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Sunday, November 30, 2008

Non-Profit Leads Push for Tax Credit for Special Needs Families

A Florida non-profit organization has begun a petition drive urging Congress to offer a tax credit to families of children with special needs to assist with the costs of obtaining guardianship.

Prosperity Life Planning, the organization behind the petition, teaches families of children with special needs how to locate resources for their children while preserving access to government benefits. According to a recent article in US News and World Report, the organization decided to pursue the petition because "families often can't afford to set up a guardianship, which involves court expenses and doctors' fees, so they don't do it."

Once a child turns 18, parents’ legal relationship with the child changes because suddenly it is presumed that the child has the ability to make decisions on her own, regardless of her abilities. At this point, one option is to become the child's legal guardian so that the parents can continue to make the important medical and financial decisions on child’s behalf. The proposed tax credit would give families an incentive to pursue guardianship, which many avoid because of the costs.
Prosperity Life Planning is proposing that a tax credit of up to $5,000 would be available to reimburse families for the legal fees they incur in order to obtain guardianship of their child.

The same tax credit could also be used to help families establish a supplemental needs trust for their child with special needs. These trusts are used to preserve assets for a person with special needs in order to supplement any benefits he receives from the government. According to the proposal, the tax credit should be made available to any family member of a child with special needs who pursues guardianship or intends to draft a supplemental needs trust (especially in situations where a child is being raised by family members other than her parents) and would be tracked using the child's Social Security number, so only one tax credit per child could be used.

Prosperity Life Planning points out that the government already provides numerous tax incentives for programs that benefit the public, including tax-deductible retirement accounts and education tax credits. Prosperity Life Planning argues that families of children with special needs face greater challenges than most with minimal government resources to assist them.

To read more about the tax credit proposal, and to download a statement that you can mail to Prosperity Life Planning to show your support for their initiative, go to

Friday, November 28, 2008

Elder Mediation Resolves Family Conflicts

“My daughter is insisting I move in with her,” complains Martha. “She just wants to control my life and take away my freedom,” she continues.

Jenny, Martha’s daughter worries that her mother keeps falling, and fears one day she will break her hip or hit her head.

“I’ll take my sister to court before I will let her get control of mom and my inheritance,” exclaims Jim about Jenny’s desire to move her mother in with her.

It is amazing how quickly formerly cordial relationships between family members will sour when the family has to deal with care of elderly parents or inheritance at their death. Sometimes the consequence of dealing with the final years of elderly parents can break families apart and create long-lasting animosity.

The National Care Planning Council has seen an increase in requests from caregiving children for help in solving disputes with siblings. In one case, the caregiver was being sued by her sister for abusing their parent and stealing the Social Security checks. In another, the caregiving child would not allow siblings to see their mother, claiming they would take advantage of her.

A lot of times it is a “she said,” “he said” situation with neither party really understanding what the elder person needs or wants.

Some families find it hard to communicate with each other when their parent is in need of care. Perhaps when they grew up together they were not accustomed to come together as parents and children to work out problems. And now those children are older and taking care of parents and they don't have this family council strategy to rely on. It may seem unnatural to them. But that is often exactly what is needed, especially in situations where perhaps one child is caring for the parents and the others are left out of the loop.

Children all have a common bond to their parents and as a result a common obligation or responsibility to each other. When disagreements arise, suspicions begin to grow. Suspicions or distrust often lead to anger and the anger often leads to severing the channels of communication between family members. This can occur between parent and child or between siblings or between all of them.

It is often at this point that a neutral third party can come in and repair the damage that has been done and help correct the problems that have come about because of the disagreement.

A practitioner experienced in elder mediation is a perfect choice for solving disagreements due to issues with the elderly.


Mediation is a non-adversarial approach to solving disputes. Mediation is a process of bringing two or more disputing parties together and having them mutually negotiate a solution to their disagreement. The mediator is not a judge and does not render a decision but is there to make sure that communication flows freely between the disputing parties. Elder Mediators are trained in the art of negotiating resolutions between elderly parents and family members.

Mediation can achieve results that the family by itself may not be capable of realizing or have the expertise of achieving. Here are some reasons that make Elder Mediation so valuable.

  • A trained expert on communication gives the family a perspective it could not gain by meeting together on its own;
  • All family members involved meet and prevent problems from arising by anticipating situations that may cause disputes;
  • Allows for the mediator to invite experts such as care managers or other care providers into the meeting to educate the family and give them a new perspective;
  • Allows parents to focus on their abilities rather than their limitations;llows children to come up with and consider options not thought of previously;
  • Encourages uninvolved family members to become involved;
  • Allows parents to express wishes and desires that had previously gone unuttered;
  • Allows for a neutral third party to challenge family members and make them take responsibility for their actions;
  • Promotes consensus of all involved which in turn creates a much higher rate of compliance with the plan than with any other process; (the success rate for compliance with elder mediation is estimated to be about 80% to 85%)
  • Requires a written plan with specific responsibilities which makes compliance feasible.

There are many organizations and companies throughout the country providing expertise in “Elder Mediation” to help seniors and their families. You will also find that mediators often have many coincident professional accreditations such as, Professional or Geriatric Care Manager, Elder Attorney, Clinical Social Worker or Certified Mediator.

In choosing a mediator, consider your needs. Is there a need for a medical assessment to determine the type of care? Are legal concerns with inheritance or family business or power of attorney, the main need? Perhaps, just bringing the family together to communicate on what needs to be done and who will do it is the agenda for now.

In one case, after months of dispute with her parents over their health and safety issues, Connie enlisted the service of a professional care manager mediator.

“Bringing a neutral person with a professional and compassionate attitude into our disputes was the best thing for all involved,” Connie recalled. “My parents shared their concerns and listened with acceptance to mine. All of a sudden we could communicate and work out a plan that they could live with and I could relax knowing they were safe.”

Seniors Use Mediators to help the family plan for long term care.

In the National Care Planning Council's book, “The 4 Steps of Long Term Care Planning,” the process of creating your own “Care Plan” before you need it is introduced. Quoting from the book:

“If the current or future caregiver wants the other persons attending the meeting to give support with respite care, transportation to doctors, etc., everyone needs to be aware of this and in total agreement to do it. All must also be willing to work with the member of the family, friend or professional who is designated as the Personal Care Coordinator.

If you feel the communication will be strained, consider having a professional mediator present. The mediator will be able to keep things calm and running smoothly
and help work out each person's concerns.”

“The 4 Steps of Long Term Care Planning” book can be found at

Where to Find an Elder Mediator

• In your local phone book, on the internet or with your community senior services.
• References from friends and neighbors
• Contact the local area agency on aging
• Contact your state bar association
• Contact a local university or college and asked to speak to the department that provides mediation training and ask for a referral.
• On the internet look up mediation in your area
• Yellow pages in local phone books

The National Care Planning Council lists Professional Mediators throughout the United States on its website at

Monday, November 24, 2008

Holiday Blues - Depression In The Elderly

The holiday season is quickly coming upon us. If you are a caregiver for an elderly loved one, you may notice a change in your loved one's mood as the holidays approach. Perhaps you are one of many, who visit elderly parents and family during the holidays who live a distance away. When you visit you may notice that loved ones are not as physically active, or they show symptoms of fatigue or sadness and have no interest in the holiday or in their surroundings.

According to the National Institutes of Health; of the 35 million Americans age 65 or older, about 2 million suffer from full-blown depression. Another 5 million suffer from less severe forms of the illness. This represents about 20% of the senior population -- a significant proportion.

Depression in the elderly is difficult to diagnose and is frequently untreated. The symptoms may be confused with a medical illness, dementia, or malnutrition due to a poor diet. Many older people will not accept the idea that they have depression and refuse to seek treatment.

What causes depression in the elderly?
It is not the actual holiday that causes depression, but the fact that holidays tend to bring memories of earlier, perhaps happier times. Additional contributing factors that bring on depression may be the loss of a spouse or close friend, or a move from a home to assisted living, or a change with an older person's routine.

