Estate Planning and Trusts Blog

Avoiding the Epic Fail of a Business Succession Plan

Business succession
A business succession plan should be part of every business owner’s estate plan.

For a business owner, the success of our business impacts our daily lives. The success of our business succession plans (say that five times fast!) is inexorably linked to having a well-conceived and properly prepared plan which is coordinated with our estate plan. Both plans need to be built to withstand challenges, which are outlined in the article “Five events that can ruin a succession plan” from Kenosha News.

Let’s take a closer look at the “Five D’s of Succession Planning.”

Death. Believe it or not, businesses can succeed in the face of the owner’s death. However, this is only if all of the right steps are taken, and the right people are prepared to lead. If the business owner has named a successor, created a plan, and purchased business interruption insurance and/or life insurance, the business has a shot at continuing. However, in most cases, the estate plan fails to address leadership succession, liquidity, and leadership.

Disability or Disease. Sometimes disability and disease can be worse than death to a business. If the right advisors and plan are in place for death, the business may survive. However, a sick or disabled business owner, especially one who has been making all the key decisions, makes it less likely that the business will survive. If a disabled business owner has lost some cognitive function and isn’t able to make the best decisions on behalf of their business and their employees, the business may lose value.

Divorce. Nothing destroys a business like extended litigation. This often happens when a business owner divorces. A smart couple will work together, despite their personal acrimony, to protect the value of the business and their joint assets. Tearing each other apart harms their children and their business. The best approach is to have a plan created that includes what would happen to the business if the owner divorced. Think of it as a prenup for the business.

Drama. Our tendencies toward drama impact our businesses. If there’s a business succession plan and those plans are communicated to the leaders, and those leaders make clear to middle management and the employees that there are plans in place to continue the business, the company can remain stable. In the absence of communication, rumors will impact everyone – from key employees to management to vendors. Nothing hurts a business more than other companies in the same business gossiping about its impending demise. The shining stars of the company will flee for more stable opportunities, vendors may refuse credit, and it spirals downward.

Drive. Most business owners are self-driven individuals who love to see their inspiration, ideas, and energy grow into successful businesses. But when it’s time to get into the weeds of managing details or people, they’re generally not that interested. Or, they dig into the details and then the company is depending on one person to succeed—rarely a good idea. When that drive is lost and there’s no plan to hand things over to the next generation or key employees, the business can slump, lose value, and eventually, close its doors.

A strong business succession plan does more than protect a business owner. It protects the owner’s family, the employees, and their families and communities. An estate planning attorney who routinely works with business owners will be familiar with the strategies available to ensure that all the pieces are in place to continue the business and protect the family.

Reference: Kenosha News (August 25, 2019) “Five events that can ruin a succession plan”

Other articles that may interest you:

Time to Review Your Estate Plan?

Planning for the Unexpected

Help Your Elderly Parent Without Ruining Your Relationship

Elderly parent
Even if your  family was like the Cleavers in “Leave it to Beaver,” providing care to an elderly parent can sometimes be difficult for the parent and the child.

If you have elderly parents, you might have to step in at some point and provide caregiving services. Whether that concept means hands-on personal assistance with things like bathing, dressing, grooming, and feeding, or handling their finances and making decisions for them, this change in your roles can be challenging for you and your parent. Here are some issues to consider about how to help your elderly parent without ruining your relationship.

It’s Usually Not “Leave It to Beaver”

Many people grow up seeing fictional families on television and wish their parents and siblings got along like those families. But very few families measure up to the fictional ones. You and your parent may not have had the kind of relationship in which you would regularly get together for coffee or shopping. That’s not unusual; many people have strained interactions with their parents.

Relationships carry the baggage of the past. Your parent is the same person with whom you have had conflict, which means he or she will continue to do things that upset you. And you will do things to upset him or her. If your parent was extremely authoritarian or independent, it’ll be very difficult for him or her to accept someone telling them what to do – especially a child.

Patience versus Doormat

You should try to be understanding of what your parent is going through – losing independence and feeling less valuable and weak can be very difficult. Forgetfulness can also be an issue. Dad might get confused and forget you already did things – which he now accuses you of not doing. He might also be dealing with chronic pain and other health issues.

