Estate Tax: One Less Thing to Worry About

When I started practicing in 1997, the estate tax exemption was $600,000 and the top estate tax rate was a whopping 55%. This meant that there was a considerable estate tax to pay if you died with an estate larger than $600,000. That sounds like a lot, but remember that the value of your estate includes real estate and life insurance proceeds. So it was relatively common for estates to trigger the tax back then, which prompted some fancy footwork with my clients’ estate planning prior to death in order to mitigate the tax bite.

Well, times have changed.

The federal estate tax exemption is now a jaw-dropping $11.4 million and the top tax rate is down to 40%! And even if you are in the tiny percentage of the U.S. population that actually exceeds that figure, they only tax the dollars above that $11.4 million threshold.

Additionally, if you are a married couple you can take advantage of an estate tax concept called “portability”, which allows your surviving spouse to use any unused portion of your exemption. For example, if a husband dies with a $3 million estate, then he did not use $8.4 million of his exemption. That unused exemption can be shifted over to his spouse, and now she can pass away with an estate as large as $19.8 million with no estate tax liability. Put another way, a married couple essentially enjoys a $22.8 million estate tax exemption!

Now, of course, Connecticut has its own state estate tax. The Connecticut exemption isn’t quite as generous as the federal exemption, but it still ain’t bad. The exemption is $3.6 million this year, $5.1 million in 2020, $7.1 million in 2021, $9.1 million in 2022, and then it catches up with the federal exemption in 2023.

All of this means that virtually none of my clients are doing estate tax planning anymore. Instead, they’re focused mostly on minimizing probate exposure and generally making sure things go smoothly for their loved ones if they pass away.

There are plenty of things to fret over these days, but having your estate decimated by a huge estate tax is, thankfully, no longer one of them.

DISCLAIMER: This blog does not offer legal advice, nor does it create an attorney-client relationship.  If you need legal advice, consult with a lawyer instead of a blog.

Estate Planning: A Tale of Two Celebrities

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Prince, the iconic American musical artist, died in 2016 and inexplicably left no last will & testament. This is despite having an enormous estate which is reportedly in the neighborhood of $300 million. Suffice it to say an epic legal/probate mess quickly ensued and Prince’s estate will most likely not be wrapped up anytime soon. Click here for an online article from Money for all of the gory probate details.

Another celebrity from my boyhood days in the 1980’s, Luke Perry, died unexpectedly from a stroke on March 4th. Despite his relatively young age of 52, it looks like he actually had a solid estate plan in place. Not only will this make it more likely that his estate (estimated at around $10 million) will be distributed and wound up in an orderly manner, but his advance medical directives presumably made the difficult situation at the hospital go much smoother than it may have otherwise. Click here for an online article from Forbes for the details.

Well, reading about such famous people from my childhood passing away makes me feel old. On the upside, this comparison of how two well-known celebrities planned ahead (or didn’t) provides us with a good illustration of why estate planning is so important, whether you’re famous or not.

3 Reasons to Get a Will if You Have Minor Children

If you have young kids, it’s possible that you don’t have a huge estate yet, so there may be no sense of urgency to sign a last will & testament. Why do any estate planning if there’s no estate to plan for, right?

Well, there are at least three big reasons to get a last will & testament in place.

The first reason, which most parents are at least vaguely aware of, is to appoint guardians. It’s not fun to think about, but if you suddenly disappear and you have a minor child then you will need someone to take over to make personal, medical and educational decisions for your child. Your appointment of guardian is made in your will. If there is no will, then it’s up the court to appoint someone as guardian. In some families, the choice is relatively obvious. But in many families, it’s not. And in some families it’s clear that World War III is going to break out over who will become guardian if there are no legal instructions in place. Don’t leave this potential landmine behind for your child and family. They will be going through enough turmoil as it is.