Depression may also be a sign of a medical problem. Chronic pain or complications of an illness or memory loss can also cause depression. In addition, diet can also be a factor when proper nutrition and vitamins are lacking.

As an example, Selma’s husband passed away, a few months before Christmas. Her family lived close by and would call or drop in often to check on her. Selma seemed a little preoccupied and tired, but this was to be expected as she had been the caregiver for her husband for many years. It wasn’t until the family noticed that her holiday decorations were not out and her yearly routine of Christmas card writing was not happening that they began questioning her mental and physical well being.

A trip to her physician confirmed depression, caused by not only the loss of her spouse, but a vitamin B12 deficiency. There were both mental and physical reasons for her depression.

Symptoms to look for in depression might include:

  • Depressed or irritable mood
  • Feelings of worthlessness or sadness
  • Expressions of helplessness
  • Anxiety
  • Loss of interest in daily activities
  • Loss of appetite
  • Weight loss
  • Lack of attending to personal care and hygiene
  • Fatigue
  • Difficulty concentrating
  • Irresponsible behavior
  • Obsessive thoughts about death
  • Talk about suicide

How do you know if it is depression or dementia?
Depression and dementia share similar symptoms. A recent article on gives some specific differences:

In depression there is a rapid mental decline, but memory of time, date and awareness of the environment remains. Motor skills are slow, but normal in depression. Concern with concentrating and worry about impaired memory may occur.

On the other hand, dementia symptoms reveal a slow mental decline with confusion and loss of recognizing familiar locations. Writing, speaking and motor skills are impaired and memory loss is not acknowledged as a being problem by the person suffering dementia.

Whether it is depression or dementia, prompt treatment is recommended. A physical exam will help determine if there is a medical cause for depression. A geriatric medical practitioner is skilled in diagnosing depression and illnesses in the elderly. If you are a care taker of an elderly person it may be beneficial for you to seek out a geriatric health care specialist. Click this link for more information on senior health services.

Treating depression in older people.
Once the cause of depression is identified, a treatment program can be implemented. Treatment may be as simple as relieving loneliness through visitations, outings and involvement in family activities. In more severe cases antidepressant drugs have been known to improve the quality of life in depressed elderly people. Cognitive therapy sessions with a counselor may also be effective.

As a care giver or family member of a depressed older person, make it your responsibility to get involved. The elder person generally denies any problems or may fear being mentally ill. You can make the difference in and remove the Holiday Blues from seniors suffering from depression.

The Geriatric Mental Health Foundation offers a “Depression Tool Kit.”

To find a Senior Health Care Services in your area on the National Care Planning Council website go to

The National Care Planning Council supports the work of geriatric practitioners and their services to the growing senior population. If you are a geriatric practitioner and would like to list your services with the NCPC please call 800-989-8137.

Friday, November 21, 2008

Can I Create a Trust Inside My Will?

All trusts aren't alike. When you put a trust in your will, it should be drafted precisely in order to satisfy your wishes and goals. Just any old boilerplate text or preprinted legal form won't do.

You may have one or more reasons to put a trust in your will (called a testamentary trust by lawyers). It can benefit your family, protect your money and save taxes. When the initial beneficiary dies (your spouse, perhaps), your trust can make certain other heirs chosen by you (say, children or grandchildren) will share the principal. Or you may want your favorite charitable organization to benefit. Quite likely you have other goals you want your trust to achieve.

You can set up a trust for just about any purpose. It's a remarkably versatile and flexible means to carry out your intent and assure the prudent management and eventual distribution of your assets. Let's look at some possibilities and benefits.

Types of Trusts
Testamentary trusts are often given various kinds of descriptive labels to identify their nature and purpose. Still, a trust can have multiple objectives.
  • Marital trust. You can leave some of your estate to a marital trust for your surviving spouse's benefit. The trust assets will be free of federal estate tax in your estate because of a marital deduction, but they will be subject to estate tax when your spouse dies later. You can give your spouse the right to appoint the trust remainder to anyone. Or, if you prefer, you can use a "QTIP trust" so you can name the remainder beneficiaries.

  • Family trust. Also called a bypass or credit-shelter trust, this provides lifetime financial support for your spouse. The trust assets can bypass the federal estate tax twice: first, at your death, when it qualifies for the unified estate and gift tax credit; second, on your spouse's death, when the remaining principal passes directly to your children or other beneficiaries you name. Many couples include both a marital trust and a family trust in their estate plans.

  • Other trust types. An irrevocable life insurance trust is funded by the proceeds of life insurance on your life. A trust that benefits your family first and then distributes the principal to your favorite philanthropy is called a charitable remainder trust. Trust types go on and on.

Typical and Special Trust Provisions
Trusts usually last a long time. Just as you wisely choose the right kind of trust, you should include essential terms to assure flexibility and anticipate unpredictable circumstances.

Plan Carefully
Don't take chances—make sure your trust plans fulfill your beneficiaries' needs, allow prudent investment management and shelter the assets from unnecessary taxes. See an attorney who specializes in drafting wills and trusts. Equally important, name an experienced corporate trustee.

SOURCE: University of Georgia in an article written by Mary L. McCormack

Saturday, November 15, 2008

Spice Up Your Estate Plan By Using Trusts

Are you looking for new ways to protect your family and your money? Would you like to cut estate taxes and probate costs, too?

Trusts can be the answer. They are remarkably versatile and can broaden your estate plan. While not magical, they can produce results that seem beyond belief.

The particulars are simple. A trustee chosen by you manages the trust assets, called the principal, and pays an income to those you want to support, your beneficiaries. Your will or a separate legal document is needed to establish a trust. When you create a trust, you are referred to as the grantor or donor.

Why Would You Use Trusts Today?
A trust can be either revocable or irrevocable. A revocable living trust agreement allows you to amend or cancel the trust at any time, in case you change your mind. On the other hand, if you put a trust arrangement in your will, it will become irrevocable upon your death.

You can set up a trust for anyone for just about any purpose. Here are some typical trust arrangements.

  • Family trust. You can create a trust in your will—known as a testamentary trust—for the benefit of your spouse, children and other family members. In a typical family trust, a husband and wife set up a trust in their wills for the surviving spouse's benefit. Each directs that after his or her death, the trust shall continue for the support of their children until the children attain a certain age, say 25 or 30. Then the trustee is to turn over the principal to the children.

  • "QTIP trust." The acronym stands for qualified terminable interest property. Although the surviving spouse receives lifetime income from this trust, he or she may not have the power (other than certain limited rights) to determine the beneficiary of the remaining trust assets upon the survivor's death.

    The intent is generally to allow more control in a second marriage situation where the goals are to provide maximum financial support for the surviving spouse, but still ultimately pass the trust principal to children of the prior marriage.

  • Living trust. You might decide to create a trust for your own benefit, a trust that will remain operative while you are living. It logically is called a living, or inter vivos (Latin for "between living persons"), trust. In this case, you direct the trustee (which can be yourself or a professional trustee of your choice) to look after the trust assets, pay you the income and counsel you about the investments. You are to be kept fully informed about all transactions. You can reserve the right to amend or revoke the trust, to add or withdraw assets, and to approve investment changes. The trust can continue after your lifetime for the benefit of your family or others, and the trust assets avoid the costs and delays of probate.

A Versatile Tool
If you'd like to make a gift to our organization or another charitable organization, but you first must satisfy your own family's financial needs during your lifetime and after, a trust can be the ideal solution.

Trusts let you have it both ways—pass assets to your heirs with the least amount of tax and make a gift to us. Often trust arrangements will accomplish much more, including professional investment management and the assurance that your wishes will be fulfilled.

SOURCE: University of Georgia in an article written by Mary L. McCormack

Tuesday, November 11, 2008

Should I Create a Joint Trust? (Should We Have One Trust or Two?)