However, you should set boundaries. Getting old does not give your parent a right to be physically, verbally, or emotionally abusive. Be firm with your parent if any of these things happen. Being a dutiful son or daughter does not include being a doormat. Calmly inform your parent that the behavior is not acceptable. You might want to consider having someone in social services arrange for counseling to help your parent adjust to the realities of aging and of needing assistance.

The Silver Lining

For some people, this stage of life is a time to deal with unfinished business. You may be able to talk out problems or get answers to questions. You might be able to resolve conflicts that could have caused you regrets down the road. But the best approach for this goal is to tread lightly. Just because your parent is frail doesn’t give you the right to beat her up verbally with a long list of criticisms and complaints.

Address just one piece of a small issue during a visit, and don’t dredge up unpleasant topics on every visit. You don’t want your parent to dread seeing you. Be the kind of person you might wish your parent had been when you were a child – kind, compassionate, and nurturing.

For those of you who have enjoyed a happy, healthy relationship with your parents, this time together can deepen your mutual affection and interaction. Since your parent is no longer rushing around to work and raise a family, you can have uninterrupted conversations and create memories to treasure. Even children and parents who had strained relationships in the past may end up having pleasant times with each other.

References:

A Place for Mom. “Parenting the Parent: Caring for Elderly Parents.” (accessed August 21, 2019 ) https://www.aplaceformom.com/planning-and-advice/articles/caring-for-elderly-parents

Other articles you may find interesting:

Having the “Someday” Talk with Parents

Understanding Palliative Care

Grandparents Lose Millions to Fake Grandchildren

Senior woman giving credit card information over the phone.
Grandparents are being scammed out of millions of dollars by people convincing them their grandchild needs help.

Con artists steal an average of $9,000 per person from older victims, by convincing the seniors that their grandchild is in a crisis. These imposters stole over $41 million from Americans in 2018. Learning how grandparents lose millions to people pretending to be their grandkids could help you or a loved one avoid becoming a victim.

The losses from this scam are skyrocketing, from $26 million in 2017 to $41 million in 2018. In 2017, only one out of fourteen people age 70 and older who reported the scam paid money to the fraudsters. However, in 2018, one out of every four of the people in this group handed money over to the con artists.

The scam usually starts with a telephone call to the grandparent. Here are some of the common tactics the fraudsters use to steal from grandparents:

  • The caller pretends to be injured and fakes uncontrolled sobbing to disguise the caller’s voice. Most grandparents would recognize the voice of a grandchild, so the pretend crying masks the difference in the caller’s voice and that of the grandchild.
  • The caller pretends to be a friend of a grandchild and says their grandchild has been arrested or is in some other form of legal trouble. The con artist says the grandchild went on a quick trip to another country and got into trouble there. This tactic makes it less likely the grandparent will travel to where the grandchild supposedly is to render help in person. About half of the incidents in which grandparents send cash payments involves a claim of legal trouble.
  • The con artist claims the grandchild was in a car accident and needs money for the hospital or doctor. Sometimes the crook will claim the grandchild was at least partly at fault, or had been drinking, to motivate the grandparent to keep the matter private.
  • The crook says the grandchild told him the grandparent is the only person who can help or the only one whom the grandkid trusts. Another common allegation is the grandchild is embarrassed about the situation and does not want anyone to know. The purpose of these claims is to decrease the likelihood the grandparent will check with any other relatives to see if the story is true.
  • The scammer provides some personal information about you or your family in an attempt to verify the call is legitimate. You cannot trust this information, because the con artist probably got the details about you and your family from social media postings.

What to Do If You Get a Family or Friend Emergency Phone Call

Security experts say if you get a phone call like this, it is almost certainly a scam. You should pause and think before acting. Write down the information from the caller, but don’t provide any of your information over the telephone. Absolutely do not provide your address, date of birth, credit card number, bank account information or any other personal data.

Contact family members to verify whether your grandchild is indeed traveling or has gotten into trouble with the law. If you suspect the call was a scam, report it to the Federal Trade Commission.

