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Hey Dad, Can I Get an Advance on the Inheritance ?

Most parents want to divide their estate equally among their heirs, but sometimes things just don’t work out that way. That’s especially the case when one child needs more help than another. Therefore, what parents will often do is count the distributions they make during their lifetime as an advance on the inheritance . This doesn’t always go smoothly, says the article “Lifetime advances of inheritances” from Lake County News.

Equalizing distributions to some children to offset any substantial distributions made to offset the total distribution can lead to trouble, if certain legal requirements are not addressed. In California, the Probate Code is very specific. There are three different approaches in which lifetime distributions are counted as advances of inheritances at death:

  1. The instrument provides for deduction of the lifetime gift from the at-death transfer
  2. The transferor declares in a contemporaneous writing that the gift is in satisfaction of the at-death transfer or that its value is to be deducted from the value of the at-death transfer and
  3. The transferee acknowledges in writing that the gift is in satisfaction of the at-death transfer or that its value is to be deducted from the value at the at-death transfer.

In the first example, the decedent’s will, or trust expressly says that lifetime distributions are to be counted against the future inheritance. This may state a specific dollar amount or may refer to a ledger that tracks ongoing lifetime gifting. The ledger approach is often used when a child is dependent upon a parent for ongoing support, paying off school loans or paying a mortgage.

The second example, which involves a written record of the gift, was the subject of a recent appellate court decision. The deceased father kept track of all monetary gifts to his children. The father’s bookkeeper maintained a spreadsheet and was told by the father that the list was important, so that the payments would be deducted from inheritances. At the father’s death, the son had received more than $450,000 more than the daughter. The son contested the daughter’s request for equalizing the inheritance based on the ledger. The appellate court stated that the ledger met the requirements to serve as a contemporaneous written record. The court also found that the permanent ledger was property authenticated and entered into evidence, based on the daughter’s testimony that she found the ledger among her father’s papers and that it was written in her father’s handwriting.

In the third scenario, where there was a written acknowledgment by the person receiving the “advance” that the money was in satisfaction of the at-death transfer, the court found that the requirement was satisfied and the son had acknowledged that the assets given to him were advances on his inheritance.

A better scenario, and one that would have prevented some, if not all, of the litigation described above, would be to have estate planning documents that clearly state whether any disproportionate lifetime gifting to beneficiaries is to be offset with equalizing payments to the other beneficiaries at death. Your estate planning attorney will be able to create the best plan if your heirs need financial support, following the laws of your state.

Reference: Lake County News (March 14, 2020) “Lifetime advances of inheritances”

 

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The Coronavirus and Estate Planning

Coronavirus and Estate Planning – As Americans adjust to a changing public health landscape and historical changes to the economy, certain opportunities in wealth planning are becoming more valuable, according to the article “Impact of COVID-19 on Estate Planning” from The National Law Review. Here is a look at some strategies for estate plans:

Basic estate planning. Now is the time to review current estate planning documents to be sure they are all up to date. That includes wills, trusts, revocable trusts, powers of attorney, beneficiary designations and health care directives. Also be sure that you and family members know where they are located.

Wealth Transfer Strategies. The extreme volatility of financial markets, depressed asset values,and historically low interest rates present opportunities to transfer wealth to intended beneficiaries. Here are a few to consider:

Intra-Family Transactions. In a low interest rate environment, planning techniques involve intra-family transactions where the senior members of the family lend or sell assets to younger family members. The loaned or sold assets only need to appreciate at a rate greater than the interest rate charged. In these cases, the value of the assets remaining in senior family member’s estate will be frozen at the loan/purchase price. The value of the loaned or sold assets will be based on a fair market value valuation, which may include discounts for certain factors. The fair market value of many assets will be extremely depressed and discounted. When asset values rebound, all that appreciation will be outside of the taxable estate and will be held by or for the benefit of your intended beneficiaries, tax free.

Grantor Retained Annuity Trusts (GRATS). The use of a GRAT allows the Grantor to contribute assets into a trust while retaining a right to receive, over a term of years, an annuity steam from the Trust. When the term of years expires, the balance of the Trust’s assets passes to the beneficiaries. The IRS values the ultimate transfer of assets to your intended beneficiaries, based on the value of the annuity stream you retain and an assumed rate of return. The assumed rate of return, known as the 7520 rate comes from the IRS and is currently 1.8%. So, if you retain the right to receive an annuity stream from the trust equal to the value of the assets plus a 1.8% rate of return, assets left in the trust at the end of the term pass to your beneficiaries transfer-tax free.

