Food for Thought Archive

Suggestions for Senior Dilemmas

3/5/2020

Here's a scenario to consider: Your dyed-in-the-wool New England Yankee parent or grandparent is still living alone in the old Cape or Colonial they've been in since the Eisenhower administration, but they're no longer able to safely navigate the steep staircase, to make healthy meals for themselves (or to turn off the stove), to reliably monitor their medications, and perhaps also to take care of their personal needs. The trouble is, they don't see it that way and it would take a SWAT team to overcome their resistance to any changes you suggest.

Unfortunately, this isn't a horror movie plot, but a very common occurrence these days. Modern medical science has people often outliving their capabilities, and quite understandably they don't want to give up their independence. So, what to do? There's no one answer and sometimes no good answer at all. Still, we have to try to help and here are a few suggestions that may be worth the attempt.

For one thing, you may need someone else to intercede for you. You may be in your 50's or 60's, but you're still the child or grandchild they raised, and they don't think you know any more than you did in elementary school. So, enlist a trusted friend if they have one, someone who can talk to them as a peer and may have already faced and dealt successfully with these issues. Maybe the friend can share his or her story and get your senior partner to follow in those footsteps.

Or, maybe a long-time primary care physician can approach the situation from a healthcare perspective and, if all else fails, lay out the dire consequences of a bad fall, poor dietary habits or a medication failure. Any of those could take away remaining control or independence in a matter of moments, and the physician probably has the real-life stories to back up what she's saying.

Another possibility is one I'll refer to as the "baby step" approach. No one likes to think of a drastic change in their familiar routine, so don't approach it that way. Perhaps your family member can remain in their home for now with some outside services to assist with the necessary functions. I've written about available providers before and there's undoubtedly more help available now than there was then. One such option might be a professional "care manager" through an organization like the Aging Life Care Association.

But if staying at home just isn't an option any longer, no matter what services may be available, then another baby step may be to arrange a short trial visit to a prospective facility, with no strings attached and a promise to come back home if it doesn't work out. Having a friend there would greatly improve the odds and the facility would surely want to do its best to put a good foot forward. Then, if the first weekend or week or month goes well, perhaps the ice will have been broken and the move can be confirmed.

Sometimes, of course, none of this will make a difference and the Yankee just won't budge. Those are clearly the toughest cases and it may just take more time to make the point more clearly. One thing we can all do, though, is to commit ourselves not to be that Yankee for our own families when the time comes for us to need their help. Fierce independence is an admirable trait, but we might all keep in mind what we went through with our elders and vow to leave our families with happy memories of us, not tales of the nightmares we put them through.

SECURE in the Knowledge

2/6/2020

No matter where you are this winter, you'll eventually need to know at least the high points of the new SECURE Act of 2019, much of which became effective on January 1, 2020. SECURE is another of those acronyms that Congress loves and this one stands for "Setting Every Community Up for Retirement Enhancement". It sounds like someone was determined to use that name and then worked overtime to come up with the words to make it happen.

Anyhow, while the law has 125 pages and 30 sections, some are more important to most of us than others. So here goes - and I'll get the bad news out of the way first.

Many of you probably know that if you die and have an IRA that's payable to your spouse as the beneficiary, he/she can "roll over" the account into a spousal IRA that allows the accrued income earned by the account to be taxed gradually over the spouse's remaining lifetime - rather than being taxed all at once at the death of the account owner. That's still the case - which is good, of course - but the bad news is that if there's no surviving spouse and the beneficiaries are the owner's children, for example, the deferral of income taxes now will generally last only 10 years and not be "stretched" over the entire lifetime of any of the children, as used to be the case. There are a few exceptions to the stretch-less rule, but they probably won't apply in the majority of cases. (One of the exceptions, though, is when the sole beneficiary is a person with special needs.)

How about some good news? There's long been a restriction against people over 70 1/2 making contributions to their traditional IRAs. That's gone now, so if you just can't see yourself kicking back by 70 1/2, you'll be able to keep contributing to your IRA as long as you want - like you've been able to do with Roth IRAs. I'm sure this will warm the hearts of most of the people close to that age who voted for the act - you know, Congress.