References:

AARP. “Family Emergency Scams Cost Victims $41M.” (accessed August 1, 2019) https://www.aarp.org/money/scams-fraud/info-2018/cash-grandparent.html

Other articles you may find interesting:

IRS Scams: What You Need to Know

Financial Advisors Try to Prevent Financial Exploitation

You Can’t Have Your THC-Infused Cupcake and Eat it Too

Marijuana THC cupcake
Should marijuana-laced edibles be available in bars? Airplanes? Publix and Walmart? By prescription only? Or should they remain federally illegal?

Guns and marijuana are hot-button topics right now.

Most gun owners know by now that marijuana and guns don’t play well together. Federal law prohibits anyone who uses medical or recreational marijuana from possessing or buying guns – even if their state laws allow the use of medicinal marijuana. And, here in FL, our concealed carry statute says that a concealed carry license “shall be issued” unless the applicant is prohibited by the conditions enumerated in the statute, or is “prohibited from purchasing or possessing a firearm by any other provision of Florida or federal law.” Yes, I know our current Dept. of Agriculture Commissioner and her office are flagrantly violating our state and federal laws by ignoring that pesky little detail, but that’s another story.

Our U.S. Representative Greg Steube (R – 17th District) has always been a staunch supporter of the Second Amendment and gun rights. He recently introduced the Marijuana 1-to-3 Act of 2019, which would move marijuana from Schedule I to Schedule III of the Controlled Substances Act of 1970. (Before 1970, drugs were regulated by the states).

Schedule I drugs were deemed to have a high potential for abuse, no currently accepted medical use in treatment in the United States, and were unsafe to use even under under medical supervision. Drugs on this list, in addition to marijuana, include heroin, LSD, mescaline (peyote), ecstasy, quaaludes, bath salts, etc. These drugs are illegal under any circumstance and cannot be prescribed by doctors.

Schedule III drugs were deemed to be not as dangerous and are available by prescription only. The potential for abuse is less than the drugs in Schedules I and II, the drug has a currently accepted medical use in treatment in the United States, and abuse of the drug may lead to low or moderate physical dependence or high psychological dependence. Drugs on this list include forms of testosterone and estrogen, and drugs containing codeine (such as Tylenol with Codeine).

When I read Greg’s bill, I thought “That’s a good start. It would get rid of the federal gun possession prohibition and all doctors would be able to prescribe it for various conditions, which could certainly be a boon for our veterans and people undergoing chemo. It would also spur legitimate medical research on the effects of marijuana and THC – how it interacts with other drugs, its effect on the brain (especially of minors), its effect on babies in utero, etc. Win-win.”

Well, others didn’t see it that way. They say it doesn’t go far enough. They want marijuana to “be legalized.” But what exactly do they mean by that? Lots of things are legal – tomatoes, tobacco, machine guns, vodka, vitamins, prescription drugs, Twinkies, etc., but they’re all regulated differently. If you ask three different people what should happen with marijuana, you’ll get four different answers. Everyone seems to want to have their THC-infused cupcake and eat it, too.

Here are various proposals I’ve heard:

