The Petrosewicz Law Firm Estate Planning Blog

Planning for Long-Term Care Before It’s Too Late

Starting to plan for elder care should happen when you are in your 50s or 60s. By the time you are 70, it may be too late. With the national median annual cost of a private room in a nursing facility coming in at more than $100,000, not having a plan can become one of the most expensive mistakes of your financial life. The article “Four steps you can take to safeguard your retirement savings from this risk” from CNBC says that even if care is provided in your own home, the annual median national cost of in-home skilled nursing is $87.50 per visit.

There are fewer and fewer insurance companies that offer long-term care insurance policies, and even with a policy, there are many out-of-pocket costs that also have to be paid. People often fail to prepare for the indirect cost of caregiving, which primarily impacts women who are taking care of older, infirm male spouses and aging parents.

More than 34 million Americans provided unpaid care to older adults in 2015, with an economic value of $522 billion per year.

That’s not including the stress of caring for loved ones, watching them decline and needing increasingly more help from other sources.

The best time to start planning for the later years is around age 60. That’s when most people have experienced their parent’s aging and understand that planning and conversations with loved ones need to take place.

Living Transitions. Do you want to remain at home as long as is practicable, or would you rather move to a continuing care retirement community? If you are planning on aging in place in your home, what changes will need to be made to your home to ensure that you can live there safely? How will you protect yourself from loneliness, if you plan on staying at home?

Driving Transitions. Knowing when to turn in your car keys is a big issue for seniors. How will you get around, if and when you are no longer able to drive safely? What transportation alternatives are there in your community?

Financial Caretaking. Cognitive decline can start as early as age 53, leading people to make mistakes that cost them dearly. Forgetting to pay bills, paying some bills twice, or forgetting accounts, are signs that you may need some help with your financial affairs. Simplify things by having one checking, one savings account and three credit cards: one for public use, one for automatic bill-paying and a third for online purchases.

Healthcare Transitions. If you don’t already have an advance directive, you need to have one created, as part of your overall estate plan. This provides an opportunity for you to state how you want to receive care, if you are not able to communicate your wishes. Not having this document may mean that you are kept alive on a respirator, when your preference is to be allowed to die naturally. You’ll also need a Health Care Power of Attorney, a person you name to make medical decisions on your behalf when you cannot do so. This person does not have to be a spouse or an adult child—sometimes it’s best to have a trusted friend who you will be sure will follow your directions. Make sure this person is willing to serve, even when your documented wishes may be challenged.

The Petrosewicz Law Firm can assist you with your estate planning needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: CNBC (Jan. 31, 2020) “Four steps you can take to safeguard your retirement savings from this risk”

What Does the Movie “Knives Out” Teach Us About Estate Planning?

One of the recent surprise hit movies has been the murder mystery Knives Out, with a star-studded cast that includes Jamie Lee Curtis, Daniel Craig and Chris Evans.

Forbes’s recent article “What The Movie ‘Knives Out’ Gets Right (And Wrong) About Estate Planning,” says that the crux of the story is a topic most Americans wouldn’t find exciting–the world of estate planning, unless the estate planning involves the wealthy. Spoiler Alert: there are spoilers below!

In the movie, the patriarch of a wealthy family, Harlan Thrombey (Christopher Plummer) is found dead. Just before his death, he changed his estate plan. The movie takes viewers through some twists and turns to see who might be responsible for his death. However, there are also some key scenes that address estate planning concepts, such as contesting a will, undue influence and the slayer statute. These are issues moviegoers might want to know about for their own estate plans.

One of the most dramatic scenes in the movie is the gathering of the family at their father’s home for the reading of the will. In a library, the attorney sits behind the patriarch’s desk and reads the document. The importance of this scene is highlighted, when Daniel Craig’s character explains that the will reading is really a performance of “a tax return by a community theater.”

However, the filmmakers have taken some liberties because the “reading of the will” doesn’t actually happen in real life. It’s a dramatic and pivotal scene in the movie, but don’t expect it when someone dies. Although the reading of the will is also more fiction than fact, there are some things that are very real in the estate planning world.

