Law Offices of Will Morris

Law Offices of Will Morris


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Estate Planning for the Holidays

Family Photos

It’s the holidays – family, food, hot chocolate, football, days off work, and estate planning.  It can also be a time of reflection, remembrances, intermittent stresses, goal setting, and estate planning.  Maybe you haven’t made the connection – maybe you have but didn’t know it – or maybe you really should.  It has been my client experience that the end of the year triggers a review of the past year with a look towards next.  With the extra days off, many people start to get organized and take care of personal business that has been deferred in favor or their employer’s business.  The holidays present a unique opportunity for several generations to be together.  Over the years the family has grown – new children and grandchildren and a new son or daughter in law or two.  And, of course, a few loved ones are remembered who aren’t there anymore.    

Taken together, all of the above are essential components of estate planning.  Peace on Earth and Peace of Mind for those whom we love the most – our family. 

Consider the following estate planning connections and opportunities during the holidays. 

Gifts – Black Friday certainly makes the headlines on the battle for consumer gifts – stuff, if you will.  But year-end gifts can also be an integral part of an estate tax planning strategy by taking advantage of the $14,000 per person annual exclusion gifts.  Grandparents may want to start funding a 529 Plan for their grandchildren’s education which is a gift to both child and grandchild.  Year-end is also a time to make tax deductible gifts to charity, either in cash, appreciated stock, or donating old clothes to Good Will.

In a much broader context it is a time to consider how you will ultimately distribute your estate to children and grandchildren and evaluating needs and expectations.  Instead of buying a new Whatchamacallit, why not make a gift of a family heirloom – jewelry, watch, or baseball autographed by Stan Musial – and enjoy seeing the joy of your child or grandchild?

And for the grandparent, parent, or adult child who has everything, think outside the proverbial box. How about offering to pay for the update and review of their estate planning documents?  It may not sound particularly exotic, but it does say you care in a way that certainly rivals the new pair of socks, sweater, toaster oven, or Billy Bass singing fish.  An up-to-date estate plan and health care documents is a multigenerational act of love and a gift for many years to come.  It may also create an opportunity to start some important conversations.

Tell Stories – I am a big believer in telling stories - a natural consequence of families gathering together.  Make the story telling part of your Legacy Planning that incorporates family history, values, and perspective.  Don’t be afraid to tell the same stories over and over again – your married son or daughter will listen much differently than they did when they were 16.  And quite frankly, some of the best family historians will not be around forever. 

Look at Old Pictures and Take New Pictures – Not only can pictures trigger stories, they will include friends and family that are no longer around as well as events and emotions long forgotten.  Watch old home movies, the kids will love them even if they pretend they don’t.  Remember the attic scene from the moving "National Lampoon's Christmas Vacation?"  Who can watch that and not get emotional? http://www.youtube.com/watch?v=-HkO5gtliYc  (start watching at about 0:58).  Write the date and the names of the people on the back of the pictures.  I recently sat down with my uncle to go through hundreds of black and white family pictures some dating back to the early 1900’s.  He pointed out family members that I had never met but that were key influences in his life and my dad’s life.  I wish that I had asked my dad to do tell his stories about the same pictures.  Appoint a family historian and have them make copies of the pictures with notations.  Copy and preserve old 8mm or VHS movies to a more modern technology.  Many families already have somebody working on genealogy, so join together for the next step.  You will thank me later.  

Guardians for Minor Children – Most often, parents or siblings are named as guardians for minor children if the child’s parents are suddenly lost.  When families live in different cities or don’t get together often, the holidays are an opportunity to watch children interact with their grandparents, aunts and uncles, and cousins as a possible basis for an important conversation.  (See my blog article "How Do I Select A Guardian for My Children.")

