Wood + Lamping - Estate Planning / Elder Law

What Are Estate Taxes?  I.                    What is the Death Tax?·         There has been a lot of talk this week about the Trump Tax Bill, what is in it, what’s included, and in my practice this always conjures up talk about the death tax or the estate tax.·         The estate tax is a tax assessed on the total value of your assets which transfer at death to heirs or beneficiaries.·         As of 2025, the estate tax only applies for estates worth more than $13.99 million per individual, or $27.98 million for married couples who elect portability upon the death of the first spouse’s death.·         You can leave an unlimited amount of assets at death to your spouse without incurring estate taxes. However, this means that the estate tax exemption is wasted upon the death of the first spouse. Portability permits the transfer of this unused estate tax exemption to the surviving spouse creating a $27.98 million estate tax exemption for the surviving spouse in 2025.·         If you have an estate that exceeds this threshold, the excess is taxed at rates up to 40%. ·         If you have an estate worth $15 million, only $1.01 million above the exemption is taxable. ·         However, this high exemption is currently temporary. Unless Congress acts, it’s set to sunset to approximately $7 million per person starting in 2026, subjecting more estates to the estate tax. ·         Under the Biden Administration, there was discussion of reducing the estate tax exemption to $3.5 million. Under the new Trump Tax Bill proposal, there is discussion in making the exemption $15 million per individual in 2026 and making the exemption permanent.·         Therefore, we are in this waiting period on how new estate tax legislation will affect estate planning going forward.  II.                 State Estate Taxes and Inheritance Taxes·         There are some states which impose their own estate taxes and inheritance taxes.·         Unlike estate taxes, which is paid by the estate, inheritance taxes are paid by the persons inheriting the assets.·         Kentucky inheritance tax can reach as high as 16%, however, close family members, such as spouse, children, grandchildren, siblings, are exempt from the inheritance tax.·         It is important to watch out for inheritance taxes if your state has an inheritance tax which applies.  III.              How Do You Limit Estate Taxes·         There are ways to limit estate taxes when your estate may be subject to estate taxes. ·         Lifetime Giftingo   You can gift up to $19,000 per person annually without touching your lifetime exemption.o   You can gift $13.99 million in taxable gifts during your lifetime. However, every taxable gift you make, reduces your lifetime exemption from the estate tax, so you need to be careful.o   A couple could gift $38,000 to each child or grandchild every year·         Irrevocable Trustso   Transferring assets to an irrevocable trust can remove those assets from your taxable estateso   One such option is with an Irrevocable Life Insurance Trust§  This is a trust in which the death benefit that pays upon your death will be owned by the ILIT.§  This can provide a cash free benefit for your beneficiaries named in the trust. However, it can also be used to provide liquidity for anticipated federal estate taxes.§  I have represented many family farms in the past, and the issue in those situations are that the estate will be taxable, but there is very little liquid assets. The surviving family would not want to sell the farm just to pay the taxes. This is where an ILIT can be very beneficial.·         Charitable Givingo   Donating to charities through your estate reduces your taxable estate and can offer income tax deductions.o   Charitable trusts to benefit both a charity and your heirs can be especially beneficial  IV.              How to Plan in 2025·         With the federal exemption set to be cut in half and no idea when Congress is going to act, 2025 is a critical year to act and engage in estate tax planning.·         Portablity lets the surviving spouse inherit the deceased spouse’s unused estate tax exemption.·         However, you must file an estate tax return to claim it.·         Higher net worth families might lock in the current $13.99 million exemption before it shrinks with a Spousal Lifetime Access Trust·         Don’t forget to review your plan annually – asset values can grow faster than you expect, pushing you over exemption limits.

Why is estate planning a necessity for everyone over 18, not just the wealthy, and learn how to safeguard your assets and ensure your wishes are honored. We explore the critical components of estate planning, including the last will and testament, trusts, power of attorney, and healthcare directives. Dan shares real-world examples to highlight common pitfalls, such as neglecting to update plans after major life changes, which can complicate probate and lead to legal challenges. Regular reviews of your estate plan every three to five years are key to keeping everything aligned with your current life situation.Dive deeper into the world of trusts, especially their role in Medicaid and tax planning. We discuss the importance of setting up and funding a trust well before applying for Medicaid, ideally five years in advance, to protect your assets. Dan also sheds light on the strategic use of irrevocable trusts for larger estates and the significance of "see-through" language to secure tax benefits for IRAs and 401(k)s beneficiaries. With these insights, you'll be well-equipped to navigate the complexities of estate planning and ensure your goals are met, making this a must-listen episode for anyone looking to secure their financial future.

