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Elder Law, Estate Planning

The Probate Process Explained

The probate process involves authenticating the deceased individual’s will, assessing the assets, settling debts and taxes, and overseeing the allocation of the inheritance. After an asset-holder dies, the court will appoint a valid will’s executor to administer the probate process. In the absence of a will, the court will appoint a state administrator to handle probate. Probate law varies by state, but there are steps in the process that are common.

First, an executor is appointed and is normally the person named in the will. It is the executor’s responsibility to initiate the probate process. An executor can be a family member, a financial advisor, or any person the testator deemed capable of administering their estate. The executor files the will with the probate court, which initiates the probate process. A court officially appoints the executor as named in the will, giving the executor legal authority to act on the testator’s behalf.

The executor’s function is to locate and oversee all of the estate’s assets and to determine each asset’s value. The majority of the deceased’s assets are subject to the probate court, where the deceased lived at the time of their death. Real estate is an exception, and probate may extend to any county where the real estate is located.

The executor will pay any taxes and debts owed by the deceased from the estate. A notice of death is published, and creditors are given a limited time to make claims against the estate for any money owed to them. If the executor rejects the claim, the creditor may take them to court, where a probate judge will determine the debt’s validity. The executor is responsible for filing the deceased’s final, personal income tax returns. The executor’s last task, via court authorization, is to distribute what remains of the estate to the beneficiaries.

Probate is required for any asset or account that does not have a joint owner or beneficiary named.  If a joint owner or beneficiary is named, then title changes automatically and probate becomes unnecessary.

If a person dies without a will, they are said to have died intestate. An estate can also be deemed instate if the will presented to the court is found to be invalid. The decedent’s assets of an intestate estate follow a similar probate process, beginning with the appointment of an administrator. An administrator functions like an executor, receiving all legal claims against the estate, paying outstanding debts, and the decedent’s taxes.

Administrators must also seek out legal heirs, including surviving spouses, parents, and children. The probate court will determine the distribution of the estate among its legal heirs. In the absence of any family or other heirs, remaining assets go to the state.

The more complex or contested an estate is, the longer the probate process can take to finalize. The longer the process, the higher the cost. Probate without a will typically costs more than probate with a valid will, but neither scenario is inexpensive. Probate court files an estate’s assets as a matter of public record, so if you want to keep your estate private, it is best to pursue other estate planning options such as a trust. 

As estate planning attorneys, we can help you determine what planning tools are best for you. Contact us to schedule time for a private conversation to further determine how we can help. Please contact our Reno office by calling us at (775) 853-5700.

Estate Planning, Healthcare

Advance Health-Care Directives for Critical Decisions

Imagining how we may perish is probably one of the hardest things we will ever have to think about. Yet, if we want our dying to be meaningful and merciful, it is imperative that we think about it while we still can. Most of us want to die at home, in a familiar and peaceful setting surrounded by loved ones. We would much rather not spend our last moments in an emergency room or ICU, with strangers futilely pounding on our chests and our families relegated to the waiting room.

With those two alternatives in mind, we need to do all we can to keep control, as much as possible, of decisions that need to be made long before our final moments. We need to think carefully, well in advance, about what makes life worth living, and where pain and limitation have so eroded that quality of life that we would prefer not to go there.

These are notoriously difficult questions, but it is vital to address them anyway. For example, Terri Schiavo spent nearly half her young life unconscious in a condition known as a “persistent vegetative state,” being kept alive by a feeding tube. Her husband and friends claimed that before her severe brain injury, she said that she would not want her life sustained by machines. Unfortunately, she never put that wish in writing. On the other side, her devout family and right-to-life supporters insisted that she be kept alive despite her dire condition. After protracted litigation, Ms. Schiavo’s husband prevailed, the feeding tube was withdrawn, and fifteen years after she was injured and never having regained consciousness, she was finally allowed to die.