If you're married, perhaps you and your spouse are thinking about setting up living trusts. If so, you might ask, "Can't we have just one living trust for the two of us?" Is a joint trust a good idea?

How a Joint Trust Works
First, don't confuse a joint living trust with jointly owned property. A joint trust is created by a single document that manifests your and your spouse's respective wishes about the disposition of your respective property placed in the trust. As to joint ownership, there are various forms, but the most familiar is joint tenancy with rights of survivorship, by which the share of the deceased joint owner passes automatically and outright to the surviving joint owner.

With a joint trust, community property and separate property of both spouses may be transferred into the trust and retain their character as community or separate property. Both spouses benefit from the trust during their joint lifetime. When one spouse dies, the entire trust continues for the benefit of the surviving spouse.

Estate Tax Advantages
A joint trust is most commonly used in community property states, where most of the property in the trust is characterized as community property.1 In some cases, there can be significant estate tax advantages to this type of arrangement.

Typically, the terms of such a joint trust are somewhat like this: When the first of the couple dies, the trust splits into Trusts A and B. The assets allocated to Trust A qualify for the federal estate tax marital deduction and include the survivor's share of the community property and the survivor's separate property, if any.

Example: Fred and his wife, Jean, have $5 million of community property in a joint trust. When Fred dies, normally one-half, or $2.5 million, would be allocated to Trust B, intended eventually to bypass Jean's taxable estate. However, this would generate estate tax in Fred's estate on the excess over a tax-free allowance $2 million in 2008. So, assuming Fred made no prior gifts, the excess of $500,000 will be allocated to Trust A. Result: Trust A will wind up with $3 million and Trust B with $2 million, both fully exempt from federal estate tax in Fred's estate.

However, the potential estate tax advantages must be weighed against many other factors and issues created by joint trusts.

Which Is Better?
Needless to say, arriving at a decision between a joint trust versus separate trusts is relatively complex. If you reside in a community property state, you and your advisor may wish to seriously consider a joint living trust. (One cautionary note: You may live in a community property law state, but perhaps the majority of the property you plan to place in the trust is characterized as separate property. In this case, separate trusts should be considered.)

If you reside in a noncommunity property state [Ohio is a SEPARATE PROPERTY State], each spouse's wishes and property usually are dealt with more efficiently by separate trust agreements. Ultimately, the right answer depends on your state laws and your personal circumstances. Whichever course you choose, it is imperative that your selected executor and trustee are experienced in dealing with separate and community property, and that they take all the necessary steps to maintain the original character of the property.

Your living trust will have legal and tax consequences. Equally as important, the structure of that document will have an impact on you and your beneficiaries in many other ways. Seek the counsel of an attorney who specializes in estate planning. And, of course, our organization's trust and estate planning professionals are available to assist you in exploring your options in developing this very important financial planning document.

1 Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.

SOURCE: University of Georgia in an article written by Mary L. McCormack

Saturday, November 08, 2008

Discover the Flexibility of Living Trusts

A living trust is just what its name implies—a trust you establish while you're living. Living trusts can be "revocable" or "irrevocable," and there are unique characteristics to each. Although it's not normally intended to completely replace a will, a revocable living trust can be an effective way to maintain control of property during your lifetime—and a private way to dispose of it after your death.

Revocable Living Trusts
The benefits of establishing a revocable living trust—one that allows you to change the terms at any time—are many. Here are some of the most important advantages.

  • Professional management. You may not have the ability or the time now to act as your own trustee and manage your assets the way you want. A professional trustee will do that for you. You can then observe how your trustee manages your money and continually make clear to him or her exactly what you want done with your money during and after your life.

  • Probate avoidance. At your death, the revocable trust will become irrevocable. Then the assets in your living trust will bypass the expense and delay of probate. Transfers will not be public, so your privacy will be preserved.

  • Asset protection. A trust will protect beneficiaries from others (protecting children's inheritances, for example, from divorced spouses).

  • Control of terms. You may select the location of your revocable trust, thus choosing the law that will govern its operation and the interpretation of your trust instrument. By choosing the law of one state over another, it may be possible to do things that you cannot do under the laws where you are domiciled.

The Irrevocable Charitable Trust
If you are interested in making a major charitable gift but feel you can't give up the income from your assets, consider an irrevocable charitable remainder trust. Eventually [the charity] will receive what's left of the trust after your lifetime (and that of another beneficiary, if you wish), but in the meantime you'll benefit in these ways.

  • Tax savings. If you transfer long-term appreciated assets to a charitable trust, you'll receive an income tax deduction based on your age and the fair market value of the assets on the day you set up the trust. Plus, the transfer is not subject to up-front capital gains tax.

  • Lifetime income. Every year, the charitable trust pays you (or your beneficiary) either a fixed income (with the annuity trust) or variable income (with the unitrust) You make the choice when you set up your trust.
Gift Calculator See how a charitable remainder annuity trust can benefit you.

Gift Calculator See how a charitable remainder unitrust can benefit you.

SOURCE: University of Georgia in an article written by Mary L. McCormack

Monday, November 03, 2008

A Living Trust? You Don't Need to Be Rich

The term "trust fund" conjures up images of mansions, yachts and huge fortunes. But once the province of the very rich, trusts have found themselves into the lives of many families who've never thought of themselves as wealthy.

Trusts come in myriad forms, but for middle-class families, the living trust is popular because the person creating the trust can enjoy lifetime benefits. You can deposit assets in your own trust and ask the trustee to manage them prudently and pay the income to you, so you have more time for hobbies, travel and family.

Later, there are other important advantages. The property in a living trust that survives you can avoid the costs, publicity and delays of probate and speed property distribution to your spouse or other beneficiaries. If you choose, the trust can continue for their benefit in order to provide sound investment management and reliable financial support.

What Is a Living Trust, Anyway?
Unlike a trust you might establish by will, a living trust is set up by a written agreement between you and the trustee, and it takes effect immediately.

While you can be your own trustee, you may prefer to name a professional trustee to manage the trust assets, keep good records, pay you a regular income and—should you become incapacitated—pay your household and medical bills.

A living trust can be revocable or irrevocable. The advantage of a revocable trust is that you don't give up control—you can amend its terms or even cancel it whenever you wish. On the other hand, you may want to put some of your assets in an irrevocable trust so you can achieve other significant goals.

For example, you could set up a charitable remainder trust to pay yourself a dependable income for your lifetime and then distribute the remaining principal to our organization. The substantial, current income tax savings as well as future estate tax savings of this kind of trust magnify its appeal.

Your Estate Plan, Too

A revocable living trust can be an important part of your estate plan. It's an ideal vehicle for holding title to real estate outside your home state. You can make your life insurance payable to your trust. And the trust can include a credit shelter trust provision to help minimize estate taxes and other provisions to make gifts to family and charitable beneficiaries.

Along with your attorney, we can show you how a living trust can blend your personal needs, estate plans and philanthropic intentions.

SOURCE: University of Georgia in an article written by Mary L. McCormack

Saturday, November 01, 2008

Five Benefits of a Living Trust

Living trusts are flexible estate planning tools that can offer you many advantages, five of which are mentioned below:

1. Revocable. Because the needs of family members may change over time, a living trust normally allows you to modify trust provisions or change the beneficiaries.

2. Private. A living trust avoids the costs and delays of probate—the state-sanctioned system that oversees the administration of your estate. Because a living trust is not subject to public scrutiny, your beneficiaries and the specific amounts or percentages they receive remain confidential.

3. Continuous. Assets put in a living trust stay under the control of the trustee, until you choose differently. When the trust is established, you can name a successor trustee who will carry on financial responsibilities in the event of your incapacity or death.

4. Flexible. You may add other assets to the trust during your life. The living trust can be especially useful if you own real estate in another state by eliminating the need to have a separate probate proceeding in the other state.

5. Professionally managed. Though not exclusive to living trusts, banks are generally well prepared to act as trustee. Also, some attorneys are willing to take on the task. Through prudent investing, these individuals can help make the most of your trust's assets and ultimately deliver more money to your beneficiaries.