When things don’t go well for the Thrombey children in their father’s estate plan, the family immediately thinks about contesting the will. This has become increasingly common because of an increased willingness by people to challenge estate plans. This is due in part to us living longer.  Frequently estate plans aren’t updated to address changes in the family. In cases where the testator has dementia or is otherwise incapacitated, there is also a chance of undue influence. The usual result of a contested will is some type of settlement.

Again, a common claim in a will challenge is for undue influence. In the movie, when Marta the caretaker becomes the sole beneficiary, this concept is bandied about by the Thrombeys when talking about a will contest. Undue influence is a legal concept that can be used to invalidate a will, trust, or legal instrument. It occurs when a vulnerable individual is persuaded to change his or her estate plan, and the persuasion and influence rise to the level where the victim is unable to freely exercise his or her independent will.

In the film when undue influence fails, the Thrombey family turns to the concept of the “slayer statute.” This law stipulates that a person can’t inherit, if they intentionally killed the deceased. While this concept makes for good filmmaking, it’s an actual premise in estate law.

The movie Knives Out gets a lot right about estate planning, such as will contests, undue influence and slayer statutes. So, enjoy the picture!

The Petrosewicz Law Firm can assist you with your estate planning needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: Forbes (December 18, 2019) “What The Movie ‘Knives Out’ Gets Right (And Wrong) About Estate Planning”

Who Can You Really Trust for Your Financial Accounts?

Dramatically increased instances of elder financial abuse are behind a new question asked of seniors by their advisors these days: do you want to name a trusted contact on your account?

The financial industry’s regulatory authority now requires that member firms make an effort to have clients name a trusted contact person. It is not required that they do so, says Hometown Life in the article “Use a trusted contact to protect seniors from financial abuse,” but the question must be asked.

The older you are, the more seriously you should consider taking this step.

Let’s start by defining what a trusted contact is, and equally important, what a trusted contact is not. A trusted contact is not someone who can access or make financial decisions on your behalf. That is a person who has been named a Power of Attorney or POA. A trusted contact is a person that your financial advisor, brokerage house, or the financial company that holds your accounts can contact, if they see signs that indicate that you are being financially exploited.

The trusted contact can also be a person who can confirm your mental or physical health status, a legal guardian, trustee, or your POA. Unlike the POA, the trusted contact person cannot see your account information or make trades for you.

Typically, people name a family member. However, research has sadly shown that family members are actually the ones most likely to be the abusers. Naming a trusted contact may call for you to think out of the box and consider someone who is not a family member. A trusted professional or a dear friend, preferably one who is younger than you, may be the best person for this task. You could also select two trusted contacts.

This is not a perfect solution to financial elder abuse. However, it is one more layer of protection. There is no 100% solution to a problem that affects seniors in every social and economic class. Nevertheless, naming a trusted contact is something that can be done to reduce the risk and is worth doing.

Other safeguards include having an estate plan, including a will, power of attorney, health care power of attorney and trust. Your estate planning attorney will be able to explain the many different types of trusts and how they can be used to ensure that you remain in control of your assets, while protecting you from financial abuse.

The Petrosewicz Law Firm can assist you with your estate planning needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: Hometown Life ( August 15, 2019) “Use a trusted contact to protect seniors from financial abuse”

What the Elder Law Attorney Needs to Know

If you went to a doctor’s office and did not tell the doctor what your symptoms were, it would be hard to get a good diagnosis and treatment. The same goes for a visit to the elder law estate planning attorney. Without all the necessary facts, advises the Times Herald-Record in the article “What you need to tell the elder law estate planning attorney,” the estate plan may need to be revised or created all over again, the inheritance may be given to people other than those you intended and there could be family conflicts.

Elder law is all about planning for disability and incapacity, to include identifying the people who would make decisions for you, if you become incapacitated and protecting your hard-earned assets from the cost of nursing home care.

Estate planning is focused on transferring assets to the desired people, the way you want, when you want, with minimal court costs, taxes, or unnecessary legal fees and avoiding disputes over an inheritance.