Since her passing, the law has evolved nationwide to encourage us all to document final wishes, to avoid the anguish and uncertainty of Ms. Schiavo’s situation. There are a number of documents available in your state for that purpose. The umbrella term for these is “advance health-care directives.”

It’s our job as lawyers to help you sort through the various directives needed to express your wishes. Here is a step-by-step guide to begin the conversation about final wishes, and to understand which document does what when.

1. If you are over the age of 18, appoint a health-care agent to speak for you when you can’t.

Decide who, among those who know you well, is best suited to take on this responsibility. That person must possess good communication skills, remain calm in difficult situations, and be able to deal flexibly with the complexity that might arise in reconciling your wishes with available medical options. Depending on which state you live in, your agent can also be called a “health care proxy.”

Sit down with that person and discuss your wishes in various scenarios. This is not an easy conversation to have, but there are guides available to help you. Visit “The Conversation”

and download the starter kit.

Click to access TCP_StarterKit_Final.pdf

2. Health Care Power of Attorney (HCPOA)

Once you have had that conversation, visit your lawyer to name your agent formally in an HCPOA document. HCPOA conveys legal authority on your agent or proxy to express your health-care decisions when you are unable to.

3. HIPAA authorization

Your agent or proxy will also need access to your otherwise private medical information. This is best done by a standardized document that complies with the federal Health Insurance Portability and Accountability Act (HIPAA). Without this authorization, your agent will be unable to obtain the medical information necessary to exercise the authority you want him or her to have.

Now armed with your agent and the HCPOA and HIPAA documents, you will know that if you were to meet with an accident or lose consciousness, you have chosen and empowered an advocate to speak for you. You should review and update these documents every five years or so.

The next three documents are important at the end of life. All these documents should stipulate that you desire comfort care, to keep you clean and as pain-free as possible. Remember, though, that you must create these documents while you are still able to know and communicate your wishes, so it’s best to do the next two documents at the same time that you do your HCPOA and HIPAA.

4. Living Will (also known as Physician’s Directive)

This document is for use when you are not enjoying the quality of life. Either death is imminent; you are in a persistent vegetative state; or you are permanently unconscious, permanently confused, or unable to care for yourself. If you have no awareness of others; can’t remember or understand or express yourself, or are unable to move, bathe, or dress yourself, it’s advisable to have expressed, in advance, the kind of treatment you want to receive or not receive.

A living will express your choice as to whether you do, or do not, want artificial measures that will merely prolong your life but not improve it. Those measures, among others, may include CPR if your heart stops, or breathing or feeding tubes or repeated courses of antibiotics or chemotherapy.

You may also require physicians, and not your agent, to be the ones to decide whether to cease life-prolonging procedures as you would like. This decision will relieve your agent from the heavy responsibility of making that irreversible choice.

Living wills are legal in almost every state. Ask your lawyer. Don’t make this kind of document yourself. Otherwise, you risk that the document may be misinterpreted, with drastic consequences.

5. Specialized Directives

Medical decision-making varies depending on specific health conditions, so specific directives may be tailor-made for those conditions. For example, people suffering from advanced dementia benefit from a directive, in addition to the HCPOA or living will, specifically requesting that hand-feeding be ceased when the person can no longer speak, recognize loved ones, or move purposefully. Otherwise, caregivers are obligated to cajole or demand that the patient be fed by hand, taking advantage of a primitive reflex to open the mouth. This risks that the person may inhale the mush instead of swallowing it, in some cases causing pneumonia.

For this kind of condition, ask your lawyer to prepare a specific directive tailored for advanced dementia, using the directives created by End of Life Washington

or End of Life Choices New York.

If, however, you suffer from a neurological illness like Lou Gehrig’s disease (ALS) or advanced Parkinson’s, even though most of us would decline mechanical treatments, those same treatments may be important aids to preserve the quality of life for people with those conditions.

Again, remember that you must create these documents while you still have the capacity to communicate your wishes. Living wills should be reviewed every six months because wishes can change depending on the progress of the illness.