A living trust is a remarkable financial and estate planning tool. To secure the plan best suited to your individual needs, be sure to consult an attorney who is knowledgeable about the features and benefits of living trusts.

SOURCE: University of Georgia in an article written by Mary L. McCormack

Wednesday, October 29, 2008

Getting Started: The Revocable Living Trust

The University of Georgia's Mary L. McCormack wrote the following article entitled "Getting Started: The Revocable Living Trust:

The subject of a living trust as an estate planning tool generates quite a bit of discussion. A living trust is an arrangement you create during your lifetime to provide for yourself and your family both before and after your death. It has built-in flexibility that can work very well with your overall estate plans. Though there are many advantages to using this estate planning tool, it is not a substitute for a will.

revocable living trust

Looking at Both Sides

  • Reduction of probate costs. Although you can enjoy the use of the assets you place in a trust during your lifetime, a living trust removes those assets from your estate for probate purposes. Therefore, you save the probate and administration costs you would incur if those same assets were distributed by the terms of your will.
  • Speedy distribution of trust assets. By establishing a living trust during your lifetime, you are setting up a method of managing and distributing your assets. Because a living trust escapes the probate process, the plan of distribution you describe is set in motion immediately at your death. There are none of the delays that occur under distribution by will, and you can be sure your assets ultimately will benefit the charitable institution(s) that mean so much to you.
  • Flexibility of planning. Most living trusts are revocable. This gives you the freedom to amend, add to or even completely revoke the trust agreement as you wish.
  • Freedom of control. Living trusts give you the freedom to name both the beneficiaries and the trustee. Most likely you will name yourself as the trustee during your lifetime and maintain the right to appoint and select successor trustees and beneficiaries. You also control the income and principal and how much of it you wish to use during your lifetime.
  • Investment management. You may choose to appoint a professional trustee such as a bank trust department or trust institution. This frees you from the worry of the day-to-day management of assets, yet if you remain as co-trustee, you still may direct investment goals, including instructing your trustee to change investment strategies.

If you wish, you can give your trustee broad powers and allow the trustee to make the decisions, do all the paperwork and collect the dividends and interest and credit them properly. You would receive periodic and detailed accounting statements, including year-end data for tax purposes. Should you suffer a prolonged illness, your trustee could even pay your medical and household bills.

  • Confidential trust terms. A living trust is private. Unlike a will, no one, other than the beneficiaries, needs to know the contents of a trust.
  • Charitable contributions. Once your needs and those of your family are met, trust assets can be distributed to charitable organizations like UGA.
  • Tax savings. Although all the assets in a living trust are subject to estate taxes, a living trust may be drafted to make the most of estate tax advantages afforded under federal law. After your lifetime, the value of the assets distributed immediately to a charitable institution completely avoids estate tax.

Some Final Thoughts

Keep in mind that there's no income tax charitable deduction when you create a revocable trust, and the level of income is not guaranteed. The trust's assets can be invested in highly rated securities, of course, but the yield is dependent upon economic and market conditions. From your standpoint, these drawbacks may be more than offset by your right to retain control of the trust terms and investments.

A living trust generally is not a stand-alone document. It is advisable to have a pour-over will since it is difficult to get every asset into a trust.

A living trust gives you flexibility while you receive income from your assets during your lifetime, and it can provide asset management after your death.

Friday, October 24, 2008

2009 Annual Gift Exclusion Increases to $13,000

Just a quick note here - The IRS has provided in Rev Proc 8-66 that the Annual Gift Exclusion amount for 2009 has been increased to $13,000.

This means that individuals may give $13,000 in gifts each year to other persons without having to file a gift tax return. Should you be married, you can "split" these gifts and essentially give another person $26,000 in one year...but you need to file a gift tax return in that case to advise the IRS of what you've done.

Thursday, October 23, 2008

When Your Aging Parents Need You

Caregiving can bring guilt and anxiety—and it can be a gift as well.

By Sally Wadyka for MSN Health & Fitness
© Keith Brofsky/Getty Images

For most children, their parents are the people in charge of taking care of them from infancy and even into adulthood. Mom and Dad were there to bandage your boo-boos, sing you to sleep, and soothe you when you were sick. But as the population ages—and more are afflicted with age-related diseases such as Alzheimer's, stroke and cancer—the tables are often turned on parents and their now-adult children.

According to statistics from the National Institute on Aging, there were 37 million people age 65 or older in 2006; that's about 12 percent of the population. But by 2030, as the Baby Boomer generation ages, that number is predicted to rise dramatically. Projections forecast that approximately 71.5 million people—about 20 percent of the population—will be 65 or older. Alzheimer's disease currently affects 5 million Americans, and strokes, which also afflict about 5 million people, are the number-one cause of adult disability.

Finding answers to tricky questions

For most adult children who are thrust into a caregiving role for a parent, the change happens suddenly. "It usually starts with a phone call, and it's like getting hit over the head," says Andy Cohen, CEO of, a Web site that offers support and advice to caregivers.

Read the remainder of this excellent article by clicking here.

Monday, October 20, 2008

Financially Preparing for Special-Needs Kids

Sarah Palin's son Trig helps spark a national conversation

Posted September 30, 2008

Sarah Palin's 5-month-old son, Trig, who has Down syndrome, has sparked a national conversation about kids with special needs: the extra care they require, available government benefits and the pros and cons of prenatal testing.

One topic that has gotten less attention is the financial stress that parents often face. Many kids with special needs require financial support throughout their lives, and while government assistance often covers basic medical care, holding assets over $2,000 can make them ineligible. That means advance financial planning, through wills, estate planning, and trusts, can be essential to ensuring kids with special needs have the support they require once they grow up.

"If [parents] fail to deal with these issues now, it will jeopardize their child's quality of life down the road," says Tanya Harvey, an attorney who focuses on special-needs planning in the Washington, D.C., law office of Bryan Cave.

Here are tips from leading experts in the field of financial planning for kids with special needs on how to get started:

1) Establish legal guardianship. After a child reaches the age of 18, he is considered an adult. But some kids may still need a guardian, says Harvey. One of her tests includes asking whether a child would impulsively buy a pretty diamond in a store window. If the child shouldn't be held responsible for such a purchase, then he needs to have a legal guardian, or else the contract would be binding.

Karen Greenberg, director of Prosperity Life Planning, a nonprofit that teaches financial planning to families of children with special needs, along with her husband and associate director, Jaret Vogel, are urging Congress to adopt a special-needs tax credit that would help parents pay for the cost of establishing such a guardianship. Their proposal would provide up to $5,000 in tax credits to offset the cost of legal fees.

Families often can't afford to set up a guardianship, which involves court expenses and doctors' fees, so they don't do it, say Greenberg and Vogel.

2) Describe your child in writing. Greenberg recommends writing down a "minibiography" of children that could be given to any future guardians or caretakers. It should include medical information like allergies but also personal preferences, goals, and details about friends.

3) Protect your child's eligibility for public benefits. Medical care can be so expensive that even relatively wealthy families may need to rely on Medicaid and Social Security income. Because having more than $2,000 in assets threatens that eligibility, "you want to make sure that if your child is going to receive any money, that it's in a special-needs trust so it doesn't disqualify them," says Harvey. A lawyer or financial professional can help establish a special-needs trust, which doesn't count against the $2,000 limit. Money left to the child through a will should be directed into this trust.

Parents often choose to set up a trust that goes into effect when they die, says Harvey, to allow them flexibility to spend that money in different ways in the meantime. But families may be better off setting up the trust immediately if a grandparent wants to leave money to the child, for example.

Greenberg adds that another benefit to establishing a trust is that the money is then considered separate from the parents' assets, which protects it from creditors and divorce settlements.

4) Consider insurance policies. Life insurance that pays out upon the death of the second parent—often called "last to die" policies—can help parents ensure their child has enough money after they both die without straining their budgets too much beforehand.

