How Can I Avoid Family Fighting in My Estate Planning?

It’s not uncommon for parents to modify their first estate plans, when their children become adults. At that point, many parents’ estate plans are designed to help efficiently transfer assets to the surviving spouse and ultimately to the adult children. Avoid family feuds and fighting in your estate plan by working with a professional estate planning attorney. With proper estate planning counsel, hiccups and headaches will be few and far between.

Forbes’ recent article entitled “Three Steps To Estate Planning Without The Family Friction” explains that there are a number of reasons for siblings fighting in the inheritance process. The article says that frequently there are issues that stem from a lack of communication between siblings, which causes doubts as to how things are being done. In addition, siblings may not agree if and how property should be sold and maintained. To help avoid estate planning fighting, use this three-step process for estate planning. After all, family feuds and animosity are avoidable.

Work with an experienced estate planning attorney. Hire an estate planning attorney who has many years of working in this practice area. This will mean that they’ve seen—and more importantly—resolved every type of family fight and discrepancy that can arise in the estate planning process. That’s the know-how that you’re really paying for, in addition to his or her legal expertise in wills and trusts.

Create a financial overview. This will help your beneficiaries see what you own. A financial overview can simplify the inheritance process for your executor, and it can help to serve as the foundation for you and your executor to frankly communicate with future beneficiaries to reduce any lingering doubts or questions that they may have, when they’re not in the loop. This clarity replaces estate planning fighting with resolution. Your inventory should at least include the following items:

  • A list of all assets, liabilities and insurance policies you have and their beneficiaries
  • Contact information for all financial, insurance and legal professionals with whom you partner;
  • Access information for any websites your beneficiaries may need for your online accounts; and
  • A legacy letter that discusses non-financial items for your children.

Hold a family meeting. Next, conduct a family meeting that includes the parents and the children who will be inheriting assets. Some topics for this meeting include:

  • The basics of your estate intentions
  • Verify that a trusted person knows the location of your important estate documents
  • State who your executor and other involved people will be and your rationale
  • Make certain that all parties value communication and transparency during this process; and
  • Discuss non-financial legacy items that are important for you to give to your children.

This three-step process can help keep your children’s relationships intact after you are gone. The last thing that any family wants to experience upon the death of a loved one is drawn-out fights regarding ones estate. Hiring an experienced estate planning attorney, creating a clear financial overview and communicating what’s important to you are critical steps in helping to keep your family together.

Reference: Forbes (July 2, 2020) “Three Steps To Estate Planning Without The Family Friction”

Beginning Estate Planning

When beginning estate planning, it is helpful to clarify what the essential elements of a proper estate plan are. AARP’s recent article entitled “Sign These Papers” suggests that the following documents will give you and your family financial protection, as well as peace of mind. Beginning estate planning can be intimidating, but with appropriate guidance, you will reap the benefits for years to come.

Advance Directive. This document gives your family, loved ones and medical professionals your instructions for your health care. A living will, which is a kind of advance directive, details the treatment you’d like to have in the event you’re unable to speak. It covers things like when you would want doctors to stop treatment, pain relief and life support. Providing these instructions helps your family deal with these issues later.

Durable Power of Attorney for Health Care. This document, regularly included in an advance directive, lets you name a trusted person (plus a backup or two) to make medical decisions on your behalf, when you’re unable to do so.

Revocable Living Trust. Drawn up correctly by an experienced estate planning attorney, this makes it easy to keep track of your finances now, allow a trusted person step in, if necessary, and make certain that there are fewer problems for your heirs when you pass away. A revocable living trust is a powerful document that allows you to stay in control of all your finances as long as you want. You can also make changes to your trust as often as you like.

When you pass away, your family will have a much easiest task of distributing the assets in the trust to your beneficiaries. Without this, they’ll have to go through the probate process.  It can be a long and possibly costly process, if you die with only a will or intestate (i.e., without a will).

Will. Drafting a will with the guidance of an experienced estate planning attorney lets you avoid potential family fighting over what you’ve left behind. Your will can describe in succinct language whom you want to inherit items that might not be in your trust — your home or car, or specific keepsakes, such as your baseball card collection and your Hummel Figurines.

Durable Financial Power of Attorney. If you’re alive but incapacitated, the only way a trusted person, acting on your behalf, can access an IRA, pension or other financial account in your name is with a durable financial power of attorney. Many brokerages and other financial institutions have their own power of attorney forms, so make sure you ask about this.

Beginning estate planning is not complete without these five documents (sometimes four, if your advance directive and health care power of attorney are combined). Drafting a proper estate plan will allow you to enjoy a happier, less stressful life.

