RJG Legal

What Happens When the Family Fights over Personal Items or Artwork?

“The key to avoiding bitter conflict among heirs, is to have candid discussions well before the reading of the will.”

A few years after her death in 2014, Joan Rivers’ family put hundreds of her personal items up for auction at Christie’s in New York.

As The Financial Times reported in “Why an art collector’s estate needs tight planning,” a silver Tiffany bowl, engraved with her dog’s name, Spike, made headlines when it sold for thirty times its estimated price.

This shows how an auction house can generate a buzz around the estate of a late collector, creating demand for items that, had they been sold separately, might have failed to attract as much attention.

A problem for some art and collectible owners is that their heirs may feel much less passionately about the works, than the person who collected them.

A collector can either gift, donate or sell in their lifetime. He or she can also wait until they pass away and then gift, donate, or sell posthumously.

The way a collector can make certain his or her wishes are carried out or eliminate family conflicts after their death, is to take the decision out of the hands of the family, by placing an art collection in trust.

The trust will have the collector’s wishes added into the agreement, and the trustees are appointed from the family and from independent advisers with no interest in a transaction taking place.

Many collectors like to seal their legacy, by making a permanent loan or gift of art works to a museum.However, their children can renege on these agreements, if they’re not adequately protected by trusts or other legal safeguards after a collector’s death.

Even with a trust or other legal structure put in place to preserve a legacy, the key to avoiding a fight over a valuable collection after the death of the collector, is to have frank discussions about estate planning with the family well before the reading of the will. This can ensure that their wishes are respected.

Reference: Financial Times (June 20, 2019) “Why an art collector’s estate needs tight planning”

How Has the New Tax Reform Affected Charitable Giving?

“After years of strong growth, total charitable giving rose just 0.7% in 2018, according to a new report on philanthropy by Giving USA. When adjusted for inflation, total giving declined 1.7%.”

People typically don’t donate to charity because of tax benefits, but without it they’re likely to give less.

CNBC’s recent article, “Charitable contributions take a hit following tax reform,” reports that 2018 was the first time the effect of the new tax law could be gauged. The law eliminated or significantly reduced the benefits of charitable giving for many would-be donors.

In total, individuals, bequests, foundations and corporations donated roughly $430 billion to U.S. charities in 2018, according to Giving USA. However, while the giving by individuals dropped, contributions from foundations and corporations went up.

Even though the deduction for donations was unchanged in the Tax Cuts and Jobs Act, individuals still are required to itemize to claim it. That is now a much higher bar, because of the nearly doubled standard deduction.

Under the new tax reform legislation, total itemized deductions must be more than $12,000, which is the new standard deduction. That is an increase from the past $6,350 standard deduction for single people. Married couples need deductions exceeding $24,000, which is an increase from $12,700.

Because of this change, there will be fewer people who itemize their individual tax returns. The result is that many people won’t enjoy the tax benefits of their charitable contributions.

One analysis from the Tax Policy Center showed that the number of itemizers fell from to about 19 million under the new tax law. That’s’ a decrease of more than half, from about 46 million. At the same time, lower tax rates also reduced the marginal benefit of giving, the Tax Policy Center said.

Tax reform probably impacted the middle households that used to itemize the hardest, one tax analyst remarked. As a result, lower-income families reduced giving, a change that could be an issue for non-profits in the long term. The greater the revenue is concentrated in only a few sources, the greater the risk for these charities.

Another study from the Fundraising Effectiveness Project revealed that there was a nearly 3% increase in large gifts, defined as $1,000 or more in 2018. However, modest gifts between $250 and $999 dropped by 4%; and gifts under $250 decreased by more than 4%. In addition, the total number of donors declined.

Reference: CNBC (June 18, 2019) “Charitable contributions take a hit following tax reform”

What Bills Has Congress Introduced to Help Veterans?

“While the House was busy passing its defense spending bill last week, other members of Congress were introducing other legislation aimed at helping veterans.”

radio.com’s article “Congress introduces bills to increase veteran benefits, refund home loan fees, help women veterans,” lists all of the legislation that’s been introduced in Congress aimed at helping veterans.