Care for Parents and Grandparents – For families that may not get together often, it is a good opportunity for siblings to talk to their parents and grandparents about their health – it will usually come up naturally, but follow up with questions.  Sign them up for Facebook as a means to share pictures of the grandchildren.  You can also gain some insight into their driving ability and other elder care issues. (See my blog article "Elder Care – Baby Boomers and Aging Parents Who Stay at Home.")

New Year’s Resolution – Pledge to add “Complete Estate Plan” to your resolutions list for the New Year.  Trust me, it is much easier to complete an estate plan than it is to lose 20 pounds or to quit smoking.  Challenge your family members to see who completes their plan first.  You will be amazed at how much better you feel with the additional peace of mind. 

 Although estate planning may seem like an overwhelming task, it is essentially thinking about your family in the past, present and future and planning accordingly.  The holidays naturally bring families together and offer a convenient opportunity to take the first step.  

© Will Morris, JD, LLM 2014


Retirement Planning Includes Remodeling Your Home

Old Laundry Room

My wife is an extraordinary interior designer (https://www.lisabmorrisinteriors.com) who has inspired me to take notice of the connection between interior design and estate planning – more specifically, retirement planning.  For years, I have listened as she discussed seemingly abstract terms such as: aging in place; universal design; repurposing; elder-proofing; and forever homes. She explained that these are remodeling concepts for aging baby boomers and their parents.  Then I started to associate the extraordinary costs of other living options when a home does not accommodate one’s needs, such as long term care, nursing homes, and assisted living communities.  My conclusion is that retirement planning should include remodeling and upgrading your home to facilitate aging in place.  Leave a little less to your children and grandchildren and enjoy the new comforts and long term savings for yourself.

As classic baby boomers, we grew up in the ‘50s and 60s, went to college in the early ‘70s, and raised three boys born in three different decades (‘70s, '80s, and '90s). Our nest is now empty.  We wonder how our house survived over 50,000 showers, 250,000 trips up and down the stairs, and 15,000 loads of wash, not to mention indoor football, basketball, baseball, and soccer games combined with a few wrestling matches and indoor/outdoor pool parties, just for kicks.  We certainly designed a house to withstand the onslaught of three active young men and a perfectly clean carpet and walls were always a future dream.

But now, it is our turn, as evidenced by our old laundry room becoming our new wine cellar.   (See Image Gallery below.)

We debated whether to downsize our home as we began to experience the pleasures of empty nester-hood and the physical struggles just beyond the growing-old horizon.  We made the decision to stay in our home and age in place.  A 2010 AARP survey indicated that over 80% of baby boomers and 90% of people over 65 have made the same decision and are opting to stay in their home and remodel it is such a way as to accommodate the aches and pains of a retiring body.  Many of Lisa’s clients are making their homes “adult friendly” and “grandchild friendly” as part of their retirement planning. 

Too often people are forced to retrofit a home as the result of a sudden injury, fall, stroke, hip replacement, or tiring backs and knees.  Elinor Ginzler, AARP Senior Vice President for Livable Communities observed, “Far too often a person has to break a leg or contract a serious illness to discover that the home they love could restrict their comfortable lifestyle."  As baby boomers, we witness aging parents traverse through their eighties and nineties and we observe the difficulties of navigating through their homes – particularly kitchens and bathrooms – and irregular surfaces, thresholds, and steps.  The Greatest Generation is foreshadowing an expectant future.  And quite frankly, I’m not sure the Gen Xers and Millennials will be quite as patient.  

My grandparents lived to be 95 and 98. My mom is 89 and my dad lived to 86.  I really wish that I had thought of this as they were aging so that my home would have been more comfortable when they came to visit.  They never complained, but I can see where it could have been difficult at times.  Simply adding grab bars in the bathrooms and adding higher toilet seats would have been a nice gesture and one that would endure for Lisa and me.  We did remove an oddly positioned fireplace hearth, but only after my mother tripped and slammed into the wall – something I could have envision me doing as well.  And upon further reflection, most of our future house guests (other than our boys and their families) will be our age or older. 

