Paperless World Can Leave Heirs In The Dark
By: Robert M. Slutsky, Esq.
As people increasingly go “paperless”, using the online features of banks and brokerages to manage their accounts, it’s complicating the process of helping your heirs sort out your finances once you’re gone.
The problem: If you don’t keep careful records, your family might not even know where to start looking for accounts. In a worse‑case scenario, some assets may never be found.
But at the same time, you don’t want to recklessly list all your private financial‑account passwords somewhere for a bad guy to find. That would be an invitation to theft.
There are several smart steps to take to build a roadmap to your assets. The five key components: information about your assets, names of advisers, details about safe‑deposit boxes, your estate planning documents, and a few other important documents.
For starters, provide details about banking and brokerage accounts, insurance policies, real‑estate and retirement plans, and list account numbers. Explain where to find your will, trust, power of attorney and other estate documents. If you have a safe‑deposit box, give the bank’s name and address, and where you keep the keys. If you have a life insurance policy, provide the name and phone number of the agent, and a copy of the policy or its number. Consider listing all the people your heirs will need to contact, including lawyers, accountants, executors or guardians you’ve named to care for any minor children. Do NOT include your passwords to online accounts. Listing all your passwords in one place, no matter where it’s stored, is risky. And anyway, your heirs won’t need them. With assets like bank accounts, heirs can usually gain access by showing a copy of a death certificate and proof of named beneficiaries.
Do include computer passwords, if you keep back copies of potentially important paperwork (like old tax returns) on your PC. Your financial planner or estate‑planning attorney can provide guidance in putting together a file meeting your needs.
Lastly, think carefully about how to store the list. Heirs need to be able to locate it when needed but it shouldn’t be generally accessible. One option: a fire‑resistant home safe. After all, you can’t take it with you B but you wouldn’t want someone else to take it from you.
Next: A Letter of Instruction Can Spare Your Heirs Stress
While it is important to have an updated estate plan, there is a lot of information that your heirs should know that doesn’t necessarily fit into a will, trust or other components of an estate plan. The solution is a letter of instruction, which can provide your heirs with guidance if you die or become incapacitated.
A letter of instruction is a legally non‑binding document that gives your heirs information crucial to helping them tie up your affairs. Without such a letter, it can be easy for heirs to miss important items or become overwhelmed trying to sort through all the documents you left behind. The following are some items that can be included in a letter:
1. A list of people to contact when you die and a list of beneficiaries of your estate plan;
2. The location of important documents, such as your will, insurance policies, financial statements, deeds, and birth certificate;
3. A list of assets, such as bank accounts, investment accounts, insurance policies, real estate holdings, and military benefits;
4. The location of any safe deposit boxes;
5. A list of contact information for lawyers, financial planners, brokers, tax preparers, and insurance agents;
6. A list of credit card accounts and other debts;
7. A list of organizations that you belong to that should be notified in the event of your death (for example, professional organizations or boards);
8. Instructions for a funeral or memorial service;
9. Instructions for distribution of sentimental personal items;
10. A personal message to family members.
Once the letter is written, be sure to store it in an easily accessible place and to tell your family about it. You should check it once a year to make sure it stays up‑to‑date.
If you need additional information about this or other Elder Care Matters, go to http://www.eldercarematters.com/ – America’s National Directory of Elder Care / Senior Care Resources.
Robert M. Slutsky, Esq.
Robert Slutsky Associates
Plymouth Meeting, Pennsylvania
An ElderCare Matters Partner
Identifying and Avoiding Caregiver Burnout
By: Henry C. Weatherby, Esq., CLU, ChFC, CEBS
Many of our clients are caring for or being cared for by a loved one. More than 65 million Americans care for family members who need assistance due to chronic conditions, disabilities, disease, or the frailties of old age. These millions of family caregivers may include spouses, parents, or children of the person receiving care. Even when family members are not providing direct care themselves, they are often still the ones who arrange for and manage the care their loved ones need. These people are still part of the caregiving team and share in the emotional and financial stresses that can result from being a caregiver. Caregivers are often so focused on the needs of the person for whom they are caring that they forget to care for themselves. This puts them at risk for caregiver burnout.