I.    Have you ever wondered what happens to your assets and property after you pass away? ·        After you pass away all the property that you own and the debts that you have must be administered through a public court process called probate. ·        The word probate actually comes from the Latin word, as us lawyers always have to use Latin phrases, “to prove.” ·        You see, for the title to your property (whether that is real estate, your car, your bank accounts, etc.) to change to your heirs and family, a probate process must occur.    II.                 What is probate? ·        As I mentioned, before title to property can change to your family, that property must be administered through a process called probate. ·        Probate is a public court proceeding in which all of your assets, property, and debts are listed in public court documents. ·        There are a number of public court pleadings (i.e., inventory of assets, accounting, etc) which are filed with the court, as well as a number of court hearings that occur. ·        At the end of the court proceeding, the assets which remain are distributed to your family members either according to the will or according to state law, after all valid debts have been paid. ·        Example: o   Imagine for a minute Jane, who passed away with a house and bank accounts. In order for Jane’s children to receive the house and bank accounts, Jane’s children had to go through probate before those assets could be transferred. ·         Many people think that if you have a will you do not go through probate. However, that is not true. Whether you have a will or not, your property will need to be administered through the probate court process.     III.              Why does probate exist? ·         Probate Court to ensure debts are paid and assets are distributed either according to law or according to a person’s last will and testament.Probate court is there to make sure that if a person leaves a last will and testament, that the will is determined to be valid according to law. Remember the word probate I mentioned early is Latin for the phrase “to prove.” Well, the will needs to be proven to be legally valid. ·        Probate court is also there to settle any disputes and disagreements among the heirs or beneficiaries    IV.              “I hear probate is bad?” ·        Probate is time-consuming. This means that there will be delays for asset distribution to heirs or beneficiaries of the estate. ·        The average probate case can last anywhere from 6 months (more likely a year) to two years or more. ·        Even if you have a will, the will must be admitted to probate. ·        The executor that you name in your will has no power until the will is admitted to probate and the executor is given authority by the court to act on behalf of the estate. ·        Probate is also costly. Court costs, attorney fees, and executor fees can add up quickly ($15,000 or more even for simple estates is not unheard of). ·        Probate is also a public process. Every asset you own and debt that you have will be listed on a public court document than anyone can look up regarding your probate estate.    V.                Should you avoid probate? ·        Having practiced as an attorney since 2011, I have seen both simple estates and complex estates go through the probate court process. In nearly every case, my clients have said:o   This took a long timeo   This process was extremely expensiveo   I wish mom or dad knew how to avoid this ·        In general, I have found that families which plan to avoid probate enjoy a simpler estate settlement process than those who go through probate    VI.              Ways to avoid probate ·        Joint Ownershipo   Any assets held jointly with right of survivorship will not go through probate.o   Instead those assets will immediately go to the surviving joint-ownero   Think, real estate owned by a married couple with right of survivorship. The surviving joint owner takes full ownership outside of probate.o   The same can be true for jointly held bank accounts ·        Beneficiary Designationso   Designating beneficiaries on your investment accounts, retirement accounts and life insurance can ensure that those assets do not go through probate as well.o   Those assets pass to the named beneficiary outside of probate. ·         Living Trustso   Living trusts are a way to avoid probate as well.o   I would say that most of my clients prefer to establish a living trust.o   A living trust is a legal document and entity in which a person (called a grantor or settlor) establishes a legal entity known as trust and transfers their property to be managed by another person (called a trustee) until a predetermined event, usually the death of the grantor or settlor.o   Upon death, because the property was managed by the trustee, the property is transferred to the beneficiaries, not through probate, but according to the terms of the trust.o   Also, in most circumstances, the grantor or settlor is also the initial trustee. Therefore, day to day, nothing really changes. You continue to access and manage your property as you always have.o   The only difference is that upon your death, a successor trustee, usually a spouse or an adult child, will step in and distribute the property to the beneficiaries named in the trust agreement.o   Trusts can also distribute property in ways that a will and probate cannot:§  A trust can delay distribution to children and family members §  Let’s say you have concern regarding an adult child’s spending or other issues. You can delay the distribution to that child over time as a way to protect their inheritance.§  Or, let’s say that you have minor children – a trust can ensure that the successor trustee manages the trust property. If the property was distributed to minor children outright through probate court, your surviving family would have to go to probate court and establish a guardianship over that minor child or children until that child reaches the age of 18.

You can go online and craft a Will for $100 or less – sometimes a lot less.AARP writes on this subject all the time. But they make it clear that onlineWills are only for the most basic circumstances.So, if you have a small estate and want to leave everything to your spouseand then to your kids, an online Will works – IF you fill it out and execute itcorrectly.But, what kinds of issues make online Wills risky?A. Minor childrenB. Second marriagesC. Medium size estates and largerD. Disability – of the testator or the beneficiaryE. Real estate in more than one stateF. Children with “issues” such as poor money skills, bad spouses,poor judgment, drug and alcohol abuse, big debt, bad healthG. Significant “non-probate” assetsH. Planning for one’s own disabilityI. “Legacy” assets, including family cottageJ. Family business.Beneficiary Designations.Executing a Will is only one part of an estate plan. You also need toconsider:A. Power of AttorneyB. Living WillC. Power of Attorney for Health CareD. Beneficiary designations.I have never met a client who didn’t believe his/her estate was simple– most were mistaken. 

How Specific Should Your Will Be?I.        Most Wills are general in nature. The same is true of Trusts. Many clients are surprised by this. They expect a Will to list certain assets to go to certain people – at least the big things.  II.        There are two kinds of gifts:  a.    Specific bequests  b.    Residual bequests.  III.        Specific bequests come in two types:  a.    The bequest of specific assets such as a house, stock, jewelry, car, household goods, etc. For example, “I give all my jewelry to my daughter, Kay Smith.”  b.    The bequest of a specific amount of money such as giving $50,000 to my son or giving $10,000 each to my grandchildren.  IV.        Residual bequests address what is left after the cost of administration and after specific bequests.For example,   “I give the rest and residue of my estate in equal shares to my children,”  or   “I give 20% of my residual estate to the University of Cincinnati, 40% to my son Brent, and 40% to my son Eric.” Of course, it must add up to 100%  V.        Most Wills have both specific bequests and residual bequests. Most Wills say:  a.    Pay the administrative expenses.  b.    Pay my bills.  c.    Pay my taxes.  d.    Give my household goods and personal effects to my children to be determined by my executor.e.    Give what is left equally to my children in equal shares.  VI.        It is not uncommon to add one or two specific bequests:  a.    I give $5,000 to each of my grandchildren.  b.    I give my jewelry to my two daughters.  c.    I give $100,000 to Cincinnati Children’s Hospital.  It is important to specify what happens if a beneficiary dies before you do. What happens to that gift – does it go to their spouse or children, or does it lapse (get cancelled)?   Also, remember is that specific bequests come before residual bequests. So, if the specific bequests use up all the assets in the estate, nothing goes to the residual beneficiaries.  VII.                Many clients think we should list assets in the Will or Trust. But, there are a few reasons that we do not:  a.    If my Will gives 100 shares of P&G to my son and I don’t own that stock when I die, what happens? In Ohio, that gift is cancelled.  b.    It is a mistake to assume that an asset means the same to a beneficiary as it does to us. If a beneficiary really wants something specific from the estate, he/she can buy it from the executor. Don’t “saddle” your values or your sentiments on your beneficiaries.  c.    Itemizing assets may trigger an appraisal and effect estate taxes.  d.    We don’t want to amend your Will every time your assets change.  VII.  Some experts suggest that itemizing assets in your Will reduces family conflict. I don’t agree. If families want to fight, they are going to fight. The terms of the Will can affect this, but not by itemizing assets.   Alternative: Make a “private” list to give to the Executor. This is easy to change. The Will should give the Executor broad power and discretion. Pick the right Executor and trust them to work it out. Don’t tie the hands of your Executor or beneficiary.