In drafting these documents, you know that you’ve taken the steps to make navigating the future as smooth as possible. By making your intentions clear and easing the inheritance process as much as you possibly can, you’re taking care of your family. The benefits of beginning estate planning today will be enjoyed for years to come. Your family will be grateful that you did.

Reference: AARP (August/September 2018) “Sign These Papers”

Important Medicare Deadlines

Here are the important dates for Medicare enrollment:

  • You can initially enroll in Medicare during the seven-month period that begins three months before you turn 65.
  • If you continue to work past 65, sign up for Medicare within eight months of leaving the job or group health plan or penalties apply.
  • The six-month Medicare Supplement Insurance enrollment period starts when you’re 65 or older and enrolled in Medicare Part B.
  • You can make changes to your Medicare coverage during the annual open enrollment period, from Oct. 15 to Dec. 7.
  • Medicare Advantage Plan participants can move to another plan from January 1 to March 31 each year.

Yahoo News’ recent article entitled “Medicare Enrollment Deadlines You Shouldn’t Miss” takes a look at when you need to sign up for Medicare and the penalties that can be imposed for late enrollment.

Medicare Parts A and B Deadline. Individuals who are getting Social Security benefits, may be automatically enrolled in Parts A and B, and coverage starts the month they turn 65. However, those who haven’t claimed Social Security must proactively enroll in Medicare. You can first sign up for Medicare Part A hospital insurance and Medicare Part B medical insurance during the seven months that starts three months before the month you turn 65. Your coverage can start as soon as the first day of the month you turn 65, or the first day of the prior month, if your birthday falls on the first of the month. If you fail to enroll in Medicare during the initial enrollment period, you can sign up during the general enrollment period between January 1 and March 31 each year for coverage that will begin July 1. Note that you might be charged a late enrollment penalty when your benefit begins. Monthly Part B premiums increase by 10% for each 12-month period you delay signing up for Medicare, after becoming eligible for benefits.

If you or your spouse are still working after age 65 for an employer that provides group health insurance, you must enroll in Medicare within eight months of leaving the job or the coverage ending to avoid the penalty.

Medicare Part D Deadline. Part D prescription drug coverage has the same initial enrollment period of the seven months around your 65th birthday as Medicare Parts A and B, but the penalty is different. It’s calculated by multiplying 1% of the “national base beneficiary premium” ($32.74 in 2020) by the number of months you didn’t have prescription drug coverage after Medicare eligibility and rounding to the nearest 10 cents. That’s added to the Medicare Part D plan that you choose each year. As the national base beneficiary premium increases, your penalty also goes up.

Medicare Supplement Insurance Plan Deadline. These plans can be used to pay for some of Medicare’s cost-sharing requirements and some services that traditional Medicare doesn’t cover. The enrollment period is different than the other parts of Medicare. It is a six-month period that starts when you’re 65 or older and enrolled in Medicare Part B. During this open enrollment period, private health insurance companies must sell you a Medicare Supplement Insurance plan, regardless of your health conditions. After this enrollment period, insurance companies can use medical underwriting to decide how much to charge for the policy and can even reject you. If you miss the open enrollment period, you’re no longer guaranteed the ability to buy a Medicare Supplement Insurance plan without underwriting, or you could be charged significantly more, if you have any health conditions.

Medicare Open Enrollment Deadline. You can make changes to your Medicare coverage during the annual open enrollment period from October 15 to December 7. During this period, you can move to a new Medicare Part D prescription drug plan, join a Medicare Advantage Plan, or stop a Medicare Advantage Plan and return to original Medicare. Changes take effect on January 1 of the following year.

Medicare Advantage Open Enrollment Deadline. Participants can move to another plan or drop their Medicare Advantage Plan and return to original Medicare, including purchasing a Medicare Part D plan, from January 1 to March 31 each year. You can only make one change each year during this period, and the new plan will begin on the first of the month after your request is received.

Reference: Yahoo News (July 27, 2020) “Medicare Enrollment Deadlines You Shouldn’t Miss”

How Does My Estate Plan Change After Divorce?

Estate planning after a divorce involves adopting a different type of arithmetic. Without a spouse to anchor an estate plan, the trustees, guardians or health care proxies will have to be chosen from a wider pool of those that are connected to you. As with all significant life changes, a recent divorce requires immediate changes to your estate plan.

Wealth Advisor’s recent article entitled “How to Revise Your Estate Plan After Divorce” explains that beneficiary forms tied to an IRA, 401(k), 403(b) and life insurance are just some of the key documents that will need to change, reflecting the dissolution of the marriage.