6. POLST or MOLST

This is a brightly colored, short-form document that is primarily intended for emergency responders when the patient is frail and is likely to die within a year. It is designed to be immediately recognizable by hospitals and EMS personnel, to express that when the patient is unresponsive, cardio-pulmonary resuscitation (CPR) and other aggressive treatments are desired or not desired (DNR).

This document should be filled out in consultation with the patient’s physician. The acronyms stand for “physicians’ orders for life-sustaining treatment” or “medical orders for life-sustaining treatment.”  Many states provide for this kind of document.

7. Make Your Documents Known

When it comes time to use your documents, they must be readily available. Give a copy of them to your agent or proxy, make sure they are included in your medical records, and, if you are in need of the POLST or MOLST, post it beside your bed or on your fridge where EMT knows to look for it. If your documents can’t be found, or if your agent or family don’t understand them or ignore them, you will have spent your time, effort, and money in vain.

But if all goes according to your wishes, you will have done your best to create a good death, one that is as meaningful as possible for all concerned. If you have questions or would like to discuss your personal situation, please don’t hesitate to contact us. Please contact our Reno office by calling us at (775) 853-5700.

Estate Planning

The Functions of a Will

The legally binding directive declaring who will receive your assets upon death is called a will, and a will is a significant element of a complete estate plan. If you die without one (intestate), the state will distribute your assets and property via state law and quite possibly at odds with your wishes.  Having a will allows you to appoint a legal representative or executor to carry out your bequests and name a guardian for your children. There is no doubting the importance of having a will, however, there are some limitations you should be aware of.

Although a will can be the primary mechanism to transfer property on death, it does not cover all property situations. Some classes of property you are unable to distribute through a will are:

  • Property held in trust – A trust will have named beneficiaries who will receive the trust’s property according to the trust terms and not based on what is in your will (unless specifically stated in the trust).
  • Pay on death accounts – Informally known as PODs, the original account owner names a beneficiary(s) to whom the assets in the account pass automatically upon the owner’s death.
  • Life Insurance – Life insurance benefits pass to your named beneficiary(s) in the life insurance policy and are not affected by your will.
  • Jointly held property – Co-owned property is not distributed through your will. Joint tenants have an equal ownership interest in the property, and when one joint tenant dies, their interest ceases to exist. The other joint tenant now fully owns the entire property.
  • Retirement plans – In a similar manner to life insurance, money in an IRA or 401(k) passes to the named beneficiary(s). According to federal law, a surviving spouse is generally the automatic beneficiary of a 401(k); however, there are some exceptions. An IRA permits you to name a beneficiary(s).
  • Investments in transfer on death accounts – Some accounts holding stocks and bonds will transfer on death to the named beneficiary(s). Like POD accounts, transfer on death accounts bypass probate and go directly to the beneficiary(s).

A will does not allow you to avoid probate. By necessity, a will must go through the probate process in order to allow beneficiaries to inherit property. It can take months to get through probate, and it involves expenses like an attorney, executor, and court fees. Also, your will and everything associated with it (property you own, who your beneficiaries are, etc.) become part of the public record that anyone can access.

Keep funeral instructions outside of your will. The reality is your funeral may have already taken place before someone finds and reads your will, which can take days, even weeks. If your funeral or memorial service is important to you, the best way to help your family is to pre-plan, making arrangements with a funeral home. You can leave written instructions with the family as to your plans.

Your pets cannot inherit through your will. An animal is legally unable to inherit money or property from you. If you want your pets to be cared for after you die, leave money to a person willing to take care of your animals. The person you select can inherit your pets since a pet is considered property. You can also set up a pet trust or a pet protection agreement, either of which provides for your pet’s care.

Provisions for a child on government benefits are best in a trust. It is best to create a special needs trust to provide for a child with special needs or a child who is receiving government benefits. The trust can hold money for your child’s care without affecting those benefits.

There are ways to circumvent the limitations of a will by creating trusts, setting up pay-on-death accounts, and ensuring a beneficiary is named on all accounts that permit them. Your will is an important component of a comprehensive estate plan, but it can’t do everything.