Unlock the secrets of estate planning and learn how to protect your family's future with insights from Simply Money and our special guest, expert Mark Reckman from Wood and Lamping. Discover the intricacies of Anthony Bourdain’s estate, where smart planning led to the creation of a trust for his daughter, effectively sidestepping the probate process. Yet, his choice of an estranged wife as trustee serves as a cautionary tale about the importance of selecting a reliable trustee. Listen as we dissect the complex world of assets, including the unexpected significance of frequent flyer miles, and how they can play a role in your estate plans.Join us as we explore estate planning as a profound gesture of love for those you hold dear. Through the lens of Paul Newman's personalized approach and the strategic application of the Wagner Rule, we highlight the necessity of bespoke planning that fits unique family dynamics. With Mark Reckman’s expert guidance, we emphasize the critical nature of having a well-crafted estate plan to secure the future of your loved ones. Elevate your understanding of managing trusts and learn valuable lessons from the “Death Styles of the Rich and Famous” that can be applied to your own life.

Unlock the secrets of estate planning beyond the basics and learn how to protect your healthcare wishes in our latest episode featuring Mark Reckman from Wood and Lamping. With Mark's expertise, we shatter common myths about living wills, durable powers of attorney, and healthcare directives, revealing how these documents are crucial for navigating the complexities of medical care during terminal illness. Discover the truth about living wills and the dedicated commitment of healthcare professionals to patient care, ensuring that your decisions are honored when you're unable to voice them yourself. We also tackle the vital constitutional right to die, emphasizing the consistency of these rights across the tri-state area.Navigating family dynamics in healthcare decisions can be challenging, but it doesn't have to be. Join us as we highlight the emotional and ethical intricacies families face without prior guidance about their loved one's healthcare preferences. Mark Reckman brings valuable insights into why discussing advanced healthcare directives is an act of love, alleviating the emotional burden from family members who might otherwise rely on assumptions about a patient's values. We stress the importance of appointing a reliable healthcare proxy, someone who can make impartial decisions when it matters most. Tune in to ensure that your healthcare wishes are respected and that your loved ones are spared from the agony of guesswork.

Estate planning expert Mark Reckman from Wood and Lamping joins us to share his remarkable insights from serving on a jury in a criminal drug case. Offering a rare peek into the jury room, Mark explains the crucial differences between grand and petit juries, while also shedding light on how the presence of jurors often nudges parties toward settlements. His personal experience underscores the diversity and dedication of those called to serve, emphasizing jury duty not just as a civic obligation but as a fundamental pillar supporting the rule of law in the United States.In the heart of Southwest Ohio, jury duty may initially seem daunting, yet it stands as a significant opportunity to engage with the justice system. We focus on how jury commissioners strive to make the process efficient and rewarding. Discover why this civic responsibility is not just about fulfilling a duty but about actively contributing to the legal foundation of our democracy. Through Mark Reckman's perspective, listeners are encouraged to embrace this summons as a chance to uphold justice and witness firsthand the intricate workings of our courts.

Unlock the secrets to a secure and prosperous retirement with insights straight from estate planning expert Mark Reckman of Wood and Lamping. Master the intricacies of Social Security claiming strategies, and learn how to make informed decisions that could significantly impact your financial future. With almost 75% of retirees opting to stop working before 65, we dissect the vital choice of when to claim Social Security benefits. Mark clears up common misconceptions, such as the false notion that early claims will automatically increase to full benefits at full retirement age, and addresses the often misunderstood concerns about the program's solvency.Together, we explore alternative strategies to help you make the most out of your Social Security benefits, emphasizing the advantages of delaying claims to increase your future payouts. Consider options like part-time work, applying for disability benefits, or adjusting your budget to rely temporarily on savings. With Mark's seasoned advice, you'll gain clarity on navigating these options to tailor a retirement plan that fits your unique financial situation. Don't miss this episode filled with invaluable guidance—your retirement could depend on it!

Seven Ways to Divide up Your “Stuff”Clients ask me all the time how much detail should go into their Wills. They are usually referring to their “stuff” – their personal possession such as furniture, art, household goods, car, etc. Well, the answer is that we don’t usually itemize those things in your Will – except for those rare pieces. This is for a whole lot of practical reasons and tax reasons. That often is not enough for folks, so typically estate lawyers offer these alternatives. The attorney puts a paragraph in the Will that says the Executor will decide who gets what. Then, the Executor can use one of these methods:1. LIST LARGE GIFTS IN YOUR WILL. Be selective and keep this to a minimum. There are practical problems with this one.2. SELL EVERYTHING AND SPLIT THE MONEY. This is the great equalizer but is a little harsh.3. WRITE A MEMO TO YOUR EXECUTOR. This is by far the most popular. It’s simple, effective and easy to change.4. GIVE THINGS AWAY WHILE YOU ARE ALIVE. I love this one because it can simplify your life and bring you joy. And it comes naturally as you downsize.5. HAVE A LOTTERY OR TAKE TURNS PICKING. This is also effective, but it requires everyone to be together or it will take forever.6. BIDDING. You can bid with real money, but usually you bid with chips or play money or points. But this requires everyone to be together to work correctly.7. COLOR-CODED STICKERS. You put stickers on the big pieces so that your family and your executor know who gets what. This is a little compulsive, and you have to live with stickers on your stuff – but it works.

