Estate Planning and Trusts Blog

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)

How Much Money Should I Provide My Child with Special Needs?

A child with special needs
It can be hard to determine how much money you should leave for the care of your child with special needs, but the first step is to create some sort of a plan.

One of the toughest things about planning for a child with special needs is trying to calculate the amount of money it’s going to take to provide while the parents are alive and after the parents pass away.

Kiplinger’s recent article asks “How Much Should Go into Your Special Needs Trust?” The article explains that it’s not uncommon for parents to have done some estate planning, but not necessarily special needs estate planning. They haven’t thought about how much money they should earmark to fund their child’s trust or which assets would be the best to use.

Special needs estate planning often involves creating a type of trust which will allow a person with a disability to continue to receive certain public benefits while avoiding complete impoverishment. Typically, ownership of assets more than $2,000 would make the individual ineligible for certain public benefits. But assets held in a special needs trust (SNT) don’t count toward this amount.

A child with special needs can generate a lot of expenses over his or her lifetime. The precise amount will be based on the needs and lifestyle of your family, as well as your child’s capabilities. When you die, this budget must be increased because the things you did for free must now be paid for.

An SNT often isn’t funded until the parents’ death. At that point, the trust would file a tax return each year and pay taxes at the higher trust tax rates. There are also legal and trust administration expenses to think about. But the public program benefits your child receives can, in many cases, offset many of the above-mentioned costs.

It’s vital to conduct a complete analysis of the future costs of providing for your child with special needs so you can start saving and making adjustments in your financial and estate planning. The Kiplinger article provides some great information about how to start thinking about the realities of your child’s future needs.

Speak with an elder law or estate planning attorney about the different types of special needs trusts.

Reference: Kiplinger (June 10, 2019) “How Much Should Go into Your Special Needs Trust?”

Other articles you may find interesting:

ABLE Accounts: No More Medicaid Recovery

Special Needs, Special Trusts: SNT FAQs

Who Should Be the Agent of My Power of Attorney?

power of attorney - person to act on your behalf
Choose the agent you name in your power of attorney carefully. You should trust her to act in your best interests at all times.

It’s important to understand what a power of attorney is, how it factors into estate planning, and how sibling roles can differ and be shared at the same time.

Considerable’s recent article, “How to assign power of attorney without sparking a family feud,” gives us some idea how the power of attorney can work within a family and among siblings.

A power of attorney (POA) is a legal document that allows one person (the agent) to act on behalf of another (the principal), usually when that person is unable to make decisions for themselves. It’s probably the most important estate planning document an adult should have as it’s the only way to avoid guardianship court.

Many people confuse the role of the agent of a power of attorney with the role of the executor of an estate. A power of attorney is only in effect while the person who has granted the authority is alive. Once that person dies, that document terminates and the executor of the estate assumes the responsibility of seeing the estate through the probate process. They’re two very different roles, but they can be held by the same person.

There are also different types of powers of attorney. The most frequently used are the general POA and the health care POA (known in Florida as a Designation of Health Care Surrogate). The general power of attorney is for the management of financial, business, legal, and private affairs. The health care power of attorney authorizes the agent to make health care-related decisions for the principal.

If a parent grants a power of attorney to one of her children, that child has the sole authority to act on behalf of the parent. The other siblings have to abide by the inherent authority of that sibling to make decisions for the parent. Additionally, the sibling named as sole agent has no legal obligation to report to the other siblings or to request their input when making decisions.

It’s also important to understand that the power of attorney is a fiduciary obligation. This means the person who holds it must act in the best interests of the principal rather than in their own interests. He or she must also comply with the state laws and the directions within the legal document. Nonetheless, things can get messy if there isn’t transparency and trust among the siblings when major decisions are being made.

Some parents opt to appoint joint agents on their power of attorney so that two siblings share the responsibility. This may decrease the potential for jealousy and mistrust within the family. However, it can also lengthen and complicate decision-making. There’s always the possibility that the siblings simply won’t agree on an issue, and as a result, an important decision could remain stuck in neutral indefinitely.

