Wanderpolo & Siegel, Counselors at Law

Should I Help My Aging Parents Manage Their Investments?

As Americans live longer and their portfolios grow for extended periods of time, their adult children should be watching carefully—but how closely? That’s the question posed by the article “How to Help Aging Parents Manage Portfolios,” from U.S. News & World Report. There is no one answer, and it is a delicate situation. It is also more so for some families than others.

It’s not easy to talk with parents about their finances and their vulnerability to scam artists. Today’s thieves are also savvy. They use Facebook and other forms of social media to learn about family members travelling outside of the country, then call the elderly parents and pose as the grandchild needing money immediately for an emergency.

Some older adults rely on their emotional response in making financial decisions. Loneliness and depression, common in aging seniors, also increase the risk of becoming a victim of a scammer. That’s especially so, in the case of someone who has recently become a widow or widower.

It’s often hard for older adults to discuss finances with their children, unless they have done so over the course of their children’s lives and are comfortable doing so.

This issue is only growing, as investors live longer and portfolios continue to grow over the course of their lifetimes. It only takes a few mistakes for an impact to hit the portfolios and often there’s no recourse.

The first step for adult children is to be aware of  signs of mental decline. However, it’s important not to jump every time someone can’t find the right word or remember someone’s name. Keep an eye on their behavior: a formerly neat person who is now leaving bank statements lying around open on their desk, past-due notices arriving or an extreme amount of mail from questionable charities (versus large nationally-known organizations). This mean it is likely they are having a problem handling day-to-day finances.

Don’t confront the issue in a challenging manner. Have a pleasant conversation, possibly starting with a talk about your own finances and how you speak with your own children, or plan to, to get them moving into the topic. Once they are comfortable talking about money, start discussing other important issues, like whether they have done estate planning documents.

These are not always easy conversations, but they are necessary. And it is essential to have a power of attorney in place so that if there comes a time that the adult children need to help that they can.

Signed Your Will-You Aren't Done Yet

Imagine spending the time and money to do your Will and then have it ignored when you are gone.  All too often that happens because the original Will goes missing.  Either it is assumed the deceased had no Will, the document cannot be found, or only a copy is located.  

I just had a heart-breaking case where the individual had no blood relatives and left her entire estate to good friends and people who she considered family. Although she took the time to create a Will, the original document could not be found and the court would not probate the copy. In New Jersey there is a presumption that an original Will has been destroyed if it cannot be located.  This can mean that complete strangers--distant cousins or even the state--might get your assets instead of the people or charities you intend.

Therefore it is essential that you make sure that people you trust know where the original document is and can access it. This may mean leaving the original with the attorney, or putting it in a fireproof box or safe, but it is important you tell your loved ones. If you place your original Will in a safe deposit box, you also have to make sure your fiduciary has a key and is on the bank's access list. Lastly, keeping an updated list of your assets will help your loved ones administer your estate after you are gone.

Your Nest is Empty? It’s a Good Time to Plan.

My husband and I just became Empty Nesters. Most of the articles you read on the “empty nest,” focus on couples now having more time for each other or redecorating the newly-vacated room (We haven’t gotten to this quite yet.)  However, there are financial and legal issues to consider at this time too.

If you are not paying college tuition, or you just finished doing so, you may find that your bank account is healthy for the first time in a long time. It’s tempting to splurge on all the things you’ve put off, waiting until the kids were grown. However, this is a unique opportunity to bolster retirement savings and build up (or build back) the emergency cushion that so many of us forget we need—until there’s an emergency.

Many parents continue to help their children financially. That’s a great thing to do, if you and your retirement accounts can afford it. Consider putting specific limits on any continuing support, like paying a monthly phone bill or a credit card bill or a one year time limit.

In some instances, kids never become completely financially independent. For children with disabilities that limit their earnings abilities, you should consider what programs and benefits are available to help. It is important to adjust your estate and financial planning to address the needs of children who are not independent.

If you haven’t updated your will since your kids were small, put this on your “before the holidays” list. There have been many changes to tax laws and your life may have experienced some changes as well. Review your estate plan with your attorney to be sure you aren’t missing any opportunities to minimize taxes or maximize your planned giving legacy.

This is also the time to check on your beneficiary designations.  Make a complete list of all of your accounts that have beneficiary designations and make sure they are up to date.

Now that the kids are grown it’s a good time to revisit your power of attorney and medical directives. If your child is responsible enough, you may want to name your child as back-up agents.  Your kids also need to have their own basic documents even if they have limited assets.

