Why is an Advance Directive so Important with Dementia?

The Roanoke Times advises in the recent article “What to do in absence of advance directive” to talk to an experienced elder care attorney to coordinate the necessary legal issues, when dementia may be at issue with a parent or other loved one. Next, ask your physician for a geriatric evaluation consultation for your loved one with a board-certified geriatrician and a referral to a social worker to assist in navigating the medical system.

It’s wise for anyone older than 55 to have an advance directive in place, should they become incapacitated, so a trusted agent can fulfill the patient’s wishes in a dignified manner. Think ahead and plan ahead.

As a family’s planning starts, the issue of competence must be defined. A diagnosis of Alzheimer’s disease doesn’t necessarily indicate incompetence or a lack of capacity. At this point, a patient still has the right to make a decision—despite family members disagreeing with it. A patient’s competency should be evaluated after a number of poor choices or an especially serious choice that puts a patient or others at risk.

An evaluation will determine the patient’s factual understanding of concepts, decision-making and cogent expression of choices, the possible consequences of their choices and reasoning of the decision’s pros and cons. Healthcare professionals make the final determination, and these results are provided to the court.

If a patient passes the evaluation, she is deemed to have the mental capacity to make choices on her own. If she cannot demonstrate competency, an attorney can petition the court for a competency hearing, after which a trustee may be appointed to oversee her affairs.

The time to address these types of issues is before the patient becomes incapacitated. The family should clearly define and explore the topics of living wills, advanced directive, estate planning and powers of attorney now with an experienced elder law attorney.

Taking these proactive actions can be one of the greatest gifts a person can bestow upon herself and her loved ones. It can give a family peace of mind. If you put an advance directive in place, it can provide that gift when it’s needed the most.

Reference: Roanoke Times (June 17, 2019) “What to do in absence of advance directive”


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What’s a Death Tax?

The federal estate tax is sometimes called the death tax. It’s a one-time tax that is imposed at death. Forbes’ recent article, “Eight Things You Need To Know About The Death Tax Before You Die,” explains that it’s not unusual for people to mix up estate taxes with income taxes. The federal estate tax is a transfer tax imposed on individuals with estates over $11.4 million ($22.8 for couples). The tax is on anything over that amount and ranges between 18% and 40%. However, if you die with an estate less than $11.4 million in 2019, no estate tax is due.

Assets in your name only and everything else you had control over will be added into your gross estate. For example, all stocks, bonds, bank accounts and life insurance death benefits are included, as well as any real estate, business interests, jewelry, household furnishings and artwork.

Note: just because your family avoids probate with your estate, doesn’t mean they won’t have to deal with the death tax. For instance, life insurance is in your gross estate, if you owned or could control the policy. IRAs and 401(k)s are also included in your gross estate. Just because these assets aren’t included in the estate because they have a named beneficiary, it doesn’t mean they’ve avoided the death tax. It depends upon the level of control you had over the assets.

If you owned property jointly with a spouse, half of the home’s value is included in the gross estate. If you owned property jointly with someone else (not your spouse), then 100% of the value is included in the gross estate—unless you can prove that the other party contributed some or all of the value.

If you’re the beneficiary of a trust your parents created for you, those assets may be included in your gross estate, if you have certain rights over the trust assets.

If you’re married to a U.S. citizen, you get an unlimited marital deduction for all of the assets you leave to your spouse.  However, some states impose their own death tax, which may require additional planning. For example, Massachusetts has a $1 million estate tax exemption. A tax may also be levied in a state where you own real estate.

Talk to an experienced estate planning attorney about your own death tax liability, and what actions you can take to decrease any taxes that may be due.

Reference: Forbes (May 20, 2019) “Eight Things You Need To Know About The Death Tax Before You Die”

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Did the Queen of Soul Leave a Will or Die Intestate?

Legendary vocalist Aretha Franklin passed away last August of pancreatic cancer. It was believed that she died intestate —without a will, even though she was survived by four adult sons.

The Detroit News’s recent article, “Handwritten wills found in Aretha Franklin home favor her four sons” reports that three handwritten wills have been discovered in one of her homes.

These documents suggest that Aretha had been considering what she wanted to leave to her heirs, if indeed the wills are found to have been written in her hand. Two of the wills discovered in a locked cabinet were dated 2010, eight years prior to her death.

Legal documents were filed by attorneys David J. Bennett and Kevin M. Check, who were hired by the personal representative of the estate, Franklin’s niece, Sabrina Garrett Owens. Bennett has been Franklin’s lawyer for more than 40 years.