Cost of living adjustment (COLA). Senators Johnny Isakson, R-Ga., and Jon Tester, D-Mont., chairman and ranking member of the Senate Committee on Veterans Affairs, introduced the "Veterans Compensation Cost-of-Living Adjustment Act," which aims to increase veteran disability benefits from Veterans Affairs.

The COLA for veterans will mirror the increases to Social Security recipients and is decided by the Bureau of Labor Statistics' Consumer Price Index annually.

“My top priority is to ensure that veterans and their families receive the benefits they earned while serving our country,” Isakson said. “I’m proud to introduce this legislation to increase benefits for disabled veterans in keeping with rising costs of living.”

Home loan fee refunds. Tester and Sen. John Boozman, R-Ark., introduced a bill to make certain that the VA repays disabled veterans for home loan fees wrongfully charged.

An Inspector General report revealed that the VA wrongfully charged nearly 73,000 disabled veterans $286.4 million in home loan fees. The VA has been aware of the fact that it owes those veterans the money since at least 2014.

"The (VA's) failure to uphold this responsibility has unduly burdened disabled veterans. This bill ends the VA’s practice of unlawfully charging veterans who qualify for funding fee waivers. Ensuring the VA implements a process to reimburse veterans who weren’t required to pay in the first place and prevent veterans from unfair penalties in the future must be a priority,” Boozman said.

Care for women veterans. Rep. Lauren Underwood, D-Ill., introduced the Caring for Women Veterans Act, which would create an annual VA report to make certain that women veterans receive quality healthcare from VA hospitals.

The population of women veterans will nearly double by 2043, and advocates say the VA must modernize to ensure that all VA facilities are equipped to provide comprehensive services for all veterans.

Veteran burials. Another bill from Boozman and Tester is designed to assist state cemeteries in meeting federal standards for veteran burials.

Reference: radio.com (July 15, 2019) “Congress introduces bills to increase veteran benefits, refund home loan fees, help women veterans”

What Exactly is Long-Term Care Insurance?

“Surprisingly, the words "Long-Term Care (LTC) Insurance" mean different things to different people.”

Some people confuse Long-Term Care (LTC) with Long-Term Disability Insurance. The disability insurance coverage is designed to replace earned income in the event of a disability. Others think that LTC is a type of medical insurance.

nj.com’s recent article entitled “The benefits of long-term care insurance” explains that long-term care insurance isn’t meant to be disability income replacement, and it isn’t medical insurance. LTC insurance covers the varied personal needs of persons who are ill and (even temporarily) incapacitated. This includes feeding, clothing, bathing, and driving to appointments and doing the extra washing.

Some people consider LTC insurance as what was once called “Nursing Home Insurance.” This evolved to include either care at home or care in a rehab or nursing home facility.

Married couples are especially susceptible, when one spouse becomes ill or injured because the extra costs of long-term care can eat up all their savings and bankrupt the caregiver spouse. For that reason, those in their 50's should start to look at LTC insurance for several reasons:

1. Annual premiums are lower when acquired at younger ages; and
2. Aging may bring health issues in the future, which may prohibit the opportunity to buy LTC insurance coverage altogether.

 

There are many ways to tailor LTC coverage to make it affordable. The most critical components of an LTC insurance policy include the following:

• The average period of need for most is three years.
• The daily amount of coverage varies by geographical area.
• Home care should be the same as that for care in a facility.
• The waiting period, which determines when the coverage actually starts after the date the incapacity began.
• Married individuals can get a combined policy with a discount.
• An inflation rider: The daily cost of coverage will naturally increase over time with inflation, selecting a rate of inflation will ensure keeping up with rising costs in the future.

Every family should have an open discussion about potential illness or incapacity of family members, and LTC should be a part of that.

Reference: nj.com (January 6, 2019) “The benefits of long-term care insurance”

Do You Have a Will?

“Despite the importance of having a will, a recent survey from AARP found that two out of five Americans over the age of 45 do not have one.”

Drafting a will is an essential component of estate planning.