Also, if you're still punching the clock and haven't yet celebrated your 70 1/2 birthday, you won't have to take a "required minimum distribution" from your retirement account until after reaching 72. This may not be a major improvement, but it's recognition that many people are working longer - like most of the Supreme Court . . . and Congress.

For younger readers, you may know there's been a 10% penalty for most withdrawals from retirement plans prior to reaching 59 1/2. The new penalty-free exceptions are for withdrawals of up to $5,000 for the costs of childbirth or adoption, for a period of one year beginning with the date of those happy events. And if the plan participant can pay back the funds, it can also be done without penalty.

There's a waiver of the withdrawal penalty, too, for distributions of up to $100,000 to cover expenses incurred in qualified disaster areas, such as those hit by devastating forest fires, tornadoes, and hurricanes - none of which, of course, could possibly be caused by climate change.

It's also a sign of the times that there's a growing number of home health care workers - which itself is a good thing. The problem was that many of them haven't been able to contribute to retirement accounts because their compensation often wasn't considered taxable income - which kept them from meeting the compensation thresholds for plan contributions. That restriction is now gone, and their compensation will now be factored into the plan contribution calculations.

Finally - at least for purposes of this very broad brush summary - if you're either the owner or a beneficiary of a so-called "Section 529 qualified tuition program account" (I guess they couldn't come up with an acronym), you should know that it can now also be used to cover the costs of many apprenticeship programs, including the fees, books, supplies and equipment required for participation. The good news here is that maybe we'll all be able to find more plumbers and electricians in the years ahead.

Holiday Semi-Legal Offerings

12/19/2019

Sometimes what I offer you is densely legal, but this time it's less so and based more on my experience with human relations this time of year.

Specifically, I suggest you not use a holiday family gathering for one of those important "talks" about who you're going to pick as your executor or trustee, or whether you're going to leave more to the starving artist than to the hedge fund manager. While those are critical issues that do need to be broached thoroughly at some point, this isn't it. People are already stressed out enough right now; there's often not enough time or privacy to fully explore these important issues; and maybe some of the participants have even had a little too much eggnog for a cogent conversation. Believe me, I know whereof I speak. When I was at the court, our domestic dispute docket exploded this time of year, and I would get several holiday calls when the police had to intervene based on family planning discussions that turned ugly.

Instead, because these gatherings are often the ones that stick with us indefinitely, make them the kind that bring smiles to our faces, warm our cockles, and demonstrate our very best qualities - you know, generosity, thoughtfulness, forgiveness, appreciation. . . . the ones even Scrooge finally saw the light about.

Sticking with those positive sentiments, I'll also suggest that this is a great time to reconnect with folks we've drifted from or pushed away for some, often forgotten, reason. Grudges and hard feelings are unhealthy things to hold onto - like cigarettes for the soul - and this season provides the ideal time to let them go. Believe me yet again, burying an old hatchet can be the best gift you can give and you'll feel better about doing it than about anything you could buy. I wrote a couple of years ago about a father who finally made holiday peace with his long-estranged daughters, and I have personal knowledge that it's made all the difference about how they remember him. It really turned out to be the gift that's kept on giving.

So, to put a legal bow on this, I suggest you consider not dismissing that child or grandchild you never hear from, or who did some regrettable thing even they might now regret, or who never turned out the way you hoped. Instead, consider providing for them in some way that shows your concern about their past, but hope for their future - say, perhaps leaving something for them in trust that would help remedy rather than perpetuate a bad situation.

And whether you agree with me about all this or not, please have a wonderful Christmas, Hanukkah, Kwanzaa - or just holiday time - with your friends and families.

From One State to Another

11/22/2019

A recent trip got me thinking about what happens when something goes wrong in another jurisdiction. So let’s say you’re all up to date with New Hampshire powers of attorney and health care directives and then you have a problem of some kind when you’re on the road. Will those documents do their thing when a bank or doctor is looking at them in another state?