It is important to note that there are usually estate planning terms that are included in agreements created during separation and divorce. These may call for the removal of both spouses from each other’s estate planning documents and retirement accounts. For example, in New York, bequests to an ex-spouse in a will prepared during the marriage are voided after the divorce. Even though the old will is still valid, a new will has the benefit of realigning the estate assets with the intended recipients.

However, any trust created while married is treated differently. Revocable trusts can be revoked, and the assets held by those trusts can be part of the divorce. Irrevocable trusts involving marital property are less likely to be dissolved, and after the death of the grantor, distributions may be made to an ex-spouse as directed by the trust.

A big task in the post-divorce estate planning process is changing beneficiaries. Ask for a change of beneficiary forms for all retirement accounts. Without a stipulation in the divorce decree ending their interest, an ex-spouse still listed as beneficiary of an IRA or life insurance policy may still receive the proceeds at your death.

Divorce presents changes to your children in terms of planning your estate. For one, divorce makes children assume responsibility at an earlier age. Adult children in their 20s or early 30s typically assume the place of the ex-spouse as fiduciaries and health care proxies, as well as agents under powers of attorney, executors and trustees. Further, if the divorcing parents have minor children, they must choose a guardian in their wills to care for the children, in the event that both parents pass away.

Ask an experienced estate planning attorney to help you with the issues that are involved in estate planning after a divorce.

Reference: Wealth Advisor (July 7, 2020) “How to Revise Your Estate Plan After Divorce”

Nursing Homes Impacted by COVID-19 Crisis
COVID-19 has drastically altered life for residents of nursing homes.

Nursing Homes Impacted by COVID-19 Crisis

Yahoo Finance’s recent article entitled “U.S. nursing homes face ‘a crisis on top of a crisis’ with coronavirus and funding woes” explains that the nursing home industry has been facing a financial shortfall since at least 2013, particularly for non-Medicare margins, according to the American Health Care Association (AHCA). Non-Medicare margins are the revenues and costs associated with Medicaid and private payers for all lines of business. They dropped 3% in 2018, an increase from the year prior. The industry has been in financial disarray long before the COVID-19 crisis.

Lack of funding is a big issue for nursing homes. “You layer COVID on top of that and… it’s a crisis on top of a crisis,” David Grabowski, a professor of health care policy at Harvard Medical School, told Yahoo Finance. “And that you started with a lot of nursing homes that didn’t have adequate staffing models, weren’t exactly strong at infection control, lacked resources in many, many regards, and then this hits, it’s definitely the industry.”

“Over 60% of people in the country that live in nursing facilities are dependent upon Medicaid,” AHCA President and CEO Mark Parkinson told Yahoo Finance. “And unfortunately, in most states, the Medicaid rates have been set at less than the actual cost to take care of the residents. So, it makes it very difficult to provide the kind of care that providers want when they’re underfunded so dramatically.”

In addition, Parkinson commented, “most of the people don’t understand that Medicaid is really a middle-class benefit, because if people live long enough to outlive their resources, it’s the only way that they can afford to be taken care of in a facility.”

Medicaid is a federal benefits program that gives health coverage to seniors, pregnant women, children, people with disabilities and eligible low-income adults. However, the federal government permits states to level the payment amounts long as they meet federal requirements.

“The failure to adequately fund Medicaid is primarily a problem with the states,” Parkinson said. “Each state gets to make its own decision on what its reimbursement will be for Medicaid. Although the national average is around $200 a day, the rate varies dramatically by states, and some states are as low as less than $150 a day. In the low funding states, like Illinois and Texas, the politicians just haven’t decided it’s an important enough priority to adequately fund it.”

According to the New York Times, the COVID-19 crisis that has swept the nation has infected more than 282,000 people at about 12,000 facilities as of June 26. It has killed more than 54,000. There are roughly 15,600 nursing homes in the U.S., with more than 1.3 million residents and over 1.6 million staff.

“It’s important to note that COVID hasn’t discriminated, so it’s not just those worst-quality nursing homes that have seen cases,” Grabowski said. “It’s been equally apparent across the high quality and low-quality facilities, high Medicaid and low Medicaid facilities. We’ve found that it’s really about where you’re located that has driven these cases.”

Adding to the financial situation is the fact that testing for coronavirus in the thousands of nursing homes across the country can be very expensive. The AHCA and National Center for Assisted Living (NCAL) found that testing every U.S. nursing home resident and staff member just once, would cost $440 million. As the pandemic continues, more supplies are also needed. A recent NCAL survey found that many assisted living communities are running low on PPE (N95 masks, surgical face masks, face shields, gowns, and gloves).