Roughly 6 million Americans suffer from one or more dementia symptoms. 10% of folksover 85 have dementia. This is expected to rise to 14 million people by 2050.Profile of Potential Target:.1. Dementia symptoms2. Easily influenced by others3. Lives alone (isolated)4. Lonely5. Recent loss of family memberForms of Abuse:1. Forging checks or forcing victim to sign checks2. Forcing victim to sign a deed, will, trust or POA3. Stealing property4. Promising lifelong care in exchange for money5. Using property without payment or permission6. Phone scams7. Mail scams8. Internet scams9. Self neglectIndicators of Abuse:1. Changing mailing address on financial reports/statements2. Large withdrawals3. Unpaid bills4. Substandard care5. Perpetrator spends too much time with victim6. Perpetrator shows too much interest in money matters7. Missing belongings8. Limiting visitation by family and friends9. Investing in sketchy business ventures10.Late life marriagesDuty to Report:1. Last year, Ohio passed a new law that creates a duty for lawyers, doctors, socialworkers and mental health professionals to report suspected abuse2. Reports are investigated by Ohio Adult Protective Services (1-855-OHIO-APS)3. Reports are kept anonymous

SEASON OF GIVINGEach year about this time, we pause to talk about the upcoming Holiday season. This season is about family and friends. It’s also about recognizing others and giving thanks for what we have. And it is a time to think about folks who are less fortunate. That brings us to today’s topic: GIFTING.Broadly, there are two types of Gifts: 1. Gifts to individuals (usually family); and2. Gifts to charity.A. Gifts to Individuals1. Gifts can consist of anything – cash, stocks, bonds, real estate, jewels, cars, etc. Tax law treats all gifts the same way.2. Gifts can be made during your life (intervivos) or at your death (testamentary). Tax law treats both types the same way.3. Lifetime federal gift tax allowance for 2024 is roughly $13.6 million dollars per person ($27.2 million per couple). There is no longer a state gift tax in Ohio (since 2013).4. The annual exclusion amount for 2024 is $18,000 per recipient. Gifts under that amount are not reportable to the IRS and do not reduce your lifetime allowance. Next year, people are predicting that exclusion will go up to $19,000 per person, per year. 5. Gifts are not taxable income to the recipient.6. Gifts and cost basis (“cost basis” is the price you paid to buy the investment):a) gifts made during life: the person receiving the gift assumes the cost basis of the person making the gift.b) gifts made at death: The cost basis of the gifted asset is “stepped up” at the date of death.B. Gifts to Charity. Charitable gifting dropped in 2022 – for only the 4th time in 40 years. It dropped by about 3.5%. Nationwide, gifts to charity were just under $500 billion in 2022 that rebounded to $557 billion in 2023. Gifts to charities pre-approved by the IRS can be deductible on your 1040 up to 60% of your AGI, but, in many cases, 20%, 30%, or 50% limits can apply. Gifts to charities made at your death, are deductible on your estate tax return – without limitation. There are over 1.5 million “approved” charities. Most donations are made to religious charities. Education and human services are a distant second and third place. Fastest growing category is to Foundations. When making a testamentary gift, consider using qualified funds. This avoids both estate tax and income tax on that money. Consider this idea to build charitable giving into your family’s “culture.” When the kids/grandkids get a little older, put some portion of the money used to buy gifts into a “pot.” Everybody contributes. Then, convene a family meeting and make a joint decision to give it to a charity or list of charities. Not only does this “teach” charity to the next generation, it will give much greater meaning to the Holiday Season. It also reinforces family values. And, believe me, the kids in the family learn from this.

It’s not easy – it’s not hard – it’s somewhere in between. It’s making choices/decisions.A.    Broad Duties of an Executor:  1.      Follow instructions in a Last Will and Testament.  2.      Hire professionals.  3.      Work with family.  4.      Pay taxes and bills.  5.      Distribute assets.   B.    Specific Duties of an Executor:  1.      Find the Will and Review its contents  a)      Locate and review the Will with a lawyer.  b)     Determine if probate is necessary.  c)      File the Will with Probate Court.  d)     Notify beneficiaries.  2.      Secure Assets:  a)      Insure valuables or property.  b)     Conduct an inventory and get an appraisal, if needed.c)      Determine if there are any non-probate assets included in the estate (such as trusts). This is property that can be transferred outside of the Probate Court. Example: life insurance, TOD/POD assets, retirement accounts, joint and survivor assets.3.      Manage Finances:  a)      Cancel credit cards, bills and subscriptions.  b)     Freeze accounts and terminate contracts.  c)      Inform banks, brokers, landlord, tenants, doctors/health care professionals, post office, Social Security Administration and employer/employees of the testator’s passing.d)     Open estate account.  e)      Collect benefits or outstanding payments.  f)      Give notice to creditors and determine if claims are valid.  g)     Sell assets or property if necessary.  h)     Pay outstanding debts (including funeral costs).  4.      Close the Estate:  a)      File a final account with Probate Court and beneficiaries.  b)     Pay the attorney.  c)      Pay the executor.  5.      Disperse the Remaining Assets According to the Will:a)      Protect all assets until they are ready to distribute.   b)     Donate to organizations or charities if called for.  c)      Deliver gifts to individuals named in the Will.  d)     Divide remaining estate among beneficiaries as specified in the Will.

