Estate planning for the future inheritance of your children and grandchildren should include protective measures to keep assets from disappearing or being claimed by a creditor.  A simple way to achieve inheritance protection is through a trust. A trust can pass your wealth bypassing probate. This allows specific trust provisions to ensure the money left to a beneficiary is neither squandered or through ill-advised spending or divorce action of the beneficiary.

Divorce is one of the primary obstacles to contend with when trying to minimize issues of wealth transfer and preservation. High divorce rates, especially among aging Americans, can make an inherited trust vulnerable if the property becomes commingled with the marital estate. Single and married children, as well as grandchildren of inherited wealth, should always maintain inherited assets and property as a separate entity whether as a trust or direct individual inheritance. Before any marriage, a pre-nuptial agreement should be signed to protect previously inherited wealth and the potential of future inheritance.

Whether your child or grandchild inherits an existing trust or establishes their trust after a direct bequeath, the terms of the trust can limit the potential problem of future loss of inherited monies or assets due to the possibility of lawsuits and creditor claims. A properly drafted trust can protect assets from legal action in the event your child is sued. A trust also protects the trust maker and the beneficiaries from the public process of probate. Anyone can research probate court records and determine how much your estate was worth, what you owned and how you chose to divide it.

If you believe your adult child has limited aptitude to manage money properly and might squander your grandchildren’s inheritance, then draft a will or trust that earmarks a dollar amount or percentage of the estate for those grandchildren explicitly. As an example, the will or trust can also specify that these inherited assets be allocated solely for a grandchild’s college education or wedding.

Another financial vehicle with some overspending controls is a “ stretch IRA.” This inherited individual retirement account (IRA) has a required minimum distribution (RMD) that stretches over a more extended period based on the inheritor’s life expectancy. A monitored minimum distribution will allow the principal to continue growing. In the case a child or grandchild is too young to manage the RMDs it may be in their best interest to name an institutional trustee to direct distributions.

Whatever your intent is for your grandchildren, be sure to include a discussion with your child, expressing your resolve for your grandchildren to inherit and clearly stating them in your will. Also, speak honestly about your fears that your child may blow through their inheritance and discuss the value of limiting annual distributions to only investment income or a percentage of the trust’s value to preserve the aggregate of assets. In the event your child, who may have an addiction problem like gambling, drugs, or overspending, may require trustee oversight to temporarily end distribution of trust or IRA monies until they demonstrate wellness. At that time, the trustee may opt to restart money distributions.   

Ultimately it is best to find a trusted estate planning attorney that is well versed in the laws of your state to help you craft a comprehensive approach to the dispersion of your estate that will protect your intentions from the mal-intent of others. Whether you need a lifetime “dynasty” trust, individual trust or direct inheritance, institutional trustee, inheritable stretch IRA, or a combination of inheritance vehicles, is all dependent on your unique financial position and personal desires for your legacy’s distribution. There is great latitude when drafting the structure for the distribution of your estate, so look to creative inspiration to open up possibilities. Contact our office today and schedule an appointment to discuss how we can help you with your planning.

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Before the rise of COVID-19, the US economy was in a cycle of more than ten years of economic growth, its citizens, even the “wealthy” ones, are worried about running out of cash and are scared to spend. Bloomberg.com is reporting many retirees, and near-retirees are sitting on their wealth in much the same way large corporations are hoarding stockpiles of cash. Even famed investor Warren Buffet and his multinational conglomerate holding company Berkshire Hathaway Inc are side-lining cash in excess of $122 billion.

Americans are experiencing a strong economy. The Gross Domestic Product (GDP) is steadily growing. There are low-interest rates, low unemployment, a stable currency, and more than $1 trillion
of available investor cash. For those retirees who are financially well off then, why is there anxiety about money and reluctance to enjoy it in retirement years? Yes, many of the wealthy are planning on leaving a legacy to their heirs, but something else is happening.

Wealth in the US is becoming more concentrated among fewer households. Consolidating wealth is like consolidating power. Ultimately there is little difference between the two. The Americans who have most benefited from this ten-year boom cycle in the American economy are averse to spending their money. They want to survive an economic downturn and still maintain their elite financial status. This conservative approach will likely guarantee them a very comfortable lifestyle even in the event of bleak financial times. Former Brookings Institution fellow Matt Fellowes states, “It’s trillions and trillions of wealth that is not benefiting anyone except asset managers.” The rich, sitting on their wealth, create stagnant money, which negatively impacts the vitality of the American economy.