Parkinson says, it’s a “failure to recognize the importance of the elderly. It’s a conscious political decision to underfund elder care,” he said. “It’s not defensible on any level, but it’s occurring in the vast majority of states.”

Nursing homes were hardly prepared for the COVID-19 crisis. He went on to say that with more funding, nursing homes can be better prepared for the next health crisis.

Reference: Yahoo Finance (June 30, 2020) “U.S. nursing homes face ‘a crisis on top of a crisis’ with coronavirus and funding woes”

Special Needs Planning for Parents
Individuals with special needs require special consideration in estate planning.

Special Needs Planning for Parents

Public benefits for individuals with special needs include health care, supplemental income, and resources, like day programs and other vital services. Some benefits are based on the individual’s disability status, but others are “needs tested,” where eligibility is determined based on financial resources, as explained in the article “Planning for loved ones with special needs” from NWTimes.com. This distinction is an important consideration in estate planning.

Needs testing” is something that parents must address as part of special needs planning, in concert with their own estate planning. This ensures that the individual’s government benefits will continue, while their family has the comfort of knowing that after the parents die, their child may have access to resources to cover additional costs and maintain a quality of life they may not otherwise have.

Families must be very careful to make informed planning decisions, otherwise their loved ones may lose the benefits they rely upon.

A variety of special planning tools may be used, and the importance of skilled help from an elder law estate planning attorney cannot be overstated.

One family received a “re-determination” letter from the Social Security Administration. This is the process whereby the SSA scrutinizes a person’s eligibility for benefits, based on their possible access to other non-governmental resources. Once the process begins, the potential exists for a disabled person to lose benefits or be required to pay back benefits if they were deemed to have wrongfully received them.

In this case, a woman who lived in California, engaged in a periodic phone call with California Medicaid. California is known for aggressively pursuing on-going benefits eligibility. The woman mentioned a trust that had been created as a result of estate planning done by her late father. The brief mention was enough to spark an in-depth review of planning. The SSA requested no less than 15 different items, including estate documents, account history and a review of all disbursements for the last two years.

The process has created a tremendous amount of stress for the woman and for her family. The re-determination will also create expenses, as the attorney who drafted the original trust in Indiana, where the father lived, will need to work with a special needs attorney in California, who is knowledgeable about the process in the state.

Similar to estate planning, the special needs process required by Medicaid and the SSA is a constantly evolving process, and not a “one-and-done” transaction. Special needs and estate planning documents created as recently as three or four years ago should be reviewed.

Our specialized team has the tools to tackle your estate planning needs, from Medicaid support to planning for people with special needs.

Reference: NWTimes.com (June 21, 2020) “Planning for loved ones with special needs”

Why Customize Your Estate Plan?
Customize your estate plan to reflect the needs and wants of your family.

Why Customize Your Estate Plan?

A well-written estate plan is customized and unique. The only thing worse than having no estate plan, is an estate plan created from a ‘fill-in-the-blank’ form, according to the recent article “Don’t settle for a generic estate plan” from The News-Enterprise. Compare estate planning to buying a home. Before you start packing, you think about the kind of house you want and how much you can spend. You also talk with real estate agents and mortgage brokers to get ready. The planning process is detailed, and more importantly, catered to your needs and wants.

Even when you find a house you love, you don’t write a check right away. You hire an engineer to inspect the property. You might even bring in contractors for repair estimates. At some point, you contact an insurance agent to learn how much it will cost to protect the house. You rely on professionals, because buying a home is an expensive proposition and you want to be sure it will suit your needs and be a sound investment.

The same process goes for your estate plan. Consulting a skilled professional, an estate planning attorney, will prove to be worthwhile in the long run. You may even consider weighing input from trusted family or friends. It is important to work with a professional attorney who will offer expert advice in customizing your estate plan.

An estate planning attorney will also help you to avoid problems you may not anticipate. If the family includes an individual with special needs, leaving money to that person could result in their losing government benefits. Giving property to an adult child to try to avoid nursing home costs could backfire, making you ineligible for Medicaid coverage and cause your offspring to have an unexpected tax bill. These are the very considerations that our team makes in preparing your personalized estate plan.

To the surprise of many, once your estate plan is completed, it’s not done yet. It is important to communicate your estate plan with the necessary parties. Make sure that the people who need to have original documents—like a power of attorney—have these documents, or tell them where they can be found when needed. Keep in mind that many financial institutions will only accept their own power of attorney forms, so you may need to include those in your estate plan. Medical documents, like advance directives and healthcare powers of attorney, should be given to the people you selected to make decisions on your behalf. Make a list of the documents in your customized estate plan and where they can be found.