Drafting a will with an experienced estate planning attorney helps avoid unnecessary work and perhaps some stress, when a family member passes away. A will permits the heirs to act with the decedent's wishes in mind and can make certain that assets and possessions are passed to the correct individuals or organizations.

The Delaware County Daily Times’ recent article, “Senior Life: Things people should know about creating wills,” says that estate planning can be complicated. That’s the reason why many people use an experienced attorney to get the job done right. These attorneys specialize in estate planning and will discuss the following topics with their clients.

• Assets: Create a list of known assets and determine which of those are covered by the will and which have to be passed on according to other estate laws, such as through joint tenancy or a beneficiary designation, like life insurance policies or retirement plan proceeds. A will also can dispose of other assets, such as photographs, mementos and jewelry.
• Guardianship: Parents with minor children should include a clause regarding whom they want to become the guardians for their underage children or dependents.
• Pets: Some people use their will to instruct the guardianship of pets and to leave assets for their care. However, remember that pets don’t have the legal capacity to own property, so don't give money directly to pets in a will.
• Funeral instructions: Finalizing probate won’t occur until after the funeral, so wishes may go unheeded.
• Executor: This individual is a trusted person who will carry out the terms of the will. She should be willing to serve and be capable of executing the will.

 

Those who die without a valid will become intestate. This results in the estate being settled based upon the laws where that person lived. A court-appointed administrator will serve in the capacity to transfer property. This administrator will be bound by the laws of the state and may make decisions that go against the decedent's wishes.

To avoid this, a will and other estate planning documents are critical. Talk to an estate planning attorney this week.

Reference: The Delaware County Daily Times (January 7, 2019) “Senior Life: Things people should know about creating wills”

What States are Most Concerned with End-of-Life Issues?

“While roughly 90% of Americans agree that discussing end-of-life care with their loved ones is important, only 27% actually follow through with conversations focused on planning, according to research from public engagement initiative The Conversation Project.”

Although many have ramped up community outreach efforts, the dread of thinking about death has been a roadblock for hospice providers in some parts of the country, says the Home Health Care News in the recent article, “These States Are Most Concerned About End-of-Life Issues.”

A new study identified several states where end-of-life is on people’s minds. It found that overall, Wisconsin is the state most concerned about end-of-life issues, with New York as a close second. New Hampshire, South Dakota, and Ohio make up the rest of the top five. And the states least concerned about end-of-life issues: Nevada, California, Wyoming, Utah and Alaska.

As a state with a large senior citizen population, California’s spot in the latter group was somewhat surprising to the researchers. They found that population size has little to no bearing on concern or awareness toward end-of-life issues. They assumed that states like California or Florida, two states that have some of the highest senior citizen populations in the country, would rank at the top of our list for end-of-life issues. However, it turned out that states in the Midwest, like Wisconsin, South Dakota, and Ohio are more concerned about these issues.

To determine which states are thinking the most about end-of-life issues, the study evaluated the prevalence of certain targeted online search terms, like “palliative care,” “estate planning,” “end-of-life care,” “home care,” “caregiver” and “assisted living.” The term “home care” ranked the highest in northeastern states like New York, Pennsylvania, and Connecticut. New York’s interest in home care could, perhaps, be explained by the fact that home health aides and personal care aides are among the state’s largest occupational group, the researchers contend.

Nationally, home care employment is anticipated to increase by more than 40% between 2016 to 2026, according to the U.S. Bureau of Labor Statistics. They found that a state’s interest in a given end-of-life topic was based on a health care-related issue unique to that area.

Although Alaska was toward the bottom of the study, it was first in hospice admissions growth from the second quarter of 2017 to the same period in 2018. In fact, the state’s hospice admissions increased by more than 17%, far outpacing Wisconsin 6.5% growth, according to the latest data.

Alaska, Delaware, and South Dakota all experienced double-digit hospice admissions growth from Q2 2017 to Q2 2018. In contrast, Maine, North Dakota, Nebraska, Hawaii, New York, and Rhode Island all experienced negative growth.

Reference: Home Health Care News (January 6, 2019) “These States Are Most Concerned About End-of-Life Issues”

What Do I Need to Do To Get Financially Fit in My 30s?