Charitable Lead Annuity Trusts. Known as “CLATs,” they are similar to a GRAT, where the Grantor transfers assets to a trust and a named charity gets an annuity stream for a set term of years. At the end of that term, the assets in the trust pass to the beneficiaries. You can structure this so the balance of the assets passes to heirs transfer-tax free.

Coronavirus and Estate Planning – Speak with your estate planning attorney about these and other wealth transfer strategies to learn if they are right for you and your family. And stay well!

Reference: The National Law Journal (March 13, 2020) “Impact of COVID-19 on Estate Planning”

 

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Coronavirus Caregiving Tips : Keeping Ourselves and Our Elderly Loved Ones Safer

We have all been warned that our elderly loved ones are at heightened risk during the coronavirus pandemic. If you are a caregiver for someone in this high-risk population, here are some coronavirus caregiving tips coronavirus caregiving tipsfrom Dr. Alicia Arbaje, who specializes in internal medicine and geriatrics at Johns Hopkins.

  1. Keep Yourself Well
    Be sure to follow all the guidelines and precautions about social distancing, hand washing, and cleaning to keep yourself well.
  2. Limit In-Person Visits
    It may be emotionally challenging but keeping in-person visits to a minimum is the best way to reduce the risk of infection. When you can’t be there in-person, use technology to stay in touch. Teach your older loved ones how to use video chat applications. Remember to add captions to your videos if they are hearing-impaired. Also, encourage others to telephone or send cards or notes as well.
  3. Be Creative About Home-Based Projects
    Now may be a great time to encourage your loved ones to record their personal stories, organize family photos or reconnect with old friends online.
  4. Decide on a Plan
    Discuss now your emergency response plan. Who will be the emergency contact? Do you know where the estate planning documents are and can you quickly access them, especially health care directives?

Coronavirus Caregiving Tips :If you or your loved one do not have an updated will or trust and health care documents, please reach out to our office. We can help get planning in place quickly and easily and are even offering virtual meetings now to keep everyone safe.

What if your elder loved one starts to develop symptoms?

If you or your loved one learn that you might have been exposed to someone diagnosed with COVID-19 or if anyone in your household develops symptoms such as cough, fever or shortness of breath, call your family doctor, nurse helpline or urgent care facility. For a medical emergency such as severe shortness of breath or high fever, call 911.

Resource: Johns Hopkins Medicine, Coronavirus and COVID-19: Caregiving for the Elderly, https://www.hopkinsmedicine.org/health/conditions-and-diseases/coronavirus/coronavirus-caregiving-for-the-elderly

 

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Medicare and Coronavirus – Will Medicare Cover Coronavirus Tests?

Medicare and Coronavirus – A test for the new coronavirus will be covered under Medicare Part B, and some large Advantage Plan providers are waiving copays or preauthorization requirements that would be applicable for diagnostic testing.

CNBC’s recent article entitled “Medicare will cover coronavirus tests. Here’s how to get one if you think you have symptoms” says that your physician would need to order a test, if they are concerned that you have the virus.

Lab services are covered by Medicare. However, if you want a random test out of the blue, it wouldn’t be covered if there’s no medically necessary reason for it. However, given the current environment, if a doctor is concerned, they’re going to say the test is medically necessary.

The number of COVID-19 cases is being tracked and is currently climbing. The fast spread of the virus has created issues with the stock market, as concerns of a global economic slowdown increase.

While the U.S. case count is low compared to some other countries, state and local governments are getting ready for community outbreaks as the virus continues to spread.

Many people experience mild symptoms from COVID-19. However, the virus appears to take a greater toll on individuals with underlying health conditions and seniors. It is similar to the influenza virus, better known as the seasonal flu. A vaccine for COVID-19 is probably a year away, if not longer. If the flu is caught early, it can be treated with antiviral medication that may lessen the symptoms and duration of the illness. However, there isn’t that option for this coronavirus.

The Centers for Disease Control and Prevention recommended that high-risk individuals stock up on supplies (such as extra medications and groceries), maintain some space between others and yourself, wash your hands frequently and avoid crowds. If there’s an outbreak in your area, stay at home as much as you can.

If you develop any symptoms that are concerning, contact your doctor by phone for guidance. The CDC has encouraged providers to use their best judgment for who should be tested, which may depend on your symptoms or other factors, such as known exposure to an infected person.

