All of us have family. Whether it is our spouse, children, extended family, or even our pets. What does estate planning have to do with your family?  Everything!  When we at the Elder Care Firm ask our clients what they want their estate plans to accomplish, the typical answer is, “I want stay in control.”  Another answer we hear is, “I don’t want to become a burden to my loved ones,” and also, “I want to keep it simple.”

Plan While You are Healthy

The reality is, the only way to stay in control and keep your estate planning simple is to do it now, while you are healthy.  In order to avoid becoming a burden to your family, your plan must provide your wishes for your care so your loved ones don’t have to make life altering decisions for you in matters they ultimately didn’t know what you wanted.

A terrible situation that we have frequently seen at the Elder Care Firm is when the children of clients have had to make the decision of whether to “unplug” mom or dad from life support or what medical treatment to administer to mom or dad, and they didn’t know what mom or dad wanted.  While something as simple as this is often believed to be accomplished by a medical directive or medical power of attorney, most medical directives fall short in providing the specific guidance to your loved ones in those “life and death situations”.  What is essential to know is most documents, like a Will, medical directive and financial power of attorney, grant a lot of legal authority but rarely provide any instruction as to how to carry out that authority. As estate planning experts who focus on LifeCare Planning, we will ensure that your intentions as to your health care and end of life decisions are clear for your loved ones.

What Do Families Fight Over?

Many times, families do not fight over the money left behind from an estate, they fight over what their loved one “really” wanted. The family wants to be sure they carry out your wishes, but they have different ideas of what your wishes are. Medical directives and powers of attorney grant legal authority to those you choose to make health care, legal and financial decisions for you, but they generally do not provide instructions on how to use that authority, which often leads to family controversy and frustration.

Finally, a trust, when properly done, can be used as your instructions to your family members and can lead to the granting of authority and the proper instructions to loved ones of how to use it; that is, to ensure what you want to have happen actually occurs when you are not there to do it yourself.  However, most of the typical revocable living trusts that we see on a daily basis, and other documents used by Michigan lawyers, only address some of the issues, but rarely address the more difficult issues that can lead to the destruction of families.

The Next Step…

If you really want to protect your family, you are the only one who can do it.  But first you must get educated on the options you have available and how to ensure your family know your instructions. These instructions help to prevent the heartbreak resulting from one of your loved ones having to make decisions whether you live or die, without knowing what your wishes truly were. To learn more, join us for one of our FREE LifeCare Planning Workshops. We promise that time will fly, you’ll learn a lot, and have a little bit of fun. To sign up for a LifeCare Planning Workshop click here.

And remember, the next time you wonder what estate planning is all about, it’s simple, it’s all about family!

The post Downriver Estate Planning Lawyers: All About Family appeared first on Michigan Estate Planning.

Avoiding sibling rivalry with Estate Planning

If you have more than one child, discuss the inheritance to prevent sibling rivalry issues. Some surprises are good, but others create tension and uncertainty. According to forbes.com, one important issue is who will be the executor of the will.

Clearing up any confusion

If you are fortunate enough to own several homes such as vacation or investment properties, don’t assume which children would prefer to inherit a certain property. An estate planning attorney will let you know how to handle a situation when one real estate property is worth more money than another. Also, you can guard against the problem of leaving a home to one child that you think will be worth more or less than it is worth in the future. Also, your children might have preconceived ideas about how much you are worth. The AARP cited a Fidelity Investments survey that showed children underestimated their parents’ estate by $100,000. In many cases, you could give your children greater peace of mind.

Avoiding probate and taxes

If you don’t want to put your children through the stress of probate, talk to an elder and estate planning attorney about ways to avoid probate with a retirement plan trust. One great way to help your children is to pay off your debts while you are living if you can. Also, you might want to simplify your financial situation by selling real estate in another state that you no longer need or want to include in the estate plan. Experts advise people who want to avoid estate taxes to start making lifetime gifts each year.

