Idaho Estate Planning

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.

Family Reunion? Have a Family Meeting Regarding Parent's Care

For many families, communication has never been easy. For other families, it has never been an issue. What about your family?

Memorial Day weekend while primarily focused on honoring those who gave all in defending our country is also a popular time for family reunions. If yours is getting together this weekend may we suggest taking time to talk with your family about the needs of your aging parents. It may be time for a family meeting, or a family huddle, or one serious conversation – whatever you choose to call it – about your elderly parents, their finances and their estate planning. How, you may ask, do you go about having “the talk” successfully?

How to first assemble and then discuss productively is an age-old problem for families with elder parents. In the end, there is no real one-size-fits-all solution, as people are different and families are complex. Fortunately, there are some basic principles worth noting as reviewed in a recent article in The Wall Street Journal titled “When It's Time to Huddle.”

If you do not have time to read the original article, here are the bullet points to ponder:

• Be Inclusive,
• Don’t Delay,
• Hire a Professional Referee,
• Set an Agenda in Advance, and
• Tap Long-Distance Relatives.

Think your family does, in fact, communicate well? That may be so, but there are still all the reasons in the world to get this conversation right. 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 Estate Planning Attorney, Mark Wight - You Tube Star!

Regular readers of our blog have probably noticed the addition of videos to some of our articles. We are excited to have these educational and promotional videos available for the public. We invite you to visit our You Tube Channel, browse the videos and let us know what you think. If you know someone who might benefit from watching one of our videos be sure to let them know about this great resource.

 

Bookkeeping Critical For Idahoans Caring For Parents

If you find yourself taking on the responsibility of a caretaker to your elderly parents, are you documenting your efforts? If you are giving time and money for the care of loved ones and would like to take tax deductions for your efforts, you ought to make sure you brush up on your bookkeeping skills. Otherwise, when it comes to tax time, you may be out of luck (and money).

The case of Estate of Olivo v. Commissioner is most instructive.

Forbes examined the Olivo case in an article titled “Mother's Day? Son Claims $1.2M Tax Write-Off For Helping Mom.” From the title of the article, it is clear that the son may have been a bit generous in his claim. To make matters even more interesting, the son was a tax attorney.

Background: Anthony Olivo was the son/tax attorney. He took nearly ten years away from his law practice to care for his parents. Accordingly, Anthony lost his law practice income. However, he did collect fees from his parents for managing their estates. When Anthony’s mother died, he sought to deduct $44,200 in administrator’s fees, $55,000 in accountant’s and attorney’s fees, and a whopping $1,240,000 for a near-decade’s worth of lost wages (he did manage his own firm, after all).

The IRS raised an eyebrow, and then raised it further when they took a look at his documentation of all of these fees and amounts. Problem: there was no contract, no invoice, and no evidence. Not good.

Even when Anthony was handling the estate and filing the tax return he didn’t keep track of his time and just estimated. Also, not good.

In reality, not everything claimed may have been deductible. Nevertheless, the lack of recordkeeping killed any chance for success.

If you and your loved ones are entering a period of caregiving, then a little forethought and planning can go a long way. In the end, a little recordkeeping can be the deciding factor in making your claim. 

For more information on this and other Elder Law issues, contact Idaho Estate Planning and schedule a consultation. If you are caring for a veteran you need to investigate the VA Pension Benefit as well. Remember, good planning is no accident.

 

Mother's Day Special - Helping Parents Prepare for Their Future

Another oldie but goodie from January 2011 made more timely by the celebration of Mother's Day today. Our Moms (and Dads) deserve our attention when it comes to their potential long term care needs.

There is a very good chance that you or someone you know is taking care of elderly parents now or looking at that possibility in the near future. In 2008 a USA TODAY/ABC News/Gallup Poll of baby boomers found that 41% who had a living parent were providing care for them — either financial help, personal care or both — and 8% of boomers said their parents had moved in with them.

Of those who were not caring for an aging parent, 37% said they expected to do so in the future. About half said they were concerned about being able to provide such care.

 If financial planning and long term care planning have not been done previous to the need for care, the burden falls on the caregiving family member. Decisions about how care will be paid for, who will be responsible for managing the estate as well as how the long term care will be given can cause stress and contention among family members.

It is best for parents and all family members to be involved in planning for future financial needs. The financial resources being used today could change drastically with the occurrence of a stroke, illness or onset of dementia. In order to plan financially for long term care, you need to know what the costs are now and what they will be in the future.

Every year MetLife does a survey of long term care costs. Their 2010 survey shows that the average daily rate for private nursing home is $229 which is up from $219 in 2009. Assisted living monthly base rate cost rose to $3,293 in 2010 from $3131 in 2009. Home health aides average $21 an hour.

