Salt Lake City Estate Planning

Millions of Americans Provide Regular Care for an Older Adult

That group of 15 million Americans was the subject of a November report from the University of Michigan’s National Poll on Healthy Aging. Consumer Reports notes in its recent article, “What It's Like Being a Dementia Caregiver Detailed in New Report,” that the results show being a caregiver to someone with dementia is an experience with great challenges and great rewards.

From the outside, it can look extremely stressful, the associate director of the Michigan poll said. However, many people also find rewards in the experience.

Although 78% of the caregivers who responded to the poll said the experience was “very or somewhat stressful” and two-thirds said caregiving “interferes with [the] ability to take care of themselves or their daily activities,” about 85% described caring for someone with dementia as “very or somewhat rewarding.”

The new report also found that, despite the stresses and concerns, only 27% of caregivers had taken advantage of caregiving resources like family therapy and support groups. Here are a few tips on how to make caring for someone with dementia more rewarding and less stressful.

• Educate yourself on dementia. Understanding the disease itself can help caregivers better appreciate the behaviors that are associated with it and to respond accordingly.
• Planning. Don’t wait until there is an emergency. That means estate-planning documents, like a power of attorney and healthcare directives should be signed well before someone begins having trouble speaking on his or her own behalf. Caregivers should also consider the types of additional future care that might be needed and plan for how to pay for that care. Talk with an elder law attorney to get the process started.
• Take care of yourself. It’s critical to take some time away from caregiving to do things you need to do, like run errands, sleep and prepare healthy meals. Caregiving for someone with dementia can often take place over many years, so the strain can add up. Your own self-care is also beneficial to the person for whom you’re caring—it will allow you to do more for a longer period of time.

Reference: Consumer Reports (November 3, 2017) “What It's Like Being a Dementia Caregiver Detailed in New Report”

If you need helping preparing the necessary documents give our office a call for a free consultation, 801-438-7120!

The GOP Tax Bill May Eliminate the Medical Tax Deduction

House Republicans have proposed the elimination of the medical tax deduction. That provision lets people write off qualifying medical and dental expenses that exceed 10% of their adjusted gross income (AGI). Currently, individuals can deduct their own expenses and those of their tax dependents. This includes aging parents who live with the individual and meet other criteria.

Time’s recent article, “An Important Tax Deduction for Seniors and Their Families Is on the Chopping Block,” notes that about 6% of tax filers take advantage of this deduction. They include people with expensive care needs, like seniors in nursing homes, people with chronic medical conditions and parents of disabled children.

Those who support the bill believe it would put more money into middle-class pockets because of a proposed increase in the standard deduction for individuals and married couples, rising to $12,000 and $24,000, respectively. However, that increase won’t offset the loss of the medical expense deduction for those who claim it.

Here’s an example of how the deduction works: a single senior with $40,000 AGI has medical expenses of $6,000 annually. That’s more than 10% of her income, so $2,000, wouldn’t be subject to tax. If her taxable income places her in the 15% bracket, she’d lose out on $300 of federal income tax savings.

In addition, people who use the deduction to pay for long-term care costs may forfeit much more. For example, a woman in her mid-80s who pays, on her own, the $11,000 monthly cost of her assisted living facility can afford to do this by selling highly appreciated stock and using the medical expense tax deduction to eliminate any taxes she’d otherwise owe. An increase in the standard deduction wouldn’t help her, because it wouldn’t be as much as her savings under the medical expense deduction.   She would also have a higher tax burden along with her substantial care costs. If the medical deduction went away, this lady would go through her money quickly and possibly need Medicaid. Medicaid pays the long-term care costs of people who have exhausted their income and meet other criteria.

Some believe that the elimination of the medical expense deduction, would ultimately increase costs for this government program.

If you would like more information, please call our office for a free consultation, 801-438-7120. 