  1. Only medical marijuana should be legal. These folks believe marijuana has legitimate medical uses and should only be available from any doctor by prescription. Okay, Greg’s bill would do that and it would remove the gun possession prohibition. A medical marijuana user would have the same constitutional rights as an opioid user. But, let’s think about this further. Will insurance cover it? Will it only cover some forms of it? Medicare costs are already out of control – what would this do? The minute third party insurers get involved, the price of prescription pot will skyrocket, just like every prescription drug out there. Also, is there a reliable instant marijuana test for employees whose jobs require they not be impaired? And you thought Big Pharma was a problem? Wait until you meet its incestuous cousin, Big Weed.
  2. Recreational marijuana should be sold and regulated like rum. Okay, so unlike the people supporting #1, these people are saying there is NO legitimate medical use, and it’s a purely recreational drug like alcohol. It would remove the federal gun possession prohibition, which is a plus. To get to this point, marijuana would have to be removed from the DEA Schedules completely and brought under the auspices of the BATFE. (Because they’re so good and efficient at what they do, let’s give them even more power over our lives). And, of course, to sell pot legally, someone would have to obtain a state license, like a liquor license. More regulation. And where would pot be sold? In existing liquor stores or in dedicated privately owned pot shops? Or in government-owned pot shops like socialist Canada has? Or both? Would you be able to buy an edible at a bar?  On an airplane? There are no federal regulations banning alcohol advertising on TV – the industry has been self-regulating for decades – but will a newly-minted weed industry be willing to hamstring itself? Or will the feds use it as another reason to step in and regulate all alcohol and weed advertising? All this regulation and taxes (yes, there will be confiscatory taxes imposed to raise revenue and to “raise awareness of” or “to fight” something) will drive the prices up and contribute to a thriving illegal black market. We already have an illegal street trade, and medical marijuana pushers…I mean doctors…who will write a medical marijuana recommendation for anyone for any reason, so it seems the only people who would really benefit from this would be gun owners who don’t like buying their recreational pot on the street.
  3. Marijuana should be sold as a supplement, like vitamins. Because it’s “natural.” LOL. Yeah, I suppose if you chewed a leaf or flower directly from the plant you have growing in your organic home garden, you could say it was natural. There’s nothing natural about the commercial processing of THC and pot – the chemicals used are as bad as those used in tobacco, and growers use all kinds of toxins to keep bugs and animals from eating the plants. But, let’s go with the premise. It would certainly remove the federal gun possession prohibition. Pot would be loosely regulated by the FDA just to make sure it wasn’t pure poison and wasn’t marketed using pure lies, and it could be advertised on the radio, TV, and billboards, and sold in Walmart’s vitamin section, near the condoms and makeup. See anything wrong with that plan?
  4. Split the baby – regulate marijuana like beer and rum. These folks also don’t believe there’s any medical use for pot, that it’s purely recreational. But they think marijuana should be regulated by THC content, with the lower THC pot regulated like beer and the higher THC pot regulated like liquor. Yes, it would remove the federal gun possession prohibition. But we’d have all of the same problems I mentioned in #2, plus now we’d have pot being sold in Publix and advertised on TV.
  5. Split the baby lite – regulate marijuana like alcohol and supplements. Again, these people obviously don’t believe there’s any legitimate medical use for pot. This “solution” is similar to #4 except that the higher THC pot would be regulated like either beer or rum, and the lower THC pot would be sold like a supplement. All of the problems I mentioned in #2, #3, and #4 would apply.
  6. Marijuana should be sold like tobacco. Well, this seems to make some sense if you believe there’s no medicinal value in THC. It would remove the federal gun possession prohibition, and, in theory, only people over a certain age could buy it. Of course, we know that’s false as we currently have way too many minors using tobacco and vaping products. Of course, the FDA and BATFE would be in charge of regulating it, which shouldn’t give anyone the warm and fuzzies. Interestingly, during my research for this article, I discovered that the FDA’s rules about what constitutes a tobacco product are as broad as the BATFE’s rules regarding what constitutes a machine gun. Which explains why the FDA regulates rolling papers and e-cig coils just as the BATFE regulates things it deems as “machine gun parts” (even things that definitively aren’t). The FDA also has rules about “manufacturing” that are eerily similar the BATFE’s “manufacturing” rules.
  7. Marijuana should be sold like veggies. The thought here is that marijuana is just a plant, like an onion or broccoli, and should be sold the same way. Pot could be bought at grocery stores and farmers markets by people of any age. It would certainly remove the gun possession prohibition, but I somehow doubt that our society is ready to go that far. And, there’s a very important case, Wickard v. Filburn, that has allowed the national government to say that pretty much everything – even purely intrastate commerce – affects interstate commerce, and, thus, the national government can regulate it. So, we’d be right back where we started with the national government regulating marijuana.
  8. The all-over-the-map “solution”. These people don’t know what they want done. They vaguely think some pot should be designated for medicinal use, but are unclear as to whether it should be available by prescription or OTC. They don’t have any idea how some versions of pot would be selected for this treatment, but they’re sure that other versions of pot should be available recreationally. Somehow.

My point is that there’s no simple solution to this complex problem, and anyone who just says “legalize it” hasn’t thought things through. And, every single “solution” expands the role of the government in our lives and constricts liberty.

And what do I think should be done? That’s a tough question. First, as a small government/free trade/constitutional republic Libertarian, it find it appalling that the national government has any control over drugs at all. For nearly 200 years, drugs, like alcohol and guns, had been regulated by the states. I look at the history of Prohibition and the violence caused by that law, which led to the expansion of the national government and the creation of the ATF (now BATFE). And then I see how the violence decreased substantially when Prohibition was repealed. But we didn’t learn our lesson, and we repeated history with this losing political battle called the War on Drugs, and we’re now living with the violence caused by those laws tearing our cities apart.