We would be happy to discuss the pros and cons of having a will and other options available to you as part of your overall estate plan. Please contact our Reno office by calling us at (775) 853-5700.

Elder Living

Can You Expect a Fourth Stimulus Check?

At this time, it is still uncertain if Americans can expect another federal stimulus check. We do know that the IRS is nearly done sending out its third round of stimulus checks, and some lawmakers are already pushing for a fourth. Though some households are showing signs of economic recovery after more than a year of shutdowns due to the coronavirus, CNBC reports that nearly thirty percent of Americans were unable to cover their living expenses in late March.  Further data from the US Census Bureau indicates about eighteen million adults are going hungry every month.

While President Biden maintains his focus on his two trillion-dollar infrastructure plan, twenty-one Democratic Senators have sent a letter to the President. In their letter, the Senators write, “Almost 6 in 10 people say the $1,400 payments set to be included in the rescue package will last them less than three months”. In particular, these direct payments help Americans who do not qualify for unemployment insurance yet have seen their work hours reduced or left their employment to care for family members during the pandemic.

The Senators ask President Biden to include automatic unemployment insurance extensions and recurring direct payments in his long-term economic plans. The letter from the Senators is similar to an overture made by House Democratic members who advocate for monthly payments until the US achieves full economic recovery. Some progressive Washington lawmakers are projecting payments should continue into 2022. President Biden has not yet publically said he supports a fourth stimulus payment.

Even with continuing stimulus check payments, the economy is projected to grow rapidly yet unevenly, leaving some US cities suffering economic hardships for decades. Even with uneven economic growth, the individual and family stimulus money provides a small modicum of housing and food security for those who are hit hardest due to COVID-19. By itself, a fourth stimulus check can lift 6.6 million people out of poverty in 2021, according to a report from the Urban-Brookings Tax Policy Center.

The Biden Administration is currently working on a sequel to the March-approved American Rescue Plan known as the Build Back Better plan. This proposal seeks to invest in transportation, the nation’s energy grid, water systems, and broadband though it may not include stimulus checks. As Biden seeks Congressional approval for funding of Build Back Better, Democratic Congresspeople and Senators are calling for the President to include recurring stimulus checks during the pandemic.

Other ideas for helping the most economically vulnerable Americans include passing a minimum wage hike. Senators Mitt Romney (R) and Kyrsten Sinema (D) are the most recent to attempt passing a minimum wage hike from the federal minimum wage of $7.25 an hour. Some proponents want to see the minimum hourly wage set to 15 dollars an hour, and others are proposing 11 dollars an hour. No matter the dollar amount, there is widespread support to increase the federal minimum wage. A 2021 report from the Brookings Institute models how a 15 dollar an hour minimum wage can economically lift 37 percent of US households to become financially self-sufficient.

Another proposal to increase economic security for Americans is to make the child tax credit raise permanent. In July 0f 2021, the federal government will send periodic payments to lower and middle-income families with dependent children. This action alone can lift millions of US children out of poverty. Finally, an extension of the federal unemployment assistance program beyond September will also help Americans weather the pandemic. Even with the advent of the vaccination program, businesses still run at limited capacity, affecting workers’ hours to prevent new waves of COVID-19.

There are several options to protect the most economically vulnerable Americans during the pandemic, and as of yet, President Biden has not made clear which options his administration prefers. With a mid-term election cycle upon the US in 2022 and a closely divided Congress, many Congressional lawmakers will be advocating for ways to help Americans better survive the coronavirus pandemic. Additional stimulus checks are one way to achieve economic security for many but not President Biden’s only option. If you have questions or would like to discuss your personal situation, please don’t hesitate to contact us. Please contact our Reno office by calling us at (775) 853-5700.