Here are some of the things your attorney will need to know, with full disclosure from you:

Family dynamics. If you have a child you haven’t seen in years, you need to discuss the child. They may have a legal claim to your estate, and that must be planned for. Perhaps you want to include the child in the estate, perhaps you don’t. If you disinherit a child in a will and you die without a plan, that child becomes a necessary party to probate proceedings and has the right to contest your will.

Health issues are important to disclose. If you don’t have long-term care insurance, you need five years to protect assets in a Medicaid Asset Protection Trust (MAPT). Therefore, now may be the time to start a plan. If you have a child who is disabled and receives government benefits, you can leave them money in a Special Needs Trust (SNT).

Full disclosure of all your assets, income, how assets are titled, and who the beneficiaries are on your IRAs, 401(k)s and life insurance policies are all the kinds of information needed to create a comprehensive estate plan. Keeping secrets during this process could lead to a wide variety of problems for your family. Your entire estate could be consumed by taxes, or the cost of nursing home care.

There’s no doubt of the seriousness of these issues. You or your spouse may experience some strong emotions, while discussing them with your attorney. However, creating a proper estate plan, preparing for incapacity and protecting loved ones with special challenges will provide you with peace of mind.

One last point: an estate plan is like your home, requiring maintenance and updates. Once it is done, make a note in your schedule to review it every time there is a major life event or every three or four years. Laws change, and life changes. Your estate plan may also need to change.

The Petrosewicz Law Firm can assist you with your elder law needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: Times Herald-Record (May 25, 2019) “What you need to tell the elder law estate planning attorney”

How to Combat Elder Financial Abuse

One estimate is that the amount of elder financial fraud is $30 billion a year, defining it as the theft of money by thieves who include con artists, strangers, caregivers or trusted friends or family members. According to Consumer Reports, in the article “3 Critical Ways to Prevent Elder Financial Abuse,” these crimes are often not reported. Sometimes, the seniors are too embarrassed to admit that they were fooled, or they don’t want to put a family member at risk. They often don’t know they have been scammed, or are physically unable to articulate what has happened to them.

This is starting to change, as banks are starting to increase their reporting of suspected elder financial abuse. Last year, U.S. banks reported roughly 25,000 cases of suspected elder financial abuse to the U.S. Treasury. That’s more than double the amount reported in 2013, as reflected in data from the U.S. Treasury department’s Financial Crimes Enforcement Bureau.

One reason behind the surge is demographics: although the baby boomers are getting older, they have a tremendous amount of assets and are vulnerable to being defrauded.

However, the increase in reported cases may also be bolstered by big pushes from the federal government, states, and the financial industry to fight elder financial abuse. New regulations are now in place to encourage people who are on the front lines for elder abuse: brokers, bankers and financial advisors.

FINRA, the self-regulatory agency that oversees brokers, now requires them to ask clients, no matter how young or old, to provide the name and contact information for a trusted family member or friend. If the broker believes that person is being exploited, they have someone to contact. The new regulations also allow brokers to put a hold on withdrawals from a client’s account, if they believe there may be elder financial abuse occurring. The hold is for 15 days but can be extended 10 more days.

From the federal government, the Senior Safe Act became law in 2018. It enables the employees of any financial institutions to report concerns about elder abuse, without fear of being held liable for disclosing private information. To qualify for this protection, financial institutions are required to provide training to staff about recognizing the abuse. At the state level, NASAA (the North American Securities Administrators Association, a group of state regulators) adopted a rule in 2016 which mandates that brokers and financial advisors report any suspected abuse to state authorities. The rule also allows them to stop withdrawals on accounts and protects brokers and advisors from liability, if they stop account disbursement. Sixteen states have enacted versions of the rule, and there are six more states working on legislation.

On a more personal level, there are three things family members and friends can do to prevent elder financial abuse. One is to stay in touch and ask questions of aging parents. Isolation and cognitive impairment are the biggest risk factors. Make sure that your parent is keeping up with bill paying, and whether he or she is in contact with new friends, strangers who may not have their best interests in mind.

If your parent is willing, start by offering to help with a few financial tasks, like bill paying. Keep it low key, by including a visit with the task. If you see things are not being handled well, stay on top of it.