The Federal Reserve provides a quarterly balance sheet of all individual and charitable monies and America’s combined net worth now stands at $109 trillion. It is a lot of money; however, it has disproportionately flowed to the wealthy. Celebrity and wealth-obsessed culture saturates Americans with images of the rich with expensive real estate, private jets and yachts, and attending posh philanthropic parties. The reality of the average millionaire in America is far more frugal than their Instagram and paparazzi driven counterparts. Retirement experts often disagree as to why these conservative millionaires are unwilling to enjoy the fruits of their lifelong labors.

Being cautious with money is inherently prudent, particularly at the height of an economic boom cycle. Even without market uncertainty, a key characteristic of modern capitalist economies is a boom-bust cycle. A process of economic expansion (boom) will be followed by economic contraction (bust), and the cycle occurs repeatedly.

www.federalreserve.gov

All Americans, even the wealthy ones, are experiencing uncertainty about their economic future. Will their rate of return on investments be able to address increasing medical costs? Will they have enough streams of income to support themselves when taking into account their longevity risk? Collectively, Americans are not saving enough to accomplish a successful retirement. However, individually, wealthy Americans are fearful of losing their financial position in a severe market downturn. These wealthy Americans have already lived through harsh economic times, particularly the Great Recession. This economic bust was triggered by the subprime mortgage crisis and the collapse of the US housing market bubble. Market bubbles present themselves from time to time, and if the free market successfully deleverages them, there is little economic incident. But when the bottom drops out, bleak economic times follow.

Once you achieve wealth, it becomes an inherent part of your identity, and consequently spending your wealth is like spending your own identity’s capital. Additionally, as you age, the tendency is to become more risk-averse, according to the National Institutes of Health ( NIH ). With the bulk of the wealth of America in older households than in previous decades, it is no surprise that risk-averse strategies are in play. A lifetime spent acquiring wealth and watching accounts and investments mature then morphs into retirement years of asset spending and the dilution of wealth. The majority of wealthy Americans are not keen to adapt to the life cycle of asset accumulation followed by retirement spending. Their preference is to live frugally, retaining as many assets as possible to be able to ride out an economic downturn.

Planning for retirement can be stressful. Having a proper estate plan in place can eliminate much of the stress, especially when it comes to transferring assets to children who may not be ready to handle large sums of money. We can help. Give us a call to discuss your wishes , and how to design a plan that will help carry those wishes out.

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In this Covid-19 epidemic, a wrenching question especially demands an answer: if you or someone you love is taken down into life-threatening illness, how far would you want extreme life-prolonging measures to be tried?

For us who are particularly vulnerable – seniors, those with compromised immune systems, those already struggling with medical conditions – this question is particularly stark. Many people are familiar with DNR orders, “do not resuscitate.” These are intended for cardiac arrest. The threats posed by the current virus, though, more often implicate breathing problems. The longer time spent on a ventilator, the greater the chances of permanent damage, disability or death.

Many are dying alone, without their loved ones present. The New York Times recently reported on a particularly heartbreaking case.

Most people over sixty with a serious illness say they would prefer to be kept in comfort at the end, even if that care shortens life. But where to draw the line? How much time alive would you be willing to sacrifice, to decline aggressive treatment and possibly die sooner? The need to provide at least some answers is important not just for you. Clinicians and caregivers need guidance
, too.

A 2017 study showed that approximately two-thirds of Americans had neglected to provide prior guidance by creating advance health-care directives like health care powers of attorney and living wills. Back then, most of us could not have imagined being in an epidemic like the one now.

Even if you or your loved ones have already done the responsible thing and created advance directives, now is the time to review those documents to make sure they reflect what you want under current conditions.

Health-care providers are ethically obligated to do everything feasible to keep us alive. If we have no advance directives in place, the system will take over – and families can end up in long-lasting anguish for having had to be the ones to make the final call. Don’t let that happen. Think through the question for yourself and talk with a person whom you trust to make that decision for you if need be. Call us for your advance health-care directives – and may you and yours not need them for a good long while.

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There is a growing need for affordable senior housing that is only starting to be addressed by businesses that build for this market. If you have a lot of money you typically have a lot of options. At the other end of the spectrum if you have nothing you can qualify for government assistance though these programs, but most often include wait times, years of wait times, due to lack of available housing. The truth is many seniors, nearly 40%, have less than $50,000 in savings, not including the value of their homes, according to a study by the Joint Center for Housing Studies and Harvard University. That doesn’t make them poor but it doesn’t make them rich either. Middle income seniors are stuck in the middle and the statistics are indicative of a looming senior housing crisis. By 2035 one in three households will be headed by someone aged sixty-five or more years and the population aged eighty or more years will have doubled to 24 million.