According to the documents, Owens discovered a key to a locked cabinet that she previously couldn’t open. She found two holographic wills inside that were dated June 21, 2010 and October 20, 2010. Owens also found a spiral notebook with another purported holographic will dated March 31, 2014, under the cushions of a living room couch.

The court filing says that the heirs and their counsel “have been unable to reach a resolution with each other over the admission, validity and dispositive provisions of the purported Holographic Wills.”

Unlike traditional wills, the signing of holographic wills aren’t witnessed and are probated in several states, providing they’re authenticated by other means, such as by verifying the handwriting and the intended wishes they contain. Michigan recognizes holographic wills. New York does not. In New York you would die intestate.

Owens has asked for direction from County Probate Judge Jennifer S. Callaghan on how to continue as personal representative in the matter. A hearing is scheduled for this summer regarding intestacy.

“She remains neutral and wishes that all parties involved make wise choices on behalf of their mother, her rich legacy, the family and the Aretha Franklin estate,” a statement said of Garrett Owens, according to the Associated Press.

The new wills certainly add confusion to the probating of Franklin’s estate. The handwritten wills are hard to read and may be a bit embarrassing. If they were personally written by Franklin, some sections contain comments about relatives, attorneys, and even a “Ha, Ha, Ha” and “BS” when describing someone. In an another aside, she said that one attorney had been “grossly inefficient.”

Each document starts with “being in sound mind and physical health” pronouncement—one noted “with the exception of high blood pressure, a mass on the pancreas, diabetes …”

A common theme of these wills is that Aretha clearly wanted to care for her sons: she wanted her automobiles and property to be supervised by one son; and all of her artwork, copyrights, and future royalties from her music to be shared equally by all her boys. She also wanted them to have her personal papers, awards and gold records.

One statement said that she wanted two of her sons to “take business administration classes and get a certificate or degree.” She specifically directed that her grandchildren are also to be gifted.

The only dollar figure listed in the paperwork is a $1.6 million bank account. However, Aretha’s total worth from her various properties, jewelry, royalties and other assets have been estimated at roughly $80 million.

The IRS says that Franklin owed more than $6.3 million in back taxes. However, Bennett says that Franklin paid all her debts, including several million dollars in federal taxes.

If you die intestate, your wishes will not be carried out.

Reference: The Detroit News (May 20, 2019) “Handwritten wills found in Aretha Franklin home favor her four sons”


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Three Children Named Co-Executors of Your Will?

Is it a good idea to have your three grown children listed as co-executors of your will? This may get somewhat confusing when probating a will, if there are multiple executors.

What are the pros and cons to choosing one child to act as your executor, instead of selecting all three of your children to act co-executors?

nj.com’s recent article asks “I’m planning my will. Is it bad to have more than one executor?”

The article explains that the duty of the executor is to gather all the decedent’s assets, pay any outstanding debts and liabilities and then account for and distribute the remaining estate to the beneficiaries, according to the instructions in the decedent’s will.

The executor is allowed to hire professionals and others to help with tasks, like completing a decedent’s final income tax return or preparing the home for sale.

When you have multiple executors appointed, these tasks can be assigned to each person to lessen the burden of the many duties and responsibilities that an executor has.

On the downside, if those appointed can’t work together easily and without strife, appointing multiple siblings can make the administration of an estate much more difficult due to arguments, conflicts of interest, one sibling taking the lead to the resentment of the others or one executor undermining another executor’s actions.

The problem is, in situations where the siblings don’t get along, designating one of them as co-executors can cause hard feelings and conflict. It’s not uncommon for those siblings who aren’t named as executor, to complain about every decision made by the named executor or delay in the administration of the estate.

If there are multiple executors, the majority rules. That can avoid deadlock. Simple math in this case says that you want to avoid naming an even number of executors or name a person who can act as the tiebreaker.

Even with a “majority rules” agreement among the co-executors, there are some financial institutions and other entities that may require all the executors to sign documents and/or checks on behalf of the estate. This can become burdensome and inefficient, if there are multiple executors.

Speak with your estate planning attorney about your family dynamics and get their opinion about what would be best in your personal situation.

Reference: nj.com (May 22, 2019) “I’m planning my will. Is it bad to have more than one executor?”


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Will Contests May Be Rare, but They Do Happen

In an ideal world, wills and estate plans are created when people are sound of mind and body, just as the familiar legal phrase describes. The best way to avoid a will contest is to have a well-written will, prepared by a qualified estate planning attorney who can help avoid legal contest. However, there are times when this is not the case, says The Huntsville Item in the article “Legal Corner: Will contests while rare are messy.”