Caregiver burnout is the physical and mental exhaustion caused by the prolonged stress of being a caregiver. If you are a caregiver, you may not even realize that what you are experiencing is burnout or that there are things you can and should do to make things better. If you are acting as a loved one’s caregiver, be alert for signs that could indicate that what you are feeling is more than just being a little bit tired. Take a look at the following list of symptoms of caregiver burnout to see if any of them apply to you:
If some of these symptoms apply to you, there is something you can do about it:
1) Protect your health. See your doctor regularly, eat a healthy diet, get sufficient rest, and make time to exercise. Stress doesn’t just affect you emotionally; it can also take a physical toll.
2) Develop a strong support system. Find a support group where you can share your situation and learn coping strategies. Talk to supportive friends and family. See a counselor or therapist to help you deal with the emotional impact of being a caregiver.
3) Accept help! Share responsibilities with other family members and friends. Forgive yourself for not being able to do everything – no one can. Giving yourself a break will allow you to be a better caregiver to your loved one. Learn to say no when your responsibilities become too much and identify people you can reach out to when you need a hand. Look into respite care, a short-term care arrangement that can provide a break for family caregivers. The time period for respite care can vary from a couple of days to a couple of months. It can also take different forms. You may prefer to find an in-home option or choose to arrange a temporary stay at a local assisted living community.
4) Stay involved with the things that make you happy. Make time for your hobbies and other interests. Read a book. Take a yoga class. Meet a friend for dinner or a movie. Don’t count running errands or doing chores as a break. Take a real break from time to time and do something for yourself.
If you need additional information about this or other Elder Care Matters, go to www.ElderCareMatters.com – America’s National Directory of Elder Care / Senior Care Professionals.
Henry C. Weatherby, Esq., CLU, ChFC, CEBS
Weatherby & Associates, PC
An ElderCare Matters Partner
Do It Yourself Estate Planning – Gone Wrong
By: Anne R. Moses, Esq., CELA
Beginning your estate plan requires that you follow certain tips:
If you prepare your own Will from a form on the web, you have no legal advice, and no one is checking to make sure the information is complete and correct. You will not be able to take advantage of the knowledge an estate planning attorney can provide about income and estate taxes and other options that may be available – such as certain trusts to protect minors or disabled individuals, to protect profligate spouses or children; to minimize capital gains tax; to protect an elderly person from financial abuse; and to ensure that a subsequent marriage by your spouse will not undermine your plan.
Here is a list of some of the simplest mistakes that I have encountered, and the family comes to me, after your death, to settle everything:
I’m just getting started! Protect yourself and your family. Don’t try this at home. Engage an attorney who knows what he or she is doing about estate planning; who will ask the right questions and give you the opportunity to think through the issues as you may never have before. Does it cost money? Yes. So does fixing the mistakes! And it’s a lot more money than the original plan.
If you need additional information about a wide range of Elder Care Matters, go to www.ElderCareMatters.com – America’s National Directory of Elder Care / Senior Care Professionals.
Anne R. Moses, Esq., CELA
Moses & Moses, P.C.
An ElderCare Matters Partner
Physician, Heal Thyself
Lifecare Innovations, Inc.
Burr Ridge, Illinois
Member of the national Panel for Elder Care Answers
This article, written by Shay Jacobson, President of Lifecare Innovations, shows the restorative power of guardianship, and demonstrates that the old proverb – Physician, heal thyself – while honorable in its original meaning, may not be quite so honorable in practice.
Imagine a physician, beset by psychiatric problems, who determines her best option is to treat herself.
Delusional, paranoid, in the throes of an unwanted divorce and thoroughly estranged from her children, Dr. S took out her prescription pad and went to work.
Dr. S. developed her own treatment plan for the paranoid schizophrenia that had de-railed her life and damaged her relationships. The results were disastrous. Her illness escalated and the tenuous control she once had over her unraveling life vanished entirely.