“Take up the challenge and get on track for financial independence.”

Whether you’re 30 or 39, retirement will come up fast. Many people are surprised when they see how much they need to put away to keep their current standard of living in retirement.

Once you decide when you want to retire, you need to calculate how much money you’ll need and how you’ll get there. Of course, you should take advantage of company matching and various tax deductions, when saving for retirement. Don’t wait until your 40s or 50s to try to catch up. That will be painful, or worse, impossible.

Forbes’s recent article, “3 Steps To Financial Fitness In Your Thirties,” advises that when you start to accumulate wealth, be sure someone is watching your investments and that those investments are suitable for your time frames and financial goals.

Work with a fiduciary advisor you think can help improve your situation. This should be someone you trust, and most important of all, who you feel has your best interests at heart.

If you are accumulating assets, make sure they’re protected. Be certain you and your family are covered by having the correct insurance policies. Of course, in a perfect world nothing would happen. For instance, most people on disability would much rather be healthy. They’d love to be able to joke and say that having that disability insurance was a “bad investment”. However, those who are disabled and aren’t covered with a disability insurance policy, most likely wish they’d made sure they had this income protection in place.

Another form of protection is an emergency fund. If you don’t have one, start by regularly putting some amount of money into a non-retirement account. Even if it’s a small amount, something is better than nothing. If you were to be laid off, chances are that your unemployment benefits would not be enough to pay the rent or make a mortgage payment.

If you’re single, you should protect yourself—even more so than someone who has a partner to rely on. Many life insurance policies have living benefits that can protect you, if an emergency happens. You may also be able to use cash value life insurance to partially fund your retirement.

Finally, it’s critical that you think about estate planning. You should have an estate plan, including a will, Powers of Attorney, health care power of attorney and, if you have minor children, a guardian should be named in your will.

Let’s say you’re living with someone. If something happens to either of you, the living partner will most likely will be treated as a roommate—and have no legal rights to your property. An estate plan can be prepared to provide your partner with legal protection.

Reference: Forbes (December 17, 2018) “3 Steps To Financial Fitness In Your Thirties”

What Are Some of the Myths About Caregiving Costs?

“Decipher the fine print when caring for a loved one.”

The financial aspects of caring for an aging loved one can frequently be a gray area. It can be hard to predict upcoming health-related expenses and estimate how much assistance will be needed. However, the costs of caregiving tend to run high, and the value of family and friend caregiving amounts to about $470 billion each year, according to an AARP Public Policy Institute report.

U.S. News & World Report says, in “7 Myths About Caregiving Costs,” if you’re currently providing care for a senior or plan to do so in the future, sifting through the financial details as early as possible can save time and money in the long term. Let’s look at some common misconceptions concerning the costs of caregiving, as well as the realities to expect.

Your relative will stay at home and not have caregiving expenses. While your aging relative may never move to an assisted living facility, other care-related costs could still arise because many adult children take on the responsibilities for their aging parent gradually. You eventually may need to bring in skilled nursing support or arrange for in-home care. Even if your senior never lives outside of his own home, responsibilities like these define the role of a caregiver, and costs creep up over time.

All home help will be paid for by insurance. You may think that health insurance or Medicare will pay for all of the costs. However, in most instances, you'll need to find other funds for daily help at home. Health insurance and Medicare never pay for custodial care.

It’s easy to figure out how much assistance at home will cost. The precise amount your loved one or family will spend on bringing in home assistance can vary significantly. It really depends on the level of care needed, along with whether a patient has long-term care insurance or any other form of long-term insurance, where they live and if they qualify for Medicaid. The cost can also vary based on the family situation where relatives are available to help on certain days, reducing the amount needed to pay for professional caregiving assistance.

The cost of caregiving is merely financial. If you’re taking hours every week of your days caring for a loved one, you may experience struggles in other areas of your life. This could mean you have little time for other family and friends, sleep or exercise. These can lead to non-financial costs like increased stress, your own health problems and the emotional strain of caring for an aging loved one.