When Should You Update Your Estate Plan?  Once you have created an estate plan, it is important to keep it up to date. You will need to revisit your plan after certain key life events, including marriage, the birth of children, divorce or the death of a spouse, and a significant increase or decrease in assets. Here’s why.    Marriage.  Whether it is your first or a late marriage, you will need to update your estate plan after you get married. A spouse does not automatically become your heir once you get married. In Ohio, without a Will, your spouse would get one-third to one-half of your probate assets. The rest will go to other relatives. You need a Will to spell out how much you wish your spouse to get. Your estate plan will get more complicated if your marriage is not your first. You and your new spouse need to figure out where each of you wants your assets to go when you die. If you have children from a previous marriage, this can be a difficult discussion. There is no guarantee that youleave your assets to your new spouse, he or she will provide for your children after you are gone. There are a number of options to ensure your children are provided for, including creating a trust for your children, making your children beneficiaries of life insurance policies, or giving your children joint ownership of property. Even if you don’t have children, there may be family heirlooms or mementos that you want to keep in your family.    Minor Children.  Once you have children, it is important to name a guardian for your children in your Will. If you don’t name someone to act as guardian, the court will choose the guardian. Because the court doesn’t know your kids like you do, the person they choose may not be ideal. In addition to naming a guardian, you may also want to set up a trust for your children so that your assets are set aside for your children when they get older. Similarly, when your children reach adulthood, you will want to update your plan to reflect the changes. They will no longer need a guardian, and they may not need a trust. You may even want your children to act as executors or hold a power of attorney.  Divorce or Death of a Spouse.  If you get divorced or your spouse dies, you will need to revisit your entire estate plan. It is likely that your spouse is named in some capacity in your estate plan – for example, as beneficiary, executor, or power of attorney. If you have a trust, you will need to make sure your spouse is no longer a trustee or beneficiary of the trust. You will also need to change the beneficiary on your retirement plans and insurance policies.    Increase or Decrease in Assets.  One part of estate planning is estate tax planning. When your estate is small, you don’t usually have to worry about estate taxes because only estates over a certain amount, depending on current state and federal law, are subject to estate taxes. As your estate grows, you may want to create a plan that minimizes your estate taxes. If you have a plan that focuses on tax planning, but you experience a decrease in assets, you may want to change your plan to focus on other things.Other.  Other reasons to have your estate plan updated could include:   ·       You move to another state; ·       Federal or state estate tax laws have changed; ·       A guardian, executor, or trustee is no longer able to serve; ·       You wish to change your beneficiaries; ·       It has been more that five years since the plan has been reviewed by an attorney.Contact your elder law attorney to update your plan.

SIMPLY MONEY   September 2024   WHAT ARE THE CAPACITY STANDARDS FOR   SIGNING LEGAL DOCUMENTS?  ELDER LAW ATTORNEYS ARE OFTEN CALLED UPON TO DETERMINE IF A CLIENT HAS THE LEGAL CAPACITY TO SIGN CERTAIN DOCUMENTS. HOW DO THEY MAKE THAT CALL? WELL, THE TESTS ARE DIFFERENT FOR DIFFERENT THINGS. WHEN CONFRONTED BY THE PROSPECTS OF A GUARDIANSHIP, THE TEST IS IN THE STATUTE:CAN A PERSON MANAGE HIS/HER AFFAIRS OR THE AFFAIRS OF A DEPENDENT?THAT IS A VERY BROAD AND VAGUE TEST. THE COURT USUALLY LOOKS FOR CLUES THAT A PERSON IS AT RISK FOR PHYSICAL HARM OR FINANCIAL LOSS. THE COURT ALSO RELIES ON A PROFESSIONAL ASSESSMENT BY A DOCTOR OR MENTAL HEALTH PROFESSIONAL. THE LAW PRESUMES THAT WE ARE COMPETENT UNLESS PROVEN OTHERWISE BY CLEAR AND CONVINCING EVIDENCE. ONLY THE COURT CAN MAKE THAT LEGAL FINDING.BUT THE TEST IS DIFFERENT FOR SIGNING DOCUMENTS.  I.        SIGNING A WILL:CALLED TESTAMENTARY CAPACITY.   THIS TEST REQUIRES THE PERSON SIGNING TO BE FREE OF DELUSION AND TO:1.    UNDERSTAND THE NATURE OF HIS/HER PROPERTY2.    UNDERSTAND HIS/HER RELATIONSHIP TO THOSE WHO WOULD BE HIS NATURAL BENEFICIARIES3.    LEAVE HIS PROPERTY IN A MANNER CONSISTENT WITH 1 AND 2 ABOVE4.    BE ABSENT OF UNDUE INFLUENCE  II.   CAPACITY TO SIGN A CONTRACT  1.    COMPREHENSION OF WHAT IS “GOING ON” IN THE TRANSACTION2.    REASONABLE TERMS IN THE AGREEMENT  3.    UNDERSTAND THE NATURE AND QUALITY OF THE CONSEQUENCES OF THE AGREEMENT4.    ABSENCE OF UNDUE INFLUENCE  III.   CAPACITY TO SIGN A POA. THE SIGNOR MUST:  1.    KNOW AND TRUST THE AGENT  2.    UNDERSTAND THAT HE/SHE IS GIVING THE AGENT THE POWER TO ACT IN HIS/HER STEAD3.    BE ABSENT OF UNDUE INFLUENCE        WHAT IS THE LAWYERS DUTY IN ALL THIS IS?:   1.    TO CARRY OUT THE CLIENT’S WISHES  2.    TO MAKE A REASONABLE INQUIRY INTO THE CLIENT’S CAPACITY      3.    TO MAKE A REASONABLE DETERMINATION ABOUT THE CLIENT’S CAPACITY4.    TO DETERMINE THE ABSENCE OF UNDUE INFLUENCE.        EVERYONE IS PRESUMED TO HAVE CAPACITY.                                                                                                     