Though I admit I haven’t reviewed the statutes and cases in all the other 49, and although those documents invariably look different in every one of them, the answer is you'll likely be fine. That’s because of a provision in the Constitution about one state giving “full faith and credit” to the laws of another. That means if your New Hampshire documents have been properly executed here, they’ll probably get the credit they’re due elsewhere. How’s that for our Founders thinking ahead.

One thing that will help is to have the relevant documents with you. Even if you don’t pack hard copies in your carry-on, you might have them saved on your laptop or smart phone where you could produce them in a pinch. Of course, making sure your agents have their copies will also help if the doctor needs guidance or the banker needs something from your representatives.

Let’s flip it around now. What if you had your documents prepared before you decided on the move to New Hampshire? Will they work here or do you have to start all over again? For the same reasons I just mentioned, your powers of attorney and health care directives should be fine, as long as they’re less than 8-10 years old - those documents get stale after about that point and should be updated no matter where you've been in the meantime.

Your wills and trusts should stand up, too, and age isn’t a problem there - we’ve successfully handled many of those that were 40 or more years old. However, the issue might be terminology that differs from one state to another. For example, what if you want your property to go to your siblings, but you haven’t said what happens with the share of one who predeceases you? Does that share go to the sibling’s own children - your nieces and nephews - or does it get divided among your surviving brothers and sisters? You may have intended one result, but New Hampshire law might call for the other. The best way to sort that out would be to have the documents reviewed here to make sure things will still work out the way you planned. If not, then a modest tweak may be all that’s needed. Likewise, it might be smart to provide that the governing law will be New Hampshire's, not Connecticut's any longer, as this is where all the governing will take place from now on.

By the way, if you've relocated here from another state and left your original documents with your lawyers there, it would be smart to request that they - the documents, not the lawyers - be sent to you here. It's not unusual to find that a law firm moved or a lawyer retired, and that can make tracking down the documents more challenging.

What to Do with Those Documents

6/5/2019

This time around I'm going to assume you've fully executed all those planning documents I harp on - you have, right? - and talk instead about what to do with them now. So, let's say you've just executed your new will, even a revocable trust, and some durable powers of attorney and health care directives. First, where's the best place for the originals? Not surprisingly, my suggestion is to leave them right there where you signed them all - in your lawyer's office where they'll be placed in a secure vault or fireproof filing cabinet. That way, you'll never have to worry about which drawer you put them in at home or where the key is to your safe deposit box. And while the latter is certainly safe, the contents may not be readily accessible if you're gone and someone else is trying to get into the box. How do we know these are real problems? Because we always provide people with binders containing copies of their documents - and they frequently can't find those. And once they've left us, we occasionally need to have their boxes drilled when no one can locate their keys.

But let's say you've overcome that hurdle and the question is who to give copies of the documents to. Let's start with the easy one. If you've executed a health care directive that designates one or more agents to make health care and medical decisions for you if you can't do it yourself, then make sure those folks have copies of the document in case they need to prove their authority in an emergency. Of course, it's critical for your physicians also to have copies so they'll know who to contact (and how to do it) if that time comes. Say also that you're having surgery performed at another facility, you'll want to make sure that one receives a copy, as well, when you arrive for your pre-op visit. Finally, because we travel more than ever these days, it's a good idea to take a copy of that document with you on the road (like copies of your credit cards and passport), and I even keep a copy on my phone.

Alright, but what about the other important lifetime planning document - the durable power of attorney for legal and financial affairs? It's my humble suggestion not to turn over copies of that one until the time comes for your agent actually to use it to do your business. There are two reasons. First, it's unusual for a financial or legal emergency to arise that would require your agent to act under the same kind of circumstances as for medical purposes; and second, a copy of that document is just as powerful as the original, so handing over even a copy is tantamount to giving someone your checkbook and hoping they'll do the right thing. In all likelihood they will (or you wouldn't have named them as your agents in the first place); however, we've seen enough unfortunate situations over the years to know that financial stress can be a dangerous motivator. You know how it goes - agents get in a bind themselves; figure they'll just take a temporary loan from, say, mom's or dad's surplus funds; then they can't stop doing so or can't afford to pay back what they've borrowed. And that's just the most innocent scenario. Unfortunately, we've seen downright abuse occur more than a few times that jeopardizes the financial security of [often] a senior family member. Just be careful, that's all.