Secondly, you will probably want someone to manage your child’s inheritance for her if she is over the age of majority but still relatively young when you pass away. For most clients, the age range for this is 18 to 25. In other words, a child over the age of 18 (in Connecticut) is legally competent to manage her own inheritance, but she may not be actually competent to do so if she is under 25. Most folks under 25 don’t have a lot of investment experience and could potentially be easy prey to scam artists. If you’re shrugging this off because you don’t think your estate is very big then think again, particularly if you have life insurance. It seems like nearly all of my clients end up underestimating the size of their estate by a good amount.

Third, and perhaps most importantly, you’ll simply feel like a responsible and diligent parent. I’m certainly not trying to lay a guilt-trip on anyone who hasn’t attended to this yet. As a father of three young boys myself, I know first-hand how crazy the schedule can be with young kids. But yearning for some peace-of-mind seems to be what drives most of my clients with minor kids to come in and get their wills done.

DISCLAIMER: This blog does not offer legal advice, nor does it create an attorney-client relationship.  If you need legal advice, consult with a lawyer instead of a blog.

"Dignity of Life" Seminar on April 3rd

Attorney Keenan will participate in a panel discussion at St. Paul’s Church in Glastonbury, CT on planning for the end of life. Attorney Keenan will discuss essential estate planning steps. The discussion is presented by the Catholic Cemeteries Association of the Archdiocese of Hartford, Inc. Call 203-507-6952 for details and to register.

There will be two presentations at 2pm and 6pm. It should last about one hour. Light refreshments will be served.

"Digital Assets" and Estate Planning

For most of us, both financial and social online accounts have played a rather significant role in our day-to-day lives for many years. However, it’s rare that clients consider them when designing their estate plan. Leaving some detailed information and directions for your Executor regarding your “digital assets” should be an agenda item for your estate planning.

Consider maintaining a list (either paper or a computer spreadsheet) which includes all of your usernames and passwords for your online accounts. This would include email (including any encryption information), bank and brokerage accounts, retirement accounts, photograph/video/data storage sites (e.g. Google Drive, Microsoft OneDrive), social networking sites (e.g. Facebook, Instagram, Twitter), business-oriented social media sites (LikedIn), blogs, your own personal website or business website, streaming services (e.g. Netflix, Amazon Prime, ESPN+), online data backup services (Carbonite), online document & spreadsheet processing accounts (Google Docs), tax preparation accounts (Turbo Tax), credit card accounts and accounts for paying your household utilities.

Some of these accounts will help your Executor figure out where your assets are and what outstanding bills need to be paid. There may also be some automatic payments scheduled from online bank accounts that will need to be shut off. You could also leave instructions about which social media sites to shut down and whether you want one or more of these sites to share information with your online social community about your demise. Some of these sites (a personal blog or an online photography account, in particular) may contain information that you want your Executor to download and pass on to children or grandchildren for sentimental reasons.

You should also put together a list of all your devices, such as your desktop computers, laptop computers, tablets and smart phones. Those devices may hold additional data on their hard drives (information that you do not keep online or in “the cloud”) that could further help your Executor wind up your financial affairs.

Keeping these lists updated is important since some of this information, particularly passwords, change relatively frequently. Perhaps you could make updating these lists part of your annual routine, maybe at the same time that you do your tax reporting each year.

I can tell you from 21+ years of probate experience that an Executor’s job is not easy. That’s probably the understatement of the day. But easy access to comprehensive information about your digital assets will make the probate process, as well as addressing all of the non-probate details, much easier.

DISCLAIMER: This blog does not offer legal advice, nor does it create an attorney-client relationship.  If you need legal advice, consult with a lawyer instead of a blog.

A New "Asset Test" for the Medicare Savings Program in Connecticut?

Governor Ned Lamont is taking aim at Connecticut’s sizable budget deficit. Unfortunately, he has proposed an asset test for the Medicare Savings Program (MSP) which currently only has an income test.