Do I Need to File a Guardianship When My Disabled Child Turns 18?  Parents of disabled children are often encouraged to consider a guardianship by a number of sources – school counselors, case managers, medical advisors, etc. The truth is that guardianships are not always needed.I.         What is a Guardianship?   It is a court proceeding in which you ask the court to declare your child to be incompetent. A guardian takes over. Your child is stripped of the legal capacity to act for him or herself.II.        There are Different Kinds of Guardianships.   Primarily two kinds:  1.   Guardian of the Estate – Money management. If there is no money in the child’s name, no guardian of the estate is needed.2.   Guardian of the Person – Health care and daily living.  III.        Advantages of Guardianship.  1.   It puts one person in full charge of all decisions.  2.   It gives you authority to enforce your decisions.  3.   It protects ward’s money/property.  4.   It protects the ward and the guardian.IV.        Disadvantages of a Guardianship.  1.   Declaring your child incompetent can be demoralizing.  2.   It costs $3,000 - $5,000 up front, and $1,500 to $2,500 every year – plus a bond in some cases. 3.   You need court approval to spend money (Guardianships of the Estate, only). That costs extra. 4.   You must take a lengthy class.  5.   You must file reports.  V.        Alternatives – Only Applies to the Cooperative and Highly Functional Disabled Child.1.   Power of Attorney.  2.   Living Will.  3.   Power of Attorney for Health Care.  4.   Joint Financial Accounts.  5.   STABLE Account.  6.   Trusts.  VI.        So, do I need to file a guardianship at age 18? Not necessarily – if your child is cooperative and high functioning, try one or more less intrusive options first. You can always “default” to a guardianship, if needed. 

THE AFTERLIFE OF YOUR FREQUENT FLYER MILES  In a normal year, Americans rack up about 3 trillion frequent flyer miles. The average is about $622 per household per year. And travel experts are predicting that travel this year will exceed all previous years. What happens to those frequent flyer miles when we die?Many airlines allow you to give your miles to your heirs – so do many hotel reward programs. There is often a fee - $50 - $100.Neat idea – but also a pain in the neck – probably worthwhile but a pain nonetheless.  How does it work?You can do it in a Will. You can be specific or it will pass as a part of your residual estate. You can do it in a Trust.You can do it in a beneficiary designation specific to those loyalty points.To make the claim: Have a death certificate. Have the regular address and email address of the deceased. Have the account number and password of the deceased. Have your own account number and password.Have the transfer documentation (assignment, Will or Trust)  Then contact the airline – probably by phone – and be patient.  Some airlines (Delta and American Airlines) will send you a packet to fill out. Some airlines (Southwest) simply do not allow transfers. Loyalty points are part of your taxable estate – so they should go on your estate tax return – if you file one. The hardest part is how to pick a value for them. I have never seen loyalty points on an inventory or on an estate tax return. The IRS has not adopted an enforcement plan relative to FFM.Don’t take the first “No” as an answer – try again.Tips to make things easy: Make a list of all your frequent flyer accounts and put it with your Will.  Sign a document that says “When I die, I leave my frequent flyer miles in Delta Airlines Acct. #                                              to my wife, Jane Doe.  Transfer those miles to your own account, if the plan allows. It is best to do that before death. But, you can log on as the deceased and do it that way – if you know the account number and password (and other security info).  Some plans allow the owner to buy tickets for others. You can long on as the deceased and buy a ticket for yourself.    

Medicare and Medicaid are the same thing, right? They come as a package, right? Aren’t they the same?  Well, while they both address medical costs, they are not a package and they are very different.    Back in the 1960s, when JFK was assassinated, he was succeeded by his VP – a Texan named Lynden Johnson. Johnson’s goal was to expand the social “safety net”. He called his program “The Great Society”.  The Great Society had three main pillars:1)    Expanded Social Security.2)    Medicare – this was a new Federal program.3)    Medicaid – this was a new State program funded with federal money.  Medicare is federally subsidized health insurance. It was designed for folks who were otherwise uninsured. It covers everyone over 65 and disabled people of any age. There are no financial conditions – just age and disability. For example, Warren Buffet and Bill Gates are eligible for Medicare.  Medicare covers doctor bills, hospital bills, and, if you elect, prescriptions. It is NOT comprehensive and many folks elect to buy additional coverage (called “gap filler” or Medi-gap policies, etc.) Medicare is pretty cheap – but the premiums are scaled such that higher income folks pay higher monthly premiums.Premiums are very often deducted from your social security before you get your check.  Medicare is funded and run by the federal government. They often hire private insurance companies to manage the claims and the paperwork.  But, most of all, Medicare is health insurance and only pays for medical care – just like the health insurance you get from your employer.  Medicaid is not the same. It is not health insurance. It is not run by the federal government. Medicaid is a welfare program – run by the state welfare departments. The federal government pays a big chunk of the cost but does not run the program. And, it is for poor folks only – you have to be broke to qualify to receive it. There are no premiums to pay. But, it is not the sort of thing to aspire to have. It’s something you “settle” for if you do not have a better choice.  Initially, Medicaid was designed to pay for nursing home care. Not medical care – just room and board (which is NOT covered by Medicare). Called “custodial care”, it has expanded in many ways over the years and now offers benefits for disabled people living in the community. The purpose is to keep them out of a nursing home because that saves the government money and improves quality of life.  Examples of what Medicaid will pay for now:Treatment of substance abusePrivate duty nursingNursing home room and boardAssisted CareVisionDentalTransportationFamily planningPrescriptions     Clearly, there is overlap between these programs. And there are folks who are eligible for both. This causes a lot of confusion and that is not going to change anytime soon. So, seek help when you need it. Do NOT rely on what you hear at the hairdresser or the barber shop. Call a Medicare specialist, a Medicaid professional or call Pro Seniors for help.