Elder Living

New App “Mind Your Loved One” Provides Storage for Important Information

Today, digital apps provide a means by which we can store and send information on our smartphones and tablet devices. Whether engaging in online banking, using a mobile plane boarding pass or creating work calendars shared in the cloud, the internet of things provides needed connectivity. Yet critical medical information, health care directives, and other essential legal documents tend to remain in older storage formats such as paper files or on-site at a hospital or doctor’s office. The American Bar Association website displays and recommends an app called Mind Your Loved Ones (MYLO) that provides access to this critical information 24/7.

The app allows you to send information directly to health care providers, whether they be an insurance company, doctor, hospital, or trusted friend or family members, via email, text, fax, or print. Information is not stored in the cloud but locally on the user’s tablet or smartphone for enhanced security.  A mobile app like MYLO falls under the Health Insurance Portability and Accountability Act (HIPAA) scope because it handles personal health information (PHI). The information you want resides on your smartphone, and MYLO has no access to the user’s profile beyond an email address and registered name.

Whether traveling for work, leisure, or living in a retirement community, you can securely store your and your family’s health care advance directives, key medical information like prescriptions, physician contacts, medical notes, and insurance information. There is no need to hunt for paper files or sign onto a website to obtain the information, and you can create as many individual profiles on the app as you want. This immediate access to critical information allows your trusted agent to immediately answer difficult questions that an emergency room or other healthcare professionals ask, creating better health outcomes.

Because you can create an unlimited number of profiles, you can use MYLO to store information on your aging parents, yourself, spouse, siblings, children, and even friends. Each profile automatically generates reports that can be shared electronically with the desired recipient. Insurance information includes copies of both sides of insurance cards. Event notes, routine appointments, prescription changes, activities of daily living, and vital signs can all be maintained and measured over time. A dropbox is available to backup, share, and restore profiles, so even if you accidentally delete or damage a profile, it can be easily recreated. An annual subscription service to MYLO is less than ten dollars.

Other apps provide a format to carry your medical history and records on your phone; however, these apps do not combine legal documents as part of the app. MYLO provides ways to track medical, legal, and other information seamlessly in one app, which is a big plus when under duress to provide information to help yourself or a loved one. Remember that you default your or your loved one’s decision-making to hospital authority without proper legal documentation to make medical decisions.

Keeping all of this critical information current is easy by simply uploading new forms, medical information, insurance data, and legal documents to the app. You will not have to guess which prescription information or legal document is most current as all data storage is by date. A medical doctor can even review previous to current medications to make assessments based on health responses to those prescription changes.

The MYLO app does not mean you have to give up your paperwork if you still like that hard copy in a file cabinet somewhere. Many older individuals like covering all bases with both the standard paper file format and the MYLO app. Time is precious when you or someone you love is experiencing an adverse health event. Quick and easy access to reliable health and legal documentation can help drive the best possible outcome for the situation at hand.

If you or a loved one do not yet have health care directives or powers of attorney for financial decisions, we can help. It’s important to have proper legal advice on what options to choose and to make sure the document fully represents your wishes. If you’d like to discuss this in more detail, please don’t hesitate to reach out. Please contact our Reno office by calling us at (775) 853-5700.

Elder Living

Seniors Victims of Data Breaches

A staggering 100 million Americans were victims of a Capital One data breach earlier this year, bringing this topic to the forefront of conversations. But what hasn’t been receiving much major media coverage are the recent breaches affecting seniors.

One such breach occurred last year in May, and that breach compromised the personal information of almost 4,000 clients and employees of home care and support services for seniors in the bay area. That “personal information” includes quite a lot, from names, emails, and phone numbers to Social Security numbers, financial records, and health information.

2018 saw three times as many records breaches as in 2017, with 15 million patient records compromised in the healthcare sector. And this issue has only been exacerbated in 2019, with potentially more than 25 million records breached as of July.

Just one security incident in April affected at least 60 facilities in Massachusetts, Minnesota, Missouri, and Tennessee, compromising the personal information of an unknown number of patients in those four states.

