What Is a ‘Survivorship’ Period?

Estate Planning, Probate, Trust / Assets, Beneficiaries, Beneficiary, elder law, Estate Planning Lawyer, Probate, St. Petersburg Estate Planning Attorney, Survivorship Clause, Trust, Will

A survivorship clause in a will or a trust says that beneficiaries can inherit, only if they live a certain number of days after the person who made the will or trust dies. The goal is to avoid situations where assets pass under your beneficiary’s estate plan, and not yours, if they outlive you only by a short period of time. While these situations are rare, they do occur, according to the article “How Survivorship Periods Work” from kake.com.

Many wills and trusts contain a survivorship period. Most estates won’t rise to the level of today’s very high federal estate tax exemption ($11.58 million for an individual), so a long survivorship period is not necessary. However, if the surviving spouse must wait too long to receive property under the will—six months or more—it might harm their eligibility for the marital deduction, even if they are made in a qualifying trust or an outright gift.

Even if a will does not contain a survivorship clause, many states require one. Some states require at least a five-day or 120-hour survivorship period. That law might apply to beneficiaries who inherit property under a will, trust or, if there is no will, under state law. This usually does not apply to those who are beneficiaries of an insurance policy, a POD bank account (Payable on Death), or a surviving co-owner of property held in joint tenancy. To learn what states have a set of laws, known as the Uniform Probate Code or the revised version of the Uniform Simultaneous Death Act, speak with a local estate planning lawyer.

Survivorship requirements are put into place in case of simultaneous or close to simultaneous deaths of the estate owners and the estate beneficiaries. This is to avoid having the distribution of assets from an estate owner’s estate distributed according to the beneficiary’s estate plan, and not the estate owner’s plan.

For an example, let’s say Jeff dies and leaves his estate to his sister Judy. Jeff has named his favorite charity as an alternative beneficiary. Jeff’s assets would normally go to his sister Judy. They would only go to his favorite charity, if Judy were not alive at the time of his death. However, if Jeff dies and then Judy dies 14 days later, Jeff’s assets could go to Judy’s beneficiaries under the terms of her will. The charity, Jeff’s intended beneficiary, would receive nothing.

The family would also have the burden of dealing with not one but two probate proceedings at the same time.

However, if a 30-day survivorship clause was in place, the assets would pass to his favorite charity, as originally intended. Jeff’s estate plan would be carried out, according to his wishes.

These are the types of details that make estate planning succeed as the estate owner wishes. Having a complete and secure—and properly prepared—estate plan in place is worth the effort.

Reference: kake.com (March 31, 2020) “How Survivorship Periods Work”

Planning for the Unexpected

Elder Care, Estate Planning, Health Care, Power of Attorney, Wills / Beneficiaries, elder law, Estate Planning Attorney, Life Insurance, parents, Retirement Accounts, St. Petersburg Estate Planning

Sadly, this is not an unusual situation. The daughter spoke with her mother once or twice a week, and the fall happened just after their last conversation. She dropped what she was doing and drove to the hospital, according to the article “Parents” in BusinessWest.com. At the hospital, she was worried that her mother was suffering from more than fractures, as her mother was disoriented because of the pain medications. She had no idea whether her mother had done any planning for unexpected events such as this.

planning for the unexpected — Without taking time to plan for unexpected events, things can get complicated…quick.

The conversation with her brother and mother about why she wasn’t notified immediately was frustrating. They “didn’t want to worry her.” She was worried, and not just about her mother’s well-being, but about her finances, and whether any plans were in place for this situation.

Her brother was a retired comptroller, and she thought that as a former financial professional, he would have taken care of everything. That was not the case.

Despite his professional career, the brother had never had “the talk” with his mother about money. No one knew if she had an estate plan, and if she did, where the documents were located.

All too often, families discover during an emergency that no planning for unexpected events has taken place.

The conversation took place in the hospital, when the siblings learned that documents had never been updated after their father had passed—more than 20 years earlier! The attorney who prepared the documents had retired long ago. Where the original estate planning documents were, mom had no idea.