Explaining your intentions

Most parents and grandparents only want what’s best for their family. Explain your reasoning to your children or other beneficiaries. By having the difficult inheritance talk you can create more family harmony. The AARP recommends if you plan to distribute the inheritance unequally, just explain your reasoning. Some reasons might include the fact that one child earns significantly more or one child has many more children to care for in life.

While it might to tempting to try to control your children from beyond this world, experts caution against using an “incentive trust,” that stipulates what your children have to do in order to receive an inheritance. While incentive trusts make for a good storyline in a movie, it’s often counterproductive and leads to lawsuits that eat up your hard-earned money.

Christopher J. Berry, an elder law and estate planning attorney, and the Elder Care Firm, work hard to provide you with the answers you need for your estate plan. For more tips on how to talk to your children and their inheritance and how to set up a Michigan Retirement Plan Trust, please contact us.

The post Estate Planning: Having the Inheritance Talk appeared first on The Elder Care Firm.

Choosing the Right Beneficiary

Many people assume that just because they have hit retirement age, they can simply take it easy and let the due process of law determine for them which of their loved ones can benefit from their retirement plans. However, as is always the case, it can be very easy to lose sight of certain things in the long run if you’re not being careful with how you bequeath your retirement plan like, for instance, your 401(k).

When most people open a retirement account, it can be fairly easy for them to gloss over some of the facts and just go straight to the “nitty-gritty”, as it were; in this case, it’s always naming their beneficiaries. While the spouses commonly get to be named as the beneficiaries to their significant spouses retirement plans, who do you name after your spouse?

The answer is, it depends.

It depends because for one, priorities and circumstances can change once we get older. And really, we’re not even talking about the likelihood of you and your spouse separating at some point in time; rather, it more has to do with the fact that that gesture may not prove to be the best choice not just for your spouse, but also for the rest of your family, too.

Here’s a more concrete example of what we are talking about: let’s say that you have named your spouse as the sole beneficiary to your 401(k) or IRA. When you pass on, your spouse now has the option of getting all your assets or, most likely, “rolling” yours over to his or her retirement plan.

Well, how about if you have other loved ones whom you think can benefit from your retirement plan? Well, that is where things get a little bit complicated.

Non-spouse beneficiaries do not have the option of rolling the deceased’s retirement plan into their own. However, they may have an “inherited IRA.”

With an inherited IRA, a beneficiary may stretch out the minimum required distributions over their life expectancy. However, there is no asset protection, so if there is a divorce, lawsuit, creditor action, the asset may be lost.

Naming beneficiaries are a tricky proposition, that too often are overlooked. Counsel with a Michigan estate planning lawyer to discuss the options, including stand-alone retirement plan trusts.

The post Choosing the RIGHT Beneficiary: How to Responsibly Leave Your Retirement Plan to the Loved Ones that Matter Most to You appeared first on Elder Care Firm.

According to a communication from Terrence M. Beurer, Director, Field Operations Administration, all SBO Trust assets are deemed countable pursuant to BEM 401, page 11 regarding Medicaid irrevocable trusts, which states:

Count as the person’s countable asset the value of the countable assets in the trust principal if there is any condition under which the principal could be paid to or on behalf of the person from an irrevocable trust.

This is a huge and disturbing change of policy with zero warning.

This effects married couples where one spouse is health and one spouse is in a nursing home.  As a Certified Elder Law Attorney, we have other planning strategies that are available to protect the assets, however, for Michigan married couples who have SBO Trust currently in process with DHS looking to protect their assets from nursing home spend down, this will be a huge problem and will most likely result in a bunch of denials.

The post Massive Changes to Medicaid Planning in Michigan For Married Couples using Sole Benefit Trusts appeared first on Elder Care Firm.

So, the question is, why did Phillip Seymour Hoffman ignore his son and his two daughters?  Well, according to the article, he did not want his children to grow up to be “trust fund kids.”

This is not an uncommon approach that many of the affluent are now taking.  There is a prevailing argument that leaving such a large amount of wealth directly to the next generation can ruin their work ethic as well as their appreciation for money.