As for copies of the will and/or trust documents, that's another call you'll have to make. On the one hand, people say they want to be as transparent as possible with their family members, so there are no surprises later on and everyone knows what to expect. That's certainly a commendable viewpoint in principle, but it can lead to awkward, even negative, results in some cases - of which I'll mention a couple. What if the parents decide to name one of the children as their "go to" agent for executor and trusteeship, and that creates jealousies or hurt feelings among the others? What if mom and dad aren't treating all the children the same, perhaps because one needs more help than another, or what if one of the children isn't financially responsible and won't receive a share outright but will have that share held in trust for some additional period of time?

These may all be perfectly valid decisions based on the family dynamics, but why cause potential damage to the family relationships before the time actually comes? A carefully written letter left with those documents could convey the parents' thinking and there wouldn't be any harm done in the meantime. Also, fully laying out the plan could cause hard feelings if subsequent events mean a change in those plans needs to be made. Finally, putting all the financial resources on the table could sap the children's incentive to do their own things if they think they'll eventually be set for life no matter what they do for themselves. Don't get me wrong, I'm not suggesting that the family be kept completely in the dark about everything until you're gone. I'm only urging that thoughtful decisions be made about the communications, taking into account the potential consequences of this or that disclosure and when it's made.

And here's a novel thought if you're still wondering what to do about all this. Maybe it would diffuse problems later on if you sat down with the primary beneficiaries and discussed some of the choices before you actually make them. Then at least you may have better information to work with, you may get a better sense of what roles are most important to all the cast members, and you may be able to head off some of the problems before they rise to a troublesome level.

It's Never Too Early to Plan Ahead by Phil Runyon

4/24/2019

It's Never Too Early to Plan Ahead

It occurred to me that most of what I say in these pieces is directed toward my contemporaries rather than our children and grandchildren. The former are certainly the prime consumers of estate planning, but young people and their families are at risk if they figure they can wait another 30 years to bother with it.

For starters, whether they're single or married people, without some planning they don't have anyone who's legally in a position to help out if something befalls them unexpectedly. If they get injured while riding a mountain bike or catch mono at college, they may expect their parents (if they're single) or their young spouse (if married) to jump in and deal with the situation. The trouble is, if they're at least 18, they're adults in the eyes of the law and not even their closest family members can act for them without official papers. Those could be guardianship appointments from the probate court - a cumbersome and expensive option to be avoided - or designations as health care agents in an advance directive and as financial agents under a durable power of attorney. There was a reason their parents executed those documents and the same reason applies to the younger generation, even though the reason may be an accident rather than a stroke or dementia.

Another reason for some Gen Y or Millennial planning is that without a will, the State will decide who receives their Google stock options - and their kids - because a will is where those designations would be made. If they're single, the law says it's parents first, then siblings, but it certainly wouldn't be a live-in partner or close friend or a worthy cause they wanted to support. If they're married, the spouse would get it all if there are no children, but if children are in the mix, they would get a share of everything and then at 18 would be entitled to spend it on whatever is most important to a person that age - probably not growth-oriented mutual funds.

In order to prevent that likely spending spree, young parents should probably consider the same kind of trust their parents have. It would keep their kids from receiving anything outright at 18 and provide for the funds to be held and used for the children until, say, they get through school and have learned a little more about growth-oriented mutual funds.

Although young parents may say, "Why bother with all that planning when we can barely pay for Netflix?", they're probably worth more than they think. They may have IRA's or 401k's that they can't touch now but would be a nice nest egg for the children, and they may have group life policies provided by their employers. Even if they don't have much of that, though, they could likely qualify for low-cost term life insurance that would be payable to the family trust and provide enough for care of the kids by the designated guardian and still leave some funds for college or any other worthwhile pursuit.

So the takeaway here is that planning isn't just for coupon-clipping Baby Boomers. It's also for Gens and Mills of all designations - and whatever the next generation will be called!