This 55-year-old physician was reported to the guardianship court by her divorce attorney. The attorney was trying to represent Dr. S’s best interests as her husband, also a physician, sought to end their lengthy marriage. As a wife, her behavior and ability to comprehend the division of their considerable assets was in question, and her attorney believed she needed a surrogate to help protect her interests in the settlement.
Bugged and Bellicose
The case was complicated by Dr. S.’s severe paranoia. She believed her home was bugged and sought refuge in hotels. She relocated to a different hotel nightly, and at no small cost. She was frequently MIA and would resurface when she caused disturbances that required police intervention. Suffice to say, Dr. S was slightly famous among local hotel clerks, and well known to law enforcement.
Dr. S. was estranged from her two adult children who each fled across the country to establish lives that were not controlled by their mother’s chaotic mental illness. Although they both loved their mother, they believed sharing in her life would destroy theirs. They flatly refused to participate in the guardianship hearing but provided collateral information to verify the extent of her illness and its startling progress.
The guardianship proceeding started with an extensive psychiatric assessment and included a thorough review of her recent medication history. It was at this time that Dr. S’s proclivity for self-prescribing came to light. Also discovered was her uncontrolled diabetes. The court approved a private guardian of person and a bank to act as guardian of estate; each of these entities would represent her interests in the divorce proceedings.
The tangle we encountered at the start of this case was difficult to unwind. Dr .S. was a prominent social figure; she sat on many boards and ran for local political positions. She continued to privately write prescriptions for herself and others, including psychotropic medication. The guardian had her medical license revoked and also withdrew her from local political posts. The divorce was finalized and the rebuilding process commenced in earnest.
The Doctor is Out
As with most adults who obtain a guardianship through contested court procedure, Dr. S. was a reluctant client, to say the least. Her mental illness interfered with her perception of her situation and distorted her understanding of the need to establish a new approach to life and her problems. Every effort to knit her life back together was met with staunch resistance.
As her guardians, we kept reminding ourselves that the only way to climb a mountain was by putting one foot in front of the other. We began by helping her manage her diabetes. Fluctuating blood sugars clearly added to her confusion.
Once the medical situation was stabilized, we developed a plan of treatment to address her mental illness. The illness had been long and ruinous for her. Her children reported that her paranoia had caused the estrangement and spanned at least 15 years. They felt the situation was hopeless and that their mother would never again be a part of their lives.
All of Dr. S’s self-prescribed medications were discontinued and her physician admitted her for medication stabilization. She was discharged to her home with 24-hour in-home care to maintain supervision. She placed in excess of 200 phone calls a day to our offices, the courts, and her attorneys. And then the miracles started to happen.
The new medications, delivered in a careful regimen, started to calm her paranoia. With her blood sugars and paranoia under control, she started to take a reality-based look at the rubble left by 15 years of unmanaged mental illness. A sweet and highly intelligent woman by nature, she was shocked at what she saw and began to recalibrate her thinking. Step by step, she regained her insight. We were able to decrease her in-home care to come-and-go caretakers.
Her friends started coming back into her life one at a time.
Restored At Last
We kept in constant contact with her children. They were afraid that this transformation would be temporary and that further disappointment was inevitable. Over time, though, they risked re-involvement and initiated weekly phone calls with their mother. There was a lot of catching up to do as their mother was not a part of their lives and did not know about their marriages and the birth of her first grandchild. They finally took the step to have her visit and from there, the healing process accelerated.
Dr. S. saw renewed purpose in life and worked hard to stay well and strengthen her family ties. We, as guardians, changed our plan to reflect this new reality. We began the restoration process. Dr. S. was fully restored just three years after the initiation of the guardianship.
The rest of the story continues to unfold. Dr. S.’s husband divorced her over her mental illness. As she recovered, so did their relationship. Dr. S. remarried her husband after her restoration. Today she is working toward restoring her medical license and she continues to have her medical and psychiatric treatment managed by professionals.
Our once recalcitrant and delusional ward joined us in our office to celebrate her restoration. She looked and felt wonderful. She remains close to the caregiver who spent many hours sorting through her issues with her during the worst times. She sees her children regularly and has become a doting Grandma.
The story of Dr. S is about many things, but the greatest of these is restoration – specifically, the restorative power of guardianship.