If your doctor or other provider thinks you need testing, they’ll contact their local health department or the CDC for instructions on where you can get the test, says the National Institutes of Health. The coronavirus test may involve a swab, blood draw, or other method, based on where the test is administered. The CDC said that coronavirus testing is now available across all 50 states, and Quest Diagnostics and LabCorp — two of the country’s largest private labs — are making test kits available.

Medicare Part B covers diagnostic tests. However, some of Medicare’s 62 million beneficiaries — the majority of whom are over 65 — may have a copay, if they have an Advantage Plan. Those plans may differ from original Medicare as to the amount patients must pay for any particular service. However, the good news is that many providers are waiving any cost-sharing associated with getting a COVID-19 test, as well as any prior authorizations that normally would be required, if a test is deemed warranted.

If there is a doctor’s appointment involved, you could have a copay or coinsurance, depending on your specific Medicare coverage. Costs beyond that would depend on whether you have the virus, whether you need additional medical treatment, or should self-quarantine.

Reference:  CNBC (March 10, 2020) “Medicare will cover coronavirus tests. Here’s how to get one if you think you have symptoms”

 

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What Do I Need to Know Before I have Mom Move in with My Family ?
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What Do I Need to Know Before I have Mom Move in with My Family ?

Mom Move in with My Family ? Multigenerational living can help an aging parent avoid the sense of isolation and depression that may come with living alone. However, by this time in life, you have a set way of doing things. Your likes, dislikes, value, and personalities have also changed over time.

AARP’s article from 2018 asks “Considering Moving Your Loved One into Your Home?” This is still a timely article. It notes that, regardless of how close and loving your relationship may be, adding another person to your household changes the dynamics for the entire family. The journey will be smoother, if you and your loved one go in with some clear parameters.

First, prior to having Mom Move in with My Family, ask yourself a few questions:

  • How will the move impact my spouse, children and my siblings?
  • How will my parent’s presence impact my family routine, activities and privacy?
  • Will I need to remodel the house or add a bedroom or bath?
  • Will my siblings help with some expenses?
  • Can we afford to do this?
  • Should part of my parent’s income be used to help defray living expenses?
  • Will this change require me to alter my work schedule?
  • How will I create boundaries?
  • How does my parent feel about moving in with my family?
  • How do I feel about this change?

Next, your parent should consider these questions.

  • Will this move take me away from people or activities I enjoy?
  • Do I like being with this family for long periods of time?
  • Are they expecting me to contribute some of my income or savings to living expenses?
  • If the home requires remodeling to accommodate me, am I able to help pay for it?
  • Will my other children help out?
  • If I don’t like something my child does, am I comfortable talking to him about it?
  • What are my feelings about being dependent?

You should then have an open and frank discussion about expectations, fears, finances and any lingering issues. It may be as easy as telling each other what bothers you (since the other person may not otherwise know and would be happy to make a change).

After this, create a list of the positive aspects and refer to it when you have a bad day with the arrangement.

Next, conduct a pair of meetings. Let your children know that they’re not the cause of their grandparent’s possible negative reactions, such as anger, weeping or fear. Tell them that the whole family needs to contribute, but they aren’t responsible for caregiving or fixing their grandparent. Discuss ways that the children can help their grandparent.

The other meeting is with your siblings. In addition to acknowledging that your parent needs help and will likely need more, it can be an emotional realization for all of you. Talk it out. You also shouldn’t be shy about asking for help.

Gifts of time are important in helping you manage other responsibilities in your life. Let your siblings know about your anticipated needs, like serving as a back-up and respite care, help with chores, meals delivered, grocery and prescription pickup and money to offset increased living expenses or to hire an aide.

Reference: AARP (Jan. 22, 2018) “Considering Moving Your Loved One into Your Home?”

 

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Revocation of Living Trust How Does That Work?

Revocation of Living Trust How Does That Work? A revocable trust is a flexible legal vehicle that lets the creator (known as the grantor) manage trust assets, as well as to alter the trust itself or its beneficiaries at any time in her lifetime. Also called a “living trust,” this trust is frequently used to transfer assets to heirs to avoid the time and expenses of probate. It is much different than if assets were simply bequeathed in a will. During the life of the trust, income earned is distributed to the grantor, and only after her death does its property transfer to the beneficiaries.