For this family, the story had a happy ending. Once the mother got out of the hospital, the family made an appointment to meet with an estate planning attorney to get all of her estate planning completed. In addition, the family updated beneficiaries on life insurance and retirement accounts, which are now set to avoid probate.

Both siblings have a list of their mother’s assets, account numbers, credit card information and what’s more, they are tracking the accounts to ensure that any sort of questionable transactions are reviewed quickly. They finally have a clear picture of their mother’s expenses, assets and income.

If your family’s situation is closer to the start of the story than the end, it’s time to contact a qualified estate planning attorney who is licensed to practice in your state and have all the necessary preparation done. Don’t wait until you’re uncovering family mysteries in the hospital.

Reference: BusinessWest.com (Aug. 1, 2019) “Parents”

Countdown to Retirement with Three Simple Questions

Elder Care, Elder Law, Long Term Care Planning, Medicare, Social Security / elder law, Long-Term Care Planning, Medicare, Retirement Planning, Social Security, St. Petersburg

To help plan for retirement, it helps to move from asking global questions, like “Can I afford to retire?” to more specific questions, like “What’s my monthly cost of living right now?”

Sometimes retirement planning is so overwhelming that people just shrug their shoulders and hope that things work out. That’s a terrible way to plan for the last two or even three decades of your life. Plus, says Motley Fool in a recent article titled “Don’t Even Think About Retiring Until You Can Answer These 3 Questions,” if you can’t answer three basic questions, maybe you’re not ready to start thinking about retirement.

Can you believe that just 38% of Americans say they have a long-term financial plan, according to a recent survey? Let’s look at three important planning questions.

When to claim Social Security. Many people think that retirement and claiming Social Security benefits occur at the same time. However, they don’t have to. You could elect to retire at age 60 but wait to claim your benefits until you reach 65. Remember that the amount of money you get in benefits is linked to the age at which you start claiming them. Age 62 is the earliest you can claim Social Security. However, if you do, your benefits will be reduced by up to 30% of what they could be. For every month you wait, you’ll receive slightly more with each check up to age 70. Your full retirement age (FRA) is the age when you’ll get 100% of the benefits to which you’re entitled. Waiting can have its advantages, but there’s no single right answer for when you should start claiming. It all depends on your personal circumstances.

Will your retirement savings last? Take a look at how far your savings will last during retirement. To determine how far your money will go, calculate the amount you’ll need each year to get by during retirement. With a number in mind, you’ll be able to better determine how long your current savings will last. You might realize that you need more than you anticipated, especially if you’re going to be spending several decades in retirement.

Paying for healthcare costs. Healthcare costs are one of the largest expenses in retirement. Know that the average retiree spends about $4,300 per year on out-of-pocket healthcare expenses. A total of two-thirds of that is spent on premiums. It’s important to understand that Medicare will help cover many healthcare expenses you’ll face, but it doesn’t cover everything.

Circumstances often dictate when people retire; they lose a job in their mid to late 60s or illness prevents them from working. However, even when that is the case, understanding where you are from a financial perspective can help make your retirement work in your favor.

Reference: Motley Fool (October 9, 2018) “Don’t Even Think About Retiring Until You Can Answer These 3 Questions”

How Does Medicaid Treat College Savings Funds?

Elder Care, Elder Law, Medicaid / 529 Education Savings Plan, Elder Care, elder law, Medicaid Nursing Home Planning, Medicaid Planning Lawyer, Paying for a Nursing Home, St. Petersburg

Saving for college but needing to receive Medicaid is a complicated equation.

The answer “It depends” is not much of a comfort when considering how college savings accounts will be treated for Medicaid purposes. However, it is, unfortunately, the most accurate answer. There are several factors that must be considered:

What type of account you used to set aside the college money;
How and when you funded the account; and
Whether you still have access to the money.

A recentnj.com article asks, “Will my college savings be counted for Medicaid?” If you can liquidate an account and access the money that you deposited, Medicaid will typically expect you to do so to fund your own care for as long as possible. Another challenge is that Medicaid will always penalize gifts. Odds are good that the funds you added to these college accounts are gifts.

However, there may be an exception: if the account was funded prior to the 60-month lookback period, the applicant can’t be penalized for making a gift.