According to Matt Lauer, of the Today Show, “The old saying is: You leave them enough to do something, not enough to do nothing.”

That said, Phillip Seymour Hoffman’s decision to leave his $35 million estate to his partner, without much left for his children seems a bit tough to understand as an estate planning lawyer.  There are many ways to customize trust documents so as to include the important values that a parent would want to leave for his or her children.  There are things like building in incentives.  For example, the trust could distribute assets to match a W2, thereby matching the wages a child earns.  That’s just one of many examples.

My advice would be to speak with an experienced estate planning or elder law attorney about how best to leave wealth to the next generation, including a discussion of the values you want to pass down to the children.

The post Philip Seymour Hoffman Leaves his Children Zilch…$35Million to his Partner appeared first on Elder Care Firm.

Melissa Franklin of the Area Agency on Aging states, “We have multiple care providers now who are on the sex offender registry.  There is nothing that anyone can do to protect” those receiving care.

In some cases, Medicaid, which is a joint Federal and Michigan program, is paying for the care for our Michigan seniors.  Often times, the seniors are in a vulnerable position, sometimes with Alzheimer’s or Dementia.

There was a finding earlier this month by the Michigan Auditor General that there are 3,800 convicted felons delivering in-home care to the elderly and disabled Medicaid patients.  In the past the Michigan Department of Community Health had done background checks on anyone who was providing care to seniors under Medicaid, however, this ended with the Snyder administration.

Out of this mess, the state will create a task force to try to address this.  Whether it works in curbing this creepy situation, we’ll find out.

As  Certified Elder Law Attorney, I’m pretty horrified by this, but not surprised.  I often advise my clients on issues involving home care, quality of care, and Medicaid.  One of the things that I generally tell my clients is that you get what you pay for.

For example, one family told me that they had a 24/7 caregiver set up, living at home to take care of a husband who had dementia.  The wife told me they were only paying him $400 per month.  This immediately caused red flags to go up in my thinking.  I advised the client that, typically in-home 24/7 care could run well over $10,000.

It turns out that the caregiver was using heroin and stealing from the family.

It’s scare stuff to think of brining a stranger into the home of a vulnerable senior.  You need to be careful

The post Is your Michigan Caregiver for Your Senior a Felon? appeared first on Elder Care Firm.

Don’t leave your IRA outright to a kid.

In the big news department, the Supreme Court held in Clark v. Rameker that inherited IRA’s are not asset protected.  There were differing opinions on whether an inherited IRA would be protected against bankruptcy, however it is now clear that they are not.
Here’s the facts, at death Ms. Heffrom owned an IRA worth about $300k, with her daughter Mrs. Heffron-Clark named as the designated beneficiary.  When Mom’s account passed to daughter, daughter and her husband were in the middle of bankruptcy proceedings.

It’s common knowledge that IRA’s are protected assets that are protected against such proceedings.  However, the issue is whether an inherited IRA is a “retirement fund” under the bankruptcy code.

The Supreme Court unanimously ruled that the inherited IRA was NOT a “retirement fund” under the bankruptcy code and was not protected.

Sooooo………what does this mean?

Well it means for Michigan clients who have retirement accounts greater than $250,000 then those IRA’s should not be given outright to children, but instead should be held in Stand Alone Retirement Plan Trusts (RPTs) to provide asset protection against creditors and bankruptcy proceedings.

The post BIG NEWS: Supreme Court Holds Inherited IRAs are Not Protected Anymore appeared first on Elder Care Firm.

Problems with the Five Wishes and Free Advanced Directives

In my Michigan estate planning practice, I’ve had a ton of clients and financial planners bring up the Five Wishes as a way to handle end of life decisions.  Everyone over the age of 18 in Michigan needs advanced directives (sometimes called medical powers of attorney).  In Michigan we call these documents Patient Advocate Designations.

A popular version of this is called the Five Wishes.

