Idaho Estate Planning

Taking Care of Elderly Parent's Finances in Boise, Idaho

As children, we depend on our parents for all financial needs.  And many young adults (and grown ones too) still seek financial help or advice from mom and dad. But there will come a time when that assistance will need to be reciprocated back to our parents in their later years.

The key to an effective transition, while preserving the dignity of all involved, is communication.

A recent article in CNBC recently offered advice to adult children and their elderly parents. The article titled “When Adult Children Become Financial Caregivers” suggested six steps. While you can read the original article for the detail, the steps are as follows:

1. Knowing the Right Time to Talk
2. Framing a Sensitive Subject
3. Building Trust
4. Sibling Responsibilities
5. Maximizing Efficiency
6. Maximizing Inherited IRA

The basic principle to bear in mind is that both the elderly parents and the adult children have to assume and understand their roles. This is key for a family transition to move gracefully. This means communication, not only between parents and adult children, but likewise between adult children working together on behalf of the family as a whole.

Naturally, this is all easier said than done. In truth, there are any number of principles and rules for this transition, but the six from the original article certainly are a helpful start. For more information on this and other estate planning subjects, contact Idaho Estate Planning and schedule a consultation. Remember, good planning is no accident.

Careless Beneficiary Designation Can Be Estate Planning Kryptonite

We first shared this story back in 2011. Nothing has changed much since then as far as the need to be careful when designating beneficiaries. Please read the article then give us a call.

What is the quickest way to un-do an otherwise carefully planned estate?

Open a bank account, brokerage or retirement account.

Why? Because the beneficiary designations on these accounts override your will. Yes, it’s true – the beneficiary designation is the estate planning trump card. And many an estate plan has come undone because of carelessly named beneficiaries.

The Wall Street Journal last week issued a warning in an article entitled Beware the Beneficiary Form.

“People don’t realize the importance of this,” says Martin Shenkman, an estate planning lawyer in Paramus, NJ. A carelessly named beneficiary on a financial account can cause a loved one to be disinherited, a disabled child to lose government benefits, and heirs to be slapped with a big tax bill.

The Journal also offers a few tips to protect you from this type of estate plan destruction, to include:

Know what kinds of accounts have beneficiary designations. Did you know that U.S. Savings bonds have a beneficiary form? Other accounts for which you may have named a beneficiary include retirement accounts, life insurance policies, bank accounts, certificates of deposit, stocks, bonds and mutual funds.

Review your beneficiary designations regularly and certainly after any life-changing event such as a marriage, divorce, birth or death of a loved one. Also, job-changers and retirees take note: Beneficiary designations on retirement plans don’t carry over when you roll a 401(k) to a new employer’s plan or to an IRA, or when you convert a regular IRA to a Roth IRA.

At Idaho Estate Planning we educate our clients on the proper procedures for naming beneficiaries. Our Life Plan™ Members also participate in a yearly review of the assets contained in their estate plan and any changes made through the previous year. If you have been considering putting your estate plan together, we have the experience and expertise to help you maintain your options and protect yourself as well as your loved ones now and into the future. The best time to plan is always now! Remember, good planning is no accident!

Applying For Medicaid in Idaho? Document Everything!

We first blogged this story back in July of 2011. While the story is a couple years old the lessons to be learned are very timely.

Here’s another important reminder on how much of a stickler Medicare and Medicaid can be when it comes to denying benefits: the Matter of Komanoff Ctr. for Geriatric & Rehabilitative Medicine v Daines (N.Y. Sup. Ct., App. Div., 2nd Dept., No. 2010-05776, June 28, 2011) (here summarized on ElderLawAnswers.com.)

It’s the case of Bernadette Jordan and how she entered a nursing home and filed for Medicaid only to find that the State ruled her ineligible for a period of 14.31 months. Apparently, Mrs. Jordan had transferred funds from a revocable trust to her daughter, to repay expenses that her daughter had shouldered in getting her to the nursing home. States are skeptical of such transfers, and often examine them carefully. In this case they found that the transfers were made at less than fair market value for purposes of Medicaid eligibility, and so denied Mrs. Jordan Medicaid benefits.

On Mrs. Jordan’s behalf, her nursing home called a hearing and later appealed. After all, the expenses the daughter paid were documented and done with the assumption that they would be repaid with assets from the trust. The State still denied benefits. The problem was that there was no written document at the time of the expenditure that specified the agreement to repay the daughter’s expenditures. 

The moral of the story is documentation. By documenting your interactions and intentions you can provide hard proof and avoid getting caught on a technicality. In Mrs. Jordan’s case, 14.31 months is a long time to wait for nursing home benefits.

Applications for Medicare and Medicaid are important and should not be taken lightly. If you, or a loved one, need to make plans for long-term care, then you need to schedule a consultation with us right away, before you take any actions. Remember, good planning is no accident.