The proposal calls for an asset limit of $7,560 for singles and $11,340 for couples. The State would count assets like cash you have in a checking, savings or investment account, as well as stocks and bonds. I haven’t heard if assets that are considered non-countable under the Medicaid program (e.g. term life insurance, irrevocable funeral contracts) would also be non-countable for MSP. The asset test will be effective July 1, 2020.

This is not great news for some of my elderly and disabled clients. Stay tuned.

DISCLAIMER: This blog does not offer legal advice, nor does it create an attorney-client relationship.  If you need legal advice, consult with a lawyer instead of a blog.

Guest Author: Jane Duncan

June Duncan is the author of the upcoming book, The Complete Guide to Caregiving: A Daily Companion for New Senior Caregivers. I am anxiously awaiting the book's release in the Winter of 2018. June has generously allowed me to share an article she recently wrote which includes some of the information from her upcoming book, which covers a wide variety of caregiving-related topics.

Enjoy!

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Above photo By: Pixabay

Does Your Loved One Need Live-In Help?

 As the loved one in your life ages, it’s inevitable their physical and mental health needs will change. It’s normal to see diminished hearing/eyesight, lessened mobility/balance, and a cognitive decline. At first, it was easy for you to be there to offer assistance, like driving them to the grocery store once a week or stopping in periodically to deliver med refills or sort through the mail. However, as their health changes, your caregiving responsibilities increase. You can’t be there for them 24/7, so it might be necessary to consider the possibility of additional help, possibly live-in help. Consider the following signs that it might be time to consider taking this next step:

Broaching the Subject

Before you take the next step, it’s important to sit down and have a serious conversation with your loved one about what you’re considering. Once the word “help” is thrown into the mix, there will be questions, so come prepared with research. There are different types of home health care services, so becoming knowledgeable of the various options will benefit you too. Perhaps your loved one needs help with transportation, basic household tasks, or desires a companion to combat loneliness. Depending on the stage your loved one is in, the degree of help may intensify to the point where live-in help is necessary to provide more careful monitoring and ensure they’re remaining safe and healthy.

When you first bring up the possibility of hiring help, ease into it slowly, but back off if you’re met with resistance. It may take several conversations before you’re able to explicitly suggest live-in help, so be patient. Follow their cues, letting them guide the conversation. You might find that they are open to help, while others are a little wary or downright turned off by the idea. Consider having someone else talk about it with them, like a doctor, close friend or even another family member.

Signs It’s Time to Bring in Help

Increased Difficulty

One of the biggest signs that it’s time to call in reinforcements is when your loved one starts having difficulty with personal care, mobility and medications. Hygiene and cleanliness are essential, but proper bathing and grooming can be difficult due to decreased mobility or even forgetfulness. Mobility and balance also affect the ability to complete daily tasks like cooking, cleaning, using the bathroom or getting in and out of bed/chairs/cars. As for medication, even the slightest mix-up can be fatal due to an interaction or unintentional overdose, and a home health aide can help keep your loved one on track by administering meds.

Declining Health

Look for signs of diminished health such as sudden weight loss/gain, forgetfulness, or bruises, which could be a sign of a fall. It’s possible certain tasks have become to difficult. Your loved one may struggle with preparing meals, driving, washing clothes, or taking out the trash. Even the easiest tasks such as tying shoes, getting the mail, or opening kitchen cabinets can become troublesome due to frailty and loss of energy, all of which can lead to an increased risk of injury due to falls. Once physical signs start to show, this is a big indicator that now might be time to bring in someone to offer around-the-clock assistance.

Loss of Interest

Your loved one used to cringe at the thought of ever missing their weekly yoga or art class, and when you stopped to check in you could almost always be sure that they were knitting yet another blanket or outside working on another carpentry project. However, you may have recently noticed that they have lost interest in hobbies and activities they once enjoyed, pointing to signs of depression, loneliness, or an underlying medical condition. Interests change, but a sudden abandonment of an activity that once brought so much joy is a red flag.