When Greenberg, who has an autistic son, examined her budget several years ago, she decided to purchase such a policy. It pays out $650,000 on the death of Greenberg or her former husband, whichever comes second, for about $2,000 a year. In addition, for years, she tucked away about $400 a month into a special-needs trust, which now holds around $55,000. That means that if both she and her former husband were to die, their son would have the $650,000 life insurance payout and the $55,000 trust. Together, she calculates, that will generate an income of around $35,000 a year—enough to pay the bulk of his expenses.

5) Avoid common family-related mistakes. "A lot of parents say, 'How about if I give money to a relative?'" says Harvey. But doing so is a mistake, she says, because not only is the relative not legally bound to spend that money on your child but a creditor or divorce settlement could take it.

Greenberg recalls looking into her options for her son in the 1980s, when the common wisdom held that parents should leave money to their other children, who would then be expected to care for their sibling with special needs. But Greenberg doesn't like the idea of burdening siblings, who have often already experienced so much stress.

Family members and friends planning to leave money to a child with special needs should also be encouraged to do so through a special-needs trust instead of leaving money directly to the child, which could interfere with benefits eligibility. Grandparents may even want to have their wills looked over by an attorney to make sure any gifts don't threaten that eligibility.

SOURCE: US News & World Report

Sunday, October 19, 2008

Medicare Enrollment Period Starts November 15, 2008

It’s that time, once again, to make changes to Medicare options. According to CMS, which is the government entity that oversees Medicare, the six weeks from November 15, 2008 through December 31, 2008 is a hectic time of the year otherwise known as the Annual Election Period (AEP.) Once a year, Medicare allows enrollees to opt in or out of Medicare Part D and Medicare Part C -- otherwise know as Medicare Advantage Plans. Before we get into what that means, some background is in order.

Medicare consists of four parts -- Part A, Part B, Part C and part D. The majority of Medicare enrollees have Part A and Part B. In addition they may have an employer-sponsored supplement or a Medigap policy to go along with Part A and Part B. The fourth part of Medicare is Part D or prescription drug coverage. Most people think that the "D" in Part D is because of the word "drugs." Actually it’s because there is a Part C. Part C is the Medicare Advantage program. It was started in 2003 as part of the Medicare Modernization Act -- the same Act that created the Medicare Part D prescription drug coverage. Medicare Advantage Plans have been around for some time. Before 2003 they were known as Medicare + Choice Plans. With Medicare Advantage, Medicare pays a private insurance company to take over and administer someone’s Medicare benefits. That person is still a part of the Medicare system. He or she doesn't leave the system. A person is simply now receiving his or her benefits from a Private company not the Government.

Back to the massive stack of mail from Medicare that is coming and will be coming over the next few months. Hopefully your people are sitting down. This gets confusing. From November 15, 2008 through December 31, 2008, those eligible for Medicare have the option to change existing Medicare Advantage Plans and/or Medicare Part D. This period is called the Annual Election Period or AEP.

There is also another period of time from January 1, 2009 through March 31, 2009 that is called the Open Enrollment Period or OEP. During OEP, a person can enroll in Advantage but cannot change Part D status, meaning if there is just a Part D, a change or cancellation to the drug Plan cannot occur at this time. If there is a Medicare Advantage Plan which includes Prescription Drug Coverage (MAPD), a change can be made by purchasing another MAPD. Or, if there is just prescription coverage, an MAPD can be purchased. Going the other direction from an MAPD to prescription coverage only, is not allowed.

On April 1, 2009 and thereafter, Medicare institutes a lock-in period. During this time, no changes to drug coverage or an MAPD are allowed. As with most government programs there are a few exceptions to the rule. If a person has moved out of the area the plan operates in, or if a person becomes a resident in any long term care facility, or if a person involuntarily loses coverage, that person can enroll for new coverage under a Special Election Period or SEP. Finally, most people who are eligible for or who are on Medicaid can change coverage whenever they choose.

So why the big deal? Why does someone need to be aware each year of what is going on? The reason is the insurance companies that sponsor the Medicare Advantage and the Part D Plans have the option to change what they offer each year. Changes may come as a result of directives from Medicare, from previous years' claims experience, or from a multitude of other issues. Asking 10 people if there are pending changes to the plans they are in will result in 9 of them replying they have received notice of adjustments or premium changes. However, not all changes are for the worse. There are some instances where the plans have gotten better. Nevertheless, from year to year most plans will have changes. Sometimes a plan may pull out of an area thus forcing an individual to make an unwanted change.

Medicare allows the Advantage companies to start marketing their plans to the public on October 1 and the companies can release information on intended changes to existing plans. For any pending changes, a beneficiary should receive an Annual Notice of Change (ANOC.) Most people will receive this document in November. People need to take the time to review changes. They need to be aware of the plan they are in and the benefits it provides when they might need to use the coverage.

Medicare Advantage Plans can be a great fit for many Medicare enrollees. As with anything, one size does not fit all. During the six-week period when changes can be made, people owe it to themselves to evaluate their options. In the past, many Advantage Plan companies made a big push during this change period to move people out of existing plans and into new ones. Medicare has changed the rules on how companies can induce people to change. In the past, seniors were invited to attend presentations where they received free meals as an inducement to attend. Starting in 2009, only snacks can be provided. Preliminary indications are that pie and coffee are on the menu. Personally we like Pecan pie and free pie is good pie.

On the National Care Planning Council website, at, is a link to all medicare approved advantage plans in every state. All the plans listed in an area can be found there. Finally, those people who need help or who are facing changes should contact a trusted insurance agent. Medicare Advantage plans are only available from someone who is licensed to sell health insurance.

Friday, October 17, 2008

Family Wealth Planning Institute Personal Family Lawyers & Story of My Life Team Up To Preserve 'Priceless Conservations'

The Family Wealth Planning Institute™ and Story of My Life® announce a partnership program to capture and preserve "Priceless Conversations™" that clients create when they create their estate plan with a Personal Family Lawyer® law firm. The Story of My Life website deposits these precious memories into its perpetual, secure Vault to store them for their loved ones and ensure they are never lost.

Long Beach, CA (PRWEB) October 5, 2008 -- The Family Wealth Planning Institute™ and Story of My Life® announce a partnership program to capture and preserve "Priceless Conversations™" that clients create when they create their estate plan with a Personal Family Lawyer® law firm. The Story of My Life website deposits these precious memories into its perpetual, secure Vault to store them for their loved ones and ensure they are never lost.

The mission of the Family Wealth Planning Institute is to help parents make smart legal and financial decisions during life and leave the world a better place when they are gone. One way it achieves its mission is to train Personal Family Lawyers throughout the nation on how to help their clients pass on more than just their money. After the final "I"s are dotted and "t"s crossed in the Wills and Trusts, the tape recorder is then turned on and the Personal Family Lawyer captures, documents and preserves her client's most valuable wealth … the intellectual, spiritual and human assets that are most often lost when someone dies.

Alexis "Guiding our clients to pass on more than just their money is what makes being a lawyer truly meaningful," says Alexis Martin Neely, America's Personal Family Lawyer, founder of the Family Wealth Planning Institute and author of Wear Clean Underwear! A Fast, Fun, Friendly - and Essential - Guide to Legal Planning for Busy Parents. "For our VIP membership clients, we have a new Priceless Conversation each year allowing our clients to build and leave behind a true Legacy Library™ for their loved ones."

The annual audio recordings are uploaded to the Story of My Life site, and permanent data storage space is purchased from the Story of My Life Foundation, a 501(c)(3) not-for-profit, which preserves Stories and files for users in perpetuity.

"Story of My Life is thrilled to be the repository of these special recordings," says CEO and co-founder Patrick Tardif. "Our intention is to capture stories in whatever digital format - whether text, important documents, audio and video - and ensure the technology stays up to date so the files are accessible in the future. These Priceless Conversations are indeed just that - priceless, and deserve the utmost care in storing and preserving them for private access by future generations."