A recent Investopedia article asks “How exactly does one go about revoking a revocable trust?” According to the article, people might revoke a trust for several reasons, but typically it involves a life change. A common reason for revoking a trust, is a divorce when the trust was created as a joint document with one’s soon-to-be ex-spouse.

A trust might also be revoked because the grantor wants to make changes that are so extensive that it would be simpler to dissolve the trust and create a new one. A revocable trust may also be revoked, if the grantor wants to appoint a new trustee or totally change the provisions of the trust.

Note that while they avoid probate, revocable trusts aren’t exempt from estate taxes. Because of the fact that the grantor has control of the assets during his or her lifetime, the property is considered part of the taxable estate.

When attempting the revocation of Living Trust, first remove all the assets that have been transferred into it. This means changing titles, deeds, or other legal documents to transfer ownership from the assets of the trust back to the trust’s grantor directly. Next, have a legal document created that states the trust’s creator, having the right to revoke the trust, does want to revoke all terms and conditions of the trust and dissolve it completely. This is often called a “trust revocation declaration” or “revocation of living trust.” As a seasoned estate planning attorney to create this document for you to be sure that it is correctly worded and meets all the qualifications of your state’s laws. If the trust has a variety of assets, it is also often smarter to let an experienced attorney make certain that everything has been properly transferred out of the trust.

The Revocation of Living Trust document should be signed, dated, witnessed and notarized. If the trust being dissolved was registered with a specific court, the dissolution document should be filed with the same court. Otherwise, you can just attach it to your trust papers and store it with your will or new trust documents.

Contact you estate planning attorney to find out more. 

Reference: Investopedia (Jan. 13, 2020) “How exactly does one go about revoking a revocable trust?”

 

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C19 UPDATE: CDC Updates Business Response to Coronavirus
Businesspeople in Meeting --- Image by © Royalty-Free/Corbis

C19 UPDATE: CDC Updates Business Response to Coronavirus

C19 UPDATE: CDC Updates Business Response to Coronavirus

As we learn more about the coronavirus the Centers for Disease Control (CDC) is updating the guidance they give to business owners and employers. They issued updates on Friday, March 21st to include

  • Updated cleaning and disinfection guidance
  • Updated best practices for conducting social distancing
  • Updated strategies and recommendations to be implement now to respond to COVID-19

If you are a business owner, you may want to bookmark this page and check back regularly for updates: https://www.cdc.gov/coronavirus/2019-ncov/community/guidance-business-response.html

Resource: Interim Guidance for Businesses and Employers to Plan and Respond to Coronavirus Disease 2019 (COVID-19), updated March 21, 2020, https://www.cdc.gov/coronavirus/2019-ncov/community/guidance-business-response.html

 

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C19 UPDATE: Are Online Wills Valid – Beware the Rush

With COVID-19 affecting more and more Americans, people across the country are scrambling to set up wills and end-of-life directives. But are Online Wills Valid ? Over the last two weeks, online will companies have seen an explosion in users, according to the article, “Coronavirus Pandemic Triggers Rush by Americans to Make Online Wills,” published by CNBC.com.

However, as online wills grow in popularity, estate and elder lawyers increasingly caution against using them, for several reasons.

  • Are Online Wills Valid ? Since most of these do-it-yourself wills are created and executed without any oversight from an attorney, a larger number of wills may not be executed in compliance with the proper will formalities, and that could end up invalidating the will.
  • Do you fully understand the questions and consequences of your answers? There are many nuances in estate planning, as well as a good bit of legal jargon. Confusion over the question or the consequences of a decision can result in costly mistakes … and could even mean your will won’t hold up to a challenge in court.
  • What about asset protection? There is more to estate planning than just giving your stuff away after you die. How you transfer ownership of your assets can mean the difference between a protected inheritance and legacy for many generations … or the squandering or loss of a person’s life’s work within a few years … or months … after they pass away.
  • Is there any planning for long-term care? It’s estimated that more than half of people turning age 65 who will need some type of long-term care services in their lifetimes. Proper estate planning should balance the possibility that you will need assistance paying for nursing home care (Medicaid), with other estate planning goals. Mistakes in this area could disqualify you from receiving assistance should you need it.

As COVID-19 keeps people home, meeting with a lawyer to create a will could not be easier. In most states, a lawyer’s services have been deemed “essential,” even during stay-at-home orders. We are doing everything we can to make our services as easy and convenient for you as possible, including meeting over telephone, online video services and other innovative ways to ensure you get the planning you need while complying with all safety measures.