Another step is to set up checks and balances, by making sure that critical legal documents are in place. There should be a will, a healthcare proxy, a HIPAA release form and a durable power of attorney. The durable power of attorney will let you pay bills and manage finances, if and when they can no longer manage. If there is no will or estate plan in place, make an appointment for your parent with a qualified estate planning attorney as soon as possible.

Consider streamlining aging parent’s finances. If they have too many credit cards and too many bank accounts, it may make things easier if they can pare things down to one bank and one credit card. Be very careful with retirement accounts, like 401(k)s and IRAs, to avoid any taxes and penalties.

Simplifying money management and being involved with your parent’s finances and their lives can help prevent financial elder abuse.

The Petrosewicz Law Firm can assist you with your elder law needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: Consumer Reports (Feb. 22, 2019) “3 Critical Ways to Prevent Elder Financial Abuse”

How Can I Make a Trip to the ER Easier for an Alzheimer’s Patient?

Trying to make someone with Alzheimer’s comfortable in an ER is not an easy thing. However, there are some things you can do to make the stimulation-saturated environment a little less overwhelming, says The Advocate in the article “Alzheimer’s Q&A: What should I know before taking someone with Alzheimer’s to the emergency room.”

Start long before you must go to the ER, by creating a list of your medications and have a few copies with you.

Bring the medication list and any assistive devices, including hearing aids, dentures, an extra pair of glasses and any walking aids, like a walker or a cane.

Also, have a list of contact information for all healthcare providers and family members. If you have a power of attorney, bring that as well. If the individual has an advance directive or any other documents, like a do not resuscitate (DNR), bring those just in case. Make sure to have all health insurance information.

Expect a wait, so bring snacks. A portable music player with the person’s favorite soothing music and headphones may provide some comfort. Magazines or books that are used during quiet times at home may be useful. Don’t bring anything of value, like jewelry or a wallet. And don’t bring a crowd. Small children, unless there is no one who can care for them, or other family members, are best left at home.

Unless the individual is having a life-threatening emergency, you will likely have to wait, and you may be waiting a while. Provide simple step-by-step explanations of what is taking place and be honest with them about why they are in the hospital and what is happening.

Focus on keeping them calm and comfortable. Offer a snack and if possible, find a quiet space in the waiting room.

Make sure that the hospital staff is aware you are there with a person who has Alzheimer’s or dementia. They may not have training in caring for dementia patients, so be prepared to advocate for your parent or loved one. Offer suggestions in communicating with the person and ask doctors and medical personnel to limit their questions, which may increase stress and anxiety. Speak with the doctor privately, if possible.

Request that the staff avoid using any physical restraints or medications to control the person’s behavior, unless absolutely necessary. Let the staff know about any fever, medication side effects or changes in mental status. Never leave the person alone in the ER or the evaluation room.

The Petrosewicz Law Firm can assist you with your estate planning needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: The Advocate (Jan. 20, 2019) “Alzheimer’s Q&A: What should I know before taking someone with Alzheimer’s to the emergency room”

New Year’s Resolutions: This Time, Make Them Stick

Recent studies show that about half of Americans still make resolutions, but fewer than 10% of us are successful in maintaining them, says The Sentinel in “Elder Care: New Year’s resolutions.” This year, try making your resolutions simpler and more time-sensitive, and maybe you’ll have more luck maintaining them. Start with your estate plan. A call to your estate planning attorney to make an appointment won’t take a lot of time, and it will get the process started.

Getting your estate plan in order in 2019 will prevent your family from unnecessary stress and costs in the future. Here are a few examples of what can happen to families who don’t plan properly.

A married couple owns a home and some investments. To protect their assets, they create a Revocable Living Trust and transfer all their assets into the trust. They believed that by doing so, they’ll avoid probate and preserve assets from long-term care costs. However, while a revocable trust can avoid probate, if properly created and funded, it has limited other benefits.

When the husband needed nursing care, the couple was surprised to learn that putting their largest asset—their primary residence—in a revocable trust resulted in a situation where the home was counted as an asset for Medicaid to pay for care.