Unfortunately, I can’t put the toothpaste back in the tube, and it’s likely the national government will just continue to grow in power as we continue to lose our individual rights to self-determination – all under the false flag of safety. If we lived in a truly free society, I’d support removing marijuana from all Schedules and letting it be sold like rum (which, in my world, wouldn’t be regulated by the national government, either). Let adults decide whether they want to use recreational drugs or not, and let them suffer the dire consequences of abuse.

But we don’t live in a free society. We’ve created a vast, suffocating web of government safety nets to “protect” people from themselves. More laws and regulations would be chained to our necks no matter what choice we make. So, given our current socialist-leaning reality, and since I think marijuana may have some valid medicinal value and should be studied further so adults can make educated decisions about using it, I think moving marijuana from Schedule I to Schedule III is a very reasonable first step.

What is a Title II or NFA firearm?

NFA firearms include suppressors and SBRs
NFA firearms include suppressors and short-barreled rifles (SBRs).

NFA/Title II firearms include: machine guns, short-barreled rifles and shotguns, silencers (suppressors), destructive devices (e.g. Molotov cocktails, bazookas, mortars, etc.), and “any other weapons (AOW).” AOWs include things such as cane guns, gadget-type firearms such as “pen guns,” etc.

The NFA/Title II umbrella also includes any parts designed for fabricating any of these weapons.

A little bit of background…

Back in the 1930s, criminals such as John Dillinger, Bonnie Parker, and Clyde Barrow were making headlines. And the organized crime gangsters, which were the natural result of Prohibition, were also a big political problem. So the federal government decided to attack the guns being used by these criminals. (Sound familiar?)

At that time, it was widely acknowledged that the Second Amendment wouldn’t allow the government to prohibit the ownership of firearms, so the politicians decided to tax certain weapons out of existence instead.

The gangsters who made the news loved their Tommy guns and sawed-off shotguns, so The National Firearms Act of 1934 (NFA) imposed a registration process and a $200 transfer tax (about $3500 today) on the purchase or transfer of machine guns, sawed-off shotguns and rifles (technically, short-barreled shotguns and rifles), and silencers (suppressors). The expensive tax effectively took such weapons out of the hands of most law-abiding citizens.

Prohibition ended and gangsters were no longer in the headlines. The Supreme Court struck down the NFA’s registration process and, over time, public support for the law waned.

But the assassinations of the Kennedys and Dr. King in the 1960s made guns a political punching bag once again.

In 1968, the Gun Control Act (GCA) was passed. It did many things, but primarily brought all firearms regulation under the ever-expanding “interstate commerce” clause of the U.S. Constitution. It also banned the importation of military surplus weapons unless they met the now infamous “sporting purposes” requirement.

Title II of the GCA strengthened the old NFA law by resurrecting the registration requirement and adding destructive devices and AOWs to the list of regulated items. However, the $200 transfer tax was not changed or linked to inflation. Interestingly, the transfer tax on AOWs was set at only $5, not $200.

NFA/Title II firearms are sometimes also referred to as Class 3 weapons. All gun dealers must obtain a federal firearms license (FFL). A gun dealer who wants to offer NFA firearms must also pay a Special Occupational Tax (SOT). The amount of the tax depends on the business classification: an importer of NFA firearms is Class 1, a manufacturer of NFA firearms is Class 2, and a dealer of NFA firearms is Class 3. Since many people buy their NFA/Title II weapons from a “Class 3” dealer, such weapons have become colloquially known as Class 3 weapons.

So, NFA/Title II firearms such as machine guns, silencers, and short-barreled rifles (SBRs) are legal on the federal level, but you have to jump through some hoops to purchase or manufacture them. Additionally, some states may ban some or all NFA weapons.

However, no NFA weapons are banned in Florida.

Other articles you may find interesting:

NFA Firearm Trust FAQs

Choose: Concealed Carry License or Medical Marijuana Card

Understanding Palliative Care

An elderly man receiving palliative care
Palliative care is focused on providing relief from the symptoms and stress of a serious illness. The goal is to improve quality of life for both the patient and the family.