Posted 04/24/2019 Estate Planning

Gist and Estate Taxes Untangled by Phil Runyon

2/28/2019

Gift and Estate Taxes Untangled

This time I want to shed some sunlight on how gift and estate taxes work. I spend a lot of time dispelling rumors about them that have persisted since Warren Buffet made his first billion, so let's try to clear up some misconceptions.

The first thing to keep in mind is that we're talking only about federal taxes here. New Hampshire has no gift or estate taxes at all, even if you really are Buffet-rich. This State gets you in other ways, particularly if you own real estate, but it leaves gift and estate taxation to the feds.

And the thing to remember about federal gift and estate taxes is that they're closely intertwined. The way it works is that each of us currently has an "exemption" of $11,400,000 for lifetime gifts and/or date-of-death-transfers that can pass totally tax-free - that number's not a typo. So a married couple actually has $22,800,000 to work with. That may be just a drop in the buffet for Warren, but it will keep most of us from having to worry much about even federal taxes.

As if that wasn't enough, there's also the annual gift tax "exclusion" that allows each of us to make a yearly gift of up to $15,000 in value to each and every other person we choose, totally without tax consequences of any kind. And if we're married, we can double up on those exclusions, even if only one of us actually makes the gift.

So let's put all this together to see how the taxes dovetail. Let's say we make a gift of $50,000 to one of our children this year. That qualifies for the $15,000 annual exclusion and because we're married, we can count $30,000 as qualifying for it. The remaining $20,000 is then deducted from our lifetime exemption of $11,400,000, so there's no tax due, but now we're all the way down to $11,380,000 to apply to other gifts during lifetime - or to use against the value of our assets at death.

Then, if we die having $1,000,000 of estate assets and having made no other lifetime gifts above the annual exclusions, our estates will use up another $1,000,000 of our exemption and there will be $10,380,000 left that can be added to the exemption amount our spouse will have available at his/her death.

One caveat, though, is that if an annual gift exceeds the exclusion amount, we do have to file a gift tax return - not because there's any tax due but because the IRS wants to keep track of the amount of lifetime exemption we've used up.

And there's still one more goody. If we contribute to our children's or grandchildren's school tuitions or uninsured medical expenses (or anyone else's, for that matter), those payments, whatever the amounts, don't even count toward our annual exclusion gifts. We just have to be sure to make the payments directly to the school or medical provider.

Oh, sure, there are a few twists and turns about what I've said - after all, the tax code makes the Manhattan phone book look like a pamphlet - but if you've hung in here this long, you've got the big picture. The main takeaway is that most of us can be as generous with our needy children and grandchildren as we can afford to be, even if that benevolence far exceeds the annual $15,000 exclusions.

posted 02/28/2019

Know Your Family Responsibilities by Phil Runyon

7/31/2018

Know Your Family Responsibilities

This time I thought you might like to know a little about what you're getting into when you sign a hospital or nursing home form to admit a parent, spouse or child to a health care facility that will likely want to be paid at some point.

Let's take the child's situation first, because that's the easiest one. If the child is a minor (under 18 years of age), you're definitely going to be held responsible for the obligations related to the child's care. With authority over the child comes responsibility for the child.

So what about your spouse's bills? Using the ancient doctrine of "necessaries", the New Hampshire Supreme Court has pretty recently confirmed that based on the marriage contract, "both husbands and wives must pay for debts for the basic necessities of the other spouse if the spouse is unable to pay her or his bills, including medical, hospital and nursing home bills." Apparently, those wedding vows about "in sickness and in health" are more than old-fashioned window dressing, at least in New Hampshire. And that's consistent with the Medicaid requirement that both spouses' assets get lumped together to determine the amount that needs to be "spent down" before either one of them can qualify for government assistance with nursing home bills.

Now don't get me wrong. I'm not advocating for what used to be called "living in sin", but there's definitely an advantage for unmarried partners when it comes to liability for medical and nursing home bills. That "unaffiliated" status, shall we say, would also keep the assets of the healthy partner from being dragged into the calculations of the nursing home partner's eligibility for Medicaid. That may not be much of a consideration for young people still in child-bearing mode, but it's often a serious issue when more senior singles are deciding whether to tie the knot. Often, too, that knot is a second one - which is why the children from a prior marriage frequently have strong views on the subject of exposing their inheritance to the nursing home expenses of a new spouse. And unfortunately, even a pre-nuptial agreement, which is a good idea for protecting the children's inheritance from the new spouse's claims, won't keep those assets from being claimed to pay his or her nursing home expenses.