Realizing that your loved one needs extra help beyond what you can provide might seem counterintuitive to your caregiving role, but bringing in reinforcements simply shows how dedicated you are to the health and well-being of your loved one. Caregiving is a group effort, and extra help is not only necessary, but encouraged.

Check Out "The Sharing Tree" Glastonbury Newsletter for Seniors

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I just ran across a fantastic monthly newsletter published by the Glastonbury Senior Center called "The Sharing Tree". It contains information on special events, support groups, programs, trips and classes. It also provides a calendar, Social Services news and brief medical articles.

This newsletter is a great little resource for local seniors and their families. Check it out here when you get a chance. 

Estate Planning for Problematic Children

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It's unfortunate, but clients who meet with me to do their estate planning will sometimes mention that one or more of their children is "problematic" for one reason or another.  

And although the clients want to leave something to that child, there's a concern that their hard-earned money will be "wasted" once the child receives his inheritance.

The best approach in such a situation is usually to have that child's inheritance go into what is commonly called a "spendthrift" trust.  I prefer the term "protection" trust just because it sounds kinder.  

In any case, using such a trust as a component of your estate planning is generally a wise approach when a child (or any beneficiary who is not a child) is in one or more of the following cicumstances:

  • The child is irresponsible with money management, does not have a history of saving and investing, and there is a concern that your hard-earned estate will be wasted;
  • The child has a history of creditor problems, actually has current creditor problems, or you are reasonably certain that creditor issues will arise in the future based on the child's behavior;
  • The child is in an unstable marriage where a divorce is more than likely, in which case the trust can prevent the estate from becoming part of a divorce settlement process;
  • The child is addicted to drugs, alcohol or gambling;
  • The child has a history of being influenced by an overbearing spouse in regards to money management;
  • The child joins an unorthodox religious group (a.k.a. "cult") or some similar organization and you do not want some/all of your estate to ultimately be donated to such a group;
  • The child would be prone to "financial predators" and scam artists.

Please note that this is not always the best approach, but those of you with unstable children should discuss this issue with your estate planning attorney.  Otherwise, your child's inheritance may tragically disappear...and perhaps make your child's problem worse.

DISCLAIMER: This blog does not offer legal advice, nor does it create an attorney-client relationship.  If you need legal advice, consult with a lawyer instead of a blog.

Connecticut Probate Cannot be Avoided

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For those of you who have not been through the probate process in Connecticut yet, I'm writing to give you a head's-up about the fact that there is no way to completely avoid probate in this state.

In other words, even if you do everything humanly possible to avoid probate, which is to say you use a revocable living trust (and actually fund it, by the way!), you have updated beneficiaries on your life insurance, retirement accounts, annuities, etc., you use joint ownership effectively, and you use TOD/POD features if available, someone will still need to file documents with the probate court upon your passing.

The most important document to file, regardless of how many assets (if any) have to go through probate, is the estate tax return.  The return needs to list everything in your name when you died, including probate and non-probate assets.  The court will use this return to determine if there is any estate tax liability to attend to. It will also be used to calculate the probate court's fee. And yes, there will be a probate court fee even if none of your assets are actually processed through probate.

Now, having said that, please keep in mind that there is an enormous difference between filing a few documents with the court and going through a full-blown probate process (maybe 10-12 months of administration, even if everything goes smoothly). So it is still worthwhile to consider some probate-avoidance maneuvers you can make before you pass away.   

So, to sum up, you can only minimize Connecticut probate upon death.  You cannot avoid it entirely.

DISCLAIMER: This blog does not offer legal advice, nor does it create an attorney-client relationship.  If you need legal advice, consult with a lawyer instead of a blog.

Save Your Health Care Document on Your Smart Phone

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This is one of the better "document maintenance" tips I've come across: Keep a copy of your health care instructions (a.k.a. advanced medical directives, health care proxy) on your smart phone and have your health care agent do the same.