The term “palliative care” can cause many people to draw a blank. Many people think it’s just a synonym for hospice care. However, that’s an inaccurate assumption. Here’s some information that may help you better understand palliative care.

Hospice Care

Hospice care is one of many types of palliative care. If your loved one is in the hospital with a terminal illness, the doctor may suggest that the family talk with someone in the hospice department of the hospital. This is the first encounter many people have with the concept of hospice care.

Hospice care is typically delivered during the end stages of a final illness. Hospice care may be given in the hospital, in a hospice care center, or in the home. This type of treatment focuses on keeping the person as comfortable as possible, including pain management and emotional distress.

Palliative Care

Palliative care encompasses quality of life issues for people who have severe ongoing health issues or life-threatening conditions. You don’t have to be in the end stages of life to receive palliative care. The doctor who treats your medical condition can refer you to a palliative care specialist.

The services the palliative care specialist can provide include:

  • Reducing your symptoms
  • Relieving your pain
  • Providing general physical comfort
  • Providing spiritual comfort

Because palliative care can help the patient achieve a better outcome, many doctors prescribe this type of treatment for conditions like multiple sclerosis, cancer, stroke, Parkinson’s, Alzheimer’s, severe kidney disease and other significant conditions. Anyone who needs help managing a major health crisis or ongoing illness that is life-changing can benefit from palliative care.

Myth-Busting Palliative Care

There are many misconceptions about palliative care. Here are some of the most common:

  • You have to be dying to get palliative care.
    • This is not true. People with severe injuries or illnesses can receive palliative care, whether they are expected to make a full recovery, have life-long limitations, or not survive the illness. You can be two years old or 92 years old.
  • Palliative care is a way for people addicted to painkillers to get a steady supply of drugs.
    • This is also not true. Palliative care does not give you unrestricted access to painkillers. Medical professionals will determine the appropriate level of medications for your condition. You must have a significant medical condition to qualify for palliative care.
  • The people who provide palliative care services are “hippie dippies” and not medical professionals.
    • This isn’t true. Your primary care doctor will be part of your treatment planning team, along with the medical professionals who are appropriate for your condition. Your team might include a doctor who specializes in medical care, nurses, physical therapists, a dietician or nutritionist, psychologist, social worker and spiritual advisor.
  • You have to stop your medical treatment to go on palliative care.
    • This is also not true. Palliative care works in conjunction with the medical treatment that your primary care doctor prescribes.
  • Palliative care is for people who refuse traditional medical care and prescription medicines.
    • This is not true. Palliative care incorporates both traditional medical care and complementary services. Palliative care also often involves prescription drugs for pain control.

With a better understanding of palliative care, more people can benefit from these services and manage major health challenges more comfortably.

References:

A Place for Mom. “Palliative Care: Facts and Questions.” (accessed August 7, 2019) https://www.aplaceformom.com/planning-and-advice/articles/palliative-care

Other articles you may find interesting:

Becoming Your Aging Loved One’s Money Manager

Including Pets in Your Estate Plan

Planning for the Unexpected

A hospital visit can make you realize you need to do some planning for the unexpected.
A hospital visit can make you realize you need to do some planning for the unexpected.

Sadly, this is not an unusual situation. The daughter spoke with her mother once or twice a week, and the fall happened just after their last conversation. She dropped what she was doing and drove to the hospital, according to the article “Parents” in BusinessWest.com. At the hospital, she was worried that her mother was suffering from more than fractures, as her mother was disoriented because of the pain medications.

The conversation with her brother and mother about why she wasn’t notified immediately was frustrating. They “didn’t want to worry her.” She was worried, and not just about her mother’s well-being, but about her mother’s finances, and whether any plans were in place for this situation.

Her brother was a retired comptroller, and she thought that as a former financial professional, he would have taken care of everything. That was not the case.

Despite his professional career, the brother had never had “the talk” with his mother about money. No one knew if she had an estate plan, and if she did, where the documents were located.

All too often, families discover that no planning has taken place during an emergency.

The conversation took place in the hospital, when the siblings learned that documents had never been updated after their father had passed—more than 20 years earlier! The attorney who prepared the documents had retired long ago. The originals? Mom had no idea. The names of her banks and financial institutions had changed so many times over the years that she wasn’t even sure where her money was.