You can find help for this and other elder care matters on America’s National Directory of Elder Care / Senior Care Professionals – ElderCareMatters.com.
Caregiver Agreements: Making the Pathway of Caregiving
a Two-Way Street
Family caregivers play a major role in maximizing the health and quality of life individuals with acute and chronic illness in the United States. Recipients of care depend on family caregivers for assistance with daily activities, managing complex care, navigating the overwhelming health and health insurance systems and communicating with health care professionals. Family caregivers provide valuable care out of love and often necessity but the role of caregiver is an extremely demanding job. According to the National Alliance for Caregiving, 37% of caregivers spend more than 40 hours a week providing care and another 30% spend 20-39 hours assisting with needs. Caregivers cope with physical, emotional, spiritual and financial challenges brought about by the demands of the job and the need to reduce or forgo employment to care for a loved one. These challenges affect the caregiver’s health and quality of life as well as the recipients.
Long-term caregiving has significant financial consequences for caregivers, particularly for women. Caregivers face the loss of their own income, loss of employer-based benefits, shrinking of saving to pay for caregiving costs and a threat to their retirement income due to fewer contributions to retirement vehicles. One way to compensate an adult child willing to devote so much of his or her time to caring for an ailing or aging family member is through a caregiver agreement. The agreement is essentially an employment contract between the caregiver and the recipient of care. The family member and the caregiver stipulate to a caregiver’s tasks, the hours spent caregiving and financial compensation. Often it is hard to accept that a caregiver may want or need to be compensated for services rendered because love doesn’t pay the mortgage or for groceries but by having a binding legal contract in effect can protect both parties down the road.
Here are five important ways a caregiver agreement can help your family.
Caregivers get paid for the job they do
It offers a great way to support the person for their time and effort in caring. This may be a caregiver’s sole source of income or a second job. How much to pay a caregiver is up to the family. A good place to start is to look at how much a home health agency would charge. Current rates in Chester County PA are $18-25 per hour. These rates often come with minimum requirements and vary based on needs and time etc. After research and discussion, set a salary and establish a schedule for payment.
Define the caregiver relationship
A detailed caregiver agreement sets boundaries. It makes clear the extent of the services being provided and the amount of money the caregiver is getting paid.
Keep peace among family members
Having a caregiver agreement in place helps minimize the conflict between family members over the handling of care. The existence of a contract helps elevate the validity of the arrangement and value the services provided by the caregiver.
Clear the way for Medicaid
With regard to Medicaid eligibility, payments made to a caregiver under contract can reduce the care recipient’s countable assets, which in turn may accelerate Medicaid eligibility. Absent an agreement in writing, the money a recipient pays a caregiver may be deemed a gift by Medicaid. This triggering event may cause a period of delay where recipient may not qualify due to the current 5 year Medicaid look-back period. At the time of Medicaid application, Medicaid will total all payments made to caregiver for the past 60 months and divide that by the average monthly cost of a semi-private room at a nursing home in the state. This quotient is the penalty period which equals the number of months Medicaid will not pay for nursing home care. The monetary and emotional cost to the family for the delay in Medicaid far outweighs the time and cost to properly execute a caregiver agreement.
Keep care and money in the family
Many recipients find comfort in having care from a devoted family member over a stranger and the money the family pays for care stays in the family.
Caregiving is a journey. The journey changes daily, weekly monthly and yearly.
The caregiver agreement sets the stage for the journey and makes the pathway to caregiving a two-way street. It fosters open communication amongst caregiver, recipient and family members. It begins a relationship with an elder law attorney and may also be an opportunity to review, update or prepare legal documents including Authorization to Release Health Care Information, Health Care Power of Attorney, Living Will, General Durable Power of Attorney, Will and Trust(s). It paves the way for Medicaid planning, if necessary. The elder law attorney initiates the formation of a support team for the caregiver which includes professionals such as a financial advisor, banker, CPA, trust officer, insurance agent and local resources such as department of aging, religious organizations, hospitals and support groups.
With the understanding of the caregiver role, organization of legal documents and establishment of a support team, the caregiver relationship is on track for success.