My family history indicates that the next 25,000 showers will become increasingly more difficult and our home should accommodate that realization.  Even more importantly, it makes sense to enjoy the comfort and beauty of our remodeled home for the next several years.  How often do people spend thousands of dollars upgrading their home to sell it, but never enjoy it? 

In working with clients and their financial planners I note a lot of time and effort is spent on planning investments, calculating retirement income, and worrying about future health care costs and long term care.  A big part of planning includes how their children and grandchildren will later enjoy the fruits of their labor and frugality.  I submit that remodeling ones home for both current enjoyment and age appropriate accommodations should be an integral part of retirement planning.  Staying in your home will be a valuable legacy to your children.  The money you spend now will no doubt increase your children’s inheritance through future health care savings.  Trust me, they will appreciate your thoughtful consideration and one less thing for them to worry about. 

I can’t pass up the classic cliché:  “WIN-WIN”.

© Will Morris, JD, LLM 2014


Elder Care – Baby Boomers and Aging Parents Who Stay at Home

This article is not intended to discuss or address all of the legal issues associated with “elder care,” such as qualification for Medicaid, long term care, nursing home care, elder abuse, or other technical legal issues.  Instead, I want to address common practical issues that arise with aging parents who want to stay in their home and maintain their independence for as long as possible. 

This is an invitation to children who may be approaching “care giver” status to start planning these conversations while your parents can provide the necessary information.  This is also a guide to aging parents to invite their children into the process. 

Every family dynamic is different and you may feel like it is prying into their private affairs to discuss these topics.  Start the conversation gradually, but do not avoid it. The downside to avoidance can be catastrophic.  One way to start the conversation is to say, “We are updating our estate plan and our attorney pointed out several things that we should be considering for ourselves.  We want to make sure that you have thought about these things as well.” 

Health Care Information – There are three legal documents that parents must have, giving one or more of their children the ability to act on their behalf with regard to health care matters. - Medical Power of Attorney, HIPAA Authorization, and Directive to Physicians (Living Will).  Because of strict privacy rules, you will need these documents in order to talk to their doctors and health care providers, review medical records and bills, or make health care decisions if they are unable to do so.  You also want to have a discussion about end of life decisions.  Make sure their doctors, clinics, and hospitals have copies and that you can access them on your computer, smart phone, and tablets.

Doctors:  Make a list of all of their doctors, clinics, hospitals, and specialists.  Have these names, addresses, and phone numbers stored on your computer, smart phone, and tablet so that you can access the information 24/7.  Attend at least one appointment with your parents and each of their doctors to put a face with a name, open the dialogue, and ask questions that your parents may not be asking.  As they get older, find out if they have a geriatric specialist who is coordinating their overall care.

Medications: THIS IS HUGE.  My mother knows exactly what she is taking and when she takes it – that’s the good news.  However she cannot read the labels on her prescriptions and relies on the color and shape of the pills and a special coding she puts on the bottles.  Parents think they can handle the pill thing and may be possessive about it, but learn to engage the process and a system of checks and balances.  If you see pills laying loose on tables and counter tops or on the floor, there could be a problem.  Pets are also at risk if medication is on the floor.   

     

Create a system for setting out their medication a week at a time – I find that Sunday afternoon is a good time to visit and put the pills together.  My mother takes 11 different medications which totals 22 different names when you include the name brand and the generic substitute.  They are white, pink, yellow, orange, bright red and two-toned pink and white.  They are round and oval – large and small.  I have taken pictures of each pill, identified by name, and listed the dosage. 

If they are rushed to an emergency room away from their regular hospital – YOU will have to provide that information.  Be able to access it quickly. 