The truth is that thoughtfully designed housing for senior adults is not being created on a scale that reflects the growing need and the need is palpable. Many aging adults don’t even want to project that one day they will no longer be able to live in their current home. When asked about their forward living plans it usually consists of some variant of “the plan is to die in my home.” Sadly, it is impossible to script your passing and while you might hope it happens gently in your home it is more likely that an adverse event, such as a fall, will change everything and you will require some level of care. The Social Security Administration estimates that if you turn 65 today, you will live to 84.3 if you are a man, and to 86.6 for women. Added SSA: “And those are just averages. About one out of every four 65-year-olds today will live past age 90, and one out of ten will live past age 95.” ( https://www.thestreet.com/story/13640644/1/inside-the-nation-s-looming-senior-housing-crisis.html ) Those numbers of longevity represent staggering costs when you consider the likelihood that those oldest years will require the most significant care.

That “significant care” costs serious money. According to “A Place for Mom,” the average national cost for a private assisted living facility is almost $4,000 per month. If you want private nursing home care that cost increases to more than $6,000 per month, depending on where you live. If you compare these costs with the fact that nearly 50% of adults aged sixty-five or older have just enough income to afford basic expenses you can intuit it is a recipe for disaster. The only thing left is to spend assets pay for care. That is not a good option for several reasons. First, you will likely run out of assets quickly due to the current costs of care. Second, you would be unable to leave a legacy to children or continue to provide for a spouse after you are gone.

That is why the understanding of aging is facing a paradigm shift – many companies that design and build for retirement communities want the word “senior” dropped altogether. Innovative technology companies and non-profits are sounding the alarm and changing the discussion from challenge to opportunity, from health care to health, wellness, and lifestyle, and bringing entrepreneurial ideas to create a positive change. It is a step in the right direction but it does not change the current reality – there is a shortage of affordable senior housing and there is a continuing increase in need for senior residency.

What is your housing reality and future? Do you have a plan in place to handle the changes that most likely will affect you and your living environment? It is important to have this discussion with your family, and with a  professional elder law attorney.  Proactive planning is in your best interest.  Contact our office  today and schedule an appointment to discuss how we can help you with your planning.

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You should check your estate planning documents every so often, to make sure they’re still good, especially with big life changes like births, marriages, divorces, and moving to another state. Children grow up, marriages dissolve, property gets sold, residences change. That’s why we recommend that you consult us for an estate-plan check-up every five years or so.

If you retire to another state, your will would probably be good, but powers of attorney vary from state to state. Documents from the “old” state might not work in the “new” one, and your documents would not be there for you when you need them.

Suppose you willed your property to your spouse and appointed that person to be your power of attorney. You got divorced, but you never got around to changing your plan. The law would usually step in to prevent your ex-spouse from inheriting, but you might be stuck with that person holding power of attorney over your property and health care.

Maybe you named your ex-spouse’s father as your executor and agent. Now he can’t stand you and blames you for the break-up.

Perhaps you willed your property to your two children equally – but now one child is addicted to opioids. Your will did not restrict how money should be spent. If your addicted child inherits a lot of money in one chunk, that money could vanish to drugs and your child’s survival might be at risk.

Or, you deeded your house to one child and made a will leaving money to your other child. Then you forgot about the deed and made another will, years later. That will split everything equally. The law would invalidate the second will as to the house, because deeds supplant wills. Consequently, one child might end up receiving more value than the other. That unfairness might sour the children against each other forever.

If you got divorced, sold property, moved to another state, or did your documents more than five years ago, come see us for an estate plan check-up.

When it comes to estate planning, “once is not done.”

The post Is Your Current Estate Plan Up to Date? appeared first on Faloni Law Group.

If you retire to another state, your will would probably be good, but powers of attorney vary from state to state. Documents from the “old” state might not work in the “new” one, and your documents would not be there for you when you need them.

Suppose you willed your property to your spouse and appointed that person to be your power of attorney. You got divorced, but you never got around to changing your plan. The law would usually step in to prevent your ex-spouse from inheriting, but you might be stuck with that person holding power of attorney over your property and health care.

Maybe you named your ex-spouse’s father as your executor and agent. Now he can’t stand you and blames you for the break-up.

Perhaps you willed your property to your two children equally – but now one child is addicted to opioids. Your will did not restrict how money should be spent. If your addicted child inherits a lot of money in one chunk, that money could vanish to drugs and your child’s survival might be at risk.