Now understand, there are a variety of healthcare advanced directives.  There could me medical powers of attorney, living wills, or Do-Not Resuscitate orders (DNRs).

Now where do the Five Wishes fit in?  They should probably come with a warning label as this article discusses.

One of the issues with the Five Wishes is that it incorporates a specific religious creed that makes it permissible to take action that you know will cause death, it cannot intend death.  A very, very subtle concept, but the theory is called the “doctrine of double effect.”

For example, wish Number 2, “My Wish for the Kind of Medical Treatment I Want or Don’t Want.” includes the general instruction “I do not want anything done or omitted by my doctors or nurses with the intention of taking my life.”  However, continuing on it includes language that you can check a box to say you “do not want life-support.”

The confusion is that a doctor or hospital could interpret that language as intending death and thereby creating confusion.  What a mess of a document!

This is just one issue with the Five Wishes document.

Another issue, which is an issue with the state forms some states have, including Michigan, is that there is an unauthorized practice of law aspect involved where you have medical providers explaining one of the most important legal documents that can effect your life (or death).

My advice?  Sit down with a certified elder law attorney who can walk you through all of the issues involving end of life decision making.  It’s your life, don’t risk it.

The post Your Free Five Wishes Medical Power of Attorney Ain’t No Good. appeared first on Elder Care Firm.

Standalone Retirement Plan Trust

A common question I hear is “who should be named for beneficiaries of an IRA or retirement account?”  Should it be the spouse, the kids, the revocable living trust?  Typically, I hear, even professionals, say that it should be spouse first to accommodate a spousal rollover, then the living trust while the kids are minors, and then the kids, once they become adults.

There is some wisdom in this planning, however, it is missing a huge opportunity that not enough estate planing lawyers and financial professionals are brining up.  That being the Standalone Retirement Plan Trust.

The common wisdom is that it makes sense to name a spouse or individual the beneficiary of an IRA or retirement account for tax purposes.  What this allows is for a spousal rollover and continued deferment of taxes for a spouse.  For an individual, it would allow for an inherited IRA.

However, what happens if the beneficiary has long-term care issues, medical problems, divorce, creditor issues, or bankruptcy issues?  That IRA could be going “bye-bye”.  Michigan inherited IRAs are not asset protected.

Or what if the beneficiary cannot be trusted to manage the money properly.  If you name a beneficiary outright as beneficiary of the IRA, they could choose to take the IRA as a lump sum, destroying the goal of deferring paying taxes as long as possible.

The solution to this is the Standalone Retirement Plan Trust.

With the Standalone Retirement Plan Trust you can force the stretch out of the IRA for the beneficiary, build in asset protection, and protect the beneficiary against creditors and their own poor mismanagement.

I have no clue while more lawyers and financial planners are not recommending this more to their clients.  If you have an IRA or retirement account with a balance greater than $250,000 then it should be a planning tool that is part of the equation.

The post How to Title IRA Beneficiary Designations appeared first on Elder Care Firm.

Brighton’s only Certified Elder Law Attorney

As the only Certified Elder Law Attorney in Brighton, Michigan, I’m excited to be at the Livingston County Caregiver Fair on Saturday April 5th, 2014.  The Livingston County Caregiver Fair will be held at Brighton High School, 7878 Brighton Rd., Brighton, MI 48116.

The Livingston County Consortium on Aging is one of the sponsors, with over 60 exhibitors providing information on transportation, nutrition, medical, financial assistance, home safety, respite, and home care.

There are many attorneys that say they do elder law, however there are only 15 Certified Elder Law Attorneys (CELA) in Michigan.  The CELA designation is the gold standard in elder law.  Before you hire a Brighton elder care lawyer to help your family with VA Benefits, Aid & Attendance, Medicaid planning or just navigating the long-term care maze for your family, make sure to check out their credentials.

Are they a Certified Elder Law Attorney?

Only a Certified Elder Law Attorney has been peer reviewed, shown the requisite amount of experience, and demonstrated that knowledge by passing an exam on 12 different topics of elder law.