Having a detailed, written caregiver agreement allows a caregiver to be Compassionate; Alert to current needs; Resourceful and Energetic in their care for a loved one.
To find elder care professionals near you who can help you with this and other elder care matters, go to: ElderCareMatters.com – America’s National Directory of Elder Care / Senior Care Professionals and Resources for Families.
Secret Money for Senior Veterans
Many Veterans believe that they have to have suffered an in-service disability to qualify for monetary benefits from the Veterans Administration. This is a common misconception. Depending on their health status, their income, and their assets, many senior Veterans and their dependent or surviving spouses can qualify for not only basic “Improved Pensions” based on low income, but also supplemental benefits of up to $2053 per month as of 2013. The supplemental benefits are called “Housebound Benefits” and “Aid & Attendance Benefits.”
In order to qualify for any of these pension benefits, the Veteran (or surviving spouse, based on the Veteran’s military service record), must satisfy the following general criteria:
As the name implies, Housebound Benefits are payable where the claimant is substantially confined to his or her home because of permanent disability. In order to qualify for Aid & Attendance benefits, the claimant must:
Applying for these supplemental benefits is not a quick or simple process, and if you decide to apply, you may want to enlist the help of a Veterans’ assistance organization or a specially-trained individual. Note that whoever assists with the application cannot charge a fee for that service. However, if the individual or organization performs other services, fees may be chargeable for those other services.
To find professionals across America who can help you plan for and/or deal with your family’s elder care matters, go to: ElderCareMatters.com – America’s National Directory of Elder Care / Senior Care Resources for Families.
Paperless World Can Leave Heirs in the Dark
Build a roadmap to your assets
As people increasingly go “paperless” – using the online features of banks and brokerages to manage their accounts – it’s complicating the process of helping your heirs sort out your finances once you’re gone.
The problem: If you don’t keep careful records, your family might not even know where to start looking for accounts. In a worst-case scenario, some assets may never be found.
But at the same time, you don’t want to recklessly list all your private financial-account passwords somewhere for a bad guy to find. That would be an invitation to theft.
There are several smart steps to take to build a roadmap to your assets. The five key components: information about your assets, names of advisers, details about safe-deposit boxes, your estate-planning documents, and a few other important documents.
For starters, provide details about banking and brokerage accounts, insurance policies, real-estate and retirement plans, and list account numbers.
Explain where to find your will, trust, power of attorney and other estate documents. If you have a safe-deposit box, give the bank’s name and address, and where you keep the keys. If you have a life-insurance policy, provide the name and phone number of the agent and a copy of the policy or its number.
Consider listing all the people your heirs will need to contact, including lawyers, accountants, executors or guardians you’ve named to care for any minor children.
Here’s what not to include: Your passwords to online accounts. Listing all your passwords in one place — no matter where it’s stored — is risky. And anyway, your heirs won’t need them. For instance, with some assets like bank accounts, heirs can sometimes gain access by showing a copy of a death certificate and proof of designated beneficiaries.
Another important, but often overlooked, item to include: computer passwords, if you keep back copies of potentially important financial paperwork (like old tax returns) on your PC.
Your financial planner or estate-planning attorney can provide additional guidance in putting together a file meeting your particular needs.
Lastly, think carefully about how to store the list. Heirs need to be able to locate it when needed (and you need to be able to update it with a minimum of hassle) but it shouldn’t be generally accessible. One option: a fire-resistant home safe, where you should also be keeping, say, your passport or other items you may need to access more quickly than things in a safe-deposit box. You might also give a copy to your lawyer to keep with other estate-planning documents.
As a general rule, don’t keep a copy on your computer. But if it is kept there, make sure your computer is as safe as possible from hackers, and is password-protected.
After all, you can’t take it with you — but you wouldn’t want someone else to take it from you.
If you would like to find additional information about elder care matters and/or find an elder care professional near you who can help you with your elder care matters, then go to: ElderCareMatters.com – America’s National Directory of Elder Care / Senior Care Resources for Families.
Robert M. Slutsky, Esq.