Or, you deeded your house to one child and made a will leaving money to your other child. Then you forgot about the deed and made another will, years later. That will split everything equally. The law would invalidate the second will as to the house, because deeds supplant wills. Consequently, one child might end up receiving more value than the other. That unfairness might sour the children against each other forever.

If you got divorced, sold property, moved to another state, or did your documents more than five years ago, come see us for an estate plan check-up.

When it comes to estate planning, “once is not done.”

The post Is Your Current Estate Plan Up-To-Date? appeared first on Faloni Law Group.

Hospice care can be very difficult for families to come to terms with, but can be a beneficial care option for those caring for a terminally ill loved one. The purpose of hospice is to provide comfort and quality of life for a terminally ill person. Hospice can allow the patient to remain at home and can provide ways to alleviate pain and make the person more comfortable. It is a great option for those who are seriously ill, who have exhausted their treatment possibilities, or who do not wish to continue treatment for a terminal illness.

In order to be placed under hospice, normally a patient must receive a prognosis from two doctors that the patient has six months or less to live. Since there is no way to be sure how long a patient will live, the patient must continue to qualify every 60 to 90 days.

A hospice team will work with other healthcare professionals, including the doctors a patient already has, to coordinate and provide treatment and care. Support for families and caregivers is another benefit of hospice care. The team can help train caregivers to provide care to a loved one. Medical equipment and medications related to the illness will be provided for those in hospice.

The hospice team comes to the patient wherever they may live. Hospice provides different levels of care including home care, but can also extend to in-patient care in a hospital’s hospice unit.

Respite care is a benefit of hospice for the family and caregiver. Caregivers are provided through the hospice program so that caregivers can go on vacation, rest, or take care of other matters. Hospice care addresses not only the physical needs of the patient, but also the spiritual, emotional, and mental well-being of the patient receiving hospice care.  Hospice offers bereavement follow-up and support for families as well.

Terminally ill patients do not normally have to pay for hospice care. Most hospice patients have their care paid for through Medicare and the Medicare Hospice Benefit. Veterans are eligible for hospice benefits provided through the Veteran’s Health Administration, and these benefits are also similar to the Medicare Hospice Benefit. Health insurance may cover some hospice benefits. This can vary among insurers, so it is important to check qualifications and coverage. If the patient has no other way to pay for hospice, it may be provided on a sliding scale or free of charge.

Hospice care is a beneficial option for helping families care for a terminally ill loved one. The loved one does not have to be moved unless their medical condition requires constant care. They are able to stay in their homes and receive care to keep them comfortable and their pain managed. It is nearly impossible for a terminally ill patient to be turned down for hospice care if they have six months or less to live. Payment options are always available and patients are rarely turned away.

If you have any questions about something you have read or would like additional information, please feel free to  contact  us.

The post Understanding Hospice Care appeared first on Faloni Law Group.

Hospice care can be very difficult for families to come to terms with, but can be a beneficial care option for those caring for a terminally ill loved one. The purpose of hospice is to provide comfort and quality of life for a terminally ill person. Hospice can allow the patient to remain at home and can provide ways to alleviate pain and make the person more comfortable. It is a great option for those who are seriously ill, who have exhausted their treatment possibilities, or who do not wish to continue treatment for a terminal illness.

In order to be placed under hospice, normally a patient must receive a prognosis from two doctors that the patient has six months or less to live. Since there is no way to be sure how long a patient will live, the patient must continue to qualify every 60 to 90 days.

A hospice team will work with other healthcare professionals, including the doctors a patient already has, to coordinate and provide treatment and care. Support for families and caregivers is another benefit of hospice care. The team can help train caregivers to provide care to a loved one. Medical equipment and medications related to the illness will be provided for those in hospice.

The hospice team comes to the patient wherever they may live. Hospice provides different levels of care including home care, but can also extend to in-patient care in a hospital’s hospice unit.

Respite care is a benefit of hospice for the family and caregiver. Caregivers are provided through the hospice program so that caregivers can go on vacation, rest, or take care of other matters. Hospice care addresses not only the physical needs of the patient, but also the spiritual, emotional, and mental well-being of the patient receiving hospice care.  Hospice offers bereavement follow-up and support for families as well.

Terminally ill patients do not normally have to pay for hospice care. Most hospice patients have their care paid for through Medicare and the Medicare Hospice Benefit. Veterans are eligible for hospice benefits provided through the Veteran’s Health Administration, and these benefits are also similar to the Medicare Hospice Benefit. Health insurance may cover some hospice benefits. This can vary among insurers, so it is important to check qualifications and coverage. If the patient has no other way to pay for hospice, it may be provided on a sliding scale or free of charge.