Let’s examine why the type of account is also important.

If the money was put into a 529 plan, the funds aren’t part of the donor's taxable estate, and the assets aren’t includible. However, if the funds are invested in an account “ITF” (“in trust for”) a grandchild, then the funds would be includible. It its calculations, Medicaid examines all assets in the name of the applicant. Assets held in 529 plans—although the donor's name may be shown as the participant—are deemed to be a gift, when the assets are transferred and, therefore, are no longer the donor's asset.

To be safe, grandparents who set up 529 plans for their grandkids should change the participant to the grandchild's parent or guardian. This entirely disconnects the donor's name with the account.

If the grandparent just added a grandchild's name on one of his savings accounts, then that would be includable. This is true even if it were completed more than 60 months earlier, because it wouldn’t be deemed to be a completed gift.

When it comes to the intersection of college savings and Medicaid, you may need to speak with an elder law attorney who will be able to review how the college savings assets are owned, and whether or not they’ll impact your Medicaid eligibility.

Reference: nj.com (September 19, 2018) “Will my college savings be counted for Medicaid?”

Medicare Facts and Penalties You Need to Know

Elder Care, Elder Law, Medicare, Retirement Planning / Elder Care, elder law, Medicare, Medicare Advantage, Retirement Planning

Make sure to review your coverage and plan in advance to avoid any penalties.

Start with the basics, to make sure you’re making informed decisions.

Created in July 1965 as part of the Social Security Act, Medicare is how most adults over age 65 cover their healthcare costs. Medicare has four parts. They are Part A: Hospital, Part B: Outpatient Services, Part C: Medicare Replacement and Part D: Prescription Drugs. This useful article from Think Advisor, “Essential Medicare Facts & Penalties Advisors Should Know on One Page,” covers Medicare fundamentals.

As a general rule, if you are 65 and you or your spouse have paid Medicare taxes for at least 10 years, you may enroll in the program. Those under 65 may also enroll, if they are disabled or have end stage renal disease.

Let’s look at the different parts of Medicare:

Part A is free for most people. If you didn’t pay Medicare taxes, you may be able to enroll and pay for Part A. If you’re under 65 and didn’t pay into Medicare, you may be eligible if you have been entitled to Social Security or Railroad Retirement Board disability benefits for 24 months or you are a kidney dialysis or kidney transplant patient.

Everyone is required to pay a premium for Medicare Part B, which is deducted from your Social Security retirement payment. If you’re eligible but haven’t yet begun to receive a Social Security retirement benefit, Medicare will send you a bill.

Part C is also known as a Medicare Advantage plan. It’s issued by a Medicare-approved private insurer. Even if you choose Medicare Part C, you still are required to pay a Part B premium. Although these plans cover all services in Part A and Part B, they frequently have other benefits like vision, dental, hearing, and prescription drugs.

Part D covers prescription drugs. Each Medicare drug plan list its approved drugs and a “tier” for them. A lower tier drug will generally cost less, and a higher tier drug will cost more.

The window to enroll in Medicare starts on the first day of the third month prior to your birth month and ends on the last day of the third month following the month of your birth.

There is a separate “late enrollment” penalty, if you go 64 continuous days or more beyond the end of your initial enrollment period and did not have a Medicare Prescription Drug Plan, a Medicare Advantage Plan (Part C) and another Medicare plan that offers prescription drug coverage, including a plan through an employer or union.

Make sure to review your coverage and plan in advance to avoid any penalties. If you make a mistake, you may end up paying a premium for certain types of coverage, for as long as you have Medicare.

Reference: Think Advisor (July 31, 2018) “Essential Medicare Facts & Penalties Advisors Should Know on One Page”

Here’s Where NOT to Retire

Elder Law, Retirement Planning / elder law, Retirement Planning

You’ve read plenty of surveys about the best places to retire, but have you ever looked at the worst ones?

If taxes and cost of living are important factors for you, here’s a look at states where you should only retire with a good reason, like family ties.

You’ve read plenty of surveys about the best places to retire, but have you ever looked at the worst ones? Think Advisortook a new twist on a new survey by Bankrate.com, in its article“12 Worst States for Retirement: 2018.”