The health care document (a standard item in the estate planning "package") is what I would call an "emergency document" meaning that there may be a sudden and immediate need to use the document at any given time. However, it's hard to have your original health care instructions on-hand at all times. That's why having a PDF of the document on your smart phone can come in handy!

I can't quote a particular study, but I can state with confidence that a steadily growing number of my clients (of ALL ages, by the way) carry smartphones with them just about everywhere they go. This means that they have the ability to carry a copy of their advanced medical directives with them everywhere they go.

Please note that it's always better to have an original health care document on-hand.  That's because many doctors and hospitals get nervous when relying on something other than an original document. But it's certainly better to have a PDF of the document on your phone than nothing at all. 

Of course, explaining how to get your health care instructions document onto your smart phone is beyond the scope of this post.  Click here for iPhones, and here for Android.    

DISCLAIMER: This blog does not offer legal advice, nor does it create an attorney-client relationship.  If you need legal advice, consult with a lawyer instead of a blog.

"Domicile" vs. "Residence"

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In the legal world there is a big difference between one's "domicle" and one's "residence". For starters, you can have as many residences as you want, but you can have only one domicile, legally speaking. So your domicile is your legal home, which you treat as your fixed and permanent location. It's your principal establishment. Residence is more of a transient concept; your temporary place of abode.

For instance, I have a lot of senior "snow bird" clients who "fly south for the winter", meaning that they spend the winter months in Florida to avoid all of the blizzards up here in New England, but then they spend the other three seasons in Connecticut. So their domicile is in Connecticut while they have a residence in Florida.

I suppose the obvious question is, "Who cares?" Well, the various state agencies in charge of raising revenue care very much. Your domicile's location will determine which state can tax your income and your estate when you pass away. If minimizing or eliminating such state taxes is important to you then you should make it clear to everyone that your domicile is in a low (or no) tax state. 

But domicile is, to borrow a legal term, a "question of fact". This means that you need to look at the facts of each case to make a determination. In the vast majority of cases, determining your domicile is very easy. But sometimes it's a close call.  

How do you make sure that your domicile is crystal-clear to an objective observer? Well, you should keep in mind that if your domicile becomes a legal question then courts tend to look at the following facts: (1) residence at death, (2) your proclamation of domicile in your wills, trusts, deeds, etc. (3) ownership of real estate, (3) place of automobile registration, (4) place to which you return to from trips, (5) where you're registered to vote, (6) the address you use in tax returns and whether you file them as a "resident" or "non-resident", (7) locations of bank accounts and safe deposit boxes, (8) hobby materials, (9) the location of your valuable personal property, (10) where your pets are kept, (11) location of deceased family members, (12) membership in clubs and religious organizations, (13) location of volunteer activity, (14) location of political activity, (15) place of birth, and (16) local newspaper subscriptions.

Remember, many times there are some big bucks involved in this question so there are plenty of important court cases that focus on this issue. So if this is one of your concerns then discuss this topic with your accountant and estate planning attorney.

DISCLAIMER: This blog does not offer legal advice, nor does it create an attorney-client relationship.  If you need legal advice, consult with a lawyer instead of a blog.

The Biggest Decision for your Special Needs Trust

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There are obviously many important considerations to ponder when designing an estate plan for a beneficiary who has special needs. But the most important issue in the planning process is picking the person or persons who will be in charge of managing the special needs trust. This person is known as the "trustee" and he/she has the biggest impact on whether or not the purposes of the trust are actually carried out after you pass away. Pick the wrong person and the whole plan can come crashing down, to the severe detriment of your disabled loved one.

Ideally, you want to have a trustee that is relatively stable and financially savvy since that person may be in charge of investing a great deal of money. The trustee should also have a good relationship with the disabled beneficiary. If the trustee interacts with the beneficiary on a regular basis then he/she will have a better understanding of the beneficiary's disability and therefore better able to make appropriate distributions from the trust funds.