A will is contested, when the person challenging the will believes that it does not represent the true intent of the testator to pass the estate to the people he wanted.

A will must be written in the correct form and executed according to the law in order to be valid. This is why it is necessary to work with an estate planning attorney to create a will. A person may try to do it on their own, typing it out, downloading a form or copying a form, but because the law is very strict about the form and execution, many of these do-it-yourself wills end up being deemed invalid by the courts.

When the will is not valid, the laws of intestate are applied to the person’s estate. This is rarely in accordance with the person’s wishes, but at this point, it’s too late.

To make a will, the person must have “testamentary capacity.” That means that he or she knows what they are doing, what their estate includes and who the recipients of the estate will be. They also must not have been subject to undue influence. That means that the person making the will is so controlled and dominated by another person, that they were not able to make the will that they wanted.

When the sad day comes that a loved one passes, the family grieves. Each member will deal with the loss in their own way. For some people, the intense level of emotions can bring about conflicts. Sometimes these are the result of old battles that were never resolved. Sibling rivalry that’s been simmering for decades can emerge.

One of the goals of a properly prepared will, is to prevent will contests or any family fights after a loved one has passed.

Studies have found that the struggle over mom’s necklace or dad’s watch are not about the material items themselves, but over the symbolic meaning of those items. When families fight over inheritances in a will contests, it’s rarely because of the actual item or even the money.

As the family’s older member, you want to do anything you can to avoid fracturing the family after you’ve gone.

Unless you take the steps to create a will and a strong estate plan, your loved ones could be entrenched in a long inheritance conflict that lasts years and consumes more resources than anyone can spare.  However, with careful planning, you can avoid inheritance conflicts. After all, estate planning is more for those you love than for you.

Rely on the skill and knowledge of an experienced estate planning attorney and leave your family intact.

Reference: The Huntsville Item (May 26, 2019) “Legal Corner: Will contests while rare are messy”


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Suze Orman’s Advice for Retirement Savings at 55.

It is easy to put off thinking about retirement savings at 55, while you are raising your children. You are busy every waking hour, running them around from one activity to the next, keeping up with the laundry, their homework, your day job and putting meals on the table. Besides, with children in the house, it is hard enough to make it from one paycheck to another, so there is no money left over to save.

One day it hits you that retirement is around the corner, and you do not have a nest egg for retirement. Social Security will not even pay your mortgage. You will never be able to quit that job you hate. Do not despair. Here is Suze Orman’s advice if you are 55 with no retirement savings.

Shift Your Focus

Up until now, your children have been your highest priority, and rightly so. You have spent the last couple of decades providing for their every need. If they are in college or on their way there, Suze has some tough advice for you. Do not take out any loans or use your home equity to pay for their college costs.

This guidance is more palatable, when you realize that your children might have to help you financially if you do not prepare adequately for your golden years. Do not assume that you can keep working forever to pay your bills. Most older workers have to stop working against their will, because of health reasons or employer decisions.

Work Past Your Full Retirement Age

People who retire at the earliest possible age to collect Social Security, 62, take a hit every month on their Social Security retirement benefits. For those born in or after 1960, you can increase your monthly check by around 70 percent by continuing to work, until you are 70.

While working a few years past your full retirement age (which is around 67) might sound onerous, the increase in your monthly benefits could be enough for you to retire without having to work a part-time job. Just imagine what a difference it would make now if you got a raise of 70 percent.

Grab the Free Money

If your job offers a 401(k) or 403(b) or another retirement plan with a matching contribution, that matching contribution is free money. Make sure that you contribute at least enough to your account every month to get the maximum employer match. Your contributions are also pre-tax, so they lower your taxable income, thereby reducing your income taxes. You can probably afford to contribute more to your plan than you think.

Slash Your Spending

Sit down and make a hard, cold assessment of how you spend money. Dinner at a restaurant or a pedicure now is money that you are not saving for retirement. List your needs and your wants in two columns. Add up the cost of the “wants” to see how much more you can and should be saving in a Roth IRA or other tax-advantaged account.

Balance Investment Growth and Security

As you get older, you need to be more conservative with the investments in your retirement accounts. However, some of the money should be in stocks for growth. Just make sure that you have a large portion of your assets in conservative investments, so stock market fluctuations will not wipe out your nest egg.


AARP. “Help! I’m 55 and Have No Nest Egg.” (accessed May 8, 2019)



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My 403(b) Plan? What’s the Best Way to Deal with it?