Hospice care is a beneficial option for helping families care for a terminally ill loved one. The loved one does not have to be moved unless their medical condition requires constant care. They are able to stay in their homes and receive care to keep them comfortable and their pain managed. It is nearly impossible for a terminally ill patient to be turned down for hospice care if they have six months or less to live. Payment options are always available and patients are rarely turned away.

If you have any questions about something you have read or would like additional information, please feel free to contact us.

The post Important Thing You Should Know About Hospice Care appeared first on Faloni Law Group.

It is essential to bring up a parent’s aging expectations and set goals together even though initial discussions may be uncomfortable. Often, an exploration into a parent’s future thoughts about health, finances, and residential plans can make the difference between reacting to a crisis or following an  established plan
 that can bring both the parent and their children peace of mind. The sooner an identified caregiver begins a dialogue, the better the outcome for all involved.

It is common for an older parent to try and shield loved ones from some of their harsh realities – whether financial or health-related – because they are reluctant to accept help, embarrassed by their finances and don’t want to be a burden, or are hiding some critical health information. Even in the best of health circumstances an older parent’s ability to remain independent and manage their life can be challenging. Family caregivers are essential to the experience of aging in America and while individual care needs vary there are some general topics to address when helping an aging parent.

Safety issues are paramount. If there are assets and retirement plans in place, do not allow an aging parent to become financially vulnerable. In the most  recent report  released by the Department of Justice (DOJ) more than 2 million elderly Americans were defrauded out of more than 750 million dollars in one year. Get educated and learn systems that can protect parental assets. Physical safety must also be addressed to prevent accidental falls in the home. Technology can be adapted into the home to have environment lighting controls and other comforts that can keep a parent safer. Driving is also a topic that needs to be discussed. At what point is it best to remove a parent from behind the wheel to avoid unintended accidents that can be costly both financially and health-wise.

Activities of Daily Living (ADLs) and Instrumental Activities of Daily Living (IADLs) are the basic foundation of day to day functioning. IADLs include chores such as managing finances, transportation, home maintenance, shopping, and meal preparation. ADLs include eating, bathing, getting dressed, toileting, transferring and continence. The level of need in the described activities generally determines the sorts of care and housing arrangements a parent, caregiver, and family must consider.

Health and medical issues are pervasive as a parent ages. Many elder parents suffer from chronic conditions requiring medications, management, and monitoring. A caregiver may notice new health concerns that will need attention and routine visits to physicians to diagnose any new medical conditions. Dementia and other serious chronic illnesses can cause a parent to lose their ability to manage their health decisions or oversee their medical care. A medical power of attorney becomes necessary in the event a parent is no longer able to make sound decisions. All of these legal and financial issues that address health directives must be documented with the necessary legal paperwork. Legal designations such as a will, trust, and power of attorney are also essential to have in place. When the time becomes necessary, this documentation affords a designated power of attorney, and medical power of attorney the right to act on a parent’s behalf without the time-consuming need to address the courts for permission. Very often a caregiver is assigned these legal designations. Planning for a parent’s inevitable future decline, emergencies, and end of life care goes a long way to helping reduce stress, hassles and sometimes expense.

Housing issues are at the forefront of successful aging. Is a parent able to age in place, particularly with the aid of technologies that simplify their day to day living? If they are not, what sort of environment is best suited to their current needs? Do they need to move in with a family member or might they require assisted living? If so, is that financially viable? How does housing address the parent’s quality of life? Beyond the basic needs, a caregiver and family should want a parent to thrive, not just survive. It is essential to learn what matters most to the parent and what they would be willing to compromise on if the need arises. A parent’s desire for social connections, autonomy, dignity, and purpose must be considered to ensure a positive quality of life.

Finally, the management of family dynamics and relationships often brings many challenges and painful emotions to process. A caregiver deals with relationship stresses that can include physical exhaustion, financial depletion, and emotional burnout. A caregiver is only as useful to a parent as they are to themselves. While setting boundaries can be difficult, establishing frameworks that designate acceptable norms are healthy for all involved. A caregiver who puts their well being in jeopardy will also affect their ability to care for a parent. Some strategies for wellness in a caregiver’s life include: joining a support group, asking family members for help, learning to say no when needs outside established boundaries arise, and allotting time for themselves.

There is much to consider. Planning can become complicated as human emotions and relationships are involved when setting forth caregiving expectations and parent aging plans. We help families navigate the aging process and plan for how to find and access appropriate care.  Contact our office  today and schedule an appointment to discuss how we can help you with your planning.

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