Reference: Time (November 3, 2017) “An Important Tax Deduction for Seniors and Their Families Is on the Chopping Block”

New Federal Estate and Gift Tax Exemptions for 2018

The federal government recently announced that for 2018 the estate and gift tax exemption is $5.6 million per individual. That’s an increase from $5.49 million in 2017.

As a result, a person can leave $5.6 million to his or her heirs and pay no federal estate or gift tax. A married couple will be able to protect $11.2 million from federal estate and gift taxes.

The annual gift exclusion amount is $15,000 for 2018. That’s an increase from $14,000, where it has been since 2013.

Forbes warns in its recent article, “IRS Announces 2018 Estate And Gift Tax Limits: $11.2 Million Per Couple,” that tax reform legislation could change this.

President Trump’s tax reform framework proposes the elimination of the federal estate tax.  However, that’s not a lock. The latest news reports that estate tax repeal will end up being scrapped, as Congress focuses on lowering the corporate and individual income tax rates.

This means that the wealthy will need to still plan around the estate tax and reduce their estates with lifetime wealth transfer strategies to dip below the new threshold and avoid the 40% federal estate tax. A couple who’s used up every dollar of their exemption before the increase, now can count on another $220,000. If they’ve been planning, and they’ve used up their lifetime exclusion, they can make gifts to trusts and other vehicles already in place. For instance, with a dynasty trust for their children, they may add another piece of their business or cash. Alternatively, they can consider new strategies.

In addition, individuals can apply the $15,000 annual exclusion amount to give away $15,000 to as many individuals as desired. A husband and wife can each make $15,000 gifts, so a couple could make $15,000 gifts to each of their six grandchildren, for a total of $180,000. Lifetime gifts beyond the annual exclusion amount, count towards the $5.6 million combined estate/gift tax exemption.

Speak with a qualified estate planning attorney about the $11.2 million number per couple, because it’s not automatic. An unlimited marital deduction lets you leave all or part of your assets to your surviving spouse free of federal estate tax. However, to use your late spouse’s unused exemption (called “portability”), you must elect it on the estate tax return of the first spouse to die—even if there’s no tax due. If you don’t know about portability and how to elect it, your heirs could see a surprise federal estate tax bill. If you live in a state or DC that imposes separate estate and/or inheritance taxes, there’s even more at risk because these taxes can accrue with the first dollar of an estate.

Reference: Forbes (October 19, 2017) “IRS Announces 2018 Estate And Gift Tax Limits: $11.2 Million Per Couple”

If you would like more information please give our office a call for a free consultation 801-438-7120!

What is Estate Planning for the Heart?

Even though we know it’s beneficial, few of us have been willing to have a life care planning conversation, says The Oakland Post recently in the article, “How to Have a Conversation About the End of Your Life.”

According to the California Healthcare Foundation, 90% of Americans say that talking to loved ones about end-of-life care is important, but just 27% have actually done this.

Fewer than 30% have completed an Advance Healthcare Directive, which documents a person’s choice of their healthcare representative and specifies the end of life care they wish to receive.

Begin the life care planning conversation early. As soon as a teen gets a driver’s license, parents should ask who he would trust to make his decisions, if for some reason–like being injured in a car accident–the teen couldn’t speak for himself.

This life care planning conversation should continue throughout a lifetime, because answers can change as people age. Injury and disease can occur at any time—young or old—so it’s best to be prepared. Families should discuss the details of what it means to be placed on life-sustaining treatment, before being faced with that reality.

Because there are so many medical options now available, people need to understand the consequences of their decisions.

One way to begin a life care planning conversation is to consider your values, what matters most to you, and what you would consider to be a good end to your life. A person should consider who she trusts to carry out her wishes. Discussing with loved ones about what you want ahead of time also helps to ensure that your wishes will be honored.

Reference: Oakland Post (October 20, 2017) “How to Have a Conversation About the End of Your Life”

If you would like more information, please give our office a call for a free consultation, 801-438-7120!

