power of attorney. Having these documents in place saves you and your family a lot of money and time at a very difficult and emotional time.
Your estate planning should also address the coordination of the way you hold title to your various assets, your beneficiary selections, and the possible transfer of certain assets while you are alive.
Regardless of the extent of your net worth, estate planning is important for everyone. Complex strategies may be used by wealthy people to reduce death taxes and costs. Others may only require a simple will and/or trust to pass on property to their heirs and provide for minor children.
Even if a simple will is all you require, an estate plan is an essential part of your financial planning. Everybody will need it someday. The time to address or update your estate plan is now.
CHECKLIST — SIX STEPS TOWARD SUCCESSFUL ESTATE PLANNING
1. DEFINE YOUR GOALS: What do you want to happen to your assets in the event of your death or disability? If your beneficiaries predecease you, who are your alternate selections? How will your assets be distributed, and when will these distributions take place?
- Decisions on distribution of your estate assets should take into account the size of the estate, the ages and abilities of your children, and your personal desires. For example, a distribution to children over time might consist of 10 percent of the estate at age 18, 25 percent at age 21, 50 percent at age 24 or upon completion of college, and the balance at age 30.
- Choose your appointees for important roles: Who will be your executor and, if applicable, trustee and/or guardians? It is advisable to list at least a first and second alternate for each appointment in case your first choice is unwilling or unable to serve.
- If you have children who are minors, the appointment of a guardian is probably the most important decision you’ll make. With the court’s approval, this person, or persons, will raise your children. Consider appointing a family member and spouse, or another close couple who’ll care for your children the way you would want.
- You may want to consider listing multiple executors, trustees and guardians to serve together in handling the details of your estate. This can provide a check-and-balance system for the appointees and help them avoid oversights or misappropriations. Consider appointing family members, friends, professionals, advisers and/or trust companies for this position.
- There is some risk here: If these people disagree and have problems, they can each be represented in court by counsel paid for by your estate, so be very careful in making your selections.
- Living trusts have become popular because less administration is required in comparison with a will. Be aware that having a living trust does not eliminate the need for a will and administration at either the first or second spouse’s death.
- To get the benefits of the trust, certain details must be attended to, and this is the job of your appointees. For example, leaving a trust for the surviving spouse requires that the trust be funded properly and in a timely manner at the first death, or major tax benefits can be lost.
- Is estate privacy an issue for you? Do you want your estate to be public record upon your death? Do you have any special gifts you want made to charity? Do you want an elderly parent or friend to be financially cared for? All of these circumstances should be noted in your plan.
2. GATHER & ORGANIZE YOUR DATA: There are three basic tasks to be accomplished:
- Review and update your financial position.
- Review how you hold title to your assets. Is it consistent with your estate plan?
- Review your beneficiary selections. Are they aligned with your estate plans?
- Did you know that how you hold title to assets has a higher legal priority than your will? For example, if you and your best friend held title to an investment club account as joint tenants and you died, the property would revert to your friend even though you had willed your interest to your spouse.
3. ANALYZE YOUR SITUATION: Start by determining your current net worth, assuming your death occurred today. This can be done by totaling your current assets and liabilities, and adding the value of any life insurance.
- Try sketching a picture or flow chart of your existing estate plan. Review your appointees:
- Guardian of the Person/of the Property
- Power of Attorney – Property Management
- Advance Health-Care Directive or Health-Care Power of Attorney
ESTATE PLANNING ALERT: On January 2, 2013 President Obama signed the American Taxpayer Relief Act (ATRA) into law. Many of the temporary provisions from prior tax acts were made permanent ending much confusion and speculation.
- Federal Estate, Gift and GST Taxes ? The estate tax, gift tax and generation skipping tax exclusion amounts are all set at $5 million and indexed for inflation after 2011. For 2013 the exemption amount is $5.25 million.
- The top estate, gift, and GST tax rate is increased from 35 % to 40%.
- Portability ? Beginning for taxpayers dying after Dec. 31, 2010 the estate tax exclusion becomes “portable” between spouses. This means that the surviving spouse’s exemption is increased by any exemption not used at the first spouse’s death. However, this is not automatic; it must elected by timely filing a 706 estate tax return.
- Carryover Basis ? For most capital assets transferred at the time of death the beneficiary receives a “stepped up” basis to its fair market value at the date of death.