OK, then what about a child's responsibility for the medical and nursing home expenses of a parent? That's called "filial responsibility" in legal jargon, and it's been a murky area in many states. Fortunately this time, in New Hampshire there's new law that eliminates that potential responsibility - but be careful. If a child misuses the parent's assets, so they're not available to pay the bills, or if the child fails to apply for Medicaid benefits once the parent runs out of money, the child can still be held responsible for negligent management of the situation.

Be careful, too, about those forms you're asked to sign when checking a parent into a care facility. They often say you're signing as the "responsible party", but what does that really mean? Are you just agreeing to be the contact person in the event of emergency, or are you committing to be responsible for payment of the bills if mom's or dad's funds run dry? It's really important to inquire about that - and then to get the clarification in writing - so you'll have something tangible to pull out when the bills start arriving with your name on them.

By the way, the new law I mentioned also relieves parents from liability for the medical bills of their adult children (18 and older), subject to the same requirements of reasonable care I described above if you're handling the finances for a son or daughter who may still be in school, for example.

The bottom line is that paying your own medical bills - even what's left after insurance does its part - is challenging enough. If we can also help with other family members' bills, that's going to be a tremendous relief to them, but having it be a voluntary decision instead of a legal obligation would make it a lot better.

A Modest Proposal by Phil Runyon

3/15/2018

A Modest Proposal

Many of you have already taken the suggestion to convey your assets to revocable trusts to help your family avoid the winter (spring, summer and fall) of discontent that is probate administration. Often the plan is to hold the nest egg in trust until you’ve shoveled your last driveway, and then to distribute it in equal shares among the kids once they’ve reached responsible ages.

The problem with this plan can be that age alone doesn’t guaranty smooth sailing for anyone. For example, what if you’ve settled on a final payout at 30, but by then a divorce or a lawsuit or bankruptcy has made it treacherous for your offspring to receive - and retain - even a morsel of the egg? Yet the trust says 30, so the estranged spouse or the plaintiff or the bankruptcy creditors want their shares. Or what if 30 just turns out to be way too early - or unnecessarily late - for your folks, no matter how you assessed the situation way back when they were 10 and 12?

Let's also say you want the trust to provide for the children's or grandchildren's tuition somewhere really expensive - that doesn't narrow it down much these days - but you don't want the trust assets to count against them in the financial aid decisions. Or perhaps one of those youngsters ends up spending every nickel he touches on harmful substances or needs disability benefits at some point - and you don't want a trust share to finance their problems or disqualify them from help they may be able to qualify for otherwise.

How about one more scenario: maybe one of the kids or grandkids doesn't really need as much as another, because his spouse has a lucrative career or inherited a lot herself - or maybe needs more, because she's committed to a wonderful non-profit that does important work but can't pay a living wage.

So, what kind of magic tweak might actually deal with nearly all these concerns? Well, suppose you substituted the word "may" for "shall" in the trust provision about distributions, and suppose you took out all the ages for mandatory equal distributions and left it totally up to a trusted person - you know, a trustee - to decide when and for what purposes distributions could be made once you're gone. Then, instead of inserting any specifics into the trust agreement itself - specifics that might have to be disclosed to someone snooping into a beneficiary's right to a quantifiable share of the assets - suppose you left some informal guidelines for the trustee about how and under what circumstances the trust funds might be used. And because those guidelines weren't included in the official document and weren't legally enforceable anyhow, they wouldn't have to be disclosed to anyone. No one's share would really be a share at all, so no third parties could get their claws into anything definite or put a meaningful value on it.

Needless to say, this approach isn't for everyone. Some people don't want others - even trusted others - making all those fundamental decisions. Some people don't even have others they trust that much. And some people just figure that their kids need to leave the nest and fend for themselves at some point - say, at 30 - no matter what happens next. So it's just a modest proposal for your consideration.