Learn About Wills in Kansas

A will is a legal document that provides instructions regarding how your property is to be distributed after your death. To be valid in the State of Kansas, a valid will must comply with these requirements: 

• The maker or “testator” must be at least 18 years old;
• The testator must be of sound mind at the time the will is drafted;
• The will must be properly prepared and signed by the testator; and
• The will must be witnessed by at least two people who will not receive any assets in the will.

In addition, a notary public can sign the will. This is known as a “self-proving” will. Nevertheless, witnesses are still required, and the notary public must make a special certification, if the will is to meet state requirements.

A will should designate an executor to administer and settle the estate. This means paying all debts and taxes out of the estate, and distributing the estate according to the testator’s wishes. An alternate executor should be named to serve as a back-up, in case the first choice can’t serve.

McPherson Sentinel’s recent article, “Estate planning: wills and trusts,” explains that generally Kansas law allows you to distribute property however you like.  However, the one major exception is that a spouse has an absolute right to at least half of the estate. If the will is written to give a spouse less than half, that spouse must have agreed to the smaller share of the estate pursuant to state law for the will to be valid as written. This may be accomplished by writing a new will or by writing an amendment to the current will. The document must be signed with all the requirements of the original will.

A will may be revoked by burning, tearing, destroying, or marking through it with the intent of revoking it.

It is important to remember that life events like marriage, divorce, and birth or adoption of a child all have an impact on your will. You should review your will every few years with an experienced estate planning attorney to be certain that it reflects your current wishes.

If you die without a valid will (“intestate”), your property, other than property held jointly, will be divided into various portions depending on whether a spouse, child(ren), parents or other relatives survive. 

There’s also an estate tax imposed by the federal government on the value of all property owned at death over a certain amount. It is currently $5.49 million in 2017 and in 2018, the estate and gift tax exemption will increase to $5.6 million per individual. Kansas does not impose a state estate tax and has no independent inheritance tax.

Reference: McPherson Sentinel (October 18, 2017) “Estate planning: wills and trusts”

If you would like more information, give our office a call for a free consultation, 80.438.7120!

Billy Joel’s New Baby Means Changes as an Older New Parent

Singer Billy Joel and his fourth wife just had his third child. Those who become parents later in life need to adjust how they divide their assets and their anticipated retirement lifestyle.

The 68-year-old Joel is already the father to two other children: a 31-year-old daughter with ex-wife Christie Brinkley and a 2-year-old daughter with his current wife, Alexis Roderick. CNBC’s recent article, “Billy Joel, 68, will soon be a new dad. What older parents need to know,” says that older parents need to consider specific estate and financial planning issues.

Grammy-award winning singer or not, a new dad should start planning now, even if you don't know how your family relationships may change with the addition of a new child. You can always change things later.

For a superstar like Billy Joel with a high public profile and substantial wealth, he might think about a Quiet Trust in a state that permits it, such as Delaware, Nevada, or Alaska. This type of trust allows a person to set aside assets and plan for how they will be divided, without telling the beneficiaries. It also keeps those plans private, and there's less reporting to the people involved. Anyone with multiple children and former spouses should directly address all family members in their plan. Make certain that you address each individual to the degree you want to or don't want to, and if you don't want to, make  it readily apparent.

Beyond age and physical challenges, the biggest issue for families in this situation is being certain that there will be enough money to provide for the younger spouse and the child.

To cover a child's needs into his or her mid-20s, a parent could easily use an additional $400,000. That can be a big surprise to the senior, more established member of the couple. That person, if planning for a family of moderate means, is going to have to set aside considerably more money for the younger people in the home. It can mean working longer for the older spouse and working more for the younger spouse. The couple can also plan for the more senior individual to boost Social Security payouts by delaying benefits until age 70.  However, that extra money is often not sufficient.

The big issue is for the couple to lower their expectations. Financial plans for couples typically get more complicated when the age difference is 15 years or more. Those spouses also need to examine longevity and elder care issues. That expense will wipe out Social Security payouts and more.