Certified Elder Law Attorneys have specialized knowledge to help seniors, veterans, and their families navigate the long-term care legal maze.  For example, in our office we have unique legal planning strategies to help our clients qualify for the VA Benefit even when the Department of Veterans Affairs say that the veteran or surviving spouse may not qualify.

I help families through the special use of trusts and other legal documents to protect and shelter resources against the catastrophic cost of long-term care.

If you are a senior, veteran of have a loved one who is concerned about the cost of long-term care and has questions on how to qualify for the VA Benefit or Medicaid, give our office a call and we’ll be happy to assist you.  You deserve the best representation possible, and there is only one Certified Elder Law Attorney serving families in Brighton Michigan.

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As one of the few Certified Elder Law Attorneys in Michigan, give our office a call if you have a loved one who needs help paying for nursing home costs.  (248) 481-4000.

To qualify for the veterans benefit, sometimes called Aid & Attendance, in Michigan, a veteran or surviving spouse of a veteran must meet certain requirements.

1) The veteran must have served 90 days active duty,

2) The veteran must have served one day during a period of war,

3) Cannot be dishonorably discharged,

4) Paying more in long-term care costs then income coming in from social security or pension

5) Pass the resource test

If the veteran or surviving spouse meets all of the above requirements then they can qualify for over $2,000 per month, tax free, to pay their long-term care costs.

However, there are some things to keep in mind.

First, with the resource analysis, many times prior to coming into our office a family will be over the asset limit to qualify for the VA Benefit.  In situations like this, typically we put together a Veterans Asset Protection Trust where the family can retain control of the assets, however still qualify for the VA Benefit under the resource test.  Plus, this Veterans Asset Protection Trust helps the family also qualify for Medicaid if they should wish to bring in that governmental benefit as well.

Next, it is important to understand that your loved one needs to have long-term care costs that exceed their income.  The veteran or surviving spouse needs a doctor to say that they need the assistance of daily living activities and that they are now willing to pay to receive that assistance.

Last, keep in mind that the veterans benefit maxes out at just over $2,000 per month.  This benefit is great for paying for assisted living costs or home care costs, but when you’re paying over $10,000 per month in nursing home costs, Medicaid may be a better answer.  Medicaid can pay almost the entire cost of nursing home care, minus the private pay.

Do you have veterans benefits or Medicaid questions?  Call our office at (248) 481-4000 and we’ll be happy to answer your questions.

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Michigan Veterans Benefits For Seniors

Many Michigan families do not realize that there are Veterans Benefits available to pay for home care, care contracts and assistance in the home for seniors.  As one of the few Certified Elder Law Attorneys in Michigan, my practice is devoted to helping seniors, veterans and their families navigate the long-term care legal maze.

A common mistake I see families make is that they wait to long to try to secure their Aid & Attendance veterans benefits.  It’s unfortunate because many times if they would have come into our Bloomfield Hills law office years ago, we could have had their VA Benefit turned on this whole time.

This means that families could literally be leaving thousands of dollars on the table.

For example, let’s say Joe is a senior veteran living in Troy, Michigan.  He’s living on his own, however his daughter helps him with some activities of daily living a few times a week for a couple hours a day.  Plus, he receives a couple hours of private duty home care from a commercial Oakland County home care company.

Let’s assume Joe receives $1500 per month in Social Security and has $300k in savings and a house.  He is paying the commercial home care company $1000 per month.

If Joe or his family were to go to a local veterans service organization, chances are they would tell him that he will not qualify for the full benefit (or any benefit) because he does not meet the income or asset tests.

However, if he were to come to our office, as a VA accredited attorney, I would counsel the family in setting up a Veterans Asset Protection Trust, Care Contract and submit the VA application on his behalf.  In the end I would be able to turn on a $1,700+ monthly tax free benefit.

It’s unfair that it is all in who you talk to and where you get advice from.  That is why you should seek advice from VA Accredited Certified Elder Law Attorneys.  There aren’t many of us in the state.

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