 

Charitable Gifts Might Be Viewed as Elder Abuse

Charitable giving in the last years of the über wealthy tend to come under fire from family members and the public, oftentimes questioning the donor’s aging mind and capacity to make sound decisions regarding their finances. Such is the case of the late Huguette Clark, her immense inheritance, and the hospital that may (or may not) have influenced her generous donations. Ms. Clark was extremely wealthy, and during the last twenty years of her life the reclusive copper heiress spent an absolutely excessive amount of time in the hospital. She had few afflictions other than, well, loneliness.

After her passing, it did not take long for questions to arise regarding how the hospital pushed to care for a not-so-infirm woman for so long and just so happened to be receiving sizable donations from her all the while. What may be worse is that the allegations may be true and there are some interesting, perhaps damning, tidbits.

This scenario and the questions it raises were reported recently in The New York Times in an article titled “Hospital Caring for an Heiress Pressed Her to Give Lavishly.” The article chronicles the last lonely years on Ms. Clark’s life.

Remember, she was only all-too-human. If manipulation was afoot, what should be done about it and, closer to home, how can such manipulation be prevented in our own estates or those of our already senior loved ones?

But then there is the reverse side of the coin: what if it was not manipulation at all? Then Ms. Clark’s wishes and last charitable actions are being drawn through the mud for not having been fully articulated.

At Idaho Estate Planning we are the experts you need to know and trust. Work with us and we'll put together a plan that works for you and your loved ones. Remember, good planning is no accident.

Avoid Probate Boise - Title Your Assets

Estate planning may seem easy between spouses, but beware of the pitfalls of probate. The law tends to put a number of things on autopilot, so loving spouses with few other goals or concerns might just let things run their course … and probate is lurking around the estate planning corner.

If you want to keep your estate out of the court, then there are certain steps you need to take and certain traps you need to avoid. This is discussed in the final installment of a three-part series for married couples in Forbes titled “Estate Plan Funding for Spouses.”

Indeed, probate truly is a court proceeding which can be chock full of court rules, court timelines, and time spent idling in the clerk’s office. Any plan that lets the courts pick up the pieces of your estate plan falls into that rut. In addition, if your estate attracts any detractors or encounters other complications, then it is likely to stay there for some time. As a result, many people seek to have their estate skip straight on past those dark court corridors.

As pointed out in the original article, and the previous ones in the series, revocable trusts are powerful tools even for spouses that fall well below certain estate taxation thresholds. However, there are other means to pull one asset or another away from the probate fires.

The original article has some specific suggestions worth consideration. If nothing else, it’s worth a read to see just how many ways there are to plan for certain assets and various little steps to take that may provide big rewards.

For more information on this and other estate planning subjects, contact Idaho Estate Planning and schedule a consultation. Remember, good planning is no accident.

The Talk You Don't Have With Your Parents Could Cost You Idaho

Certain “talks” or conversations are imperative, although some of those discussions are pretty difficult to have.  And talking to your elderly loves ones about their finances normally falls into the “tough” category.

The New York Times offers one more real life example of why difficult senior parent-adult child conversation just have to happen in a recent article titled “The Talk You Didn’t Have With Your Parents Could Cost You”.

Especially with the older generations, money is often one of those taboo subjects for the family to discuss, whether in good fortune or in bad. If you have an elderly parent or loved one, then there are more important things at stake than privacy, modesty or pride. Here are some things you need to know and they need to show. Do they have an “estate,” whether many assets or few? Do they have a will and, if yes, where is it? And perhaps most important, are they taking care of their finances currently?

The original article speaks for itself and is worthy of reading. After you read it, perhaps you might share it as a conversation starter with someone you love. Having the uncomfortable conversations can provide peace of mind for all concerned.

For more information on this and other estate planning subjects, contact Idaho Estate Planning and schedule a consultation. Remember, good planning is no accident.

Idaho Ex-Spouses Could Benefit From Supreme Court Ruling

A recent SCOTUS ruling is a valuable reminder of just how important updating your estate planning can be. In the case of Hillman v. Maretta covered in Deborah L. Jacobs article on Forbes.com the Late Warren Hillman neglected to change the beneficiary of his life insurance policy after his divorce. To make matters worse he also failed to make the changes after remarrying.

Upon his death the policy was paid out to his ex-wife which didn't sit well with his widow. In the SCOTUS ruling it was determined that the policy proceeds indeed belonged to the ex. The case is of course complicated, involving the trumping of state law by federal law. I suggesting reading the article which can be found here.

Blended families bring their own complications to estate planning as we have discussed here many times before. The lesson here is plan now! For more information on this and other estate planning subjects, contact Idaho Estate Planning and schedule a consultation. Remember, good planning is no accident.

Choosing an Executor in Idaho

Another in our series of our best blogs from the past. This one is from July of 201.

There are a number of decisions to be reached when planning for your estate and not least among them is the choice of executor. A poor choice of an executor, or a disconnection between executor, estate, and beneficiaries can hobble even the best laid of estate plans. Indeed, Reuters offers one unfortunate beneficiary’s troubles in a recent article on the topic and offers some solid suggestions to consider.