What if a Hostile Family Member Wants to Become Your Guardian?

Family conflict can become exacerbated when a parent ages.  Children who have disagreed or fought with their parents now threaten to take control of their assets.  Sometimes the parent knows that if one child gets this power they will not act in the parent’s best interest.  How can you protect yourself?

The most important step is talking to an attorney while you can still clearly designate who you wish to act.  Start by naming someone as your Medical Power of Attorney to make any decisions regarding medical treatment, in case you can’t make them for yourself. Discuss with the person you want to designate what your wishes are about health care and whether you want to have extreme measures taken, if they were to become necessary. Make sure they understand that their role is to carry out your wishes and they must be prepared to make some hard decisions.

When it comes to financial decisions, you can designate a power of attorney or set up a trust. A revocable trust can be more protective and allows you to provide detailed provisions for how you want your assets used. Having the proper documents should avoid the need for a guardianship, but you can also designate who you would prefer as guardian, as well as the person(s) you do NOT want to be appointed if a guardianship were needed for any reason.

It is scary to think about losing the ability to manage our own affairs, but it is comforting to know that we can designate who and what we want ahead of time and these directives will be followed if there ever comes a time when we cannot act for ourselves.  You may not be able to change your child’s personality or behavior, but you can protect yourself.

Singles Need to Plan Differently for Retirement

When you live alone, you need to plan for retirement differently than someone who is married or has a life-partner.  Those with a partner can, in most instances, rely on their partner to help out with expenses and be a caregiver, if they should become ill.  However, when you are single, especially if you do not have close family, you need to plan in advance, and you need to plan better.

Most important of all: making sure that decisions about your health and well-being are made the way you want them to be made, if there comes a time you are not able to make them for yourself. You also want to be sure that you designate who should receive the things you own, personal possessions and assets.

If you rely solely on your own income, it’s necessary to have an emergency fund in place. It’s also a smart idea to have disability insurance. That way, if you need to stop working, you will have an income source. Unless you have another stream of income or significant personal assets, you’ll need the benefits of disability insurance, especially if you are disabled and can’t work for an extended  time.

You may also want to consider long term care insurance.  Someone turning 65 has a nearly 70% chance of needing long-term care in remaining years. It’s important to consider your options for care before you need it. You also should discuss these issues with your friends or family who you have nominated to make decisions for you, so they know your wishes.  No one likes to think about these issues but studies show that individuals who have not designated anyone to step in often end up receiving care they did not want and are more likely to end up in an institutional setting.

When It Comes to Veteran’s Benefits DIY Doesn’t Work

As you might expect, there are several benefits available to assist wounded or disabled Veterans. But unbeknownst to many, there are also pension benefits that exist for men and women who served and were not injured.

Lack of knowledge leads veterans to miss out on the important assistance they have earned. However, it is essential to understand the various programs available to that planning done for one doesn’t interfere with the individual receiving all the benefits to which he or she is entitled.

The important thing to remember is that every individual and family situation is unique.  Estate planning, asset protection, Medicaid, VA programs, and tax considerations all need to be considered.

There are many unknowns and misconceptions attached to Veteran’s benefits. When it comes to Veteran’s benefits Do It Yourself typically doesn’t work. It’s important to get independent advice.

On the one hand, there’s a misconception that only those individuals who have been wounded or disabled while serving are entitled. However, the Veteran’s Pension is an income program available to wartime veterans or their surviving spouses. Even then, to be eligible for this pension, there are certain asset and income requirements that must be met. Most Veterans only reach the eligibility level when they require long term care assistance because the cost of medical expenses is deducted from their income to allow them to qualify.

It can be hard to get accurate information about the program. According to the VA’s own data, people who call the agency’s regional offices for help and advice are likely to receive incorrect information. This is only likely to get worse as new rules just enacted fundamentally changed the program with a substantially higher asset threshold but new penalties on transfers.

The rule change was partly in response to widespread abuse.  Many annuity salespeople prayed on Veterans. An annuity may serve individuals well financially. But in many cases, it can work against them. It all depends on an individual’s unique circumstances. It’s imperative to make sure that any financial decision you make will not interfere with other assistance programs, particularly Medicaid. Under the new rule, the ability to use annuities to expedite eligibility for the VA program is largely eliminated.

Wartime Veterans, or their surviving spouses, become eligible for the Special Pension benefit when they are over 65 years of age, are permanently disabled and unable to work, are homebound, or need the regular aid and attendance of another person, whether at home or in an assisted living.