To locate your neighborhood Personal Family Lawyer®, in Ohio, contact Golowin Legal. In other states, visit or call 866-999-3974.

Tuesday, October 14, 2008

New FDIC Rules for Inter Vivos Trust Accounts

On September 26, 2008, the FDIC issued interim final regulations entitled Deposit Insurance Regulations; Living Trust Accounts. The interim rules amend 12 CFR 330 and took effective immediately, pending a sixty day comment period before finalization.

Here is a summary of the new regulations:

The FDIC is adopting an interim rule to simplify and modernize its deposit insurance rules for revocable trust accounts. The FDIC's main goal in implementing these revisions is to make the rules easier to understand and apply, without decreasing coverage currently available for revocable trust account owners. The FDIC believes that the interim rule will result in faster deposit insurance determinations after depository institution closings and will help improve public confidence in the banking system. The interim rule eliminates the concept of qualifying beneficiaries. Also, for account owners with revocable trust accounts totaling no more than $500,000, coverage will be determined without regard to the beneficial interest of each
beneficiary in the trust.

Under the new rules, a trust account owner with up to five different beneficiaries named in all his or her revocable trust accounts at one FDIC-insured institution will be insured up to $100,000 per beneficiary. Revocable trust account owners with more than $500,000 and more than five different beneficiaries named in the trust(s) will be insured for the greater of either: $500,000 or the aggregate amount of all the beneficiaries' interests in the trust(s), limited to $100,000 per beneficiary.

SOURCE: Wills, Trusts & Estates Prof Blog

Make sure your money is 100% protected! FOR MORE DETAILED INFORMATION get a free special report on "If Your Bank Fails, Will You Get Your Money Back? What You Need to Know About FDIC Coverage." Click Here.


***Note: After this post was originally created, the following rules came out:

Deposit Insurance Coverage
Changes to FDIC Deposit Insurance Rules for Revocable Trust Accounts
Revised as of October 8, 2008

Summary: The FDIC has adopted an interim regulation simplifying the rules for insuring revocable trust accounts - commonly known as payable-on-death accounts and living trust accounts. The new rules are easier to understand and apply, and provide at least as much coverage as the former rules for revocable trust accounts. The revised rules take effect today and apply to all existing and future revocable trust accounts at FDIC-insured institutions. The FDIC welcomes comments on the interim rule for 60 days after its publication in the Federal Register.

Under the interim rule:

  • The concept of "qualifying" beneficiaries based on certain family relationships has been eliminated.
  • For each account owner with combined revocable trust deposit balances of $1.25 million or less at a single bank, the maximum coverage will be determined by multiplying the number of different beneficiaries by $250,000. (This will apply to the vast majority of revocable trust accounts.)
  • For each account owner with combined revocable trust deposit balances of more than $1.25 million and more than five named beneficiaries, coverage is the greater of $1.25 million or, as before, the aggregate of all beneficiaries' proportional interests in the trust deposits, limited to $250,000 per beneficiary.
  • In determining coverage for living trust accounts, a life estate interest is valued at $250,000.
  • Irrevocable trusts that spring from a revocable trust upon the death of the revocable trust owner will continue to be insured under the revocable trust rules.

Continuation of FIL-99-2008

All FDIC-Insured Institutions

Suggested Routing:
Chief Executive Office
Head of Deposit & Branch Operations
Compliance Officer
Training Officer

Related Topics:
FDIC Deposit Insurance Regulations 12 C.F.R.
Part 330

Draft Federal Register Notice

FDIC Call Center at 1-877-275-3342

FIL-99-2008 - PDF (PDF Help)

Printable Format:

FDIC financial institution letters (FILs) may be accessed from the FDIC's Web site at

To receive FILs electronically, please visit

Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information Center, 3501 Fairfax Drive, E-1002, Arlington, VA 22226 (1-877-275-3342 or 703-562- 2200).

Financial Institution Letters
Revised as of October 8, 2008

Deposit Insurance Coverage
Changes to FDIC Deposit Insurance Rules for Revocable Trust Accounts

The FDIC Board of Directors has issued an interim rule to simplify the coverage rules on revocable trust accounts without decreasing coverage. The FDIC believes the interim rule will make the regulation easier for depositors and bankers to understand and apply. It will also result in more rapid deposit insurance determinations following bank closings and will help strengthen public confidence in the nation's banking system.


Two types of revocable trust accounts are insured under the FDIC's coverage rules: informal trust accounts and formal trust accounts. Informal trust accounts consist of a signature card on which the owner designates the names of beneficiaries to whom the funds in the account will pass upon the owner's death. These are the most common type of revocable trust accounts and generally are referred to as "payable-on-death" (POD) accounts. The other type of revocable trust accounts are accounts established in connection with formal revocable trusts. Formal revocable trusts are created for estate planning purposes and are referred to as living or family trusts.

The FDIC's former rules stated that all revocable trust accounts (both POD accounts and living trust accounts) were insured up to $250,000 for the interest of each "qualifying beneficiary" designated by the owner of the account. Qualifying beneficiaries were defined as the owner's spouse, children, grandchildren, parents, and siblings.

Summary of the Interim Rule

The interim rule eliminates the concept of qualifying beneficiaries. The relationship between the trust owner and the beneficiaries no longer affects deposit insurance coverage. Under the interim rule, coverage is based on the existence of any beneficiary named in the revocable trust, as long as the beneficiary is an individual, a charity, or another nonprofit organization.

For revocable trust account owners with balances of $1.25 million or less in one FDIC- insured institution, the interim rule eliminates the former requirement that based coverage on the proportional interest of each beneficiary in the trust deposit. For each trust owner with combined revocable trust account deposits of $1.25 million or less at a single bank, the maximum coverage will be determined by multiplying the number of different beneficiaries by $250,000. (This will apply to the vast majority of revocable trust account owners.) Note that for revocable trust deposits that are jointly owned, the $1.25 million threshold would apply to each co-owner's share of all revocable trust deposits at one FDIC-insured bank.

For revocable trust accounts where the owner has more than $1.25 million in one FDIC- insured institution and has named more than five different beneficiaries in the revocable trust(s), the maximum coverage is the greater of either $1.25 million or the aggregate amount of all the beneficiaries' proportional interests in the revocable trust(s), limited to $250,000 per beneficiary. (The impact of the interim rule results in no depositor being insured for an amount less than he or she would have been entitled to under the former revocable trust account rules).

In addition, the FDIC reminds insured institutions that the rules for coverage of informal revocable trust (payable on death) accounts require that the names of all trust beneficiaries be disclosed in the institution's account records. The FDIC also encourages bank customers to make certain that the names of living trust beneficiaries are included in the bank's account records.

The attached draft Federal Register notice provides details on the rule changes. Once the interim rule is published in the Federal Register, the FDIC will distribute a copy of that document in a follow-up FIL and highlight the due date for comments.

Sandra L. Thompson
Director Division of Supervision and Consumer

Sunday, October 12, 2008

Long-Term Care Insurance: Pricey But Necessary?

One of the most common questions I get is "Should we purchase long-term care insurance? Is it worth it?" The answer to that question is up to the individual client, but usually people feel that it's "too expensive" as they pay it while healthy, and it transforms into a "lifesaver" when one becomes ill and the insurance is paying out.

The following is an article from AP Business Writer Dave Carpenter.

cHICAGO – Joyce Smith visited friends recently at a modern nursing home that made her thankful she has long-term care insurance. With relatively plush conditions, including large private rooms and lots of space and privacy, this was the type of safety net she could live with someday.

Turning to her husband, she said: “You keep paying that long-term care, Harry!”

While the Green Valley, Ariz., couple are healthy and hope they are years away from filing a claim, they figure they’ll end up in much better hands thanks to the long-term care policy they secured six years ago when Harry was 54 and Joyce was 60. They acted after watching Joyce’s mother Gladys fall ill and go into a nursing home without such protection, draining her life savings of $200,000 in 2 1/2 years.