For this family, the story had a happy ending. Once the mother got out of the hospital, the family made an appointment to meet with an estate planning attorney to get all of her estate planning and elder law planning completed. In addition, the family updated beneficiaries on life insurance and retirement accounts, which are now set to avoid probate.

Both siblings have a list of their mother’s assets, account numbers, credit card information and what’s more, they are tracking the accounts to ensure that any sort of questionable transactions are reviewed quickly. They finally have a clear picture of their mother’s expenses, assets and income.

If your family’s situation is closer to the start of the story than the end, it’s time to contact a qualified estate planning attorney who is licensed to practice in your state and have all the necessary preparation done. Don’t wait until you’re uncovering family mysteries in the hospital.

Reference: BusinessWest.com (Aug. 1, 2019) “Parents”

Other articles you may find interesting:

Having the “Someday” Talk with Parents

Using a Trust for Your Children’s Inheritance Plan

Expressing Your End-of-Life Wishes

End-of-life wishes are needed.
Document your end-of-life wishes now to make things easier for your loved ones later.

Discussing end-of-life wishes is something most people still avoid as a difficult topic. It’s true: for many people this topic is just too sad and scary to talk about, says Flagstaff Business News in the article “Easing the End-of-Life Transition with Advance Care Planning.”

However, planning for your death is a kindness to your loved ones, family members, friends or even neighbors who are left to make decisions about your medical care when you can’t do it yourself.

In the estate planning field, this is called advance care planning. It involves learning about the decisions that often need to be made, considering the options and decisions ahead of time, and memorializing those decisions with the correct and enforceable legal documents. This gives a person the ability to think about what they want in the way of treatment or care, and what they don’t want.

Documenting your end-of-life wishes makes things much easier for the survivors who otherwise would have to guess what was on their loved one’s mind or what they would have wanted.

Here are the medical decisions that most frequently need to be made:

CPR, or Cardiopulmonary Resuscitation. This is to get the heart to start beating again, when it has stopped and can range from the use of hands, a defibrillator or chemical means.

Ventilator or Assisted Breathing. This is the use of a machine, connected to a breathing tube that is inserted through the mouth or lungs and down the throat. It is not comfortable, and the patient cannot speak with the tube in their throat.

Artificial Nutrition. This is the delivery of nutrition through an IV (intravenous) or a feeding tube.

Comfort Care. Doing anything to make an individual comfortable at the end of their life. It can include everything from medication to emotional and spiritual counseling. The goal is to provide a person with a dignified end of life, while relieving as much suffering as possible.

Once decisions have been made about these end-of-life medical treatments, it’s time to get them down on paper.

You’ll need a Living Will. This is a written document expressing your wishes for end-of-life care. If you cannot speak on your own behalf, this is the document doctors will use to guide your care.

Durable Power of Attorney. This is a legal document used to name another person to make health care decisions on your behalf.

In addition, you should have your estate planning attorney prepare a Last Will and Testament or a Revocable Living Trust, so your property is distributed according to your wishes. An estate planning attorney can help make sure all the details are addressed.

These are not fun topics but thinking about what you would like to have occur and documenting your end-of-life wishes provides direction for your loved ones, who would otherwise be guessing at what you would have wanted.

Reference: Flagstaff Business News (Aug. 2, 2019) “Easing the End-of-Life Transition with Advance Care Planning”

Other articles you may find interesting:

A Health Care Surrogate’s Powers

Who Should Be the Agent of My Power of Attorney?

New Income Tax Form Designed for Seniors

IRS Form 1040
The IRS has created a new Form 1040 for seniors.

There’s a new tax form designed with seniors in mind. The IRS released a draft form of the 1040-SR, “U.S. Tax Return for Seniors,” says Kiplinger in its article, “IRS Releases Draft Form of New 1040 Tailored for Seniors.”

This form was created by the 2018 Bipartisan Budget Act. One of its provisions required the development of a tax return that would be easy for seniors to use. The form will highlight retirement income streams and other tax benefits for seniors. Taxpayers age 65 and older can use this form to file their 2019 tax returns.

It’s designed off the regular 1040, and the IRS says it uses all the same schedules, instructions, and attachments. Taxpayers who use tax software to file may not even notice the difference.