The beneficiary was Stephanie Stephens, who, in the end, was surprised to find that the estate she received had shrunk by $129,000, something she angrily blames on the executor. Apparently, the estate had incurred a $104,000 loss when the executor failed to pull the assets from the flames of the 2008 financial meltdown and, insult to injury, that executor was then entitled to a fee of another $25,000. Needless to say, she wasn’t happy. Whether or not the executor was to blame may be debatable (since it was the beginning of the recession, after all) but there are other wrinkles to the story. For example, Stephanie hadn’t met the executor of the estate until after her relative passed away and so only knew him as a somewhat disinterested party. Further, she was surprised by the executor’s fees and even felt them to be excessive.

In this case, the beneficiary was, at best surprised (and at worst, victimized) by a situation she did not understand. Her case offers an example of a kind of disconnect that can all-too-easily arise between executor, estate, and beneficiary.

Reuter’s offers three general principles to bear in mind:

Know the estate. Choosing the right executor has a lot to do with the nature of your estate. Is it complex or simple? Are there a lot of moving parts and assets that may be at risk? A family member can likely carry out a simple estate but a professional might be necessary for those more difficult ones.

Know the person. Just because someone is a “good person,” this does not mean they should be doing business for you. You need to know that they are well-intentioned and interested in carrying out the tasks, but above and beyond that you must also know that they have the proper skills and business mindset to carry out your plans and take care of your assets in your absence.

Let your family know - communicate. It’s a difficult conversation to have but it’s important to relate your plans directly so that your family knows your decisions. Further, you’ll want to be sure they are aware of the cost of the executor so it isn’t the surprise it was in Stephanie’s case (in fact, you yourself may want to be sure you are aware of the costs, too).

For more information on this and other estate planning subjects, contact Idaho Estate Planning and schedule a consultation. Remember, good planning is no accident.

Your Idaho Rentals Can Be Your Retirement Career

This blog first appeared in July of 2011 and still has wisdome for today.

In today’s economy, it seems that everything old is new again … albeit with a bit of a twist. Years ago, it was common for older couples – and frequently widows – to rent out rooms for extra income. Taking in boarders was a viable way to supplement income.

Well, the idea is back, with a bit of a twist. As Baby Boomers face the cold, hard facts of retirement, they are increasingly changing the definition of the term to include at least some form of work. While you may not be ready to hang out a shingle on the front gate, “Rooms for Rent,” you might consider becoming a landlord. In fact, the venerable Wall Street Journal writes that it may be just the ticket, especially given the uncertain prospects for stocks and bonds and the meager interest rates on savings accounts. 

Think about it. It’s a buyer’s market now, so purchasing a multi-family home is more financially feasible. And, the trend toward the renter’s lifestyle is picking up steam. All this means you have a low cost of entry into a market that is expected to expand. Starting to make investment sense?

Sure, it’s a career of sorts, but you also need to think of it as an investment. Weigh everything in the short term, including start-up and maintenance costs, as well as the marketability of the location you’re considering. But then also keep your long-term goals in mind, including appreciation and eventual sale. Buying in a depressed market, after all, is only a steal if that market bounces back. Finally, don’t overlook the possible danger of having all your eggs in one basket since being a live-in landlord will unite your home, equity, and employment, into one potentially risky asset.

Like any retirement move, don’t make this one too quickly. Discuss your plans with a professional who can help you sort out the details, including how an investment rental property could affect your Social Security benefits. Remember, too, that this lifestyle may not suit you. In which case, you would be wise to explore other, more enjoyable options.

For more information on this and other estate planning subjects, contact Idaho Estate Planning and schedule a consultation. Remember, good planning is no accident.

Life in Idaho is Always Changing - Has Your Estate Plan Kept Up

When you create your estate plan, it is important that you recognize estate planning as a continual process. As the days go by, your life changes …and your plans need to reflect that. Have you checked over your estate plan recently? It may be time for a review.

No one said proper estate planning was an easy task. Once signed, sealed and delivered, most of us would rather not reopen and revisit the decisions contained in legal documents focused on our own morbidity and mortality.

This natural reluctance is the focus of a timely MarketWatch article titled “Make your heirs happy: Update your will.”

According to a recent Consumer Reports survey, 86% of respondents who had wills or other estate documents had not updated them within the past five years. How much happens in five years?! Five years ago it was 2008, the time of the market crash and the destruction of so much wealth and planning in the real estate crash. In addition, the last five years have witnessed five different taxation regimes governing estate and gift taxes.

Aside from financial and tax changes, what about changes closer to home? How many new family members are there and how many have passed? And how much has your own perspective on the world changed?

While there are logical reasons to review your legal documents once created, there is also an emotional reluctance to do so. Accordingly, it is best to make this another one of your scheduled “to do” items on your calendar.

As the MarketWatch article confirms, following through on your regularly scheduled estate plan review and update will make your heirs happy, and ensure that your own decisions are honored.

At Idaho Estate Planning we are the experts you need to know and trust. Work with us and we'll put together a plan that works for you and your loved ones. Remember, good planning is no accident.