LTC and TLC Considerations by Phil Runyon

10/12/2017

LTC and TLC Considerations

It turns out that most people aren't as worried about climate change or whether Twitter will go to 280 characters as they are about spending their life savings on years of nursing home expenses. On the other hand, they're nervous about just turning over their assets to the children (for the reasons I've detailed in a prior message), in order to qualify for Medicaid if and when the time comes - but they also don't want to spend up their nest eggs on expensive long-term care insurance they may never need.

What to do then? For one thing, if a couple owns their home and only one of them needs a nursing home, they can likely keep the home, its furnishings and the family car, and none of those assets will be hit with Medicaid liens. They can also keep more than $100,000 of their nest eggs, and the spouse at home can retain all his or her income from Social Security and pensions. In other words, it may be a nor'easter, but it's not hurricane Harvey.

Still, people want to do something to protect themselves, and they're often lured to risky options that get promoted as miracle drugs. They're told they can put their assets in trusts and still have those funds available to pay their personal expenses - so, voila, they'll get the nursing home financed by Medicaid without even a crack in the egg. The trouble is, it's just not that simple, and there will likely be a battle with Medicaid over the terms of the trust or about whether Medicaid can get their benefits reimbursed from the trust funds.

The problem has always been that the other option - long-term care insurance - is almost as bad, because the premiums are high, and if you never need professional nursing care, it seems like you've cracked your egg for nothing. Now, though, even the companies that sell LTC policies have recognized the drawbacks, and they've come up with hybrid policies that guaranty the return of some or all of your premiums at death if you haven't eaten them all up in payments for nursing care. I'm not an insurance expert, but there are good ones in our own backyard and they can help you decide whether these improvements in coverage are enough to tip the scales for you. Just look into the options soon rather than later, though, because the premiums increase as you get older. What a surprise!

Much of what I write about comes from actual situations I've been witnessing, and here are a couple more. If a family member needs someone to handle his or her legal and financial business or to make health care decisions, make sure to have them execute the necessary documents before a physician has declared that the window of opportunity has closed. If a person can no longer make intelligent and knowledgeable decisions, then they can't sign legal documents, and the only recourse is guardianship - an expensive and divisive process. The same goes for will or trust revisions, as I've had several family members recently say that "mom would never have wanted those [old] arrangements any longer," but she never got around to changing them.

Finally, and here's the TLC part, one of the greatest gifts you can give your family is not to leave them with a real mess once you're gone. I'm not talking now about the legal documents, because you may have been scrupulous to keep those in order. I'm referring to what, in fact, you've left behind, where to find it all, and what to do with it once the family discovers your secret hiding places. You may have a shoe box full of krugerrands or all the vintage baseball cards your mom never threw out, but where are they and what are your thoughts about what to do with them? We've even had to re-open estates when unknown assets surfaced years later in the back of a desk drawer.

Likewise, does anyone in the next generation have any idea where you came from and what you did before they came along? And do they know who your college roommate, second cousin or Army buddy was and how to contact them once you're gone? This isn't the kind of information to fill up the documents with (even though we don't actually get paid by the word), but that doesn't mean it's not just as important. If you need prompting about these and other topics you might cover, please let us know and we'll forward a form that could help.

Posted 10/12/2017 - Misc.

<<Previous

Suggestions for Senior Dilemmas

SECURE in the Knowledge

Holiday Semi-Legal Offerings

From One State to Another

What to Do with Those Documents

It's Never Too Early to Plan Ahead by Phil Runyon

It's Never Too Early to Plan Ahead

Gist and Estate Taxes Untangled by Phil Runyon

Gift and Estate Taxes Untangled

Know Your Family Responsibilities by Phil Runyon

Know Your Family Responsibilities

A Modest Proposal by Phil Runyon

A Modest Proposal

LTC and TLC Considerations by Phil Runyon

LTC and TLC Considerations

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It's Never Too Early to Plan Ahead

Gift and Estate Taxes Untangled

Know Your Family Responsibilities

A Modest Proposal

LTC and TLC Considerations

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Categories

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