The least desirable states for retirement typically had poor ratings in the categories for cost of living and taxes and were also weighed down by low scores in other categories. Bankrate.comcreated its rankings by looking at seven categories of interest to retirees and weighted those rankings based on the importance given to them by respondents to the firm’s 2017 survey. The categories were:

cost of living (20%);
taxes (20%);
health care quality (15%);
weather (15%);
crime (10%);
cultural vitality (10%); and
well-being (10%).

The last category, well-being, considered how people felt about their community, friends, health and general purpose. OneBankrate.comanalyst remarked that it’s important to have strong relationships with friends and your spouse and spend your money on leisure activities that bring you joy, citing recent research.

The seven factors were averaged, so some states that were down in the rankings had low crime, well-being, health care and cultural quality, even though they scored well on cost of living. Other states with high scores on cultural quality and crime may have done very poorly on cost of living and taxes.

Here's the list of the 12 worst states for retirement:

Oregon
Oklahoma
South Carolina
Nevada
Washington
Illinois
California
Arkansas
Louisiana
Maryland
New Mexico
New York

Of course, no one can make the decision about where to move for retirement based on a single set of facts. However, the information above provides some compelling data. An estate planning attorney will be able to create a tax strategy for your retirement and your estate plan, that may overcome the tax portion of your desired state. If being close to children, grandchildren or friends is important to you, that may be more valuable than taxes.

Reference: Think Advisor (July 17, 2018) “12 Worst States for Retirement: 2018”

Feeling Squeezed? You Might be in the “Sandwich” Generation

Elder Care, Estate Planning, Trusts, Wills / Elder Care, elder law, Estate Planning Lawyer, Estate Tax, Gift Tax, Inheritance, Living Trusts, Medicaid Planning, Medicare, Power of Attorney, Tax Planning, Wills

The term “sandwich generation” was added to Meriam Webster’s dictionary in 2006.

If you’re feeling pressure on two generational sides—caring for aging parents and taking care of children—you’re a member of the Sandwich Generation.

The term “sandwich generation” was added to Meriam Webster’s dictionary in 2006. However, twelve years later, the number of people it describes seems to be on the rise. Sandwich Generation members are raising their children and are responsible for their parents or taking responsibility for their grandchildren and grandparents. Whichever sandwich you’re in, it’s not an easy place to be. Even if your parents or grandparents are financially fine, your time for yourself, your career and your kids is squeezed.

ThePress-Enterprise’s article, “3 tips for anyone in the sandwich generation,”offers the following tips tomake the “sandwiching” easier on you and your family:

Talk About Money Issues. Discuss finances with your children and parents. Perhaps you could go with them to meet with their estate planning attorney. He or she can make sure your parents have all the proper estate planning documents, such as a will, trust, living wills and powers of attorney.

This legal professional will create a plan to lessen or avoid estate taxes and work to ensure that your life's savings and assets are protected from your beneficiaries' creditors after your death, and that your legacy is assured.

Estate planning attorneys are accustomed to working with families and navigating the issues between adult children and their aging parents. There is little chance that yours is a unique situation. It does not mean it is easy, but a skilled attorney will be able to help you and your family deal with whatever situation you face, with dignity and compassion.

Get (More) Help. You may get support or assistance to help your parents, your kids, or even yourself. Odds are good that your parents will be reluctant to accept help, so start the process yourself. This could involve hiring a housekeeper for yourself to free up some of your time for things that are more important.

This will give you more time, and your parents won’t feel you are using your finances to assist them. If you have friends and relatives that offer help, take them up on it. Don’t try to do everything yourself.

If your children are old enough, you can also get them involved. Children are surprisingly capable, and sometimes grandparents are more comfortable having grandchildren help with minor chores around the house, where their children’s own actions may seem intrusive.

3.Get Rid of the Guilt. Even a dedicated husband and wife team can’t cover everything. Do the best you can and remember that you do have to set some time and energy aside for yourself.

