Archive for the ‘Estate Planning’ category

Do you see the real person, or just what you want to see?

January 19, 2016

This is a preview of this month’s legal corner article which will be published on January 27, 2016.

90-Year Old - Wheelchair

“Uniqueness is what makes you the most beautiful.” 

~ Lea Michele

I was re-reading one of the late Stephen Covey’s books and a story caught my eye.   The story is about what he calls a “paradigm shift”, but that’s too complicated for me.  I just call it “perspective” or “how you look at the world”.

Picture Covey riding peacefully on a subway reading his newspaper.  His peaceful ride was interrupted when a father and his three young children got on the train.  The kids were running up and down, yelling, throwing things.  Covey was annoyed at the kids and, even more, at the father who was allowing them to carry on.

After several minutes, Covey asked the father if he could control his children a little more.  The man lifted his gaze and said softly, “Oh, you’re right.  I guess I should do something about it.  We just came from the hospital where their mother died about an hour ago.  I don’t know what to think, and I guess they don’t know how to handle it either.”

Can you imagine what Covey thought at that moment?  In an instant, his perspective – his view of this man’s world – changed.  This new information made him think differently, feel differently and behave differently.

In my elder law practice, I have noticed over the years that our society has become desensitized about growing old and many people have a flawed view of the elderly.  They see the elderly as “generic” people – like they are all the same.

It is not uncommon for my law office to deal with clients who are well into their 80’s, 90’s and even some over 100 years old.  Let me tell you, no matter the age they don’t consider themselves “elderly”, they consider themselves a person who happens to be a certain age.  And each person is unique and has his or her own stories.

Consider Max, who is 90 years old and who was married to his wife, Sandy, for 64 years.

His eyes brighten as he talks about his first job and ripping open his first paycheck.  He remembers his hands gripping the steering wheel the first time he was allowed to drive the family car alone.

Max recalls his first dog, Abby, and how she followed him everywhere.  And he remembers hugging Abby as she took her last breath, because the vet said putting her to sleep was the only option.

He proudly reminisces about walking to the podium to receive his college degree, the first one in his family to do so.

His graduation ceremony evokes other memories, including a road trip to Florida with his college buddies, Stan and Eddie.  “I’m the only one left”, he whispers.

Max is reverent and humble when he talks about his wife, Sandy, who has been gone for 6 years.  He is almost in a trance as he flashes back to their first date, falling in love, dancing in the kitchen, getting married, raising their daughter.

He is somber when he talks about his service in World War II.  He remembers bombs and bullets and friends who never made it home.  “Too many didn’t come back”, he says.

Max talks about “ice cream dates” that he used to have with his only daughter, and how he told her he wouldn’t cry when he walked her down the aisle.  “But I did”, he says, a wry smile creasing his face.

He talks about his grandchildren and how the whole family went on vacation up north, swimming, fishing, playing.

He recalls with pride the top salesman award he earned at his company for five straight years.

You can sense Max’s heartache when he recounts his health problems that resulted in him moving out of the home he loved after 52 years.

Can you imagine having your car keys taken away?  Or being told you can no longer live on your own?  Or that you must move out of the home that you built with your own hands?

That was Max after his wife died and his health started to deteriorate.

Today, Max is living in an assisted living community with over 70 other men and women.

If you entered the foyer and walked past Max sitting in his wheelchair, you may be tempted to see him as “another old man”.

He is not.

He is unique, just like you and I are unique.

The next time you see a “Max”, I challenge you to see him from a different perspective, a different world view.

He is a person who had parents, a brother, sisters, a daughter, a wife.  He has fallen in love, had a broken heart, seen his daughter and grandchildren grow up, seen his friends and loved ones die, and still, even today, has hopes and dreams.

When you see Max as unique, you will change your perspective, like Stephen Covey on the subway.  In an instant, you will think differently, feel differently and behave differently.  And that perspective is exactly what Max has earned, and what he deserves.

_________________________________________________________________

 Glenn Matecun is a founder of the law firm of Matecun, Thomas & Olson, PLC in Howell.  He is an estate planning and elder law attorney, and is accredited by the Department of Veterans Affairs. His website, www.MichiganEstatePlans.com, is packed with helpful information and action plans for anyone dealing with estate planning, elder law, nursing home, probate or Veterans’ benefits issues.  You can email him at gmatecun@mtolaw.com or call (517) 548-7400 for a free consultation.

What is a Lady Bird Deed?

March 31, 2012

Check this out if you want to learn more about how a Michigan Lady Bird Deed works and how it can help with your Will, Trust or other estate planning.

Beware! Estate Planning for Second Marriages Can Be Tricky.

March 8, 2012

The following was recently published in my “Ask the Lawyer” column:

Question:   I just got remarried and both my husband and I have children from previous marriages. I am worried that my son and daughter won’t get anything if I die first.

Answer:   You must take special care to plan if you are in a second marriage because of the complex relationships between step-parents and step-children. We see two common problems: (1) you add your husband’s name on the house and bank accounts, and if you die first he gets everything, and your children get nothing; or (2) you leave everything to your children, and your husband gets nothing (if you can believe it, we have had kids evict their mom’s husband from the house after their mom died). One other thing, your husband has inheritance rights to your assets even if you have a Will leaving everything to your children (this is called “spousal election”). We have special “Second Marriage Estate Planning Worksheet” to help you and your husband work through these issues (yes, there are solutions, and they result in taking care of your husband and your children, which is what most people want). If you would like our free Worksheet, please email me at gmatecun@mtolaw.com or call me at (517) 548-7400.

IRS Issues Long-Term Care Premium Deductibility Limits for 2012

October 23, 2011

The Internal Revenue Service (IRS) is increasing the amount taxpayers can deduct from their 2012 taxes as a result of buying long-term care insurance.  Premiums for “qualified” long-term care insurance policies (see explanation below) are tax deductible to the extent that they, along with other unreimbursed medical expenses (including Medicare premiums), exceed 7.5 percent of the insured’s adjusted gross income.

These premiums – what the policyholder pays the insurance company to keep the policy in force – are deductible for the taxpayer, his or her spouse and other dependents.  Note that if you are self-employed, the tax-deductibility rules are a little different: You can take the amount of the premium as a deduction as long as you made a net profit; your medical expenses do not have to exceed 7.5 percent of your income.  However, there is a limit on how large a premium can be deducted, depending on the age of the taxpayer at the end of the year. Following are the deductibility limits for 2012.  Any premium amounts for the year above these limits are not considered to be a medical expense.

Attained age before the close of the taxable year

 

Maximum deduction for year

 

40 or less $350.00
More than 40 but not more than 50 $660.00
More than 50 but not more than 60 $1,310.00
More than 60 but not more than 70 $3,500.00
More than 70 $4,370.00

What Is a “Qualified” Policy?

To be “qualified,” policies issued on or after January 1, 1997, must adhere to certain requirements, among them that the policy must offer the consumer the options of “inflation” and “non-forfeiture” protection, although the consumer can choose not to purchase these features.  Policies purchased before January 1, 1997, will be grandfathered and treated as “qualified” as long as they have been approved by the insurance commissioner of the state in which they are sold.  For more on the “qualified” definition, click here. The Georgetown University Long-Term Care Financing Project has a two-page fact sheet, “Tax Code Treatment of Long-Term Care and Long-Term Care Insurance.”   You can download it here in PDF format:  http://ltc.georgetown.edu/pdfs/taxcode.pdf

Glenn Matecun is a Michigan attorney focusing on Estate Planning and Elder Law.  He helps families avoid the devasting financial effects of nursing homes and other long-term care communities.  For more information, visit www.MichiganEstatePlans.com or www.MTOlaw.com

 

Be Careful Deeding Real Estate To A Family Member Before Death. The IRS Is On The Hunt To Impose Gift Tax.

April 2, 2011

Clients often ask me:  “Should I deed my home to my kids now [before I die] to avoid probate?”   This question generally arises when they are told by their realtor/barber/uncle/friend/etc. (you get the point) that this is the best way to do their estate planning.  The short answer is NO, NO, NO!    Well, now the IRS has given us one more good reason why NOT to rely on a deed (whether a quitclaim deed or warranty deed) to transfer property prior to death.

The following is an excerpt from Forbes writer William P. Barrett, from an article titled “IRS Targets Family Real Estate Transfers”:

As part of a new national hunt for gift tax evaders, the IRS has asked a federal court for permission to order a California state tax agency to hand over its computer database of everyone who transferred real estate to relatives for little or no consideration from 2005 to 2010. If granted, the sweeping request could expose many Californians–especially those who didn’t file federal gift tax returns–to audits as well as penalties or even substantial back taxes. The little-known lawsuit, called “In the Matter of the Tax Liabilities of John Does,” was filed in December on behalf of the IRS in federal court in Sacramento, the state capital. That’s the home of the California Board of Equalization, which oversees property tax issues across the state. No action has been taken yet on the request. The IRS all but admits it is going on a fishing expedition for John Does–but one it considers to be in well-stocked waters. An affidavit attached to its lawsuit signed by Josephine Bonaffini, a Boston-based official of the national IRS Estate and Gift Tax Program, states that the agency already has obtained official real estate transfer information from 15 other states [not Michigan – yet] and found widespread noncompliance.  Nationally, Bonaffini said, “I estimate that between 60% and 90% of taxpayers that transfer real property for little or no consideration to family members fail to file a Form 709 as required by the internal revenue laws.”

So, the short answer to the question of whether you should deed real estate prior to your death as part of your estate plan is now even a more adamant NO, NO, NO — do not deed real estate to your family members (or anyone else), at least without understanding the tax consequences.   And, by the way, there are several strategies that will allow you to avoid probate, without having to worry about the tax consequences.