Planning financial needs can be very difficult, considering you do not know when long term care will be required or how long it will be needed. Staying in the home for care will require professional home care assistance, travel accommodations to doctor appointments, help with shopping, meals, medical supplies and medication and possibly a 24-hour attendant. Even if a family member is doing most of the care, in most cases professional care will eventually be required or a move to a nursing home facility will be necessary.

When evaluating present income and assets consider how they would work for future needs. Consider the following:

• Care options
• Long Term Care Costs
• Long Term Care Insurance
• Home Care Costs
• Medicaid Planning
• VA Benefits & Planning
• Legal Documents – Estate Planning 

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

Pay Attention Idaho - Obama Eyes Estate Planning Tools

In the midst of the budget battlefield, many estate planning attorneys are closing watching the President’s budget proposal. Why such interest? Well, beyond the Military spending and health care sections, the proposed budget targets numerous estate planning tools and techniques.

Forbes has been watching the various budget proposals with great interest and provided a helpful summary in an article titled “Obama's Budget Proposal: The Impact On Estate Planning Tools.”

Essentially, this is a crib sheet list of the techniques presently in the crosshairs:

• High value IRAs of over $3 million
• Generation Skipping Transfer Trusts
• Dynasty Trusts
• Grantor Retained Annuity Trusts (GRATs)
• Intentionally Defective Grantor Trusts (IDGTs)

Click over to the article for an overview of the techniques, along with examples of their estate planning applications.

If your current estate plan already includes one or more of these techniques, then any change could impact you, your loved ones and your assets in a significant way. This would be a good time to schedule a review consultation with your own estate planning attorney.

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

  

Boise, Meridian, Eagle, Nampa, Caldwell - Have the Inheritance Talk!

Don’t we all dread certain “talks” we’re supposed to have with our children? But even though we’d like to avoid “the talk” – when it comes to things like inheritance, it’s best to kick procrastination to the curb and face the challenge.

Add “the inheritance talk” to the short list of intergenerational talks too important to avoid. So, how do you prepare and execute this too-important-to-avoid chat?

To be blunt: there is no easy answer. Why? Because so much of the talk depends on what you have to leave, who is going to manage it, who is going to inherit it, and how soon are they going to get it?

The Wall Street Journal recently offered a pep-talk for estate planning parents in a recent article aptly titled, “The Inheritance Conversation. Ugh.”

One of the key reasons for this essential intergenerational communication is to prepare the inheriting generation for the attending responsibilities. One challenge, of course, is that any “inheritance” carries the risk of robbing a developing person of their work ethic.

In short, what makes you, your assets, and your heirs unique? That is what needs to be understood and communicated. The sooner you have the inheritance talk, the better it will be for all concerned.

At Idaho Estate Planning, we can help you find the resources you need to put 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. Remember, good planning is no accident.

 

Legal Issues with Veterans Benefits Application

This "Best of" blog is from January of 2011 on the subject of helping a veteran apply for benefits.

Accreditation

The VA Pension Benefit helps veterans and surviving spouses pay for assisted living care in the home, nursing home, or assisted living facility. It pays up to $1,949 ($2054 in 2013) per month to provide care for single or married veterans, or their surviving spouses. Applicants must meet certain medical and financial thresholds. Many find the application process complicated and seek help preparing the forms. It is important to understand federal law dictates that no one may help a veteran in the preparation, presentation and prosecution of an initial claim for VA benefits unless that person is accredited by the VA. The only exception to this law is that any one person can help any veteran – one-time only – with a claim. To help any veteran a second time requires accreditation.

VA recognizes 3 types of individuals for purposes of accreditation.

1. Accredited attorneys
2. Accredited agents and
3. Accredited representatives of service organizations. (Veterans Service Officers)

In order to be accredited to help veterans with new claims, an individual desiring this certification from VA must submit a formal application, must meet certain character requirements and work history requirements and – except for attorneys – must pass a comprehensive test relating to veterans claims and benefits. There are also requirements for ongoing continuing education.

What Does It Mean to Help a Veteran with a Claim?

VA interprets its prohibition on preparing, presenting and prosecuting a claim to mean that talking to a veteran or a veteran's qualifying spouse or dependent after that person has indicated an intent to file a specific claim for benefits requires accreditation. Anyone can talk about veterans benefits in general with any veteran and need not be accredited. The point at which discussion narrows down to specific information about the veteran's service record, medical conditions, financial situation including income and assets and other issues relating to a claim specific to a veteran or dependent triggers accreditation. According to VA, discussing the specifics of the claim means that the veteran has expressed an intent to file an application for veterans benefits, and at this point, the consultant helping the veteran must be accredited.

This bears repeating: An individual cannot advise a veteran or other eligible beneficiary about that person's specific claim for VA benefits unless that individual is accredited.

Using an Accredited Agent

The secret for receiving a successful award from the VA is not in filling out the form but in knowing what documents and evidence must be submitted with the application. Knowing the secrets for a successful award – with the special case of long term care recipients – is 95% of the battle. A knowledgeable, accredited consultant can provide information to shorten the VA’s decision window of 6 to 12 months to possibly 3 or 4 months.

