What are the Basic Estate Planning Documents?

Having a well-prepared estate plan means that you have a plan in place to distribute your home, assets and possessions. However, the estate plan does more, says the article “Trustee Tips: Estate Planning Basics” from Wilmington Biz Insights: it also gives your family the insight and legally enforceable directions to follow, so they may honor your wishes. To plan for and protect your future, don’t miss out on any important estate planning documents.

Estate planning eliminates uncertainty and maximizes the value of the estate, by streamlining the transfer of assets to beneficiaries and minimizing estate tax liability. In addition, estate planning protects your estate and your family from mismanagement, creditor claims or claims from people or companies outside of the family.

Many people equate estate planning with owning a large home and significant wealth, but that’s not true. An estate includes everything people own: their personal residence, retirement accounts, insurance policies, investments and possessions.

A case can be made that estate planning is more important for people with a modest estate to preserve and protect what assets they have, versus a large estate where the family enjoys a large cushion against poverty.

The basic estate planning documents are a last will and testament, trusts, financial power of attorney, health care power of attorney and a living will.

A Last Will and Testament provides instructions to the probate court of the decedent’s final wishes, including naming an executor to carry out the instructions. It also contains instructions on who will raise minor children by naming a guardian. This document, and any other documents filed with the probate court, become part of the public record, and can be accessed by anyone who wishes to see them.

A Revocable Trust also provides instructions but avoids probate. The trust creates a legal entity that owns assets (once they are retitled and placed in the trust). The individual who creates a revocable trust remains in control of the assets, as long as they are alive. The revocable trust can be changed at any time.

A Pour-Over Will is used with a revocable trust. It ensures that any assets not included in the Revocable Trust are “poured-over” into the trust upon death, protecting them from the probate process and keeping your wishes private.

A financial Power of Attorney and Health Care Power of Attorney are documents used to give control of legal and financial affairs and health care decisions, in the event of incapacity.

The Living Will provides directions to designated persons, usually family members, about what kind of medical care is desired in the event of an inability to communicate. This is a gift to loved ones, who would otherwise be left guessing what the person would wish. A HIPAA release should also be prepared to allow doctors to discuss medical matters with the Health Care Power of Attorney.

An estate plan is a way to protect the family’s well-being, not just distributing property and minimizing taxes. A well-crafted estate plan, created for the family’s unique situation, helps avoid family fights, litigation within and outside of the family and provides direction for the next generation.

Reference: Wilmington Biz Insights (Nov. 17, 2020) “Trustee Tips: Estate Planning Basics”

Estate Planning Steps to Take when Dementia Begins

Covid-19 has made travelling more difficult, so holiday visits this year may not be the same triggering event they were in the past. However, even an online holiday visit can reveal a great deal of change, reports a recent article “Elder Care: When the children don’t notice” from The Sentinel.

An elderly spouse caring for another elderly spouse may not notice that their loved one’s needs have increased. Caregiving may have started as the spouse needing a reminder to take a shower on a regular basis. As dementia progresses, the spouse may not be able to shower by themselves.

This dilemma quickly becomes exhausting and unsafe. If one spouse suddenly does not recognize the other and perceives their spouse as an intruder, a dangerous situation may occur, repeatedly. It’s time to discuss this with the children, if they are not available to notice this decline in person.

People are often reluctant to tell out-of-town children about this problem because they don’t want the added stress of having the children come to the rescue and making decisions that may be overwhelming. The children may also think they can come out for a visit and fix everything in the space of a few days. It’s not an easy situation for anyone.

A starting point, especially when early-stage dementia has been diagnosed, is to get an estate plan in place immediately, while the person still has the capacity to sign legal documents. Anyone who is old enough for Medicare (and anyone else, for that matter) needs to have an updated last will and testament, durable financial power of attorney for financial matters and a health care power of attorney, including a living will.

The financial power of attorney document will be the most practical because the family will be able to access financial accounts and make decisions without having to petition the court to appoint a guardian. A professional guardian might be appointed, which is extremely expensive and there have been situations where the professional guardian makes decisions the family does not want. A family member who can act under the power of attorney may be a much better solution for all concerned.

Speak with your estate planning attorney to be sure the POA permits wealth preservation. If it contains the phrase “limited gifting,” you want to discuss this and likely change it. You should also be sure that there is a secondary and even a third backup agent, in case there are any issues with the people named as POA.

Spouses typically have wills that leave everything to their spouse, and then equally among their children, if the spouse dies first. However, what if your spouse is in a nursing home when you die? The cost of nursing home care can quickly exhaust all funds. If any family member is receiving government benefits and then inherits directly, they could lose important government benefits. These are all matters to discuss with your estate planning attorney.