Investopedia’s article, “How a 403(b) Works After Retirement,” explains that your 403(b) plan is either: (i) a tax-sheltered deferred annuity from an insurance company; (ii) a custodial account at a brokerage invested in mutual funds or (iii) an account that lets you invest in either.

Your contributions were probably made on a pretax basis (like those to a 401(k) plan). Some 403(b) plans offer the option to make what is known as a Designated Roth contribution with after-tax dollars. Note that you’re not required to take all or any funds from your 403(b), when you retire. If you leave funds in your 403(b) account, they’ll keep accumulating until you withdraw them, annuitize them, or roll them over.

Withdrawals. If you do plan to make withdrawals–and if you retire before 55–you’ll have to pay regular income taxes, plus a 10% penalty on the amount, unless you agree to “substantially equal periodic payments” for at least five years or until you reach the age of 59½ (whichever is longer). The amount of those payments is based on your expected lifespan. This is for the conventional 403(b) plan.

With the Roth version, you don’t pay income tax, since the contributions were made with post-tax earnings. However, the penalty will still apply. If you’re 55 or older when you retire, you can opt to withdraw some or all of your funds in a lump sum. However, any amount you withdraw doesn’t qualify as a lump-sum distribution under the 10-year tax option, so you can’t spread your tax liability over a decade. You must pay all the income taxes due on the amount, the year you withdraw the funds. With a big withdrawal, this could push you into a higher tax bracket.

When you turn 70½, the government mandates that you begin withdrawing funds from your account. There’s a required minimum distribution (RMD) that you must take annually.

Annuity Option. Regardless of the type of 403(b) plan you have, you may want to annuitize some or all of it when you retire. With periodic, fixed payouts, you give yourself with a guaranteed income stream for life (or some period). Most experts caution against annuitizing the entire balance in your retirement plan, especially if you’re already receiving a defined benefit pension. If you are, it means part of your retirement income is already in a type of annuity, so you may want to keep some flexibility with your other assets. Your annuity also doesn’t have to end when you die, since you can bequeath it to another person (there may be a gift tax upon your death). However, if it’s a joint and survivor annuity, where only you and your spouse have the right to receive payments, the annuity will probably qualify for the unlimited marital deduction.

Rollover. You may decide to roll over part (or all) of your 403(b) plan into another sort of tax-advantaged account, like a 401(k) (at another employer), a traditional IRA, a Roth IRA, a corporate 403(a) annuity-based plan or a government-sponsored 457 plan. This gives you more ready access to your funds, different and more varied investment options and perhaps better money management during your retirement years.

Of course, there are rules on what you are able to roll over. Typically, you must roll over distribution amounts received within 60 calendar days, in order for the amount to be treated as nontaxable. You can’t roll over RMDs or any of those “substantially equal periodic payments” from an early retirement (before age 55). You are allowed to roll 403(b) funds into a Roth IRA, if the account has the same restrictions as with a rollover from a traditional IRA.

Contact your plan sponsor and get the details on how to withdraw funds. Talk with your estate planning attorney about how this may impact your retirement and estate strategies.

Reference: Investopedia (December 12, 2018) “How a 403(b) Works After Retirement”


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Do I need a Durable Power of Attorney?

A power of attorney is a document that grants a person the legal authority to make decisions about certain aspects of another person’s life. It gives a trusted person of your choosing the right to act as your agent in either highly specific or general decisions, depending on the type of power of attorney durable power or springing power. As reported in Wicked Local’s article “Investors, Plans & Money: Power of attorney,” the person you name does not have to be an attorney, nor does it have to be a spouse.

Each type of power of attorney such as a durable power of attorney works to achieve a slightly different goal. As you work with your estate planning attorney on developing your overall estate plan, you will want to know which type you need and what your state’s requirements are. You will have to be of sound mind, with awareness of what you are signing, when the documents are prepared and signed.

Here’s a look at the basic powers of attorney:

A General Durable Power of Attorney gives the named agent the broadest scope and authority to act and make decisions for another person. The document ideally lists the actions the person wishes them to take. This requires absolute trust, because it gives the agent complete control.

A Limited, Specific or Special Power of Attorney is a document that gives an agent the authority to act on your behalf in a very specific area of your life, task, or within a specified time frame. An example would be if you wanted someone to sell, maintain, or manage property for you.

The Springing Power of Attorney is “triggered” (hence the name) when, and only when, certain conditions are met. That might be a loss of mental capacity, for example. This document also must be very carefully defined, and proof of the condition being met may need to be presented.

A Healthcare Power of Attorney goes by different names depending upon the state. However it is named, this is the legal document that gives the authority to make healthcare decisions, if the person is incapacitated through illness or accident. The person named as your healthcare agent should have a clear understanding of your wishes regarding extreme life-sustaining measures, as well as critical care procedures, like blood transfusions or organ transplants.

There can be problems with powers of attorney. The person named to act as an agent must be entirely trustworthy and reliable. Other issues arise, if the documents are not prepared properly. This is why an experienced estate planning attorney is the best source. Here are some examples of what can go wrong:

  • Details are lacking, so the document is declared invalid;
  • The wrong type of power of attorney is created;
  • The state requirements are not met;
  • An agent is named who the attorney would immediately know is a bad choice; and/or
  • A generic document does not contain the correct language.

Properly prepared, a durable power of attorney can save a tremendous amount of stress, provide the ability to make time-sensitive decisions and allow your wishes to be followed. Speak with your estate planning attorney to determine the type of power of attorney your estate plan needs.

Reference: Wicked Local (April 24, 2019) “Investors, Plans & Money: Power of attorney”


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When he lost Capacity, did Director John Singleton Have an Estate Plan?

“It is with heavy hearts we announce that our beloved son, father and friend, John Daniel Singleton will be taken off of life support today,” said the statement, which was released by Singleton’s publicist around 10 a.m. Pacific time. “This was an agonizing decision, one that our family made, over a number of days, with the careful counsel of John’s doctors.”

The New York Times reported in the article “Family Ends Life Support for John Singleton After a Stroke” that the 51-year-old native of South Los Angeles died soon after the life support was disabled. Also at the same time, his family members started jockeying for control of his business affairs since he lacked capacity. Singleton had a stroke on April 17 and was hospitalized in an intensive care unit.

The statement from Singleton’s publicist said that he had “quietly struggled” with high blood pressure.

Singleton was nominated for an Oscar for his directing in his debut film “Boyz N the Hood,” which centered on three teenagers growing up amid violence in his home city. Singleton was in his early 20s and fresh out of film school, when he directed the film.

He was the first African-American and the youngest person ever to be nominated for a directing Oscar award.

After he was hospitalized with the stroke he lost capacity, his mother, Shelia Ward, filed court papers in Los Angeles asking to be appointed temporary conservator, or guardian, saying that her son was scheduled to sign a lucrative settlement agreement around April 30 and would suffer a financial loss, if no one could sign on his behalf.

Like many other celebrities, Singleton failed to sign a health care directive or power of attorney, according to his mother’s court papers.

At the time, Ward said that her son was in a coma, but several of his children disputed her assessment of his medical state. The children opposed her control of the medical and financial decision-making.

In an email last week, his daughter Cleopatra Singleton said family members were hopeful that he would recover. However, he died on April 30.

Reference: The New York Times (April 29, 2019) “Family Ends Life Support for John Singleton After a Stroke”



Funeral Arrangements- Who Will Control the When I Die?

nj.com’s recent article, “Why does a funeral home need my signature?” explains that what happens with funeral arrangements, depends on the deceased’s will and state law.

This issue may become important, depending on whether the deceased designated a funeral agent in his or her will. The funeral agent is the legal way to designate a specific person to arrange your funeral.

To appoint a valid funeral agent, it has to be done in a will or codicil. Any appointments made elsewhere aren’t acceptable. If you want to appoint a funeral agent, visit an experienced estate planning attorney.

Note that the rights of the funeral agent take precedence over the rights of all others. This includes the deceased’s spouse and other relatives, like children and parents. After the death and before the will is probated, the executor will tell the funeral agent that he or she is in charge of the funeral, as well as the amount of money that’s available to spend on funeral arrangements.

Experts advise that you should consider naming a funeral agent in your will, if you don’t have any surviving relatives or close family. When a funeral agent is designated, there will be no issues regarding who is in charge of making your final funeral arrangements. If there’s conflict with family members of equal legal right, such as children, make one of the children your funeral agent and make your wishes known to that individual. If you believe you can’t count on family to follow your wishes, find a trusted friend or companion to serve as your funeral agent.

The hierarchy set in the New Jersey statute is in the following order:

  1. The funeral agent designated in the will;
  2. The spouse or civil union partner of the deceased;
  3. The majority of surviving children over the age of 18;
  4. The deceased’s parents;
  5. The majority of surviving siblings over the age of 18; and
  6. Other relatives, according to the degree of their relationship to the deceased person.

A beneficiary can control the funeral arrangements, only if he or she is also included in the hierarchy detailed in the statute.

Reference: nj.com (April 22, 2019) “Why does a funeral home need my signature?”