Reference: CNBC (October 18, 2017) “Billy Joel, 68, will soon be a new dad. What older parents need to know”

If you would like more information please give our office a call for a free consultation 801.438.7120!

What Happens to my Taxes, if I Overdo My Gifting This Year?

If you want to give your child a gift of $14,000, but it’s a gift of stock and when it’s transferred, you learn that it’s valued at more than $14,000? What are the gift tax ramifications

There are two very different sets of gifting laws that relate to estate planning, cautions nj.com in its recent article, “When you gift over the annual limit.”

One set of gift rules is straightforward. For Medicaid qualification purposes, there’s absolutely no gifting permitted for five years prior to the program application. That’s seems to create a lot of confusion for people.

The second set of gifting rules concerning estate planning comes from the IRS. In 2017, the gift and estate tax exclusion is $5.49 million. That’s the lifetime exclusion, so an individual can leave $5.49 million to his or her heirs and not owe any federal estate or gift tax. A married couple can protect almost $11 million ($10.98 million) from federal estate and gift taxes.

The $14,000 limit is the most you can gift in any one year to any one person, without having to file an IRS 709 gift tax return. That amount has been set at that level since 2013. There’s no gift tax due, assuming you haven’t already exceeded the $5.49-million-dollar exemption.

However, if you exceed the $14,000 per person/per year limit, you must file a gift tax return.

While it may defy logic or just plain common sense, that’s the way the IRS does it.

The $5.49-million-dollar limit is a lifetime limit. The only way the IRS will know that you have or haven’t exceeded the exemption, is if you file a gift tax return every time you gift more than $14,000.

You see, the IRS is keeping track.

 Let’s return to the original scenario of the inadvertent stock transfer that’s a bit over the $14,000 annual limit. That person could just file the gift tax return, since no tax will be due. Another option is to consult with a tax attorney or CPA to find out whether, in that particular situation, that gift might be divided between two people.

Reference: nj.com (October 18, 2017) “When you gift over the annual limit”

If you need more information please call our office for a free consultation 801.438.7120! 

 

Did Tom Petty Have a Healthcare Directive that Detailed His Wishes?

Tom Petty was reportedly taken off life support following the orders he had previously drafted expressing his wishes. However, most people don’t make provisions for their end-of-life care. As a result, the costs can add up.

When Tom Petty was found in cardiac arrest earlier in October, his family reportedly took him off of life support pursuant to a do-not-resuscitate (DNR) order he had drafted, reports CNBC in its recent article, “What Tom Petty's choices can teach you about end-of-life care.” Petty could have drafted the DNR due to a known health condition or out of general concern.

A do-not-resuscitate order is a form signed by a doctor and used when a person suffers from a serious advanced illness. The form instructs health-care professionals not to perform CPR. Another consideration is a do not intubate order, which instructs medical personnel not to insert a tube into the body for breathing.

Both DNR and DNI forms can serve as components of an advance directive, which is created by an attorney and takes effect, if you can’t speak for yourself.

That can be the situation of a chronic end-stage disease, terminal illness or persistent vegetative state. One type of advance directive is a living will, which stipulates the kind of medical care you want to receive, like tube feeding, dialysis and pain management.

A major part of this plan is communicating with your health-care agent or surrogate—the person whom you’ve designated to make decisions for you. This involves detailing what you’d want to happen if you lost the ability to communicate or process bodily functions like swallowing, bathing or other functions. When your health-care surrogate knows what's important to you, they’ll be able to make better decisions for you.

If proper provisions are not made in advance, the dispute can go to court. Doing the paperwork correctly means working with an experienced estate planning attorney, not merely completing a form on the Internet.

Reference: CNBC (October 17, 2017) “What Tom Petty's choices can teach you about end-of-life care”

If you would like more information or would like to draft your Healthcare Directive, give our office a call for a free consultation 801.438.7120!

Buffalo Gets New Smartphone App to Help Stop Elder Abuse

Dozens of providers and advocates recently spent a day learning how to use the new Legal Risk Detector App.