The Pension’s Aid and Attendance rules are designed to help aging Veterans pay for the high cost of medical care when they are suffering from dementia, Parkinson’s disease, Lou Gehrig’s disease, or other health conditions necessitating long term care. The monthly benefit can pay up to $2,170/month for a couple, $1,830/month for a single Veteran and $1,176 for a single surviving spouse.

There’s also the opportunity for seniors to increase their disability ratings as they age and their war-related injuries become more severe. For instance, Veterans with hearing loss and mobility issues which are rooted in their service but aggravated by age should receive an increase in their benefits. Furthermore, many Vietnam and Korea era Veterans are not aware that Parkinson’s disease and many cancers are presumed to be service-related.

There are also additional benefits available for home modification and local stipends for in-home help. At WanderPolo and Siegel, we are committed to making sure the men and women who have served our country receive the full combination of benefits they deserve.

Larger Than Life: Celebrity Estate Planning Mistakes

 

Outdated documents, beneficiary designations and other estate planning mistakes can keep your heirs tied up in court for years, with your estate consumed by taxes, penalties and legal fees. This is not to mention the frustrating scenario of people you didn’t want to receive your assets, ever, getting the lion’s share of your estate.

That, says Kiplinger in an article titled “6 Estate-Planning Mistakes Celebrities Made,” could happen to your family, if you don’t update your estate plan on a timely basis. Making sure that your assets and prized possessions end up with the right people requires more than just having a will created. Many accounts have designated beneficiaries, like IRAs and 401(k) accounts, and insurance policies. If the person designated to be a beneficiary is an ex-spouse or a family member from whom you’re estranged, then it won’t matter: the named beneficiaries supersede anything contained in your will.

Just as everything about celebrity lives is oversized, so are their estate planning mistakes.

With no will, Prince died intestate. A judge in Minnesota made the decisions about his assets and there were significant delays due to people who claimed to be his heirs. It has been two years since his death and heirs have yet to receive their inheritances.

Singer Barry White died in 2003, while he was separated but not divorced from his second wife. She inherited everything. His live-in girlfriend of several years and his nine children received nothing. The legal battle got ugly with his girlfriend, daughter and son all filing lawsuits. Until you are legally divorced, you are still married, as far as your estate is concerned. Update your will, your financial and healthcare power of attorney and check your beneficiary designations. Don’t wait.

When actor Heath Ledger died, his will left everything to his parents and three sisters. His daughter and her mother were left with nothing. His family later gave all the money from the estate to his daughter. Use life-changing events, like the birth of a child, as reasons to review and update your estate planning documents.

Olympic sprinter Florence Griffith-Joyner died at age 38. It was believed that she had a will.  However, no one could find it. The legal battles between her husband and her mother went on for years. Most estate planning attorneys will keep a copy of your will and other estate planning documents on file. You should also keep the original documents in a safe, readily-accessible place and tell at least two people where they are located.

When acting legend Marlon Brando died, he left most of his approximately $26 million estate to his producer and other associates. A long-time housekeeper said that Brando had promised to give her his home when he died, but he never put it in writing. She sued the estate for the value of the home plus $2 million in damages. The case settled three years later for $125,000. If you are making promises to people that you wish to take care of, put those in writing.

Pop icon Michael Jackson’s death set off a long series of legal battles over his estimated $500 million estate. He had created a revocable living trust designed to pass his wealth to his children and his mother when he passed.  However, he never funded the trust. His entire estate had been left outside of the trust. That meant that it had to go through the probate process, while his children and mother lived on an $8 million annual allowance managed by the estate’s executor and a judge. There were also many legal challenges from creditors and family members.

Estates of celebrities and “regular” people can avoid all of these mistakes, by creating and updating their estate plans with the help of an experienced estate planning attorney.

 

Judge Rules that Glen Campbell’s Kids Can Contest his Will

When Glen Campbell passed away, he intentionally left three of his children from his second marriage out of his wills. These children have just won a court decision allowing them to proceed with a challenge, reports Wealth Management.com in the article “Glen Campbell’s Kids Come After the Rhinestone Cowboy’s Estate.”

The two wills at the heart of the case are from 2001 and 2006. The 2006 will names Campbell’s fourth wife Kimberly, who is the executor of the estate, and five of Campbell’s other children as his beneficiaries. Campbell went public with his Alzheimer’s diagnosis in 2011, but it’s not known when he began to decline. The legal burden facing his children: prove that he lacked the needed capacity to execute his wills.  If the 2006 will is deemed invalid because of lack of capacity or undue influence, the immediately preceding will is resurrected.