Preparing an estate plan is not just signing a series of fill-in-the-blank forms. A well-done estate plan is customized and unique. An estate plan, after all, is a means of protecting and passing down the legacy that you have devoted a lifetime to creating, no matter its size.

Reference: The News-Enterprise (June 23, 2020) “Don’t settle for a generic estate plan”

Family Stress in Funeral Planning
Allow your family to grieve your loss without the hassle of complex funeral planning and afterlife arrangements.

Family Stress in Funeral Planning

Making your way through the process of the death of a family member is an extremely personal journey, as well as a very big business that can put a financial strain on the surviving family. Planning ahead by making afterlife care and funeral arrangements now is the only way to ensure that your family’s responsibilities remain hassle-free after your death. Rate.com’s recent article entitled “Plan Your Own Funeral, Cheaply, and Leave Behind a Happier Family”  notes that on an individual basis, it can be a significant cost for a family dealing with grief. The National Funeral Directors Association found that the median cost for a traditional funeral can cost more than $9,000. Considering the cost of a plot and the services of the cemetery to take care of the burial and ongoing maintenance and other expenses,  it can total more than $15,000. If you opt for cremation and a simple service, it may run only $2,000 or less. That would save your estate or your family $13,000. Regardless of your intentions, it is important to consider the amount of legacy that can grow from your last wishes. Researching the specifics of your arrangements can be difficult. Without directions, your grieving family is an easy mark for a death care industry that’s run for profit. This can be especially problematic when death creeps up suddenly and plans need to be made at a sudden notice. Even with federal disclosure rules, most states make it nearly impossible to easily compare among funeral service providers, and online price lists often aren’t required. Further, funeral homes aren’t typically forthright about costs that are required, rather than optional. The median embalming cost is $750. However, there’s no regulation requiring embalming. Likewise, a body need not be placed in a casket for cremation. The median cost for a cremation casket is $1,200 but an alternative “container” might cost less than $200. Our office can help you navigate these intricacies and overcome the seemingly endless money traps laid out by the death care industry. Doing the legwork now will make it easier on your family when you pass. The best thing you can do for your family is to write it down your wishes and plans and make it immediately discoverable. A detailed will and testament provides your family with guidance that simplifies life when you’re gone. It can be a great relief to tell your family everything you want (and don’t want). Be certain that you detail of all your wishes in writing. You should also make sure that the document can be easily located by your executor. Here’s a simple option: Write everything out, place your instructions in a sealed envelope and let your children and the executor know the location of the letter. This elementary step can be the start to helping their decision-making when you pass away, and potentially provide some extra money to help them reach their goals. For more detailed planning and secure services, reach out to our office today. Reference: rate.com (June 21, 2020) “Plan Your Own Funeral, Cheaply, and Leave Behind a Happier Family”
What Can a Strong Estate Planning Attorney Help Me Accomplish?
Consult with our team to find out if the Law Office of Michael T. Huguelet, P.C. is the right fit for you.

What Can a Strong Estate Planning Attorney Help Me Accomplish?

No matter your age, the estate planning attorney you hire should have outstanding credentials and testimonials to their efficiency and personal concern. At the Law Office of Michael T. Huguelet, our promise to service your needs is backed by experience and expertise. Our team is equipped with the tools to make your estate planning goals become a reality.

As you begin settling down, it is sensical to start considering how you’ll provide for and protect those you love. It’s important that these responsibilities rest in good hands. Your estate planning attorney ought to have the knowledge and skill to help you design a workable, legally binding estate plan, one that’ll keep your assets safe as they accumulate, protect your loved ones, and consider the possibility that you may become incapacitated when you least expect it.

It’s only natural that you would be picky in choosing your estate planning attorney. This legal professional must be able to:

  • Listen, understand, and address your individual needs
  • Clarify your options
  • Draft, review, and file all necessary estate planning documents
  • Make certain your estate plan covers all contingencies; and
  • modify your documents as your life circumstances change.

The future is unpredictable. Estate planning can help you make that future as secure as possible.

Estate planning can be as complicated as it is essential. Accordingly, regardless of our age, speak with a highly competent estate planning attorney as soon as possible.

As the COVID-19 pandemic has dramatically shown us, planning for the unexpected can never be addressed too soon.

Reference: Legal Reader (June 23, 2020) “When Should I Start My Estate Planning?”