Whether one or more people are named as agents on a power of attorney, communication and transparency are the key factors in avoiding painful situations in the family. Another alternative is to name an independent person or professional fiduciary to act as the agent. That may be the best way to prevent family conflict and provide peace of mind when a parent needs help managing his or her affairs.

Reference: Considerable (July 10, 2019) “How to assign power of attorney without sparking a family feud”

Other articles you may find interesting:

Naming a Child as Successor Trustee?

Why is an Advance Directive so Important with Dementia?

Change Your Life Insurance Beneficiary After Divorce

update your beneficiary designations
Review and update your beneficiary designations to avoid unintended consequences.

Many surviving spouses receive an unpleasant surprise when they attempt to collect on their deceased spouse’s life insurance policies. Often, a former spouse or the former spouse’s children are legally entitled to the proceeds because the deceased person never updated his beneficiary forms.

In Florida, this accidental (or negligent) result was addressed in 2012 with a new statute. Basically, it says that if the beneficiary designation was made before the divorce, the former spouse is treated as having predeceased the policy owner. But that doesn’t always solve the problem, and may even create other problems.

If the primary beneficiary predeceases the policy owner, then the contingent beneficiaries (perhaps the former spouse’s children) will receive the proceeds. That may not sit well if the deceased policy owner also had children with his current spouse. Or, if no contingent beneficiaries were named, the proceeds will likely be paid to the deceased person’s estate. Hello, probate.

Also, our state law is preempted by federal law. Many federal and military group life insurance policies pay proceeds only to the beneficiaries named on the last form the company received from the deceased policy owner, regardless of marital status or state law. The U.S. Supreme Court upheld this treatment in 2013 in Hillman v. Maretta.

Protect your family. Review your beneficiary designations on your life insurance policies at work and at home annually, or at the very least, any time you have a life change: marriage, divorce, deaths, and births/adoptions. Keep a copy of all current signed beneficiary designations in your files with the rest of your estate planning documents. Your family will thank you.

Other articles you may find interesting:

You’ve Received an Inheritance. Now What?

Widowed? What Happens Next?

Using a Trust for Your Children’s Inheritance Plan

Inheritance by young children
An inheritance held in trust can help your children learn the value of money.

Planning for your children’s inheritance takes some thought. Young people tend to like to keep things simple. Millennials don’t want their parents’ furniture or antiques. They want to be able to move easily, without a lot of headaches. Millennials are okay with jewelry, art, and cash. Likewise, with estate planning, millennials want a simple Will. This can be a wise choice if they have no children and are under the estate tax threshold. However, when they have children of their own, they should consider a trust.

Forbes’s recent article, “Why A Simple Will Won’t Cut It If You Have Young Children,” explains that without a trust, minor children inherit assets outright when they turn 18. That may be a problem if your children are apt to blow through their inheritance in a few years instead of using the money wisely.

However, an inheritance could last a lifetime if the beneficiary lives within her means, doesn’t tap into the principal, and works to help support her lifestyle and supplement her income. However, this isn’t always the case, and individuals with access to so much cash are often vulnerable to developing addictions.

A trustee can make certain that your children and young adults are cared for over the long-term. If you’re not alive to guide and direct your children, a trust can set the necessary limitations for their finances. The trustee can also help with your children’s financial literacy, so they’ll possess tools if and when they’re given additional responsibility for their inherited assets.

This isn’t just for minor children who are under 18 years old but also for young adults. The fact that a child is “legal” in the eyes of the law doesn’t mean she’s responsible enough to invest a million-dollar inheritance. A trust sets up an experienced advisor to manage inherited assets along the way.

One option is to set up the trust so they will become a co-trustee at a certain age. This lets them have a say and learn to make decisions about the management of the trust assets. Your trust can also give them access to distributions of principal slowly over time so they get used to managing large sums of money.

Simple solutions can work for some people, and there are definitely situations in which a simple Will is appropriate. But if you have minor children, consider doing additional planning so they don’t inherit money at 18.

Ask your estate planning attorney about the options available to set up a trust to work for your family.