Have a conversation with your children about your healthcare advance directive. It’s not an easy conversation, but when the children know what their parents want concerning end-of-life care decisions, it relieves an enormous burden for all. Get specific—do you want a feeding tube to keep you alive? What about if the only thing keeping them alive is a heart-lung machine? Better to have these conversations now, than in the hospital when emotions are running high.

Another important document today is the HIPAA release. This permits healthcare providers to discuss and share information about your loved one’s medical care. Without it, even close family members are not legally permitted to be part of the conversation about health care, lab test results, etc.

Reference: The Sentinel (Dec. 11, 2020) “Elder Care: When the children don’t notice”

If You’re Going to Die, You Need an Estate Plan

If you switch the term “estate” for “stuff,” maybe you’ll have a better idea of why you need to have an estate plan. It’s so you can have a legally enforceable plan for your stuff. Estate planning is not just for millionaires and billionaires, says the Hawaii Reporter in the article “Wills and Trusts for the Rest of Us.” After all, it’s not just millionaires and billionaires who die.

There are questions that everyone needs to have an answer to:

  • Who do I want to make medical and financial decisions for me, when I can no longer do so for myself?
  • Who do I want to care for my minor children or my dependent elderly parents, when I die?
  • Who do I want to have my earthly possessions, no matter how many or how few, when I die?

Even if all you have is a car and some furniture, you will want to decide who gets those and not leave it up to a stranger.

Having a will properly prepared by an estate planning attorney, is one of the most important things you can do as a parent. If you have dependents, whether they are children or adults, you need to have a plan in place for their care, in the event you pass away before they do. That plan is the most basic part of an estate plan: a will.

Without it, your dependents will become wards of the state. The state will decide what happens to your children or adult dependents.

Trusts are not just for rich kids. A revocable living trust is a document used as a secure and easy way to have your “stuff” move from you to your beneficiaries, without them having to be subject to probate. With a trust, you get to decide who gets what through the trust, and can even control when they receive an inheritance. You can make the distribution dependent upon completing an important task, like finishing college, or reaching a certain age.

A home or a car can also be placed in a trust, with an heir named as the beneficiary of that trust. You can continue to use all of the things that are in a trust, while you are living. However, whatever is placed in a trust will automatically transfer to the person you name as a beneficiary of the trust.

For medical and financial decisions, everyone over the age of 18 needs a Power of Attorney designating a person to make decisions for them, in case of incapacity. For medical decisions, you should have a healthcare Power of Attorney. You should also have a document stating your wishes, in the case of a critical illness or injury that clarifies what kind of end-of-life care you want. This is known as a Living Will in some states and an Advance Directive in others.

An estate planning attorney can help you create a plan for you want to happen in the case of incapacity and in the case of death. One is reasonably likely to occur and the other is a definite. Being prepared is the best thing you can do for yourself and your loved ones, no matter how much “stuff” you have.

Reference: Hawaii Reporter (September 28, 2019) “Wills and Trusts for the Rest of Us.”

Does Medicare Coverage Apply to COVID-19 Treatment?

The federal government has announced that the treatment will be available with no cost-sharing for patients. Understand current Medicare coverage, and how it applies to COVID-19 treatment payments.

Money Talks News’s recent article entitled “Medicare to Cover New Coronavirus Treatment” says that treatments in settings such as a doctor’s office, nursing home, or infusion center will now be covered without cost-sharing for those with Medicare, the federal health insurance program for seniors and people with certain disabilities.

This COVID-19 coverage (which started on November 10) is for monoclonal antibody infusions in facilities where “safety precautions can be met,” according to the Centers for Medicare & Medicaid Services, or CMS.

This coverage includes having access to medications that can treat anaphylaxis and other severe infusion reactions.

The day before the CMS announcement, the FDA issued an emergency use authorization for an investigational monoclonal antibody therapy for the treatment of mild to moderate cases of COVID-19 in patients at high risk for becoming severely ill, and/or who are likely to require hospitalization. It’s called bamlanivimab.

The CMS announcement is the most recent expansion of Medicare coverage to help treat the disease.

Medicare and private insurance will also pay for any coronavirus vaccine that is approved early.

Medicare is a federal program that provides health insurance to Americans. It’s frequently called Original Medicare. It has two parts—Part A and Part B. Part A covers inpatient hospital and skilled nursing care, and Part B covers doctor visits and outpatient care.