Robert Slutsky Associates
Plymouth Meeting, PA 19462
An ElderCare Matters Partner
Article written by Don L. Rosenberg, Attorney and Counselor
The Center for Elder Law
An ElderCare Matters Partner
Caregiving for someone with Alzheimer’s, a related dementia, or a physical illness is one of the most difficult jobs in the world. In addition to making sure that your loved one is safe and their daily needs are met, you are also faced with the fact that there are many financial and legal issues that must be addressed. As if that were not enough, you also are trying provide the best quality of care at the least cost to the family. Caregiving is expensive and stressful. Hopefully, this article can provide some insight to the wisdom of consulting an elder law attorney as soon as one can. An elder law attorney can provide the navigation one needs when confronted with the various complex laws to ensure the greatest quality of care at the least cost.
Elder law is not just for senior citizens who are no longer independent or who are about to enter a nursing home. Elder law is for anyone who is middle aged and beyond — and sometimes even younger. One may say Elder Law is for anyone who wants to be old one day.
There are now more than 5 million people in the United States living with Alzheimer’s and is now the 6th leading cause of death. This is a 10% increase from 5 years ago, and clearly supports the long forecasted dementia epidemic. One in eight persons age 65 and over have Alzheimer’s disease and nearly half of all persons over the age of 85 have Alzheimer’s. Every 68 seconds someone develops Alzheimer’s disease; by mid-century someone will develop Alzheimer’s every 33 seconds. (Alzheimer’s Association Report, 2012 Alzheimer’s Disease Facts and Figures) In addition to the dementia epidemic there are the many millions of people that are afflicted with illness that also need care. The fact is that for many, one day you are living a normal life and the next minute you are a caregiver.
You are not alone. There are over 50 million caregivers in this county. Studies show that 12 million people in this country need long term care. Twenty-one percent of American adults provide free caregiving for loved ones. Fifty-nine percent of these caregivers either work outside the home, or have worked outside the home, while providing care. It has been estimated that the value of free services given by caregivers is in excess of $320 billion a year. Additionally, as a result of caregivers, businesses are also effected by the caregiving epidemic. Specifically, over 60% of caregivers work and dedicate on average 18 hours per week to provide care. Family caregivers account for 73% of early departures and late arrivals in the workplace. Caregiving by an employee costs the average employer $2,100 per employee or for all employers as much as $33 billion annually. (Met Life Caregiving Cost Study Productivity Losses to USBusiness July 2006 and Caregiving in the U.S. by National Alliance for Caregiving in Collaboration w. AARP, 2005.) These services are provided by family members without regard to cost because of the love and respect they have for their loved ones. (Alzheimer’s Association Report, 2010 Alzheimer’s Disease Facts and Figures)
These statistics only represent the economic cost of caregiving. It does not even address the emotional and physical toll on caregivers. The fact is that 70% of all caregivers over the age of 70 die first. (Alzheimer’s Association Report, 2010 Alzheimer’s Disease Facts and Figures) People generally do not think about the health of the caregiver or plan for the unthinkable – the caregiver having health problems or passing away before their loved one with dementia. It is for this reason that one must approach each situation from the worst case scenario. The only way one can prudently plan is to plan for the worst and hope for the best. The time to look down the road and make major decisions regarding your health and the health of your loved ones is now.
It is important to understand the difference between an elder law attorney and an estate planning attorney. Estate planning attorneys are typically concerned with what happens to your estate upon your death and deal with disability when a person is no longer able to participate in their own decisions. On the other hand elder law attorneys in addition to having estate planning expertise also can ensure that your affairs can be managed in the event of your disability, or even if you are competent and not disable to allow someone to become involved in your medical and financial affairs to the extent that you would want them to, as well as once you pass away.
Specifically, an experienced elder law attorney also has an special expertise in Medicaid, Veterans and Special Needs Planning and will address the following tough questions like:
Who will make my medical decisions when I am no longer able to make them?
If I am unable to care for myself, how can I achieve the greatest quality of care without bankrupting me or my family?
Who will be able to talk to my doctors and the hospital when I require guidance even though I am able to make my own medical decisions?
Who will make my end of life decisions?