A sibling of the beneficiary is often appointed as the trustee, and this arrangement is usually entirely appropriate. However, you should keep in mind that most special needs trusts will indicate that any remaining trust funds will go to the beneficiary's siblings upon the death of the beneficiary. In other words, less scrupulous trustee-siblings may be motivated to withold neccesary distributions to the beneficiary and avoid watering down their future inheritance. This issue is certainly not unprecedented, so it needs to be considered before a sibling is appointed as the trustee.

Finally, you need to have a trustee that is prudent enough to strictly follow the instructions and limitations outlined in the trust language. If the State catches wind of improper distributions from the trust (such as distributions that pay for things that the State is already covering) then there is a risk that the benefits will be cut off. Although this is a self-serving statement, you need a trustee who is wise enough to seek specialized legal guidance if the propriety of a particular distribution is questionable.

In short, you need to give long and serious thought as to who you will name as trustee of your special needs trust. The decision can make or break all of the careful special needs planning you have done.

Effective Care Plan Meetings

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If you have a loved one in a nursing home then you should be invited to attend a quarterly meeting to discuss how your loved one is doing and determine what course her care should follow going forward.  These meetings are usually called "care plan meetings/conferences" and they are required if the facility accepts Medicaid and/or Medicare.  

These meetings should not be taken lightly.  You should attend the meeting if at all possible, at least via speaker phone, and you should go there fully prepared with a list of specific questions for the nursing home staff.  This is your best opportunity to voice your concerns and determine whether your loved one is getting the best possible care.  This is also your chance to provide the staff with background information that could prove helpful in formulating the care plan.

I have been appointed many times by local probate courts to act as the conservator for seniors when family members and friends are unable to do so.  This means I have attended innumerable care conferences and I usually pose the following questions, among others depending on thes ituation, to the staff:

Have there been any notable changes in the resident's condition since the last meeting?  If so, what was the cause?

Is the resident participating in the facility's recreational/social events?  If not, can steps be taken to facilitate his/her participation?

Have there been any visitors for the resident since the last meeting?  If so, have those visits been helpful or detrimental to the resident's spirits?

What specific therapies are being provided?

Are there any roommate issues I should be aware of?

Is the resident short on any personal items (toiletries, clothes, reading material, etc.)?

These are some of the standard questions I usually ask.  However, every resident is different. So I suggest asking the above-mentioned questions as well as questions that are specific to your loved one's situation.

"Should I Transfer the House to the Kids?"

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To start off, I want to warn you that you will be disappointed by this post.  You probably Googled the above question and stumbled upon this post with the hopes that you will find a definitive "yes" or "no" answer.  Unfortunately, as simple as the above question sounds, the legal analysis used to arrive at an anser is lengthy enough that I would probably be committing legal malpractice by even suggesting that there is a universally applicable answer. 

There.  Now that that's out of the way, here's what you will learn from this post:  as self-serving as this may sound, in order to find a good answer to this question, you need to sit down with an experienced elder law attorney who can walk you through all of the pro's and con's of transferring ownership of the house to the kids (or someone else) in order to avoid the need to sell the house and spend the proceeds down on the nursing home at some point in the future. 

And here is a non-exhaustive list of all the issues to consider:

  • Gift tax.
  • Capital gains tax.
  • The dreaded "5-year look-back" period for Medicaid.
  • Will the kids turn evil someday (perhaps they already are evil?) and try to evict you from the house?
  • Will this transfer result in an unintended distribution of your estate upon your death?
  • Will one of the kids get sued someday, resulting on the property?
  • Will one of the kids get divorced someday, subjecting the house to a divorce settlement process?
  • Are one of the kids getting asset-tested government benefits?
  • Should you retain a "life use" (a.k.a. "life estate") in the property?  It could be helpful tax-wise, but it could be problematic for Medicaid eligibility.
  • Will you lose a senior or veteran real estate tax credit that you currently enjoy?
  • What are the odds that you (based on your health, family medical history, level of local family support) will need permanent nursing home placement in the future?