“If you’re able to, you should have it,” Joyce says of the coverage. She takes comfort in knowing that she and her husband will be able to provide for any daily assistance they may need in later years.

The Smiths are among 8 million Americans with long-term care insurance — an area where insurers expect big growth as baby boomers zero in on their senior years.

The projections are high because the reality is that about 70 percent of people over 65 will require some type of long-term care services during their lifetime, according to the National Clearinghouse for Long-Term Care Information. It might come at any age, actually; 40 percent of people currently receiving long-term care are 64 or under.

But adding a significant extra cost can be daunting, especially at a time when many are focused on saving for retirement.

So can figuring out what level of benefits you want and how long a period to pay for. Most people get three, four or five years of coverage, because only 20 percent of today’s 65-year-olds will need care for more than five years. The more you sign up for, the higher the cost.

The price varies widely based on age, policy type, benefit level and number of years purchased, among other things, and can range from hundreds to thousands of dollars a year. Someone seeking protection equal to today’s average annual cost of care, about $55,000, would pay $1,064 a year for a standard policy purchased at age 55 or $2,013 for a similar policy at age 65, according to the American Association for Long-Term Care Insurance, an industry group.

As a benchmark, Consumer Reports Money Adviser recently noted that, in general, coverage may be largely unaffordable for people with a net worth below $200,000 to $300,000, not including their home. If you’re in that category, you will likely have to rely on government programs for any long-term care, which can cost you your choice of care facilities and, like Gladys, all your savings.

Other drawbacks also exist, including the limits and conditions of many policies.

But foregoing it is risky. Retiree health costs can be enormous without even factoring in the savings needed to cover long-term care expenses.

A man retiring at 65 in 2008 will need anywhere from $64,000 to $159,000 in savings to cover health insurance premiums and out-of-pocket expenses in retirement just for a 50 percent chance of having enough money, according to the Employee Benefit Research Institute, and $196,000 to $331,000 for a 90 percent chance.

A woman the same age would need $86,000 to $184,000 for a 50-50 chance and $223,000 to $390,000 to have a 90 percent chance.

The Smiths, who are retired, pay $4,995 a year for a joint policy with MassMutual that will provide extensive long-term care benefits for an unlimited time — now rare — when they become eligible by virtue of needing help with daily living activities. They consider themselves fortunate they locked in for that amount, having been told by their agent recently that it might cost triple the amount today.

“It’s one of those insurance products that’s kind of difficult to understand,” says Harry, a retired firefighter. “I studied it for nearly a year. ... But it gives you peace of mind to have it.”

Having the insurance also protects children from a potentially heavy burden.

“We’ve had friends tell us ‘We’re not getting long-term care, let the kids take care of us,”’ says Joyce, who with her husband has two daughters and a son. “Well, that’s not being very nice to the children. We don’t want our kids to have to take care of us.”

Thursday, October 09, 2008

Long Term Care's Impact On The Family

"Families are not necessarily drawn together in a time of crisis. Very often, they are blown apart." says Nancy Dykeman, an educator of long term care planners.

Nancy illustrates this problem with an example:
Imagine a young family. The father is working toward a career promotion; he coaches his kids' soccer teams. His wife works part time. They have two children. The mom's parents are retired, healthy and live in Arizona, playing golf and loving life. Then the unthinkable happens - the young mom suffers a stroke. Months of rehabilitation and care at home follow. Grandma and Grandpa travel back and forth from Arizona, often staying for long periods to help, even though their retirement dream is slipping away.

Dad must continue working to support his family, but his employer is tired of the time he spends on the phone and his coming in late or leaving early. A promotion is off the table.

What about the kids? Their mom, confidante and best friend is hurting and no longer fun. All of her energy goes into trying to recover. Kids' roles change too. They must help prepare meals, keep things picked up, and support their dad and grandparents.

Who knew this young wife and mother would need long-term care? Would the impact be different had it been one of the grandparents? Whenever anyone of any age needs long term care, it's a family issue.

Dykeman says that Long-term care insurance (LTCI) would have been a priceless gift for this family because it "protects the family, allowing them to think and work together without the stress and sacrifice of constant crisis mode." It also allows each family member to keep their normal role, rather than that of a caregiver.

Make sure you have a plan - it's critical for all adults, of any age. Whether it includes long term care insurance, annuities, or Medicaid planning and asset protection, consult with a professional to ensure you and your family are taken care of.

Monday, October 06, 2008

Do Your College Age Children Have Healthcare Directives? DO YOU?

We should all protect our families and our assets with legal documents like wills and trusts, but what are our essential needs and what can we do on our own to save on legal fees? Family financial and legal expert, Alexis Martin Neely, is the author of "Wear Clean Underwear: A Fast, Fun, Friendly and Essential Guide to Legal Planning," and shared some valuable advice in an appearance this week on View From the Bay on KGO in San Francisco.

Alexis is the founder of the estate planning law firm of Martin Neely & Associates in Southern California, as well as the Family Wealth Planning Institute, a nationwide cadre of Personal Family Lawyers guiding parents to make the best legal decisions throughout life and being there for loved ones afterward.

She says everyone over 18 needs an Advance Health Care Directive & Durable Power of Attorney. If you have assets, you should also have a Will & a Living Trust. If you have minor children, you should also have a Kids Protection Plan.

She raised a great point that many parents don't think about - go watch the show to find out the important legal documents that all young adults need to have in place.

During the segment Alexis shares what legal documents you must have in place for you, and your kids! At the end, listen as she explains, what you should look for and the questions you should ask when searching for the perfect attorney to handle your family planning for a lifetime.

If you have college age kids, this is a VERY TIMELY and IMPORTANT topic. Make sure BOTH you and your adult kids have these important documents in place to avoid problems in the event they are injured or incapacitated.

Before you send them back to school, make sure these documents are in place!

If you have prepared these documents in the past, be sure to have them reviewed for compliance with HIPAA laws! Our office can help you with those needs, as well as the Kids Protection Plan, Wills and Living Trusts. If we can help you with these things, please contact us at 614.487.8887 x3 or through the Golowin Legal Website.

Thursday, October 02, 2008

Two Legal Documents Every Adult Needs No Matter The Size of Your Bank Account

Teen_2 As of your 18th birthday, you became an adult in the eyes of the law.

Even though your kids may still act like teenagers (or you may feel like one), in the eyes of the government, turning 18 means you need to have legal documents in place in case of an accident.

Every adult should have in place an Advance Health Care Directive and a Financial Durable Power of Attorney. Estate planning is not just for rich people. These legal documents are important for everyone who loves their family.

If you don’t have these legal documents in place and something scary happens, it will make life a whole lot more difficult for the people you love.

An Advance Health Care Directive (also known as a Health Care Power of Attorney and Living Will) does two things: first, it names the person you want making health care decisions for you if you cannot make them for yourself and second, it lets that person know how you want them to be made.

This is important because if you are in the hospital and cannot communicate, you need someone to make decisions for you and you want them to make those decisions as you would want them made, without question.

If you don’t have this document in place, it could create a huge rift among your family as the people you love fight about what you would have wanted.

The important thing in this document is that the whoever you name is also given authority under the new (within the past three years) Health Insurance Portability and Accountability Act (aka HIPAA).

If your health care agent (the person named in your Advance Health Care Directive) is not designated as your agent under HIPAA, they will not be able to look at your medical records, which makes it mighty hard for them to make health care decisions for you.

By the way, if you have college age kids going off to college, you’ll want to get this in place for your kid. Otherwise, when you call the school nurse to discuss your child’s illness, you may find no one can or will talk with you because they would violate HIPAA if they did.

We get frantic calls in our office at least once or twice each fall from parents looking for legal documents for their college-age kid for just this reason.