What happens if I get sick, and is there a way I can stay in my home or in some least restrictive setting other than a nursing home and receive financial assistance.
What happens if I get sick and cannot stay in my home anymore, and how am I going to pay for this care?
It should be obvious that for caregivers of loved ones with Alzheimer’s and related dementia or any health issue that information regarding Medicaid and estate planning is a necessity.
The Future and Security of your Son or Daughter
What Will Happen After I’m Gone?
Imagine for a moment that tomorrow evening, on your way home from a party, you and your spouse pass away in a car accident. Have you ever wondered what will happen to your child* with a disability after you are gone? Who will watch your child or who would be the guardian or trustee? Stop wondering. Through a very special planning process you can ensure that all these concerns are taken care of.
Estate and Financial Planning for a person with a disability is like no other type of planning-it is special. Imagine a process that will assure that your child with a disability will always have a friend, advocate and protector of their legal rights and insure that your child’s governmental benefits are never altered, diminished or destroyed as well as ensure that they will have a meaningful life after you are gone. This is what Special Needs Planning can accomplish.
Why a Will is NOT Enough
If you were to die with only a Will in place or no planning at all for your disabled child, any estate left to your child is, in reality, a gift to the government! Your child will lose his or her benefits and medical coverage while spending down your well-intentioned inheritance. It is a gift to the government instead of your child. Unfortunately this knowledge has led most parents to intentionally disinherit their child with a disability.
The Perfect Solution: The Special Needs Trust
There is an alternative to the harsh realities of a Will-it is the Special Needs Trust (SNT). The Special Needs Trust is the ONLY reliable method to make sure your inheritance and gifts benefit your child with a disability. The point of the SNT is to keep the assets in a form that will be available for your child but will not disqualify him or her from benefits for which he or she might be eligible
A properly drafted Special Needs Estate and Financial Plan will specify that the money is not to replace the benefits, but is to supplement them and ensure that funding is available to meet your goals. The SNT may be used for extra medical care, personal items such as TV’s, radios, computers, vacations, companionship, advocates or any other item or service to enhance your child’s self-esteem or situation-anything but food, clothing and shelter.
While government agencies recognize SNTs, they have imposed very strict rules upon them. This is why it is vital that you consult an experienced attorney-not just one who does general estate planning, but one who is knowledgeable in SNTs and current benefit law! One wrong word or phrase can make the difference between an inheritance that benefits your child and one that causes your child to lose the many services, assistance and benefits available.
The Letter of Guidance
Almost as important as the SNT is the Letter of Guidance. The Letter of Guidance helps pave your child’s transition by giving future caregivers the information about your child they so vitally need. A Letter of Guidance is based on the premise that no one knows your child better than you do. It is a document that describes your child’s history, current status and what your wishes, hopes and dreams are for him or her.
The Letter of Guidance addresses the following areas:
When Should I Plan?
The answer is simple. Start Now. Start Today. Procrastination is easy-when your health is good, the future looks bright and there are hundreds of other pressing tasks to be done. Yet none of us can predict the future. What will happen to your child if something happens to you? Plan NOW and say to yourself, “I know I’ve done all I can for my child’s future-something that was extremely important to do. Now I am relieved and that is very exciting!”
Special Needs Planning – With Special Needs Estate and Financial Planning you can Provide a Meaningful Life for your Loved One with a Disability After you are Gone.
One Parent’s thoughts about Planning:
One parent shared their experience about how they felt about planning as follows: It has been in the back of my mind for years, soon after I found my son had this lifelong disability. What would the future hold for him when I wasn’t there anymore to be his advocate, friend and supporter? It was both a big and little worry. Big, because it gave me a whole in my gut whenever the question crept in. And little in the sense that I tried not to think about it. I’d think I’ll worry about that tomorrow, next week, when he’s older, when I’m older.