In short, whether to gift the house to the kids is a short and simple question.  But settling on the answer to that question is a complicated process with a lengthy list of issues to consider. Also, since every family is different, there is no one-size-fits all answer to this question.  In other words, just because your neighbor three doors down the road gifted the house to his kids does not necessarily mean that you should too. 

DISCLAIMER: This blog does not offer legal advice, nor does it create an attorney-client relationship.  If you need legal advice, consult with a lawyer instead of a blog.

Higher Recording Fees for Deeds on December 1st

Due to the new Connecticut budget, the fee for recording a document on the town land records will be increased by $7 per document. More specifcially, the fee for the first page will be raised from $53 to $60, every page after that is still $5. 

This new fee applies to all deeds received for recording on December 1st and afterwards. So even if a deed is postmarked prior to 12/1 but received on 12/1, the new fee will still apply.

The new fee is statewide. The Town Clerk's Office is responsible for recording documents on the town's land records. 

Gifting with a Power of Attorney

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Not surprisingly, I am not a big fan of fill-in-the-blank estate planning documents that you can get online or from an office store.  There are many reasons for that, but one big reason is that online forms for a durable power of attorney (POA) often do not offer a "gifting" provision.  Or they do offer such a provision but there is no advisor involved to explain the benefits (or occassional pitfalls) of including such a provision in your POA.

The take-home lesson for today is this:  An agent under a POA cannot gift assets on your behalf without express authorization to do so in the POA document. 

At first glance, this may not seem like a big deal.  But it certainly becomes a big deal if/when transferring assets out of your name for Medicaid or tax purposes becomes highly advisable.  

In the context of a Medicaid application, the State of Connecticut will most likely pretend that such a gift (made by a POA agent without authorization) didn't happen and treat the gifted asset as an "available asset" for the Medicaid applicant. 

For real estate title purposes, if a POA agent transfers property without express authorization in the POA document then title to the property has not been effectively transferred.

These are just two examples of big problems that can occer when your POA document does not have adequate gifting language.

It is also worth mentioning that if you want your agent to have authority to make gifts to himself/herself, which is often the case when a spouse or trusted child is the agent, then that should be specifically spelled out in the document. 

Of course, having said all of that, there can be good reasons to not include gifting powers in a POA, depending on the circumstances.  The point is that this particular POA issue should be discussed thoroughly with your attorney.

DISCLAIMER: This blog does not offer legal advice, nor does it create an attorney-client relationship.  If you need legal advice, consult with a lawyer instead of a blog.

What are the Odds of Nursing Home Placement?

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Whenever I sit down with clients to plan ahead for Medicaid eligibility we spend a lot of time walking through the worst-case scenario of permanent nursing home placement, thereby triggering approximately $12,600 per month in nursing home fees (Connecticut is the 2nd most expensive state in the U.S. when it comes to nursing home care).  But it's also important to at least consider the possibility that the client will never actually need to be placed in a nursing home. 

There is no "crystal ball" to use and nothing can be guaranteed, but there are factors to consider when trying to determine the odds that you will need permanent nursing home placement at some point in the future.

Is there a history of dementia and/or Alzheimer's Disease in family?  It seems like these are the types of conditions that most often trigger the need for long-term nursing home placement, and they are very hereditary.  Other issues like diabetes, a heart condition, a bad hip etc. can usually be managed adequately at home.  

Do children, grandchildren and other family members live nearby or are they beyond driving distance from your home?  The larger the local support network, the less likely that you will need to be permanently institutionalized.  

How extensive are your liquid assets?  Even if you don't have long term care insurance in place, the more you have in investments, bank accounts, retirement accounts, etc., there is a greater possibility that you will be able to provide yourself with home health care and/or companionship to keep you in the community.