This is an issue that is becoming increasingly important, in a variety of sectors but especially in the healthcare sector. However, many in this area are ill-prepared to handle it. Data breaches are going on for extended periods, and not being reported within the 60 days mandated by HIPAA.

Part of the problem is that HIPAA is not well equipped to deal with security needs today, in a technological landscape remarkably different from that of 1996 when HIPAA was enacted. Unfortunately, any legislation or regulation enacted today would face a similar problem: technology continues to adapt quickly, and the market pushes the healthcare sector to invest in technological advances as they come.

A few tips to protect your online information: 1) Never open an email from an unknown sender that contains an attachment. 2) When storing information online with a bank or medical provider, make sure you choose a strong password – one that contains a combination of letters, numbers, and symbols that is not easy to guess. 3) Do not store credit card or social security information online.

If you have questions or would like to discuss your planning needs, we would be happy to help. Please contact our Reno office by calling us at (775) 853-5700.

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Estate Planning

How Do You Contest a Will?

An executor oversees the settling of the estate according to the will after your death, laying out who the inheritors are and what property needs to be divided. For many reasons, beneficiaries can feel slighted by what they did or didn’t receive, and some individuals are entirely excluded from inheriting anything at all. The legal process of challenging the validity of a will is called a will contest (or “contesting the will”).

Once probate is underway, the named executor will take the necessary steps to complete probate and notify beneficiaries named in the will. This legal notice typically limits the time when a beneficiary can contest the validity of the will. Generally, a beneficiary (and even a person not named in the will) has thirty to ninety days to bring legal action against the decedent’s will.

Know that the vast majority of wills pass through probate without issue. The courts rightly view the will like the author’s (testator), last voice. Because the testator can no longer speak to their wishes, the courts try to adhere to the legally filed will stringently. Because of the narrow timeline for filing a will contest and the odds stacked against winning the legal challenge, most challengers will find it a fruitless and costly endeavor.

Under what circumstances then would you want to contest a will? Legally, only a person or entity with “standing” can contest a will. Standing is when the party involved in the will contest will be personally affected by the case’s outcome. Most often, this means an heir or beneficiary already named in the decedent’s last will or any preceding will. It may also include any person (usually a spouse or child) not named in the will, but because of state intestacy laws would be eligible to inherit in the absence of a will. Typically, four grounds are viable for contesting a will:

  • The will’s signing lacked the proper legal formalities
  • The mental capacity of the decedent to make a will is in question
  • Someone leveraging undue influence over the decedent into making or changing a will
  • The will’s procurement is fraudulent

Certain fact patterns may lead to a successful will contest. As an example, if a testator writes their own will, some legal formalities may be overlooked, rendering the will invalid. In particular, the “do it yourself” method for creating a will may not include all of the “what if” scenarios making the will incomplete. In another example, if the testator is experiencing isolation from family and friends, the primary beneficiary’s influence and motives regarding the estate may come into question. If the executor is trying to enforce an outdated will, the newer one should supersede the older one as long as no coercion was involved in writing the most recent version. Finally, some medical evidence may suggest the testator lacked the requisite mental ability to make a will. Occasionally the challenger to an existing will can negotiate a settlement with the estate instead of enduring a court proceeding.

Some wills include a no-contest clause, also called an “in terrorem” clause. This provision states that if anyone files a lawsuit challenging the will’s validity, they will receive nothing from the estate. While this may a powerful deterrent, it may not be allowed in the state where the will is probated.

To protect your will from being contested, even if you have limited assets, your best strategy is to have your will professionally drafted by an attorney well versed in estate planning. Using an attorney can help protect you and your estate from future legal challenges while helping you think through who you want to inherit your money and property, and how each person should receive what they inherit.

If you would like to discuss whether a will is appropriate for you or whether you should update an existing will, we would be happy to speak to you at your convenience. Please contact our Reno office by calling us at (775) 853-5700.

Estate Planning

The Impact of the “For the 99.5% Act” on Estate Planning

On March 25th, 2021, a new bill named “For the 99.5% Act,” was presented to Congress by Sen. