EXPLORING PRE NEED FUNERAL PLANNING

 

Pre-Need planning is a wonderful gift to those you love. As a rule of thumb, a pre-need funeral contract refers to the purchase of funeral goods and services before a person passes away. Why would someone want to pre-plan?

The pre-arrangement allows the person to speak directly to the funeral director about his or her own funeral wishes and preferences. By having pre-planning the service, the individual is providing significant relief to surviving family members from having to make decisions during a time of tumult and grieving in addition to relieving the survivors from a financial burden. Additionally, there is a Medicaid planning benefit to planning as well. Persons who currently qualify for Medicaid assistance or who anticipate qualifying may pre-pay their funerals without impacting their Medicaid eligibility. As this is an exempt purchase. The drawback to pre-planning is that the person is tying up the money.

Now there are really two types of pre-need contract: a guaranteed price contract and a non-guaranteed. In a guaranteed price contract the funeral home guarantees the funeral goods and services the planning person selects at the amount of money stated in the agreement. Which means there will be no need for additional payment later.selected for the amount of money stated in the contract. This means that you or your estate will not be required to pay any additional cost for the guaranteed items. The “non guaranteed contract” treats the amount paid for planning as a deposit against the final costs which is determined at the time of the actual funeral services provided.

If the contract does not guarantee the prices charged, the price of the funeral will be determined at the time the services and merchandise are provided. Any amount you pre-pay will be considered as a deposit to be applied toward the purchase price.

Some good questions to ask (in addition to your wishes) during your pre-planning session are:

* Where will the pre-need funds be deposited until they are needed?
* Will I receive verification from the financial institution that the prepaid funds have been deposited in the trust account?
* If the funds are used to purchase an insurance policy, will I receive verification that the policy has been purchased?
* What is covered by the price guarantee?
* Is the pre-need contract irrevocable or revocable?
* If the contract is revocable, how can I cancel the contract?

I have had to handle funeral arrangements for family, friends and client and can tell you. It is a marvelous relief to know a plan was already in place for our loved one.E

TAX PLANNING – AGAIN

I spent over 30 years analyzing and planning estates for my clients to minimize the bite of estate tax. The mechanisms were complex, not logical, and for many a burden. But in those days before tax reform, the family business, the family farm, and live savings were all exposed to state and federal estate tax that made such planning necessary to minimize their impact.

They’re gone – almost. The Ohio estate tax is gone and the federal filing threshold is $5.9M. But now, the most important tax issue is basis and capital gains tax for beneficiaries. Since property transfers to the next generation more often now in the form of an IRA, annuity, or some survivorship designation, it is important, if you want to preserve assets, to understand how each works and the income tax impact on beneficiaries.

You can do this planning yourself if you understand this, but most don’t. Don’t leave this to chance – come talk to us because the tax bite can still hurt.

DEPRESSION AND THE CAREGIVER GUILT

I regularly meet with sons, daughters, and spouses of an elder client who is failing. These close relatives often attempt to be the “care giver” for the failing elder, fulfilling their wish to remain at home.
While that is a laudable goal and one that many share, I always caution the caregiver to be very careful about burnout from trying to do too much, both mentally and physically. Care giving for a failing elder is stressful and when it is an around-the-clock obligation, the health of the caregiver is sometimes at risk.
Solutions are very family specific, depending upon who is available. One important theme is for a caregiver to be self-forgiving. I like the myths that my friends at Right at Home, a home health agency recently listed. Each of these (with my paraphrasing) is not true:
• I need to be perfect – no;
• I should only have positive thoughts about what I am doing – no;
• I shouldn’t talk about what I’m experiencing – no;
• I shouldn’t let others know about what is going on – no;
• My needs need to take a back seat to the services I am providing –no;
• Other caregivers are better at this than me and have a better attitude –no;
• I should do it all myself – no.
Caregivers – protect yourself. Dark, cold winter days will increase the chance for depression. Get some relief and thank you for what you do.

PREPARING FOR WINTER – AND SAVING MONEY

It has been part of the cycle of life to do certain things in season.  As we enter the fall, we see the farmers gathering the harvest, the boats of summer being put in storage, our furnace filters being replaced, leaves being raked and a host of other “fall” action items.  The holidays and family-gatherings are just around the corner.

Fall is a good time to also get your affairs in order so you can spend a comfortable, content winter by the fire or go south.   And everyone has a best way to do that – some with simple account registration changes, others with wills and powers-of-attorney, and some with trust arrangements.  Each family situation is different and what is a good fit for one might be too complex or too expensive for someone else.

Yes, trusts are great and the best tool in some situations, but don’t buy the sales pitch “You need a trust” until you meet with us, to explain where trusts work best and whether it fits your situation.   A Corvette is a great, fun car to drive but try driving to work in one through the snow.  When you have the right vehicle, you save money.

We can survive the winter that is coming but it will be much easier if we prepare now.

WHAT WILL YOUR CHILDREN REMEMBER ABOUT YOU?

Many of the estate planning conferences we conduct with clients fall into a discussion of children – their strengths, weaknesses, and the hopes that clients have for their future. Then we talk about stuff: how much stuff do the clients own? How much stuff might be left after long-term illness and nursing home bills are paid?  What will the children do with the stuff:

 

On a deeper level, however, I would raise with all clients “What will your children remember about you”? That usually brings a shocked, blank stare, as that question is not usually raised by anyone else. But it is an important question, because, for most, parental relationships have the greatest effect on a child’s personality, adjustment, and life success. And I can say, from the perspective of 40 years doing this, it is rarely how much money or property a child inherited that answers the question.

One’s legacy, from my perspective, is more about value systems, perspectives on life challenges, goal-setting, love, affection, forgiveness, and shared experiences, like family outings, vacations, holidays, than about inheritance. So when you arrive at the point in life where you are planning for not being here and what will happen in your absence, think on those matters and don’t miss an opportunity to add another great memory to the book, rather than an additional valuable piece of property. Focus on what really counts. We can help guide the discussion.

LAWYERS CAN COOK – SO CAN YOU

On this 4th of July, we could spend time at family gatherings telling lawyer jokes – there are lots to go around and everyone enjoys them – except lawyers. There are better things to talk about, like Cleveland – the Cavaliers, the Indians, etc.

 

 

I, however, will be cooking over the grill, the honored tradition in our family where everyone is invited and “Tim can throw something on the grill.” I don’t mind – I’ve always loved outdoor cooking (and indoor in the winter).

 

 

Here is an easy one I came up with to replace burgers and dogs: Pork Loin. Just get a pork loin, unwrap it and make a wrapper of aluminum foil. Then open 2 cans of frozen apple juice concentrate – let it melt so it is like syrup. Make some thin slices in the edge of the loin all around, spread the concentrate on the loin, and wrap again. I like to leave it setting out on the counter for several hours on a cookie sheet to come to room temperature before I cook. Then remove the foil and put the loin put on a medium grill, turning every 15 minutes and sprinkle with salt/pepper and drizzle the apple juice concentrate on the loin until internal temperature with your meat thermometer shows the pork is done. Let it sit on the platter for 30 minutes and slice. You will be a hero.

 

 

Never got anything for free from an attorney? You just did.

AGE in PLACE- WHERE?

“Aging in Place” has become a preference I often hear from clients. It is usually shorthand for a fear of spending last days in an institution like a nursing home.

The reality, as shown by joint study done by an investment firm and AgeWave, shows many seniors have already moved or planned to move to a place they will own – a newer home with modern appliance, no steps, and much less maintenance, such as a condominium. And why are they moving? As reported by Caring Right At Home, a major supplier of home health care, many move to be closer to family (29%), reducing home expenses (26%) and because of changes in their health (17%).

It is not just “downsizing” but what I call “right sizing”, as people realize the large house with stairs and a lawn to maintain isn’t necessary after the kids have left. Because of modern medicine, we are living longer and tend to be more active – not just my grandparents sitting on the porch in a rocking chair. Why spend the time maintaining a home?