As Texas residents, their principal residence can be excluded for consideration for eligibility—if certain conditions are met. However, federal law specifically directs that real estate in a revocable trust is a countable resource. Had they placed the residence in an Irrevocable Asset Protection Trust five years prior, or even kept the residence out of a trust, they would have had more options.

Not having a will is never a good idea. A local musician had a successful career that resulted in him having a good deal of wealth. He had a son from his first marriage and when his son was born, he told his first wife that he wanted his assets to pass to her upon his death. If she died before him, he wanted his assets to go to his son. However, he never had a will made.

The first marriage ended in divorce, and he became estranged from his son. He had a daughter with a new partner and planned to leave everything to his new partner. If she passed before him, he intended to leave everything to his daughter. However, once again, he failed to have a will made.

With no will, state law governs who receives his assets. In the musician’s case, his assets pass in equal shares to his two children.

Notice that none of his assets pass to his current partner. The only way she could have inherited his assets, would have been for him to have a will. While he had told his partner that he did not want his son to get anything, under state law, his assets are to be split equally between his children.

With an estate that included songs that were copyrighted, both of his children (and any individuals claiming to be his children), may receive income streams. The court must first determine who his legal children are, before any assets can be distributed. A will would have prevented this entire mess.

These are just two examples of what happens when planning is not done correctly, or not at all. Make it one of your priorities to call your estate planning attorney.

The Petrosewicz Law Firm can assist you with your estate planning needs.  Contact us today at (281) 344-9455 or [email protected].  

The Petrosewicz Law Firm can assist you with your estate planning and trust needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: The Sentinel (Jan. 4, 2019) “Elder Care: New Year’s resolutions”

Boomers are Heading to Luxury Retirement Communities

Billions of dollars are being invested in housing for aging boomers, and that includes luxury communities for those who can afford a five-star resort lifestyle. The potential market is enormous, reports The New York Times in the article “Boomers Create a Surge in Luxury Care Communities.”Industry estimates say about 15 million people have saved enough to afford private continuing care, and these people expect a high level of service and surroundings.

There are now nearly 2,000 Continuing Care Retirement communities, or C.C.R.C.s, with about 700,000 residents. Many require entrance fees and monthly charges that cover services, food and care. The average age of people entering these communities are in their early 80s, and they tend to stay for seven to 10 years.

The upscale segment of C.C.R.C.s are not for the budget conscious, with entrance fees for one community starting at $1 million for a two-bedroom bungalow, and monthly charges of more than $6,000. Demand is high at this community, where the occupancy rate is 100% and there’s a waiting list.

Construction of new luxury communities is underway in Dallas, Southern California, Arizona, New York, San Francisco, Boston, Los Angeles, Miami and Washington, D.C.

What is the challenge, when money is not an issue? The contracts. The contracts can be complicated, there is no federal regulation or oversight and only 38 states have regulations, which vary from state to state.

In some communities, portions of the entrance fees are returned to the resident’s estate upon death or are refunded when people leave. However, some of those fees are not returned, until the units are sold. There has also been litigation over refund policies. In New Jersey, state law now requires operators to issue refunds in the order that units are vacated, and not when they are sold.

Given the complex nature of the contracts, the size of the purchase and the varied laws, it is recommended that potential occupants work with an elder care attorney to review any contract.

C.C.R.C.s have existed for decades, first as faith-based organizations created to house and support widows. Over time, they have evolved into communities for people who have a vision for how they want to live in retirement.

The luxury sector of C.C.R.C.s was smaller in the past, but experts say that as demanding customers—baby boomers—age, they will drive the market.

Most Americans do not have this level of resources. However, for those who do, it’s also recommended that they enter the communities while they are still healthy enough to enjoy all of the amenities, make new friends and build a new life.

The Petrosewicz Law Firm can assist you with your estate planning needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: The New York Times (Dec. 4, 2018) “Boomers Create a Surge in Luxury Care Communities”

Why Should Your Company Consider ‘Phased Retirements’?

Let’s face it, working at 65 presents certain challenges that working in your 20s or 30s does not. For many, it becomes physically harder to get up and going, while other seniors find the mental challenges of a demanding job a little more than they can handle. A phased retirement offers the best of both worlds to workers and their employers, says the Missoulian in the article “Why Companies Should Support Phased Retirements.” Employees get to keep working and earning income, while taking on less rigorous work, whether physical or mental.