A study published by American Economic Review in 2021 found that most seniors in the U.S. have a person or agent in mind to take over their finances in the event of cognitive decline. 81% have a family member in mind and 19% have an institution or a professional in mind.Here are the major challenges they found:1) Not aware of one’s own decline;2) Not wanting to give up control;3) Agent is not aware of decline; and4) Agent is not “available”.Let’s talk about possible solutions:1) Pick the right Agent. Agent must be:a. trustworthy;b. reliable;c. “available” – which means they have both the time and the “right” temperament; andd. young and relatively healthy.2) The Agent does NOT need to be:a. close by (although that helps);b. a relative; orc. a medical or financial expert.3) Sign a financial POA and medical POA:a. does not have to be the same person;b. name a backup Agent;c. “refresh” the financial POA every 3-5 years; andd. avoid the “springing” POA.4) When it is time to turn things over:a. file POA in local county;b. file a copy of the POA with every company you do business with – starting with the bank, broker and other financial institutions. The medical POA gets filed with each healthcare provider, doctor, hospital, and health insurance company.When does the Agent “step in”? Depends on the individual. My parents had a division of labor that was typical of the WW II generation. Dad managed the money, and mom managed the house and the family. When dad got bad, my mother did not want to manage the finances. She was plenty smart – she was the valedictorian of her high school and nursing school. But she had NO interest in finances. So, she gave it up immediately. Other cases are very different. The Agent must look for clues like bounced checks, late tax returns, unopened mail, double payments, etc., then offer to help – gently. It will take more than one offer.

WHO SHOULD PURCHASE LONG-TERM CARE INSURANCE?Buying long-term care insurance is one way to protect against the high cost of long-term care. However, this type of insurance may not be for everyone, so consider all your options. Long-term care – care in a nursing home or at home – may be paid for in four main ways:1. Out-of-pocket. If you have sufficient resources, you can pay for your long-term care needs with money you have saved. 2. Medicare. Medicare covers short-term nursing home stays after an illness or injury that require hospitalization. Medicare covers up to 100 days of “skilled nursing care” per illness. But, rarely do you get the full 100 days. Usually, it’s more like 20 days.3. Medicaid. If you have limited resources, Medicaid will pay for nursing home care. In order to be eligible for Medicaid benefits an Ohio nursing home resident may have no more than $2,000 in “countable” assets (it may be higher in some states).4. Long-term care insurance. With long-term care insurance, you pay monthly premiums to buy a policy that pays your long-term care costs if you are admitted to a nursing home or need home care (depending on the policy).Determining whether you need long-term care insurance depends, in large part, on your financial situation. The cost of a long-term care insurance policy varies considerably, depending on your age when you purchase the policy, the benefit period, and the level of benefits, among other things. But the premiums are expensive. Therefore, if you have the resources to selfinsure your long-term care and still have money left over, you likely don’t need to buy a long-term care policy. On the other hand, if you cannot afford to pay monthly long-term care premiums, you will likely be able to qualify for Medicaid.Another factor to consider is your family’s health history. A common reason for needing extended long-term care is dementia. If you know you have a family history of Alzheimer’s disease, for example, it may make more sense to buy insurance.Of course, we never really know what the future may bring. Long-term care insurance is like any insurance policy: we don’t know if we will ever need it. In general, long-term care insurance is something to consider if:1. You have the resources to pay the premiums, even in retirement;2. You want to preserve your estate for your heirs; and3. You don’t have enough money to self-insure. How much do you need to “self-insure”? That depends on your income and your marital status. If you are a single retired teacher with a good pension (more than $5,000/mo) then a million in investments is probably enough. If you are a married “1099er” with no pension, it would take more like three million. And, of course, if you have no children to leave your money to, that changes everything. LTC insurance is not for everyone. Folks with no resources cannot afford it and folks with substantial resources can self-insure. The folks in between need to look at this.AARP has excellent material to help walk you through this decision without bias. Go to their website for more information or call there.

SIX TIPS FOR SELECTING A GUARDIAN FOR MINORS  THIS IS ONE OF THE MOST IMPORTANT PARTS OF ESTATE PLANNING. SELECTING A GUARDIAN TO RAISE YOUR KIDS IS NOT HARD FOR SOME PEOPLE, BUT FOR OTHERS, I OFFER THE FOLLOWING CONSIDERATIONS:     PARENTING SKILLS: RECOGNIZE THAT YOUR CHILDREN WILL BE TRAUMATIZED BY YOUR DEATHS. THEIR GUARDIANS WILL NEED PATIENCE AND COMPASSION.  LOCATION: WHERE DOES GUARDIAN LIVE: WHAT CITY? WHAT SCHOOL DISTRICT?  RELIGION, POLITICS, MORAL BELIEFS    GUARDIAN’S AGE / WARD’S AGE  GUARDIAN’S LIVING ARRANGEMENTS. ARE THERE OTHER MINORS IN THE HOUSE? IS THE HOUSE BIG ENOUGH?  GUARDIAN’S FINANCIAL SITUATION LEAVE THEM SOME LIFE INSURANCE OR OTHER MONEY – BEST IF IN TRUSTAND IF YOUR KIDS ARE OLD/MATURE ENOUGH, YOU MAY WANT TO ASK FOR THEIR INPUT.   FINALLY, DON’T FORGET TO HAVE A “BACK UP” GUARDIAN.      NOTE – YOU DON’T HAVE TO DO THIS IN A WILL → YOU CAN JUST SIGN A NOTARIZED APPOINTMENT OF GUARDIAN.    NOTE – SOME OF THESE PRINCIPLES APPLY TO GUARDIANS OF DISABLED ADULTS.