Resource: Coronavirus Pandemic Triggers Rush by Americans to Make Online Wills, https://www.cnbc.com/2020/03/25/coronavirus-pandemic-triggers-rush-by-americans-to-make-online-wills.html

 

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Can an Elder Law Attorney Help My Family?

The right elder law attorney can counsel a family through the difficult details and requirements of the situations such as Paying for a Nursing Home that may come up to protect the rights and welfare of seniors and their families. An elder law attorney may help with issues, such as guardianship, conservatorship, power of attorney, estate planning, Medicaid planning, probate and estate administration and advanced directives.

The Senior List’s recent article entitled “What is Elder Law and How Can an Elder Law Attorney Help Me?” explains that because the laws on the care of the elderly differ in each state, and are always subject to change, it is essential to find an elder law attorney who is skilled, knowledgeable and up-to-date on elder law policy and legal issues.

Before meeting with an elder law attorney, create a list of the specific concerns for the present and foreseeable future, so you know what qualifications and capabilities your attorney will need. You want a lawyer who’s experienced and educated, as well as comfortable to speak with and relatable.

You can ask these questions of your elder law attorney to help you make your decision:

  • How long have you been practicing in elder law?
  • Do you stay up to date on this area of law, by ongoing study and attending seminars on this subject matter?
  • Take a look at the required services we think will be needed. Can you fulfill them?
  • Do you have litigation experience?
  • What type of fee schedule do you offer?

If you’d like to try to stay up to date on what’s happening within elder law, go online and search for “aging and disability” or The right elder law attorney can counsel a family through the difficult details and requirements of the situations such as Paying for a Nursing Home as well as the name of the state in which the senior lives. Every state government has a department in charge of these matters (the official names will vary).

While caring for a love done can be stressful, understanding what options are available to them and to you, can make it all much easier.

Reference: The Senior List (Oct. 10, 2019) “What is Elder Law and How Can an Elder Law Attorney Help Me?”

 

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New Blood Test May Make Alzheimer’s Diagnosis Easier

Researchers at the University of California – UC San Francisco have analyzed the blood test in more than 300 patients and believe that they will see such a test for an Alzheimer’s Diagnosis available in doctor’s offices within five years, according to a press release from The University of California- San Francisco’s entitled “New Blood Test Could Make Alzheimer’s Diagnosis Easier Than Ever.”

“This test could eventually be deployed in a primary care setting for people with memory concerns to identify who should be referred to specialized centers to participate in clinical trials or to be treated with new Alzheimer’s therapies, once they are approved,” said Adam Boxer, MD, PhD, neurologist at the UCSF Memory and Aging Center and senior author of the study published in Nature Medicine. Boxer also is affiliated with the UCSF Weill Institute for Neurosciences.

There is currently no blood test for either condition. Alzheimer’s diagnoses can only be confirmed by a PET scan of the brain, which can be expensive or an invasive lumbar puncture to test cerebrospinal fluid.

If approved, the new blood test could make screening easier and help increase the number of patients eligible for clinical trials—vital to the search for drugs to stop or slow dementia. Patients who know whether they have Alzheimer’s or FTD are also better able to manage their symptoms.

In the new study, scientists collected blood samples from 362 people aged 58 to 70, including 56 individuals who’d been diagnosed with Alzheimer’s, 190 diagnosed with FTD, 47 with mild cognitive impairment, plus 69 healthy controls.

Researchers checked the blood samples for proteins that could serve as signs of dementia. One protein, called pTau181, is known to aggregate in tangles in the brains of patients with Alzheimer’s. Blood levels of pTau181 were about 3½ times higher in people with Alzheimer’s as opposed to their healthy peers. People with FTD had normal levels of pTau181, and those with mild cognitive impairment due to underlying Alzheimer’s had an intermediate increase.

When researchers followed the patients for two years, they saw that higher levels of pTau181 predicted more rapid cognitive decline in those with Alzheimer’s or mild cognitive impairment.

The researchers note the new blood test has the same degree of accuracy as current PET scans and lumbar punctures in distinguishing Alzheimer’s from FTD. It would be less expensive and easier.

Alzheimer’s impacts nearly 6 million Americans and comprises two-thirds of dementia cases. FTD includes a broad group of brain disorders often linked with degeneration of the frontal and temporal lobes of the brain.

Reference: UCSF (March 2, 2020) “New Blood Test Could Make Alzheimer’s Diagnosis Easier Than Ever”

 

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