No Change In Amount Of Veterans Aid & Attendance Benefits For 2011

December 30, 2010

The Social Security Administration has announced that no cost-of-living adjustments will be made to Social Security benefits in 2011 because the consumer price index has not risen since 2008 when the last Social Security increase occurred.

Like recipients of Social Security and other federal benefits, Veterans, their families and survivors will also not see a cost-of-living adjustment in 2011 to their compensation and pension benefits from the Department of Veterans Affairs (VA). 

Under federal law, the cost-of-living adjustments to VA’s compensation and pension rates are the same percentage as for Social Security benefits.

One of the benefits left unchanged is the Aid and Attendance (A&A) Pension, which provides benefits for veterans and surviving spouses who require the regular attendance of another person to assist in eating, bathing, dressing and undressing or taking care of the needs of nature.  It also includes individuals who are blind or a patient in a nursing home because of mental or physical incapacity. Assisted care in an assisting living facility also qualifies.

To qualify for A&A it needs to be established by your physician that you require daily assistance by others to dress, undress, bathing, cooking, eating, taking on or off of prosthetics, leave home etc. You DO NOT have to require assistance with all of these.  There simply needs to be adequate medical evidence that you cannot function completely on your own.

The A&A Pension can provide up to $1,644 per month to a veteran, $1,055 per month to a surviving spouse, or $1,949 per month to a couple (tax free, by the way).  If you are aware of a veteran or surviving spouse of a veteran who may be in need of assistance — whether in an assisted living facility or at home — we offer a free review and analysis to determine whether that person qualifies for Aid and Attendance benefits.

Glenn Matecun

VA Accredited Attorney/Veterans Benefits

www.MichiganEstatePlans.com

Mom and Dad, Can We Talk? Answers to Top Questions About Discussing Long-Term Care Planning

December 21, 2010

Recently, the founder of Elder Law Answers, Harry Margolis, answered some questions relating to talking with aging parents or other family members about sensitive issues such as wills, funeral arrangements, assisted living and medical treatment wishes. The questions and answers are good ones, so I am passing them along:

At what point is it appropriate for grown children, spouses, caregivers or friends to attempt to discuss these issues with aging parents, relatives or friends?  

The earlier the better, but every family is different, and raising these issues can be more or less uncomfortable depending on the family dynamics. Certainly, if there is an illness or medical emergency, that can serve as justification for beginning the discussion.

What’s the best way to broach the subject?

Rather than focusing on the parent or other family member’s current or possible future physical and mental decline, it often works better for the person starting the conversation to focus on his or her own concerns. She can say that she was meeting with her own estate planning attorney, which made her think about her parents’ situation. Or she can talk about how she is nervous about being able to care for her parents when and if the need comes up. Often parents won’t take measures to protect themselves, but they never stop being parents and will respond to a call for help from a child.

Where’s the best place to have such a discussion?

In the parent’s home.

Should you seek legal counsel first before initiating a talk?

Not necessarily. A legal consultation would help the children or other family members know what issues to discuss and some of the available options. But the ultimate goal should be for the elder to consult himself or herself with an attorney with elder law experience.

 Should it be one-on-one or should family members, friends or those with specific expertise in an area be part of the discussion?

That has to be determined on a case-by-case basis. We always encourage transparency so that all family members are in the loop. However, scheduling can be difficult and too many people involved can be overwhelming. In addition, depending on the circumstances, elder care and planning issues can take several meetings to resolve. Different people may be involved in different meetings depending on the issues being discussed at each.

What if your parent, spouse, etc., refuses to talk about these issues? How do you overcome this?

Follow the advice above. If it’s a parent, the child may have to be patient and wait until an opportunity arises to bring the subject up again. Ultimately, it may be impossible to get the parent to participate in any planning. If it’s a spouse, this is also true. However, a spouse may be able to take some planning steps on his or her own.

What steps can you legally take if an elderly person such as a parent or spouse refuses to take care of issues dealing with a will, housing, medical treatment or related areas?

It depends on the parent or spouse’s mental capacity. If they are incompetent, it is possible to go to court to be appointed conservator or guardian and to take over decision making in these areas. Unfortunately, this can be an expensive, time-consuming and cumbersome process. [Glenn speaking here: This is a good way to help a parent or other loved one understand why he or she needs an estate plan, including a durable power of attorney and health care power of attorney.  Without a good plan, if your parent becomes incapacitated, it will be necessary to go through court to obtain a guardian and/or conservator.]

 What can seniors do in advance, to avoid becoming embroiled with grown children, relatives, or friends over these issues.

Plan ahead. All seniors should sit down with an elder law attorney to discuss their goals, concerns and hopes and to develop a plan to reach the goals, address the concerns and give their hopes the opportunity to become realities.

 Glenn Matecun

Michigan Estate Planning & Elder Law Attorney

www.MichiganEstatePlans.com