Reference: (Riverside CA) Press-Enterprise(June 28, 2018)“3 tips for anyone in the sandwich generation”

Lawsuit Filed by Buzz Aldrin Against Children and Former Business Manager

Asset Protection, Elder Care, Elder Law, Estate Planning, Probate, Wills / Asset Protection, Capacity, Elder Care, elder law, Estate Planning, Guardianship, Inheritance, Power of Attorney, Probate Court, Trustee, Trusts

His children have filed a petition saying he is suffering from dementia.

One of the heroes of American’s Apollo space program is now engaged in a lawsuit against his own children, while his children have filed a petition saying he is suffering from dementia.

This is not how we think the storybook life of Buzz Aldrin should be remembered. Aldrin, a legendary American astronaut and the second man to walk on the moon, has sued his adult children, saying that they are slandering him by saying he has dementia. The two adult children have asked a judge to name them as his legal guardians, as reported in a recent article fromStuff,“Buzz Aldrin sues children, alleging misuse of his finances.”

The children said Buzz was associating with new friends, who were trying to alienate him from his family and that he had been spending his assets at "an alarming rate.'' They filed a petition claiming their father was suffering from memory loss, delusions, paranoia and confusion.

The 88-year-old Aldrin underwent his own mental evaluation that was conducted by a geriatric psychiatrist at UCLA last April. The doctor said Aldrin scored "superior to normal'' for his age on tests.

"I also believe that he is perfectly capable of providing for his physical health needs, food, clothing and shelter and is substantially able to manage his finances and resist fraud and undue influence,'' said Dr. James Spar in a letter to Aldrin's attorney.

Aldrin asked a judge to remove Andrew from control of his financial affairs, social media accounts and several nonprofit and business enterprises. Andrew was a trustee of his father's trust. Buzz said in the complaint that despite revoking the power of attorney he had given his son, Andrew continued making financial decisions for him.

"Specifically, defendant Andrew Aldrin, as trustee, does not inform plaintiff of pending or future business transactions, removes large sums of monies from plaintiff’s accounts and continues to represent plaintiff in business and social capacities, despite plaintiff's repeated requests for such representations to be terminated,'' the lawsuit said.

In his complaint, Aldrin accused Janice of not acting in his financial interests and conspiracy. Buzz also accused his former manager, Christina Korp, of fraud, exploitation of the elderly and unjust enrichment. Several businesses and foundations operated by the family are also named in the lawsuit.

This past June, Aldrin was at the White House when President Trump announced that he wanted the Pentagon to create the “Space Force” as a new military branch. Aldrin was a member of the Apollo 11 crew that landed the first two people ever to walk on the moon.

Reference: Stuff (June 26, 2018)“Buzz Aldrin sues children, alleging misuse of his finances”

When Children Grow Up and Parents Become the Children’s Responsibility

Elder Care, Estate Planning, Probate, Retirement Planning, Trusts, Wills / Asset Protection, Capacity, Elder Care, elder law, Estate Planning, Long-Term Care Planning, Medicare, Paying for a Nursing Home, Planning for the Future, Power of Attorney, Probate Court, Retirement Planning, Trusts, Wills

Let’s examine some of the things you can do, as your parents go through the aging cycle.

America is aging, and by 2050, there will be nearly 88 million seniors over age 65. With this huge demographic shift, adult children will find themselves with a new role.

It is not unusual in many families that as parents age, their children take on the role of caregivers. However, the sheer number of people who will be over age 65 in coming years, will make some big changes in our nation, as reported by Fox Businessin the recent article, “Aging parents are the new ‘children.’”

One concern is that aging parents can lose their mental abilities. The Alzheimer’s Association says that every 65 seconds, someone in the U.S. develops the disease. It’s now the sixth-leading cause of death. This can create additional long-term care needs for parents and result in an emotional and financial burden on adult children.

Parents with physical limitations may have difficulties living independently. Therefore, you should understand your parents’ long-term plans and how they will impact you. Let’s examine some of the things you can do, as your parents go through the aging cycle.

Family Conversations.While talking to your parents about these topics now may be uncomfortable, it will save you a lot of stress, time, and money in the future. Parents who want to preserve autonomy should express their wishes. Parents should discuss their healthcare wishes, the what ifs and finances now to discover what options they may have for care. It’s important that adult children understand details of their parents’ financial situations, before they’re unable to communicate due to incapacity or death.