Private Medicare plans are optional and provide more coverage. Medicare Advantage plans (also known as Part C) combine Part A and Part B coverage and may have drug coverage and other benefits you don’t receive with Original Medicare.

Medicare prescription drug plans (Part D) help pay for medications. Seniors can buy a standalone Part D plan or get a Medicare Advantage plan that includes drug coverage.

Medicare supplement insurance or “Medigap” helps pay some or all costs not paid by Original Medicare, such as deductibles, copays and coinsurance.

Reference: Money Talks News (Nov. 12, 2020) “Medicare to Cover New Coronavirus Treatment”

You Need a Trust Even When You Aren’t a Billionaire

Trusts are used to solve problems in estate planning, giving great flexibility in how assets are divided after your death, no matter how modest or massive the size of your estate, according to an article titled “3 Reasons a trust may make sense for your family even though your name isn’t Trump, Gates or Rockefeller” from Market Watch. Don’t worry about anyone thinking your children are “trust fund babies.” You need a trust in your estate planning toolkit. Using trusts in your estate plan is a smart move, for many reasons.

There are two basic types of trust. A Revocable Trust is flexible and can be changed at any time by the person who creates the trust, known as the “grantor.” These are commonly used because they allow a high degree of control, while you are living. It’s as if you owned the asset, but you don’t—the trust does.

Once the trust is created, homes, bank and investment accounts and any other asset you want to be owned by the trust are retitled in the name of the trust. This is a step that sometimes gets forgotten, with terrible consequences. Once that’s done, then any documents that need to be signed regarding the trust are signed by you as the trustee, not as yourself. You can continue to sell or manage the assets as you did before they were moved into the trust.

There are many kinds of trusts for particular situations. A Special Needs Trust, or “SNT,” is used to help a disabled person, without making them ineligible for government benefits. A Charitable Trust is used to leave money to a favorite charity, while providing income to a family member during their lifetime. A real estate trust can be used for real property.

Assets that are placed in trusts do not go through the probate process and can control how your assets are distributed to heirs, both in timing and conditions.

An Irrevocable Trust is permanent and once created, cannot be changed. This type of trust is often used to save on estate taxes, by taking the asset out of your taxable estate. Funds you want to take out of your estate and bequeath to grandchildren are often placed in an irrevocable trust.

If you have relationships, properties or goals that are not straightforward, talk with your estate planning attorney about how trusts might benefit you and your family. Here’s why this makes sense:

Reducing estate taxes. While the federal exemption is $11.58 million in 2020 and $11.7 million in 2021, state estate tax exemptions are far lower. New York excludes $6 million, but Massachusetts exempts $1 million. An estate planning attorney in your state will know what your state’s estate taxes are. You need a trust to to protect your assets.

If you own property in a second or third state, your heirs will face a second or third round of probate and estate taxes. If the properties are placed in a trust, there’s less management, paperwork and costs to settling your estate.

Avoiding family battles. Families are a bit more complicated now than in the past. There are second and third marriages, children born to parents who don’t feel the need to marry and long-term relationships that serve couples without being married. Trusts can be established for estate planning goals in a way that traditional wills do not. For instance, stepchildren do not enjoy any legal protection when it comes to estate law. If you die when your children are young, a trust can be set up so your children will receive income and/or principal at whatever age you determine. Otherwise, with a will, the child will receive their full inheritance when they reach the legal age set by the state. An 18- or 21-year-old is rarely mature enough to manage a sudden influx of money. If you want to control how the money is distributed, you will need a trust.

Protect your assets while you are living. Having a trust in place prepares you and your family for the changes that often accompany aging, like Alzheimer’s disease. A trust also protects aging adults from predators who seek to take advantage of them. Elder financial abuse is an enormous problem, when trusting adults give money to unscrupulous people—even family members.

Talk with an estate planning attorney about your wishes and your worries. They will be able to create an estate plan and trusts that will protect you, your family and your legacy.

Reference: Market Watch (Dec. 4, 2020) “3 Reasons a trust may make sense for your family even though your name isn’t Trump, Gates or Rockefeller”

What Percentage of Assisted Living Communities Don’t Provide Mental Health Services?

Assisted living communities and other residential care communities are more and more becoming the setting for care of older adults with Alzheimer’s disease and other dementias, according to a new report. More so, these communities struggle with suitable access to mental health services.

That report is based on data from the 2016 wave of the biennial National Study of Long-Term Care Providers.

McKnight’s Senior Living’s recent article entitled “More than 40 percent of assisted living communities do not provide mental health services: CDC” reports that in 2016, 41.9% of assisted living community residents had diagnosed dementia, according to the authors. A total of 30.9% of assisted living residents had depression.

Mental health services are not provided at nearly half of communities (49.4%) where more than 75% of residents have been diagnosed with dementia. In addition, in 42.6% of communities there are 25% to 75% of residents who have been diagnosed with dementia, and 44.5% of communities where less than 25% of residents have been diagnosed dementia, the authors said.

In a quarter of assisted living communities across the country, over 75% of residents had diagnosed Alzheimer’s disease or other dementias. Most of those communities (90.5%) were found in metro areas, compared with communities with lower percentages of residents with dementia.

Communities where more than 75% of residents had dementia were most likely to have four to 25 beds (77.5%) compared with 26 to 50 beds (11%) or more than 50 beds (11.6%).

Residents in communities where more than three-quarters of residents had dementia saw an average of 33 more minutes of aide time and 10 more minutes of activities staff time, compared with communities where fewer of the patients suffered from dementia.

However, assisted living communities with the highest prevalence of dementia also had the highest prevalence of depression (38.7%).

However, the rate of depression was 32.3% in communities where 25% to 75% of residents had dementia and was the lowest, 25.3%, in communities where dementia was diagnosed in less than 25% of residents.

A few of the organizational and staffing characteristics vary based upon the prevalence of residents with dementia, which may help give providers, policymakers, researchers and consumer advocates data concerning the differences among assisted living communities. Understanding these unfortunate realities may pave the way for improvements to be made.

Reference: McKnight’s Senior Living (Dec. 7, 2020) “More than 40 percent of assisted living communities do not provide mental health services: CDC”

Talk to a Parent Suffering from Dementia during the Pandemic

If you have a parent living in an assisted living facility or a nursing home, or they’re at home, caregivers need to know how to explain the current coronavirus pandemic in an appropriate and clear manner—and in a way that protects and cares for your own personal health. With the busy holiday season behind us, you may have noticed new struggles with your parents.

Long Island Weekly’s recent article entitled “Caregiving During The Coronavirus” explains that older adults often have more health complications, like heart disease, diabetes and hypertension. As a result, they’re more susceptible to the complications of the coronavirus. Review the recommendations of the Centers for Disease Control and Prevention (CDC) and World Health Organization (WHO) for protecting you and your family, especially your elder parents, from exposure.

And although some people suffering from Alzheimer’s or dementia may not fully understand the complexity and severity that the COVID-19 pandemic is having on our communities, they can sense what’s happening. They can read your personal energy and can sense your stress. This may cause them to show more symptoms of anxiety, agitation, cognitive decline and confusion. Communicate as best you can to your parent frequently and clearly about what’s happening. While they may not need to have all the details, let them know that there’s a virus spreading within the community and that we need to wash our hands thoroughly and stay indoors.

For those still being cared for at home, take the necessary precautions as you’d do for yourself. Modify your grocery shopping trips, since stores are adding special senior hours, reschedule unnecessary doctor visits, stock up on needed medications and talk to your doctors about any concerns.

For those in a facility, understand the visitation policies, because many have adjusted their policies to limit or prohibit personal visitation. Ask the administration about visitation and what your parent’s care facility is doing to ensure for proper care.

Although you might be frustrated that your parent’s facility is limiting or cancelling visitation, remember that the new rules are designed to protect the residents. You may be able to schedule a time to speak with your mother or father on the phone every few days, or you can deliver food or items, like photos albums or other gifts to stay connected. Try to be reasonable and understand that these facilities may be understaffed.

Here are a few key points that may be helpful to get through this crisis:

  • Have a talk with your parent and with the facilities in which they’re living, so they can understand the new policies.
  • Be careful yourself. Take reasonable precautions for yourself and your family member.
  • Avoid public spaces. This includes routine, or non-essential doctor visits, grocery shopping and other visits.
  • Stay upbeat. Know the latest news and guidelines but try to remain calm, because your parent may sense your stress and reflect that.

Be reasonable and understanding and try your best in these uncertain times—for yourself and your parents.

Reference: Long Island Weekly (April 12, 2020) “Caregiving During The Coronavirus”

Will the Pandemic Affect My Social Security?

Kiplinger’s recent article entitled “Social Security Shocker: Pandemic to Reduce Benefits by 9% for Americans Turning 60 in 2020” explains that retirees can mitigate some of the damage, by waiting to claim their benefits. For every year you delay benefits past your full retirement age until age 70, you’ll receive an increased benefit of about 8%.