You can’t afford a caregiver, so you're not going to get one. If your aging parent has few financial resources or other family members can’t help pay for professional care, you should look at what other resources may be available.

Caregiving won’t affect your own finances. Sorry, but helping a loved one may entail additional physical demands that can affect your career and your financial status. Caregivers often work less hours, forfeit promotions, change jobs and even leave the workforce.

A discussion about finances can wait until care is warranted. Not so. If your loved one is now in good health and living at home, it can still be a wise idea to plan, so that if a crisis such as an accident occurs, everyone is ready.

Start a financial discussion with your senior with a few simple questions, perhaps asking for guidance for your own retirement to set things in motion.

Reference: U.S. News & World Report (Dec. 12, 2018) “7 Myths About Caregiving Costs”

What Type of Things Can’t a Nursing Home Do?

“People who reside in nursing homes are in a vulnerable position, since they are in need of near-constant assistance–not just with medical and health problems, but also, often, for daily living activities. Federal and state laws exist to safeguard nursing home residents’ care. However, your ability to protect yourself or your loved one during a short- or long-term nursing home stay, depends in part on knowing what these facilities are not allowed to do and what action to take if a violation occurs.”

 Investopedia’s recent article, “Things Nursing Homes Are Not Allowed to Do” cautions that the discussion points in its article apply specifically to skilled nursing facilities, that are defined by Medicare as a special facility or part of a hospital that provides medically necessary professional services from nurses, physical and occupational therapists, speech pathologists and audiologists. They don’t apply to assisted living facilities or retirement homes.

Discrimination. Federal law prohibits skilled nursing facilities from making a decision about whether someone can live there based on race, color, religion, age, sex or any other protected characteristic.

Services Provided. A skilled nursing facility must state in writing the types of services it will provide and fees before a patient moves in. Some types of retirement facilities, like continuing care communities, also require a large buy-in fee up front that guarantees residents access to various levels of care as their needs change, but skilled nursing facilities can’t charge those fees.

Health Assessment. When a patient first enters a nursing home, he is given a health assessment. These assessments continue daily for the length of his stay. The medical staff will evaluate the patient’s physical and mental health, medications, ability to take basic care of himself and ability to speak and make decisions. The assessments are used to plan treatment, evaluate progress and determine ongoing eligibility for Medicare coverage. Residents can participate in their care plan, and if they’re not able to do so, an adult child can participate on their behalf.

Money Management. A nursing home may offer to manage a resident’s personal funds as part of its services, but it can’t require a resident to let it manage their money, and it cannot do so without the resident’s written consent. When approved, the nursing home must provide quarterly financial statements and cannot prevent residents from accessing their bank accounts, cash or financial documents. If a resident deposits more than $50 into a managed account, that account must pay interest.

Dignity and Respect. Federal law states that nursing home residents have the right to be treated with dignity and respect. This includes making decisions on the time they want to go to bed and when they get up; what time to eat; and what to do during the day, provided their decisions don’t conflict with the care plan. Residents cannot be verbally or physically abused, medicated with drugs that aren’t in their treatment plan, restrained physically (unless they pose a danger to themselves or others), involuntarily isolated or to have their property used or taken by anyone else at the facility. Patients have the right to privacy and to personal property—this means being allowed to open their own mail and to have private phone conversations.

Visitation. Patients can have visitors during reasonable times of day. They’re also allowed to refuse visitors they don’t want to see. Family members must be allowed to have access to the patient at any time (unless the patient says otherwise).

Physical Condition. Even though a patient is in poor physical or mental health, she has the right to be told her physical condition; her diagnoses; and the types of medications she’s been prescribed. She also has a right to see her medical records. Patients can continue to see their own doctors, meaning they don’t have to accept the services of practitioners provided by the nursing home. Patients also have the same right to refuse treatments and medications that outpatients do. If a patient needs mental, legal, or financial counseling concerning her treatment, the nursing home must provide these services.

Medicare Benefits. Nursing homes don’t have to keep track of the Medicare benefits being used to pay for a patient's care. When it comes to facilities, Medicare coverage can be complicated because it covers a stay completely for a certain number of days but then pays a set amount for an additional period and all this only under certain conditions. After that, patients are responsible for the whole bill, unless they have long-term care insurance or some other form of coverage.