- Check with your financial advisors for updated information.
4. DEVELOP YOUR STRATEGIES: With the assistance of your estate planning advisor(s), identify the legal documents that need drafting or make any necessary adjustments to existing documents. Determine any other actions that must be taken for your wishes to be carried out.
5. IMPLEMENT YOUR PLAN: Do what needs to be done — i.e., create new wills, trusts and powers of attorney, adjust title to your properties, change alternate beneficiaries of retirement plans and life insurance policies to trusts.
6. TRACK & MONITOR YOUR PROGRESS: Check your estate plan annually or any time there are changes in your family situation or net worth. Use your financial planning calendar to schedule your next review.
For more information on estate and financial planning content contact V.Sabuco@TheFinancialAwarenessFoundation.org. For more information about our legal services, visit www.elderlawnewyork.com.
Sometimes, due to an inability to determine whether a child with special needs will be self-supporting and earn income as an adult, parents cannot assess the child’s future eligibly for government benefits. This is often the case with children who have Asperger’s syndrome or mild autism.
In such a case, locking assets up in a Special Needs Trust may not be the best way of utilizing assets for the child’s care. There are strict guidelines for the disbursement of a Special Needs Trust’s assets, which are to be used to pay for services not covered by Medicaid, for recreational and cultural experiences and, for the most part, services or items that would enrich the beneficiary’s life. It is important, therefore, that the trust has sufficient flexibility to adapt to changing circumstances. One way of doing this is to initially structure the trust as an inter vivos trust for the benefit of the child. The trustee could have the ability to make income and principal distributions to the child for health, education, maintenance, and other support purposes throughout the child’s life.
If the trustee believes that the child is capable of controlling his finances, then he would have the option of terminating the trust and distributing its assets to the beneficiary. If, however, the trustee determines in the future that the child cannot support himself and would be eligible to receive government assistance, the trustee would have the flexibility to convert this trust to a Special Needs Trust.
This flexible structure permits the child to achieve his potential and allows the trustee to use trust assets in the child’s best interests.
To learn more about New York
Co-housing is a growing trend among Baby Boomers, as the aging demographic works to delay the need to move into a nursing home.
There are as many as 78 million people between the ages of 49 and 67 in the U.S., and few of them report that they plan to end up in a nursing home unless it becomes unavoidable. While some of the Boomers are planning to move in with their adult children, many more are not choosing that option. And, with one out of every four Boomers childless, relying on adult children simply isn’t an option. For others, the increased likelihood that their adult children live thousands of miles away means that the one-third of the Boomers who are single are without established household companionship. But not, it seems, for long.
The Boomer generation, elder advocates say, is one not entirely adverse to the concept of communes and communal living. This has led to a growth in a number of living options centered around some concept of an arranged community. The variety of communal living can be found in everything from retirement “communes” and co-ops to collective housing and condominiums.
By 2030, it is expected that there will be at least 72 million people 65 and older in the U.S: 1 out of 5 people will be older than 65. Elder care advocates expect that the growing cohort will likely spur a growth of shared-interest communities. Communities could be structured around shared interests like dogs or music, or activities such as gardening or playing cards.
There are already a number of “lifelong learning,” secondary-education-based retirement communities in the U.S., close to five dozen situated near colleges such as Cornell and Dartmouth. And the growing number of 55-plus communities are already available in most major urban areas. Though generations living under one roof was once the norm, the migration across the country for work during the Depression Era, and the move to the suburbs in post World-War II era fractured the practice.
The aging population, combined with the economic downsizing of the past decade, seems to be reversing that trend: The Pew Research Center reports that between 2007 and 2009, there was a 10.5 percent increase in the number of multi-generational households. Meanwhile, not all of those multi-generational households are made of up people related to each other.
To learn more about our legal services, visit www.littmankrooks.com.
Despite a push by advocates for advance care planning, most Americans do not have a living will or other advance health care directive in place. This includes even many patients with serious health conditions, who should be considering end-of-life decisions such as whether they want to be resuscitated or intubated, and who is designated to make decisions about their care if they are incapacitated.
Much of the push has been directed toward encouraging people, especially those advanced in age or facing a serious illness, to discuss end-of-life decisions with their loved ones. Recently a team at the University of California, San Francisco found success with a new approach: offering doctors incentives for documenting their patients’ advance care decisions.
The research team came up with a simple form for doctors to use, asking patients whether they had preferences regarding end-of-life care, whether those preferences were recorded anywhere, such as in a living will, a brief summary of those wishes, and the identity and contact information of any person designated to make health care decisions for the patient.
If residents recorded that information for at least 75 percent of patients discharged, they got a $400 bonus. The program worked, bringing the percentage of patients who had their preferences recorded up from 22 percent to 90 percent.
The program is a good reminder that setting up an advance health care directive can be a fairly simple and straightforward process.
For more information about our elder law services, visit www.elderlawnewyork.com.
The following is a glossary of common terms related to federal benefits such as Medicare, Medicaid and Social Security:
- Cost of Living Adjustment (COLA): An annual adjustment that may be made to Social Security benefits to keep pace with inflation.
- Lifetime Earnings: A history of the amount of money you earned during your working lifetime.
- Lump Sum Death Payment: A $255 one-time payment paid upon death to a widow, widower or children under the age of 18, in addition to any monthly survivors benefits due.
- Medicaid: A joint federal and state program that helps with medical costs for people with limited resources.
- Medicare: The federal health insurance program for people age 65 or older, people with disabilities, and people with end-stage renal disease.
- Old Age Survivors and Disability Insurance (OASDI): The Social Security program that provides monthly benefits to workers or their dependents upon retirement, death, or becoming disabled.
- Representative Payee: A person such as a relative or friend appointed to handle your Social Security benefits if you are unable to handle your own financial affairs.
- Retirement Age: The minimum retirement age is 62 for workers and 60 for widows/widowers. You may choose to take reduced benefits at this age. Full retirement age was formerly 65; it began increasing gradually in 2000 and will reach age 67 in 2022.
- Social Security: The name for the overall system that workers pay taxes into, and from which benefits are paid upon retirement, death or disability.
- Supplemental Security Income (SSI): A supplemental income program for blind and disabled people with limited resources, funded from general tax revenue and not from Social Security taxes.
For additional terms, visit the Social Security Administration Website.
For more information about our estate planning services, visit www.littmankrooks.com.
As members of the baby-boom generation enter their retirement years, awareness is growing of the importance of palliative care for older patients with chronic illnesses, and how planning can clarify difficult end-of-life decisions.
Palliative care is a branch of medicine that focuses on providing relief from the pain and stress of chronic illness. Doctors may be primary care physicians with a specialty in palliative care and may work together with nurses and social workers to improve patients’ quality of life.
A study published in the New England Journal of Medicine found that palliative care could not only improve the quality of life for patients, but could result in them living longer. Some evidence indicates that palliative care early on can reduce the amount of time spent in an intensive care unit when admitted to a hospital and can cut medical costs.
According to New York City’s Center to Advance Palliative Care, there are about 90 million Americans living with a serious illness, and many of them could benefit from palliative care. There is access to palliative care in about 1,500 hospitals across the country, double the number in 2007. However, most patients are unaware of the specialty and do not know when it might be appropriate for them.
Experts in palliative care say that it should be sought out at the time a serious illness is diagnosed, and it may be appropriate for patients with cancer, dementia and heart or lung disease. Although some patients who are aware of palliative care equate it with hospice, it is not the same thing. Palliative care is appropriate at every stage of a disease and can benefit patients who are expected to live with an illness for a long time. Hospice is a service offered to patients who are likely to live only a few months or a shorter period of time.
However, because palliative care is a treatment for people facing serious or life-threatening illnesses, a person receiving such care may also be facing end-of-life decisions. An incapacitating illness is traumatic for both the patient and his or her loved ones, and it can be especially difficult to make decisions such as whether life-prolonging measures should be undertaken in different medical situations.
These decisions can be made easier by thinking about and communicating your end-of-life wishes while you are healthy. You can communicate your wishes directly to your loved ones, and you can document them in advance directives such as a living will and health care power of attorney. A living will records your end-of-life wishes for your family and your doctors. Because a living will cannot cover every possible situation, you may also wish to name someone to make your health care decisions for you in the event you are unable to do so, through a health care power of attorney.
As medical treatment, including palliative care, improves, people are living longer. Many older people live with serious illnesses or become incapacitated. Taking the time to plan for such possibilities when you are healthy can preserve your wishes and make things easier for your loved ones.
For more information about our elder law services, visit www.littmankrooks.com.