Eligibility for Social Security benefits requires a senior to have earned no less than 40 “credits.” You can earn up to four credits a year, so it takes 10 years of work to qualify for Social Security benefits. In 2020, you have to earn $1,410 to get one Social Security work credit and $5,640 to get the maximum four credits for the year.

Your benefit is based on the 35 years in which you earned the most amount of money. If you have fewer than 35 years of earnings, each year with no earnings is calculated as a zero. You can increase your benefit by swapping out those zero years, by working longer, even if it’s only part-time. However, don’t worry about a low-earning year replacing a higher-earning year. It won’t happen. The benefit isn’t based on 35 consecutive years of work, it’s based on your highest-earning 35 years. As a result, if you decide to ease into retirement by working part-time, you won’t wreck the amount of your Social Security benefit at all, if you have 35 years of higher earnings. If you earn more money, however, your benefit will be adjusted upward—despite the fact that you’re still working while taking your benefit.

There is a maximum benefit amount you can get. However, it depends on your age when you retire. If you retire at full retirement age this year, the maximum monthly benefit is $3,790.

In the past, a great perk of Social Security benefits was that every year, the government would adjust the benefit for inflation. This is called a cost-of-living adjustment, or “COLA.” It’s an inflation protection to help seniors keep up with rising living expenses during retirement.

The COLA is automatic and is quite valuable because purchasing inflation protection on a private annuity can be expensive.

The COLA is calculated based on changes in a federal consumer price index (CPI). The amount of the COLA depends largely on broad inflation levels determined by the federal government.

For 2021, Kiplinger anticipates that there won’t be a Social Security cost of living adjustment. That is due to the COVID-19 pandemic.

Reference: Kiplinger (July 30, 2020) “Social Security Shocker: Pandemic to Reduce Benefits by 9% for Americans Turning 60 in 2020”

What are Young People Doing to Help Seniors in Isolation?

With the pandemic continuing to be a part of our world, family caregivers are increasingly concerned about loved ones isolated at home or in facilities.

Many seniors and their family caregivers have little human interaction in “normal” times, and the pandemic makes it even worse.

Research shows that isolation and loneliness are as detrimental to health as smoking 15 cigarettes a day, says AARP’s recent article entitled “Teens Reach Out to Isolated Older Americans Through Online Programs.”

However, some new programs and approaches that have come about in the coronavirus quarantine can have a positive impact far beyond the pandemic. Young people have become pivotal in helping alleviate the lonesome burden for our seniors. Let’s look at three virtual intergenerational programs that bring hope for the future.

Music and Games to Brighten Spirits. Fifteen-year-old Maya Joshi and her twin sister, Riya, started daily video calls with their grandparents when the pandemic took hold. Seeing how much their grandparents enjoyed it, Maya decided to do something to help other isolated older adults. She launched Lifting Hearts with the Arts in April. The intergenerational program involves young teen volunteers connecting online with senior residents in 17 Illinois nursing homes and assisted living facilities. They present musical performances, games and 1:1 video chats.

These virtual activities are making a significant impact and are improving the senior residents’ moods, said the director of programming at a nursing home in Springfield, Illinois. After one resident grew more comfortable with the technology, she began initiating video calls with her friends and family. These seniors now have something to look forward to and they like seeing young smiles on the screen.

Meals and conversation To Eliminate Loneliness. The Los Angeles-based Youth Movement Against Alzheimer’s (YMAA) YouthCare program, in partnership with the University of Southern California, has been training their young students to provide in-home nonmedical respite and cognitively stimulating activities for people living with dementia.

The program was suspended when the COVID-19 lockdown began. As a rapid response to the pandemic, YMAA reached out to their chapters in high schools and college campuses across the country to create Meals Together. It’s a program where young students have virtual visits during mealtime with those in early stages of dementia and their caregivers.

In only three months, 39 YMAA chapters are participating in the expanding program. They now serve 175 senior users. They partner with nonprofits, like Meals on Wheels and assisted living facilities, to identify older participants. Seniors can also sign up on their own.

Natashia Townsend, YMAA’s director of caregiving programs, says they describe the program to participants in early stages of dementia as a way to help the students as they prepare for their careers. “It makes them feel empowered to help someone else,” Townsend explains. The youth volunteers also find it rewarding. “It’s just a great way to connect, and a lot of our seniors are feeling lonely at this time; they just want to feel like they have a friend,” she says.

Reference: AARP (July 27, 2020) “Teens Reach Out to Isolated Older Americans Through Online Programs”