Get the Family Affairs in Order.Create a system to help with gathering information. This should include medical histories and estate plans. Start to organize information with your parents as early as possible. Adult children should be sure that their parents have a will, a trust (or both), a durable power of attorney for property and a durable power of attorney for healthcare.

Determine Parents’ Long-Term Financial Needs.It’s extremely expensive to provide care for aging parents. Seek professional guidance to determine how much of your parent’s savings is currently allocated to pay for healthcare in retirement, not covered by Medicare. Look at long-term care insurance.

Have an Actively Involved Relationship.If you see your parents on a regular basis, keep your eyes open for any kind of change in their behavior or signs that things are not right: stacks of unopened mail, phone calls from people you don’t know, etc. If you do not live near your parents, ask an estate planning or elder care attorney for recommendations for social workers or elder care services to help your parents. They can do things like take parents to medical appointments, talk with care facilities on your behalf and keep you apprised of your parent’s well-being.

Your parents may or may not enjoy the “golden years” that we envision, but some preparation now, including having the tough discussions, will at the very least make it easier in the future.

Reference: Fox Business (May 25, 2018) “Aging parents are the new ‘children’”

Can a Revocable Land Trust Shield Assets from Medicaid?

Asset Protection, Elder Law, Irrevocable Trust, Medicaid, Trusts / Asset Protection, elder law, Irrevocable Trust, Medicaid Nursing Home Planning, Medicaid Planning Lawyer, Medicaid Trust Planning, Revocable Land Trust

Control of an asset is a key element, when Medicaid considers an individual’s eligibility.

Control of an asset is a key element, when Medicaid considers an individual’s eligibility.

A recent article from nj.com, “What revocable land trusts mean to Medicaid eligibility,” starts with what sounds almost like a warning: it’s not easy to protect or hide assets from Medicaid. A revocable land trust won’t help to protect an asset from Medicaid’s spend down requirements, because a trust that’s revocable can be revoked or terminated at any time by the grantor.

A land trust is a private agreement with the trustee agreeing to hold title to property for the benefit of the beneficiary or beneficiaries. The creator of the trust is called the settlor or trustor. This person is usually the titleholder to the property, before it’s transferred into the trust.

The settlor frequently remains the beneficiary of the trust for his lifetime. In effect, the trustee holds the title to the property and must follow the instructions of the beneficiary. The beneficiary typically has the absolute right to direct and control the trustee and receive all income from the trust. The trust agreement, at the creation of the trust, dictates the relationship between the trustee and beneficiary. As a result, the trustee often has no more power than the settlor gives him. In addition, he doesn’t have any other function, other than to do as the trust deed instructs.

Medicaid sees the assets in a revocable trust as countable because the Medicaid applicant who places the home in the trust she created has total control over the Trustee, and therefore, the assets in the trust. It means that she can take back the asset at any point in time.

In such a case, Medicaid will deny the application. They’re effectively telling the applicant to sell the home, spend down the assets, and then reapply when they have no more than $2,000 in assets in the applicant’s name and in the revocable trust combined.

Assets in an irrevocable trust may, however, be excluded from Medicaid spend down rules, based on the terms of the trust. Though, even if a home was placed in an irrevocable trust that would exclude it from Medicaid, the transfer to the trust must be completed more than five years, before applying for Medicaid to avoid the five-year lookback and Medicaid penalty provisions.

An experienced estate planning attorney, with current knowledge of Medicaid regulations, will know what trusts or other strategies will work best to enable an individual to become eligible for Medicaid.

Reference: nj.com(April 9, 2018) “What revocable land trusts mean to Medicaid eligibility”

What Is a ‘Survivorship’ Period?

Planning for the Unexpected

How Does Medicaid Treat College Savings Funds?

Medicare Facts and Penalties You Need to Know

Here’s Where NOT to Retire

Feeling Squeezed? You Might be in the “Sandwich” Generation

Lawsuit Filed by Buzz Aldrin Against Children and Former Business Manager

When Children Grow Up and Parents Become the Children’s Responsibility

Can a Revocable Land Trust Shield Assets from Medicaid?

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