7 Rules of Thumb in Choosing your Agent in a Power of Attorney  A Power of Attorney is a legal document you sign to name someone to be your agent to act on your behalf. That means that you must decide who to name as your agent. You can pick anyone you want. Married clients usually name each other and, if they have children, one or more of them as alternates. Unmarried clients or married clients whose spouses have dementia usually name children, if they have them. But, what are the considerations?Here are a few rules of thumb to help you make your decisions:    Only consider people you can trust to act in your best interest honestly, deliberately and transparently.   Only consider people who have the time and emotional capacity to do the job.  Pick someone who is decisive and well organized. They don’t need to be an accountant, a lawyer or a financial planner – they can hire those skills.  Proximity is important, but not conclusive. It will be easier for someone who lives in your community to travel to banks to be added to your accounts, to collect your mail and pay bills, to deal directly with vendors. That said, a lot can be set up while visiting you and handled electronically afterwards.    Avoid using co-agents. You don’t want two “cooks in the kitchen.” However, you do want a “back-up” agent named in the Power of Attorney. If you are compelled to name co- agents, only name two people as the POA and give each authority to act independently of the other.  Don’t worry too much about the feelings of anyone you don’t name. It’s more important that you have an agent or agents you can have confidence in.  Consider the age and health of your agent.                                                                                                                                                                                                                                                                                                                                                                                     If you follow these rules of thumb, you should be able to choose the right person or people to name in your Power of Attorney. If the result is that you do not have any family member or close friend that you feel comfortable with, you can name a professional, such as an attorney, accountant or bank. This is not common and will cost more in fees than naming a family member. But if it means that you’ll be protected and you’ll avoid family fights, it may well be worth the cost.

End-of-life decisions are never easy. One of the toughest decisions you may have to make is whether you need nursing home care or hospice care. It helps to know the difference. Nursing Home CareNursing homes residents receive treatment to extend their lives. This care includes custodial and skilled care. Custodial care means assistance with dressing, bathing, cooking, laundry, and other types of personal care. The provider does not need a medical license to provide this type of caie. Skilled nurslng care is provided by licensed medical practitioners. Skilled care is medical treatment that includes wound care, physical therapy, injections, and other care that ensures their physical well-being. Skilled care residents usually also receive custodial care. Medicaie generally does not cover custodial care. Medicare Part A covers certain medical conditions but is limited to short-tern care in a skilled nursing facility (rather than a nursing home).What is Hospice Care?Hospice care is an option for patients who do not wish to receive treatment or extend their life, but want comfort care as they reach the end of their lives. Hospice care teams include doctors, nurses, social workers, spiritual advisors, and volunteers. A hospice care team is also trained in treating end-of-life pain. Hospice care can be administered in a patlent's home or in an institutional setting. Hospice may also provide support to family members and caretakers, including respite care. In an institutional setting, Hospice patients generally receive custodial care as well. A Note on Concurrent CareComplicating matters is the fact that Medlcare will not cover custodial care at all and generally will not cover Skilled care and hospice care (known as concurrent care) at the same time. Currently, individuals on Medicare must give up Medicare payment for care related to their terminal condition if they want to receive Medicare's hospice benefit. As a result, many individuals facing a terminal illness may not opt for hospice support services. Policymakers have been pushing for a benefit within Medicare that would allow patients to receive hospice care services and curative treatment simultaneously. The Centers of Medicare and Medicaid Services has spent the past several years testing various models, including one known as the Medicare Care Choices Model (MCCM). MCCM has been shown to iirpiove the quality of patients' end- of-life while also resulting in Medicare savings. However, this option has not yet been made permanent.End-of-Life Dilemma: Which Should I Choose? While considering the next steps to take in your health care plan, speak candidly with your family and health care team about your needs and how you see your future. If you have questions about coverage options that may be available to you in a nursing home or with hospice care, speak to your elder law attorney.

Most older adults want to remain in their homes and communities as they age rather than move into assisted living facilities or nursing homes. To accomplish that, those folks must take steps to protect their physical, mental, and financial welfare.What Does it Mean to Age in Place? The Centers for Disease Control and Prevention defines aging in place as a senior's "ability to live in one's own home and community safely, independently, and comfortably, regardless of age, income, or ability level." According to AARP, more than three-quarters of older adults prefer to age in place. To do that, consider these issues:Resources to Manage Chronic DiseasesSeniors with a chronic disease should focus on:• Accessibility in the home;• Proper nutrition; and• Dental health. Research has found that proper oral care can help prevent the progression of many chronic diseases.Eating Well While Aging at HomeProper nutrition is a vital part of caring for yourself at home. If you need meals, Meals on Wheels is a great resource here in Cincinnati. We have severalnon-profits that offer meals on wheels. I toured Meals on Wheels S.W. Ohio some years ago up in Price Hill. Top notch operation. They make the meals onsite and deliver them to your door. Neighborhood senior centers, places of worship, and charities may also provide a hot meal while you make new friends. If you cannot leave your home, Door Dash will deliver food at your door for little or no cost. But, restaurant food may not be so "balanced".Support for MobilityAging in place is a much more realistic goal if you can walk for exercise, access transportation to medical appointments and errands, and maintain a safe environment at home, free from increased fall risks. Consider simple changes you can make to your home to promote your safety. Examples of helpful modifications around the house include handrails, temporary ramps, no-slip bath rugs, and assistive seating.Mental Health, Substance Abuse, and Memory Care ServicesThere is an increased need among older adults for mental health, substance abuse, and memory care services. An estimated 20 percent of older adults have a mental health disorder, and the total number of seniors with a mental health or memory care diagnosis is likely to increase over time. Suggestions for addressing mental health concerns among older people include:• Focusing on preventative care. Identify warnmg signs of depression, anxiety, and memory care problems.• Look for common signs of a substance abuse. This is an often overlooked area of older adult mental health care. Some common signs to watch for include reduced hygiene, unexplained bruises, erratic behavior, and the smell of alcohol on their breath.The Need for Social Connection Among Aging AdultsOlder adults benefit tremendously from social connections and interaction. Consider:• Joining an organization or social club• Volunteering• Learning a new hobby• Attending a religious institution• Adopting a pet• Using technology to stay in touch with friends and familyWearables and Smart Monitoring DevicesTechnology can help monitor our health and that of our aging loved ones. Examples of wearable health and smart-home monitoring devices include:• Smartwatches and smartphones.• Medical alert bracelets and necklaces.• Sensors and smart locks can alert caregivers when their loved one living at home leaves a window, garage, or door open, or has forgotten to lock them.• Small plugs, which can automatically turn on and off lights, space heaters, thermostats, security cameras, and more.