WIVB recently posted an article, “New App Aims to Prevent Elder Abuse,” that explains how the Center for Elder Law & Justice teamed up with the Erie County District Attorney’s Office and the Erie County Office of Senior Services in the Buffalo, NY metro area to introduce the app to those who work closely with elderly members of the community.

“This app is designed for Meals on Wheels people, home health aides, senior services workers and people who would be kind of the front line staff,” explained Karen Nicolson, Chief Executive Officer of the Center for Elder Law & Justice.

Those providers are sometimes the only individuals with whom home-bound seniors interact on a regular basis. Therefore, they can be the only people who recognize potential housing, consumer, financial exploitation or healthcare issues, provided they know the right questions to ask. That’s where the new app can help. The app is a comprehensive list of questions to ask elderly clients to help identify potential abuse. The questions are about everything from whether someone has been pressuring a senior to make changes to their power of attorney, to whether someone has been stopping them from accessing their money or health services.

The app also lets providers upload photos and documents, which are added to the report generated by the seniors’ responses. A report will give the referrals that the provider may need to help the senior.  It is automatically sent to the Center for Elder Law & Justice, when any legal risk red flags are identified.

The Erie County District Attorney said his office has seen a number of cases of financial and physical elder abuse this year, which he attributes to the fact that many seniors don’t have their children living nearby to monitor them. He hopes that awareness spreads about the app and its ability to help identify problems, so would-be abusers will reconsider taking advantage of elderly victims.

The app that was unveiled is only intended for use by providers and advocates who work with the elderly in the community. However, with a national grant, another risk detector app is in development that will be available to the public.

Reference: WIVB (October 30, 2017) “New App Aims to Prevent Elder Abuse”

If you want more information, please give our office a call for a free consultation, 801-438-7120. 

Will of Linkin Park Frontman Shows He Wanted Family Visits

Linkin Park frontman Chester Bennington, who committed suicide in July, is survived by six children from three relationships—21-year-old son Jaime and adopted son Isaiah, 19, with Elka Brand; 15-year-old son Draven with first wife Samantha; and son Tyler, 11, and twin six-year-old girls Lilly and Lila, with his widow Talinda.

Bennington was found on July 20 in his Palos Verdes Estates, California home—one week before his rock group Linkin Park was planned to begin a 29-date North American tour. The singer was on vacation in Arizona with his wife Talinda and his family, but came home alone, citing work commitments.

Wealth Advisor notes in its recent article, “Linkin Park Singer Left Cash For Kids To Visit Each Other,” that Bennington’s will was filed in a probate court in Los Angeles County and obtained by several news outlets.

In his will, Bennington wrote: "I request that my children's mothers or Guardians encourage and allow my children to visit with one another and with my extended family and the extended family of my Spouse on a regular and ongoing basis, so that my children know that they have a large and loving family."

Bennington made certain the children wouldn't need to pay for these trips out of their own pockets. He directed the trustee of the family trust to provide money to cover their travel expenses.

There’s been no report as to how much Chester left to his family.

In August, Samantha, who was married to Bennington between 1996 and 2005, blasted Talinda online for not including her and Draven in his funeral service.

"My son & I have not had an opportunity to speak, not even at his funeral (that only represented his life that he was married to his new wife) no photos but one of him anywhere," she wrote.

"Dra was never treated equally by T & never wanted to go there because of that. Thanks for not honoring the one wish my son had by sharing his prayer with his siblings & throwing the rose quarts (sic) into the ocean with him.”

Talinda serves as the executor of Bennington’s will, while the alternate executor is Chester's former business manager Jonathan Schwartz. It may be difficult for Schwartz to serve, however. He is currently in jail on charges of wire fraud.

Reference: Wealth Advisor (October 23, 2017) “Linkin Park Singer Left Cash For Kids To Visit Each Other”

If you would like help preparing your will, give our office a call for a free consultation, 801-438-7120!