So far, American companies have been slow to adopt this method. Only 20% of firms currently offer this type of formal arrangement, according to data from Transamerica. The choice is often to stay full time or retire. Savvy companies, however, understand why phased retirement works well for the companies and all their employees.

Today, more Americans are choosing to work longer than in the past, for the social and mental benefits of continuing to have an active role in the workplace. Going to an office and working with team members, is much more appealing than sitting at home. For those who have not managed to save enough for retirement, working is a necessity and not a choice.

The problem is, as much as we may hate to admit it, age does take a toll on our bodies and for some, our minds. We can’t necessarily manage the rigorous schedules that a high-pressure job requires. The risk of becoming less productive or presenting a danger to us or our co-workers, in certain settings, is real.

However, older workers have a tremendous value in the workplace. Seasoned professionals have knowledge and expertise that younger employees don’t have and can offer good guidance during periods of both prosperity and downturns. Established relationships and trust with suppliers and clients can help businesses with a needed edge over competitors. There’s also a loyalty factor: unlike younger workers, who tend to move about a lot in their careers, an older worker is more likely to stay put.

There are, therefore, a great many benefits to encouraging companies to retain their older workers by giving them the ability to ease into retirement, rather than showing them the door. This makes for an easier transition, leaving time for knowledge transfer and the training of new hires.

There’s also the matter of goodwill. Employees may agree to stay on as consultants when needed, giving companies access to their knowledge with more flexibility for both workers and employees.

Supporting phased retirements can help companies to benefit from the experience of seasoned workers. It’s a win for everyone, and one that we hope to see grow in the coming years.

The Petrosewicz Law Firm can assist you with your estate planning needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: Missoulian (Dec. 21, 2018) “Why Companies Should Support Phased Retirements”

Financial Institutions are Cognizant of Senior’s Diminishing Capacity

This is a tricky situation for banks, brokerage firms and other financial institutions. Monitoring older customers in case they start to lose their mental agility and become vulnerable to scams seems like a good idea. However, what happens when a financial institution judges a customer’s behavior and decides that they are either impaired or at risk for a scam asks The Wall Street Journal in the article “Banks Monitor Older Customers for Cognitive Decline”? The answer is not at all simple.

Financial elder abuse is on the rise. The Securities and Exchange Commission released a report this spring that says as many as 6.6% of elderly Americans had undergone financial exploitation in the last year.

Banking personnel see some of the early signs of cognitive decline, such as when a customer begins missing payments, sending duplicate checks, bouncing checks because of confusion over balances, or sending money to unrelated people. Does the bank have a legal, ethical and/or moral obligation to alert family members?

Until recently, financial institutions operated on the assumption that there were privacy issues that precluded them from informing anyone about these kinds of suspicions. The only questionable transactions that were reported concerned possible illegal activities. Should they contact the local Adult Protective Services agency, or another social service agency?

A new federal regulation was signed into law this past spring that protects financial institutions from litigation, if they report concerns about elder financial abuse to government agencies, although there is no requirement that such reporting take place.

Some experts would like to see financial institutions go further and share their concerns with each other. This is commonly done when commercial fraud is suspected, through a department of the U.S. Treasury.

Reporting on a client’s behavior is a grey area, but some companies are enhancing their ability to identify problems. The use of Artificial Intelligence (AI) allows banks to monitor and analyze massive amounts of data that may reveal cognitive declines. In addition to relying on AI, institutions are training staff members to watch for behavior markers that may indicate decline or fraud. It helps if the banks have contact information for other family members, which can happen if the customers will permit family members to access their accounts.

One persistent problem: often the family members are the ones who are committing financial elder abuse. Another is that seniors are embarrassed about a non-family member revealing their declining capacity and often deny that anything is wrong.

The Petrosewicz Law Firm can assist you with your elder law needs.  Contact us today at (281) 344-9455 or [email protected].  

Reference: The Wall Street Journal (Nov. 20, 2018) “Banks Monitor Older Customers for Cognitive Decline”