Of course, I’ve done things to prepare for that future he’s going to have without me, things like teaching him how to wash clothes and shop. But should I write a will? Make an estate plan? No, for years, I dodged that one totally. But you know, it’s funny. Now that we’re finished up our estate and only need to periodically review our plans, I feel like an enormous burden has been lifted up from me. The big, black, scary, shadow is gone. Well, not totally gone, I suppose. I still worry about Sam, what will happen to him in his life. I guess every parent does that. But now I don’t worry the same way. I have done all I can do for that part of his future, something that was extremely important to do, and I am very relieved. Now I feel like we can deal fully with the present day and see to see the other things that need to be done to prepare for our child as an adult. And that is very exciting.
Don L. Rosenberg, Attorney and Counselor
The Center for Elder Law
Troy, Michigan 48098
Premium Member of the national ElderCare Matters Alliance, Michigan chapter
A trust is the legal relationship that is created when a person transfers “stuff” to a trustee with the understanding that the trustee will manage it for the benefit of one or more beneficiaries. We use the term “stuff” to mean any kind of property you can own. It includes both real property—such as land and buildings—and personal property—such as bank accounts, stocks and bonds, and personal effects. The person who transfers the stuff to the trustee is called a trustmaker. This person is also known as a settlor, grantor, or trustor. Usually, the trustmaker is also the trustee (or perhaps co-trustee) and the initial beneficiary of the trust. It is not uncommon for husbands and wives to create two separate trusts and to be the co-trustees of both of their trusts during their joint lifetimes, and then, after the death of one spouse, to have the survivor serve either as sole trustee or co-trustee with one or more other individuals or a trust company.
A trust is controlled by a document called the trust agreement (sometimes called the trust instrument). The trust agreement sets out the rules about how the trust will be run. We often refer to a client’s set of estate planning documents as their “rule book,” and the trust agreement is the part of the rule book that controls the trust.
If the trust agreement says that the trustmaker can revoke it or change it, the trust is what we call a revocable trust. If the trust agreement does not allow the trustmaker to change or revoke it, we have what is called an irrevocable trust. Irrevocable trusts are used in many estate plans. They allow trustmakers to make gifts but keep the recipients from having complete control over the gifted assets. Irrevocable trusts play an important part in many estate plans. They can help provide tax savings, creditor protection, and expert management of assets.
A living trust is one that you create and fund (transfer stuff into) during your lifetime. It can be revocable or irrevocable, depending on how much control you want to maintain over the trust and its assets. A revocable trust gives you complete control, whereas an irrevocable trust gives you limited or no control. A testamentary trust is one that goes into effect and is funded following your death because it is governed by your last will and testament.
You remain in control of your trust assets as long as your trust is revocable. The trustee is bound by the trust agreement. You have final say over what the trust agreement says, and failure to abide by the trust agreement can make the trustee personally liable to the beneficiaries, including yourself. This means that if the trustee messes up, that person may have to pay for the mess out of his or her own pocket. Most often, the trustmaker of a revocable living trust is the initial trustee. In that situation, the trustmaker does not have to worry about anyone questioning his or her management of the trust. In fact, potential beneficiaries have a vested interest in not doing anything that might cause the trustmaker to revoke the trust or change the trust agreement in order to exclude a troublemaker. This is a simple demonstration of the “golden rule” of estate planning:
The One who hath the Gold maketh the Rules
If your kids are good kids, they won’t stick their noses into what you do with your trust. If they are bad kids, hopefully they are smart kids and will at least act like good kids as long as you’re alive because they won’t want to be disinherited. If you do not have any children—or don’t have any that you like—don’t assume that revocable living trusts are not a good idea for you. There are many good reasons for creating trusts, and some of them may apply to your situation. One reason that many people create revocable living trusts is so that their stuff will not go through probate after they are gone, or through conservatorship if they become incapacitated.
Once assets are transferred to the trustee, the trustmaker no longer holds legal title to them—even if the trustmaker and the trustee are the same person. Thus, if the trustmaker dies or becomes incapacitated, the trust continues, and the successor trustee (who is named in the trust agreement) takes over administering the trust.
Trusts are often the building blocks of effective estate plans. They provide simplicity, flexibility, and predictability in dealing with your assets. The also give you the peace of mind of knowing that you have arranged your affairs to ensure that your wishes will be carried out, and that future transitions (such as your incapacity or death) will be much easier on your loved ones.
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