 Durable Power of Attorney, for Financial Decisions:  Your parent should appoint  you (or another child) as their agent under a Durable Power of Attorney so that you may take care of financial and business related decisions for them, either as a matter of convenience or as the result of their incapacity.  Something as simple as talking to their utility or cable company can be impossible without this.  Caveat:  Some financial institutions may be hesitant to accept a power of attorney or may require their own form.  It is good to check on this ahead of time.  If your parents create a living trust, you may be a successor trustee, particularly during a period of incapacity.  Also, a power of attorney is NOT effective after your parent’s death.

Financial Accounts and Credit Cards – Look for Fraud:  It is a good idea to look over their bank statements and credit card statements to see if there are any unusual charges, purchases, or withdrawals.  There are a lot of scammers who try to take advantage of elders. 

Financial Accounts and Brokerage Accounts: This is your parent’s money.  They should NOT add you to the account as an account owner or as joint tenants with right of survivorship.  There are a number of risks in this as discussed in another blog article.  It would be a more advisable strategy to make you an authorized signer on the account as a matter of convenience, especially if you are paying their bills.  If they want you to have access after their death, then the account should have a Pay on Death (POD) designation.  Before making any changes to their accounts, have a discussion with an attorney specializing in estate planning.  Do not rely on bank personnel to advise in this regard.

Insurance:  Ask to look at all of their insurance policies and make sure that their home and autos are adequately insured for loss and liability protection.  Know when the premiums are due and paid to avoid any risk of lapse.  If they are still driving, please make sure that they have high liability limits and if appropriate, a personal umbrella policy.  A serious accident – without adequate insurance – could wipe out all of their non-exempt assets.  Have your parents give permission to your insurance agent to discuss these matters with them.

The Driving Conversation:  There comes a time due physical, visual, or mental decline, where it becomes unsafe for our parents to drive.  Often a multiplicity of medications will cause drowsiness or an alertness deficit.  And yet, for the Greatest Generation and aging Baby Boomers, driving a car is a key measure of independence, a vehicle for social interaction, coffee with their buddies, or going to church and the grocery store.  Discovering the time to have the driving conversation can be more difficult when parents live in a different city, but you should start having little conversations when you visit. 

Make a point to ride in the car a couple of times when they drive – check the car for dents and scratches – review their auto insurance for liability limits and claims.  Talk to your siblings and start practicing the conversation you will have with your parents about driving.  Engage their doctors in the conversation to discuss their abilities as well as the impact of any medication.  Start looking into alternative forms of transportation.  Be respectful and expect resistance, but having alternatives and key reference point for concern will be helpful. 

Here is a link to a PDF brochure that offers excellent guidelines – “We Need to Talk” http://hartfordauto.thehartford.com/UI/Downloads/FamConHtd.pdf

Social Security Administration (SSA):  Know your parents Social Security Numbers, where their check is direct deposited, and how much it is.  The SSA does NOT recognize any form of a power of attorney.  In order to manage a parent’s Social Security benefits, a person must be appointed a “representative payee” as defined by the SSA.

Tax Returns and IRS:  The IRS has its own power of attorney form (Form 2848) by which a person can appoint an agent for tax related matters.  Or a person can authorize a “Third Party Designee” by checking the appropriate box on the 1040 tax return.  However, a fiduciary such as a trustee, executor, or guardian is deemed to be the taxpayer and is not required to file a power of attorney.  They must file Form 56, Notice Concerning Fiduciary Relationship, to advise the IRS.  The IRS will accept a non-IRS power of attorney document but it must contain specific information, including Social Security Number, which is not commonly included in a Durable Power of Attorney without specific instruction to do so.

Pensions, Annuities, 401(k)s, IRA’s Sources of Income:  Make sure you know how to contact the administrator of all sources of income.  Check to see if they require their own special power of attorney form.  You want to make sure that their deposits are regularly made and they sign all necessary forms.  You also want to ensure that their beneficiary designations are up to date.

Guardianship – BAD SOLUTION:  The failure to update the documents above while your parents are competent to do so may require a formal guardianship proceeding in the event of their later incapacity. 

 © Will Morris, JD, LLM 2014

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