The second legal document you absolutely need to have in place as an adult is a Durable Power of Attorney. This document names someone to make financial and legal decisions for you if you can’t make them for yourself.

Beware of the one-page standard durable power of attorney you find on the internet where you just check off a list of applicable powers. I’ve seen family members try to use those to access their loved ones assets and then not be able to because the form was too generic.

It’s important for your kids going off to college to have this in place too because if they are in an accident you are going to need to take over paying the bills and get access to bank accounts and make legal decisions. But, you will have to go through a long and expensive court process if there’s not a signed Durable Power of Attorney in place.

It’s the same for you too. If you are in an accident, and you don’t have a Durable Power of Attorney in place,it will be difficult for your family to deal with things on your behalf.

So, regardless of the amount of money you have in the bank, get your Advance Health Care Directive (or living will) and your Durable Power of Attorney in place at the bare minimum. Oh, and of course, if you have kids under 18 at home, get your comprehensive Kids Protection Plan in place too.

None of this has to do with money. It has to do with making life as easy as possible for the people you love. Contact Golowin Legal today to protect your loved ones.

SOURCE FOR POST: Family Wealth Matters by Alexis Martin Neely

Monday, September 29, 2008

What To Do If You Can't Decide Who To Name As Guardians For Your Kids

There are a lot of parents out there who have not named guardians for their kids because they really can't decide who the guardian should be.

You might be one of them.

But, here's the thing. If you don't decide and something happens to you, the decision gets made by a Judge.

You don't want that, do you?

Here's a few things that may help you decide:

1. Think through on a practical, realistic and non-emotional (to the extent you can) level who would come forward to raise your kids if you were in an accident.

2. Is that who you would want to raise your kids?

3. If not, who would be better than that person or those people?

4. If more than one person would come forward, who images Judge.jpg
would a Judge pick if the Judge had to decide between all
the people who would come forward?

Bottom line?

If you don't decide, a Judge will. Even your worst choice would be better than that, right?
Call Golowin Legal, LLC for help walking you through the entire process of choosing the right guardians for your kids and then legally document your decisions!

If not knowing who you want to name has been holding you back, don't let it hold you back a second longer.

Do it now. It's Easy. No Excuses.

Golowin Legal helps parents complete their important estate planning documents, including guidance with nominating permanent and temporary guardians for their minor children. Call us today at (614) 453-5208. Visit our website for more information on Naming Guardians for Minor Children.

Saturday, September 27, 2008

Your Parents, FDIC and Keeping Your Money Safe

Timely discussion on how to protect your money held within financial institutions. Can you shield more than $100,000 via FDIC protection? Absolutely!

Don't fail to take advantage of these valuable planning techniques!

Thursday, September 25, 2008

A Grave Issue of Parenting – Writing Wills and Choosing Guardians

The following article, which appeared in the Orange County Register, features an interview with fellow Personal Family Lawyer Darlynn Morgan of The Morgan Law Group in Newport Beach, California.

Tips for making sure your children are cared for in the event of your death.

"Mommy, what happens after you die?"

It's a question most kids ask at some point – and we may quickly paint a picture of fluffy clouds, golden roads, rainbows and go about our day.

It's a question parents rarely want to truly consider. But ask yourself – what would happen to your kids if you died? Who would take care of them?

"A will may not be enough," says attorney Darlynn Morgan of The Morgan Law Group in Newport Beach. Morgan, a personal family lawyer, offers estate planning tips and advice to parenting and moms' groups, with a particular focus on children.

Here are her tips for ensuring your children's future in the event of your death:

•If both parents can't agree on a suitable guardian for the children, don't give up. Find a mediator who can help you to come to a mutual agreement for the benefit of the kids.

•When you name a couple to act as guardians, be sure to indicate what should happen if the couple broke up or one of the partners in the couple died. You want to ensure your children don't end up in the care of someone you wouldn't really want.

Name several alternate guardians if your first choice can not serve.

•It isn't necessary to take into account the financial resources of potential guardians when deciding who should raise your children. Your guardians are the people who will be in charge of your kids' emotional, spiritual and physical well-being, not necessarily their money.

It's your responsibility to leave enough money behind to take care of your kids either through savings or life insurance, and someone to manage that money if the guardians are not good money managers.

It's also a good idea to provide someone to manage your children's money so a lump sum doesn't go to your children at age 18 – without adult supervision.

•Be sure to name short-term guardians as well as long-term guardians. Short-term guardians will offer immediate care of your kids if you were in an accident. Otherwise, your kids could be taken out of your home and into the arms of strangers (child protective services) until the authorities figure out what to do.

•Be sure to specially name anyone you want excluded as guardians – those who might challenge your decisions or who you would never want raising your kids. (A grandparent or aunt or uncle, for example, who may fight the guardians for custody).

For a list of Morgan's upcoming speaking events, visit Morgan Law Group.

SOURCE: Orange County Register in an article written by CYNTHIA RUPE

Monday, September 22, 2008

Keep Your Memory Sharp With A Social Life

A recent Harvard School of Public Health (HSPH) study found that people with the highest level of social integration had the slowest rate of memory loss, with the most active experiencing memory loss at less than half the rate of the least integrated people.

So there you have it! The perfect excuse to keep up that weekly golf, bridge, church or other activity!

Thursday, September 18, 2008

Couples Face Pitfalls When Estate Planning In A Second Marriage

Attorney Stephen M. Worrall writes the following in his Georgia Wills, Trusts and Estate Planning Blog. This centers upon an issue that is constantly overlooked, creating drastic and unfortunate impact upon the estates of many people! Don't overlook the importance of planning in second marriage situations.

Our greatest challenge is planning the estate for second marriage clients. The blended family carries with it a number of competing concerns as we prepare wills and trusts to meet their needs.

If the couple is financially sound with adult children from their former marriages and have a prenuptial agreement, our task becomes fairly easy. The challenge comes with the scenario wherein the surviving spouse would need the assets from the first to die, yet the first to die would ultimately want for his or her children to inherit once the surviving spouse passes.

The problem with leaving all of the assets to the spouse is that the spouse is under no legal duty whatsoever to include the children of the deceased spouse in his or her will or trust. The children of the first to die become disgruntled when their relationship with their step-parent begins to fade for fear they will never inherit anything from their parent. Invariably they feel that their parent would never have intended the inevitable result.

By way of illustration, let's assume that Tom has two children from his previous marriage, Terri and Tim. His wife, Julie, has two children from her previous marriage, Jack and Jennifer. Should Tom's will leave his assets to Julie? What about Terri and Tim? What should Julie's will say? In such a scenario, there are several options.

We explain the options to our clients as spectrum ranging from complete control of the assets from the grave to little or no control. The first-to-die spouse can control the assets by giving the surviving spouse lifetime rights over the assets, but when the survivor dies, the remaining assets must pass to the children of the first to die. This can work well for those children, but the surviving spouse often is uncomfortable with the feeling of being controlled .

The other end of the spectrum would be to simply leave the assets to the surviving spouse and trust that the survivor would provide for the deceased spouse's children in his or her trust in the future. While this latter option sounds nice, often the relationship between the stepchildren and step-parent fades as years go by and the stepchildren are typically disinherited in the end.

We like to see a hybrid approach taken. First, using our example, we recommend that Tom's estate plan provides that Terri and Tim first be left some amount outright and then provide the remaining assets to Julie - some restricted and some not restricted. The assets typically not to restrict would be the marital residence and retirement assets.

Life insurance proceeds and other investment liquid assets could pass to a "QTIP" trust whereby Julie could withdraw funds from this trust for the rest of her lifetime, but at Julie's subsequent death, the remaining QTIP trust assets revert back to Terri and Tim. "QTIP" stands for Qualified Terminable Interest Property and was created by Congress in early 1980s.

Each and every case is different but perhaps some combination of the above should be considered when the difficult challenge of planning the estates of the blended marriage is encountered.

SOURCE: Naperville Sun in an article by Richard W. Kuhn