The nursing home doesn’t have to notify a resident that the benefit days are ending, and it can continue to charge them for their care. The one exception is if Original Medicare benefits stop earlier than expected, because the care is deemed no longer “medically reasonable and necessary.” In that case, the nursing home must notify the patient that coverage is ending, when it’s ending and why. The nursing home must also tell such patients that they’ll be responsible for further costs and how much it estimates those costs will be. But a facility usually can’t require another family member to pay for a resident’s care.

Discharge Planning. Nursing homes must help with discharge planning, and they generally can’t discharge a patient or transfer him to another facility without his consent, unless:

1. the patient’s health has declined to the stage, where the facility can no longer meet his needs;
2. the patient has improved to the point, where he no longer requires the facility’s services; or
3. the patient poses a threat to his own welfare or that of other residents.

In addition, a resident can be discharged for not paying the facility’s bills (but not when the delinquency is caused by waiting for Medicaid payments from the government).

Complaints. Residents and their advocates have a right to complain about any issue they have in a nursing home, and nursing homes can’t punish someone for doing so.

Ability to Sue. A 2016 regulation gave nursing home residents and their families the ability to sue any nursing home that receives federal funding. Before this, nursing homes could try to force people into arbitration, and any quality of care and safety issues could be kept private. However, a preliminary injunction granted in Mississippi in late in 2016 put this regulation on hold for now.

New Rules. There are new rules that give nursing home residents more rights. Residents will be allowed to receive any visitor, not just relatives, at any hour of the day, provided visitors don’t disturb fellow residents. Residents who want to live together will be permitted to do so, and nursing homes will have greater responsibility for ensuring that residents’ personal belongings aren’t lost or taken. In addition, nursing homes will be required to provide meals and snacks when residents want them, rather than only at set times. Staff will get more training in caring for dementia patients and preventing elder abuse, and nursing homes won’t be able to easily discharge residents with dementia, by sending them to a hospital and then refusing to readmit them.

In effect, a person’s rights as a nursing home resident should be the same as the rights she had outside the facility.

Reference: Investopedia (September 30, 2018) “Things Nursing Homes Are Not Allowed to Do”

What is My Retirement Plan Missing?

“How can you possibly know how much money you will need for retirement, if you don't know what you will be doing?”

Forbes’ article, “The One Piece Missing From Most Retirement Plans” says there’s just one small piece that many people don't think about when crafting their retirement plan. Any guesses what that is? Well, the missing piece is: THEIR RETIREMENT PLAN!

All the calculations are critical, but they aren’t much good without actually thinking about what you plan to do during retirement. There are two reasons why thinking about the final years of your life are crucial. The first is that you can’t possibly know how much money you’ll need for retirement, if you don't know what you’ll be doing, right? There’s a big difference in the money needed to travel around the world versus sitting on the porch knitting sweaters for grandchildren and playing bingo at church.

Next, when you wake up on your first morning of official retirement, you’ll have no responsibilities or plans. How great! But, be honest: how much can you really tend to your garden or catch up on reading? Retirement can be up to 30 years or more. That's a lot of time left to live. Retirees frequently are bored, lonely, or depressed during retirement, because they don't have the routine, social interaction or purpose that they had at work.

Before you begin your retirement calculations, ask yourself these questions:

• Where will I live?
• Do I want to downsize?
• What are my dreams and goals in retirement?
• Do I want to have the flexibility to move near my children?
• Do I want to help my children with their finances?
• Have I adequately considered the rising cost of healthcare?
• Do I have family to help me?
• Will I need to consider living in a retirement home?
• Do I want to work a part-time job to keep busy?
• Do I want to leave my estate to my children or charity?

If you’ve thought about how much money you have and how much money you'll need in retirement, that’s terrific. However, as you’re planning for retirement, remember to think about exactly what you’ll do when you retire.

Reference: Forbes (November 21, 2018) “The One Piece Missing From Most Retirement Plans”