Regardless of location, the majority of seniors want long-term care in their home for as long as they are able, so watch for the continued growth of the home care agency. Since, in Ohio, licensing is not required, check out carefully the experience and customer satisfaction stats for any potential caregiver, or see us about making a family member that designated person. Live until you die!

INSIDE JOB

Today, we mark the onset of a New Year. While we all get used to writing or typing 2015 and not 2014, this day presents us a fresh marker to number the days in our lives. We are stewards of our lessons going forward. One lesson I take from 2014, and all the years prior, is that failure is an inside job. In an era where no one takes personal responsibility for their actions, I have concluded that I am the best person to sell Me a bad idea. When a friend convinced me to play dodgeball in front of one of our large garage windows as a junior higher, I said, “Self, that is a great idea! You will have a lot of fun. Now where’s the ball?” You get the picture, and so you have been your best salesperson for many of those significant decisions in life.

This past year our law firm has helped bridge poor planning by “do-it-yourselfers” and peace for their families. In those instances, the planners may have received their bad planning ideas from the internet, a co-worker, a less than persnickety uncle, or a bank teller. However, the individual is the one who ultimately approved and took confidence in their bad idea.

In the spirit of a fresh start, let’s plan with a purpose and be ever leery of those bad ideas. If you need solid, well-constructed estate planning, contact our office. I have heard it said that “Ninety percent of all those who fail are not actually defeated. They simply quit.” You see, it is an inside job. Let 2015 be a year where you have been intentional in meeting goals for your marriage, your children, grandchildren, business, church, synagogue or work. Have a great year!     broken window

GIVE THE KIDS THE HOME? NOT A GOOD IDEA

Many seniors come to us for advice as they see their friends going into long-term custodial facilities and spending their life savings for care. They want to leave their estate to their children. Frequently, they have heard on the street that they should give their house to the kids now so it won’t count for Medicaid. WRONG! –generally.
In husband and wife situations, the marital home has protections that are lost if you give it to children. The structure of Medicaid is to protect a “community spouse” by not taking the home as long as the community spouse owns and lives there. In addition, the marital home is an investment that can be improved, using liquid assets that otherwise might be used for care of an institutionalized spouse and, with the step-up in basis on the death of the community spouse, results in a potentially greater transfer of value to the surviving children.
Another consideration is that transfer to the kids exposes the house to their creditors or their devious, unfaithful spouse in a divorce. You could end up on the street. There are several techniques that accomplish the goal of saving assets for children that don’t expose you to such risk.
It’s complicated. Come talk to us.

LATE-LIFE PLAN

One thing you quickly realize in the elder law planning area is how complex the situations are and how many variables affect the decisions of our elder population. One thing I know: placing your head in the sand is not a good option. That option just places greater stress on other loved ones who then, by default, must make decisions for you.

I regularly correspond with other elder law attorneys and caregivers – always looking for better ideas. One article Dr. Caroline Dott recently submitted to ElderCareMatters, a cross-disciplinary group I belong to, had some real value. She recommended that we all need a “late-life plan” and need to discuss it with our family while we still have our mental faculties so we can enjoy the best possible late life stage. This is far better than defaulting in a crisis to the oldest daughter or son, who now, in the middle of raising his or her family, must make decisions for you.

Caroline recommended having discussion with your parents now. Begin by fantasizing what the most comfortable and fulfilling last stage of life would be like, and then ask for some details:
• Where and/or with whom will you live?
• What pleasurable, exciting activities will you participate in?
• Where and with whom will you travel?
• What experiences will you have to avoid any regrets at life’s end?
• How will you fund your plans for the rest of your life?
• When and how will you complete all legal transactions?
• Which family members/friends/experts will be responsible for managing your finances, medical/psychiatric, legal issues and funeral arrangements when you no longer can?
• After making the plan, notify all participating parties, providing them with copies of documents related to their responsibilities.

Well-made plans pay huge dividends to those that make them. Do it today.