I always advocate for planning for the worst and hoping for the best.  However, you need to realize that future nursing home placement is not a "given", and if the chances of requiring institutionalization are remote based on your own set of personal circumstances then you should factor that into your planning. 

DISCLAIMER: This blog does not offer legal advice, nor does it create an attorney-client relationship.  If you need legal advice, consult with a lawyer instead of a blog.

The Ever-Evolving Last Will & Testament

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Many of my clients tend to procrastinate when it comes to finalizing their estate planning documents. They struggle over who to appoint as guardians for the kids, or who should be the "back up" executor if the surviving spouse can't act, or who's going to end up with the tool collection.  Sometimes these questions can be tough ones and people "freeze up" and stress out over whether or not they're making the right decision.

As the estate planner I'm always concerned that the infamous bus is going to run my clients over while the drafts of the wills sit on my desk, unsigned.  So I try to gently nudge my clients along towards finalizing everything. 

One factor that I try to impress upon my clients is the fact that their wills are not set in stone; that they should conceptualize their wills as "evolving documents". In other words, as developments occur in the family (if people pass away, someone becomes disabled, someone gets divorced, there's a "falling out", etc.) it is very easy to tweak the documents in order to address the new family situation.

I also emphasize that, thanks to computers, tweaking the documents is very easy and very inexpensive, assuming that the changes are not overly-complicated.  I always keep the documents on my computer, so re-printing the documents with small changes and a new date and re-signing everything is awfully easy. And there is nothing exotic about my law practice; this is the case with just about any law practice out there. 

So, don't stress out about it too much when you set up your will and other documents.  Make the best decision you can given the current circumstances and facts.  Then schedule a signing date with your attorney knowing that you can easily change things later if you need to. 

And remember that once your documents are signed you will experience a wonderful, liberating "peace-of-mind", and that's what estate planning is all about.

DISCLAIMER: This blog does not offer legal advice, nor does it create an attorney-client relationship.  If you need legal advice, consult with a lawyer instead of a blog.

Tips on Where to Keep Your Will

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This is one of those standard questions that nearly every client asks me after their will or living trust is finally executed, and it is a vitally important question.  I have more than enough stories about the angst and chaos that has ensued when families cannot locate the original will after a loved one passes.

First thing's first: I'm not a fan of keeping your will in a safe deposit box at a bank even though most clients assume that is the best place.  Unless you have someone else's name on the list as a signatory, it is very difficult (albeit not impossible) for someone else to gain access to the box.  Also, even if the family knows that you have a safe deposit box, it is sometimes difficult for the family to determine which bank and at which branch the box is located.  Those tiny, little keys don't really tell you anything, other than the fact that it opens a safe deposit box somewhere.

What I usually tell clients is that they should keep their wills wherever they keep their other important documents. That location is different for every client, but if the family knows that all of the important stuff is in your file cabinet, or a strong box, or your bottom dresser drawer, or the freezer (I did have one client who argued that that was the most fireproof place in his house) then it shouldn't be a problem for your loved ones to find your will upon your passing. 

Ideally, having your will in a strong box at home (with your other important documents) is the best arrangement since such boxes are usually fireproof.  But don't panic if you don't have one since the chances of a fire that completely destroys your house and everything in it are quite slim. You should also keep the box unlocked for ease of access. Trust me...a third party will have no interest in stealing your will since it has no value on the open market.

However, if you have one of those families in which good chemistry is somewhat lacking, and there are some family members who may be motivated to destroy your will, then you may have to be a little more secretive.  In fact, the safe deposit box at the bank with a trusted person as a co-owner would probably be the best way to go in that type of situation.

DISCLAIMER: This blog does not offer legal advice, nor does it create an attorney-client relationship.  If you need legal advice, consult with a lawyer instead of a blog.