It was also reported that one of his daughters, Debbie Campbell-Cloyd, has filed for a complete accounting of all payments made by the estate, as well as payments to and from a previously undisclosed bank account. She alleges that royalties that should have been deposited into an account controlled by Campbell’s estate, were instead deposited into an account controlled by Campbell’s widow.

Children from multiple marriages make estates complicated, even if you aren’t a legendary country music singer. For blended families, estate planning that includes family meetings can sometimes help prevent misunderstandings and estate battles.

Prepare to Live a Long Life and Enjoy Every Bit of It!

We are all living longer-which is terrific news. Longevity has some huge advantages--a second career, seeing grandchildren grow up, opportunities to enjoy precious time with family and friends.  A non-smoking 65-year-old woman has a 50% chance of living until she’s 88—and her male counterpart could easily live to 85. As outlined in a recent Kiplinger article, “Are You Ready for Longevity? 4 Steps to Take Now,”, the longer you live, the longer you are likely to live.

However, longevity does bring some challenges which have to be addressed. Here are a few:

Have a plan for long-term care. For married couples, it’s likely that one of the two will end up in an assisted living or nursing home. It is important to consider how you’ll manage to pay for that, long before you’ll need it. If you can purchase a long-term care insurance policy, while you are still healthy enough to qualify, you won’t need to use up all the household’s money to pay for the care. Long-term care insurance usually pays for both skilled nursing home care and in-home care.  These policies can be just as important for single individuals who will need to hire caregivers, especially if staying at home is important to you.

Traditional long-term care policies can be expensive. However, insurance companies have created hybrid policies that combine long-term care benefits with life insurance or other investment products. These products take away the worry that you will pay premiums and get nothing back.

It is important to consider housing and care options before you are in a crisis. There are experienced professionals who can help with downsizing, home modification, care and facility options and financing care.   It is important to plan ahead and know what options are available before you need them.

Plan for incapacity. You’ll need to have a medical advance directive, including a health care proxy and instruction directive, so someone can step in and make medical decisions on your behalf.

If you become incompetent and don’t have a medical advance directive in place, your family might need to go to court to get legal authority to make those decisions.

The same holds true for financial decisions. You’ll need a power of attorney, so someone else can sign on your behalf and access your accounts. This should be a trusted individual who will look out for you and your family.

Legacy Planning. Having an estate plan in place eases the burden on loved ones when you pass.  If you have no immediate family, it is especially important to appoint a funeral agent and executor to administer your estate.  Your plan should include having some accounts that are POD or Payable on Death, so funds can be accessed right away for funeral and other immediate expenses.  Your estate planning attorney can help you plan for children, grandchildren, charities you care about and even your pets.

Don’t forget tax planning. New Jersey eliminated its estate tax but an inheritance tax remains. In addition, there are many income tax ramifications of estate and long term care planning that a knowledgeable attorney can advise you on.

Multi-generational Living: estate planning and elder law impacts

A Pew Research Center analysis of census data found that in 2016, 20% of the U.S. population was living in multi-generational homes. That’s a record number and one that is expected to keep rising. In the article titled “How to Address Multigenerational Estate Planning Issues,” Financial Advisor Magazine asks what’s behind the numbers?

For some families, it’s college students moving back with mom and dad while they pay off student loans or newly married couples living with one set of parents while they save money to purchase a home of their own. New parents are recruiting their own parents to combine households, so child care and a stronger sense of family is created. In other families, elderly parents move into their children’s home when they reach a point where they cannot or should not live alone.

In many instances, families add separate living quarters to their existing homes. More and more states and municipalities are addressing zoning laws that prohibited this kind of construction in the past.

Pressures created by rising housing costs, housing shortages and demographics have all contributed to this new trend. How to navigate this kind of family “merger” requires a lot of planning, including estate planning. How will the property pass to the next generation? What about siblings who are not involved in the shared housing space? How should their portion of the inheritance be handled?

There are many ways to navigate the closer relationship with aging parents or childcare needs. Some elect to purchase a nearby condo where parents are living, so at some point the parents can move from their single-family home to an apartment. For others, the parents move to an apartment within the home, so their children and grandchildren can enjoy the larger living space. There can also be a lot of unintended consequences when it comes to long term care and government benefits impacts.

Whichever way your family chooses to live together, take the time to meet with an experienced elder law attorney who can help you work through the best way to set up the arrangement.