At Idaho Estate Planning we understand how to maximize the benefit or avoid a denial. We can also provide guidance for meeting the asset test. We provide the best strategies for reallocating assets through trusts or income conversions to allow for the best possible accommodation of assets for beneficiaries thus avoiding or reducing taxes, family disputes and Medicaid penalties.

We are VA Accredited and we know how to help you get the benefits you earned through your greatly appreciated service to our country. To secure your peace of mind as well as your family's future, get started now. Remember, good planning is no accident.

Recognizing Symptoms of Dementia

We have another installment in our series of favorite blogs from the past. Here is part of a blog from June of 2010. The information is still very valuable.

An online article from FamilyDoctor.org outlines some common symptoms in recognizing dementia.

"Dementia causes many problems for the person who has it and for the person's family. Many of the problems are caused by memory loss. Some common symptoms of dementia are listed below. Not everyone who has dementia will experience all of these symptoms.

• Recent memory loss. All of us forget things for a while and then remember them later. People who have dementia often forget things, but they never remember them. They might ask you the same question over and over, each time forgetting that you've already given them the answer. They won't even remember that they already asked the question.
• Difficulty performing familiar tasks. People who have dementia might cook a meal but forget to serve it. They might even forget that they cooked it. 
  Problems with language. People who have dementia may forget simple words or use the wrong words. This makes it hard to understand what they want.
• Time and place disorientation. People who have dementia may get lost on their own street. They may forget how they got to a certain place and how to get back home. 
  Poor judgment. Even a person who doesn't have dementia might get distracted. But people who have dementia can forget simple things, like forgetting to put on a coat before going out in cold weather.
• Problems with abstract thinking. Anybody might have trouble balancing a checkbook, but people who have dementia may forget what the numbers are and what has to be done with them.
• Misplacing things. People who have dementia may put things in the wrong places. They might put an iron in the freezer or a wristwatch in the sugar bowl. Then they can't find these things later.
• Changes in mood. Everyone is moody at times, but people who have dementia may have fast mood swings, going from calm to tears to anger in a few minutes. 
  Personality changes. People who have dementia may have drastic changes in personality. They might become irritable, suspicious or fearful.
• Loss of initiative. People who have dementia may become passive. They might not want to go places or see other people."

Dementia is caused by change or destruction of brain cells. Often this change is a result of small strokes or blockage of blood cells, severe hypothyroidism or Alzheimer’s disease. There is a continuous decline in ability to perform normal daily activities. Personal care including dressing, bathing, preparing meals and even eating a meal eventually becomes impossible.

The Alzheimer’s Organization reports that 5.3 million Americans suffer from Alzheimer’s disease, the most common cause of dementia. They also report that there are 10.9 million unpaid caregivers helping those afflicted by the disease. In 2000, there were an estimated 411,000 new (incident) cases of Alzheimer’s disease. For 2010, that number is projected to be 454,000 new cases; by 2030, 615,000; and by 2050, 959,000. To read the full report, visit www.alz.org.

In the beginning, family members find part time caregivers for their loved one. At first, loved ones need only a little help with remembering to do daily activities or prepare meals. As dementia progresses, caregiving demands often progress to 24 hour care. Night and day become confused and normal routines of sleeping, eating and functioning become more difficult for the patient. The demented person feels frustrated and may lash out in anger or fear. It is not uncommon for a child or spouse giving the care to quickly become overwhelmed and discouraged.

For more information on dealing with Alzheimer's and other forms of dementia, contact Idaho Estate Planning and schedule a consultation. Remember, good planning is no accident.

Idaho Residents Living Overseas Face Complicated Tax Issues

Traveling abroad can be exhilarating enough, but living abroad comes with a whole other level of excitement … and even some hitches if you aren’t careful. If you are one of those hopping back and forth across a U.S. border, beware of the financial hurdles and heightened attention of the IRS.

If you are no stranger to frequent border traffic, then likely you are aware of the recent adjustments in IRS practice, not to mention several large developments involving overseas accounts and income. Essentially, the IRS is on a mission – it wants to capture more and more overseas accounts and assets taxable under U.S. law. How? By working in sync with international banking institutions.

Ostensibly, the targets are tax-evasion type accounts in Swiss banks. In reality, the dragnet is catching a broader group of individuals and families of all means and intentions. And many of these individuals and families are unaware that they are targets and even fewer are aware the rules of the (tax) road.

The problem has been growing with the surge in IRS attention to the matter and The New York Times tackled the issue not too long ago in an article titled “Overseas Finances Can Trip Up Americans Abroad.”

Bottom line: if you’re going to be crossing borders regularly, whether for work, for family, or even as part of your retirement, then this is an important reminder about the hurdles those little lines on the map can pose if you aren’t careful. Whether you work, live, or retire abroad, it’s important to be aware of the new international complications.