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.

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.

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!

PLANNING FOR CHRONIC ILLNESS

Sayings are repeated because they contain some real truth. Two that I often repeat to clients are: “Life is what you experience while you are planning other things” and, in contrast, “Failure to plan Is  planning to fail”. Both contain truth and apply when you or a spouse receive a diagnosis of a long term and perhaps fatal, chronic illness.

 

Aside from the personal sorrow and fear when the diagnosis comes, we need to be responsible for those in our families who will be involved in care-giving and care decisions. That is done with a thorough review of the health prognosis, evaluation of assets, projected care costs, and projected impact on the family. Elder law attorneys (like us) are used to dealing with these complicated questions and helping families find the right answers for them. Frequently, it may mean modification of a house for wheelchairs and access, changing the registration of title and accounts, moving to a single-floor residence, adding on a suite to a child’s home, preparing care agreements, setting up trusts for long-term care, investigating financial resources, including Medicaid and veterans benefits, identifying care-givers, and, most of all – making the best of the situation for all the loved ones who will be affected.

 

There are answers but usually not ones you can “do yourself”, because the issues are complicated. We look forward to talking with you in a no-cost initial conference that can lead to the best answers.

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

EMAIL FOR GRANDMA

“Are you kidding me?”
While I operate in a world of instant communication by cell phone, seniors often forgets to charge theirs or take it with them. I have hundreds of cell phone calls – they may go a month and not use it. I have three different email mailboxes and many folders to sort my email – they still buy stamps and write letters. So should we interfere with our senior relatives and introduce them to modern communication. YES – but gently.
We are in an information age – one where the information resources almost overwhelm you, but one where the right tools are necessary for access. Take Medicare supplemental insurance (please!). My parents spent two weeks of their winter visit with my sister on the Internet – comparing prices and coverage. The truth is my sister spent two weeks on the Internet and translated screens, diagrams, and tables into digestible bites for my parents, so they could make a good decision on insurance coverage. My mother’s doctor recently suggested she look at some information on the Internet about her new prescription. She decided to take it on faith, not knowledge.
My point: there is so much that a senior citizen needs to know or might find helpful to know that is conveniently accessible on the Internet. The instant communication of email might alleviate the boredom of shut-in seniors. While it is fine for those of us who are computer literate to find the information for our seniors, they are the ones with the time available to search. SO…… gently suggest that their grandson or granddaughter would like to show them how to use a computer. When they find out it won’t blow up when they hit the wrong key and most mistakes are instantly correctable, you may have given them a valuable pipeline to information on health, estate management, and family connection they never thought possible.
Want an example? Have them go to our websites, shlawlondon.com or shlawspfld.com or Dustin’s website and sign up for our free monthly newsletter on a variety of elder issues. Remember it’s free and, I think, helpful and sometimes entertaining.

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.

Dotty’s Ten Tips for communication with a person living with Dementia

1. Do you know what makes me feel secure? A smile
2. Did you ever consider? When you get uptight it makes me feel tense and uptight.
3. Instead of getting all bent out of shape when I do something that seems perfectly normal to me and perfectly NUTTY to you. Just smile at me it takes the edge off the situation.
4. Please try to understand and remember my short term memory is gone – don’t talk so fast, or use so many words.
5. When you use one of those long winded explanations of me- I’ll say No because I can’t tell what you are asking me to do. Keep your words few and simple so I can follow you.
6. Slow down. Don’t sneak up on me and start talking. Did I mention I like smiles?
7. Make sure you have my attention before you start blabbering away. If you don’t have my attention, I’ll be confused and say NO.
8. My attention span and ability to pay attention are not so good, please make eye contact with me before you start talking. A nice smile always gets my attention. Did I mention that before?
9. Sometimes you talk to me like I’m a child or idiot. How would you like it is I did that to you? Go to your room and think about this. Don’t come back and tell me you are sorry, I won’t know what you are talking about. Just stop doing it and we will get along.
10. You talk too much – instead try taking my hand and leading the way. I need a guide not a person to nag me.

Resource: Alzheimer’s Reading Room

WHAT OUR CLIENTS ARE SAYING ABOUT US…..

What was the best thing about your experience with our firm?

We received guidance prior to Mother’s passing and professional understanding and handling of her affairs thereafter! – D.B.

Everyone was so friendly and helpful. You did not make me feel stupid for the questions I asked you. – I.T.

When I left the office, I was so content that what I wanted for my daughter was finally made legal. I feel so much more at ease now for my future and hers. – W. B.

They knew exactly what and why we wanted a “trust” and understood where we were coming from. – C.E.

We needed a “Power of Attorney” right away for my wife. They made time for us on such short notice. – H.V.