However, for taxpayers who still complete paper tax forms, the new form will be friendlier to aging eyes. The font is bigger, and the shading on the regular 1040 has been removed to improve the contrast and increase legibility.

One important feature of the new tax form is the addition of a standard deduction chart. The form lists the standard deduction amounts, including the extra standard deduction amount for which taxpayers age 65 and older qualify. This way, seniors don’t have to search around for the information. The chart also makes it simpler for seniors to take advantage of the full standard deduction for which they’re eligible, especially for those who may not even be aware of the extra amount for which they qualify.

The tax form has lines for specific retirement income streams, like Social Security benefits, IRA distributions, and pensions, as well as earned income from work.

The draft form will be finalized later this year.

Reference: Kiplinger (July 12, 2019) “IRS Releases Draft Form of New 1040 Tailored for Seniors”

Other articles you may find interesting:

Filing Estate Taxes for a Deceased Family Member

Who Should Be the Agent of My Power of Attorney?

Becoming Your Aging Loved One’s Money Manager

money managers help others with their finances
Before a loved one is showing the beginning symptoms of cognitive decline, make sure the necessary legal documents are in place so you can easily step in as his money manager.

Sometimes a loved one starts having trouble managing her money because of confusion, cognitive decline, Alzheimer’s disease, or some other form of dementia. When that happens, you might find yourself having to serve as her money manager. Here are some things you need to know about handling your aging loved one’s finances.

Changes to Make Now

Your loved one must be legally competent to take certain steps, such as adding a trusted friend or relative to a bank account or creating a power of attorney so her chosen money manager can  handle her financial matters. Once your aging loved one becomes incapacitated, she will not be able to hand the reins over to someone else. So plan ahead, before the confusion or dementia really sets in.

At that point, the only option is to go to court and obtain a guardianship or conservatorship. This legal process can take weeks, months, or even longer, and they often cost your aging loved one thousands of dollars in legal fees. Not only does she have to pay for the lawyer who files and handles the guardianship for you, she also has to foot the bill for court costs and payment to the person the court appoints to represent her.

People often challenge changes to legal documents that a person makes after a certain age, or while in the early stages of Alzheimer’s. The best way to counter this situation is to get a letter from your loved one’s doctor at the same time she decides to execute a power of attorney or add you to her bank account. The doctor’s letter should say your relative was of sound mind at that time.

How to Avoid Elder Financial Abuse

Sadly, the vast majority of people who steal from older adults are the people they trust the most. Family members, friends, clergy and financial professionals commit the lion’s share of elder financial abuse. To prevent this outcome for your loved one, you have two options:

  • Have two people in charge of your loved one’s finances instead of only one. The two people can alternate the responsibility monthly or quarterly. This arrangement provides automatic oversight of each person’s actions. You could, for example, have a close relative and a dear friend serve as the two money managers.
  • Use a money management service. These companies can take care of things like paying the bills and balancing the checkbook for your aging relative. You should have a relative or friend go over the reports from the company every month to check for fraud on the part of the company. Your local National Association of Area Agencies on Aging can provide names of money management programs in your area.

When a money manager starts handling your loved one’s finances, she should prevent identity theft and fraud by canceling and shredding your relative’s debit cards and credit cards. She should also close the accounts at PayPal and other online shopping services.

Keep All Transactions Above Suspicion

Because incapacitated people are so vulnerable to theft and fraud, the people who manage your loved one’s money and other assets should take precautionary measures to make it clear they are acting in your relative’s best interests. Always write the reason for the payment on the memo line of the check. And never co-mingle funds.

Do not borrow from the account. Do not use your loved one’s assets for purchases that benefit anyone other than your relative. Do not use her assets for your own benefit, like driving her car to work.

Every state has different regulations, so talk with an estate planning or elder law attorney near you.

References:

AARP. “Managing a Loved One’s Money.” (accessed July 11, 2019) https://www.aarp.org/caregiving/financial-legal/info-2017/managing-someone-elses-money.html?intcmp=AE-CAR-LEG-EOA1

Other articles you may find interesting:

Why is an Advance Directive so Important with Dementia?

Are Your Estate Planning Documents Age-Appropriate? (Part 1)