Reference: Forbes (July 12, 2019) “Why A Simple Will Won’t Cut It If You Have Young Children”

Other articles you may find interesting:

Understanding Your Trust Document

Why Unmarried Couples Need Estate Planning

Including Pets in Your Estate Plan

Pet trusts can be for horses.
Pet trusts aren’t just for dogs and cats; horses, parrots, and other animals may also benefit.

Estate planning helps to create a strategy for managing our assets while we are living and preparing for their distribution when we die. That includes determining what happens to our tangible property as well as financial investments, retirement accounts, etc. An estate plan can also be used to protect the well-being of our beloved companion animals, says The Balance in the article “Estate Planning for Fido: How to Set Up a Pet Trust.”

Pet trusts were once thought of as something only for extremely wealthy or eccentric individuals, but today many ‘regular’ people use them to ensure that if they die before their pets, their pets will have a secure future.

Every state (except for Washington) and the District of Columbia now has laws governing the creation and use of pet trusts. Knowing how they work and what they can and cannot do will be helpful if you are considering having a pet trust as part of your estate plan.

When you set up a trust, you are the “grantor.” You have the authority as creator of the trust to direct how you want the assets in the trust to be managed – for yourself and any beneficiaries of the trust. The same principal holds true for pet trusts. You set up the trust and name a trustee. The trustee oversees the money and any other assets placed in the trust for the pet’s benefit. Those funds are to be used to pay the pet’s caregiver for the pet’s care and related expenses. These expenses can include:

  • Regular care by a veterinarian,
  • Emergency veterinarian care,
  • Grooming, and
  • Feeding and boarding costs.

A pet trust can also be used to provide directions for end of life care and treatment for pets, as well as burial or cremation arrangements you may want for your pet.

In most instances, the pet trust, once established, remains in place for the entire life span of the pet. Some states, however, place a time limit on how long such a trust can continue. For animals with very long lives, like certain birds or horses, you’ll want to be sure the trust will be created to last for the entire life span of your pet. In several states, the limit is 21 years.

An estate planning attorney who has experience with pet trusts will know the laws of your state.

Creating a pet trust is like creating any other type of trust. An estate planning attorney can help with drafting the documents, helping you select a trustee and if you’re worried about your pet outliving the first trustee, naming any successor trustees.

Here are some things to consider when setting up your pet’s trust:

  • What’s your pet’s current standard of living and care?
  • What kind of care do you expect the pet’s new caregiver to offer?
  • Who do you want to be the pet’s caregiver, and who should be the successor caregivers?
  • How often should the caregiver report on the pet’s status to the trustee?
  • How long do you expect the pet to live?
  • How likely your pet is to develop a serious illness?
  • How much money do you think your pet’s caregiver will need to cover all pet-related expenses?
  • What should happen to the money, if any remains in the pet trust, after the pet passes away?

The last item is important if you don’t want the funds to disappear. You might want to give the money to family members, or you may want to give it to charity. The pet trust needs to include a contingency plan for these scenarios.

Another point: think about when you want the pet trust to go into effect. You may not expect to become incapacitated, but these things do happen. Your trust can be designed to become effective if you become incapacitated.

Make sure the pet trust clearly identifies your pet so no one can abuse its terms and access trust funds fraudulently. One way to do this is to have your pet microchipped and record the chip number in the pet information document. You should also include photos of your pet and a physical description.

Be as specific as necessary when creating the document. If there are certain types of foods that you use, list them. If there are regular routines that your pet is comfortable with and that you’d like the caregiver to continue, then detail them. The more information you can provide, the more likely it will be that your pet will continue to live as they did when you were taking care of them.

Finally, make sure that your estate planning attorney, the trustee and the pet’s designated caregiver all have a copy of your pet trust so they are certain to follow your wishes.

Reference: The Balance (March 27, 2019) “Estate Planning for Fido: How to Set Up a Pet Trust”

Other articles you may find interesting:

Pet Trust FAQs: For the Love of Fluffy

Smart Second Marriage Planning Tips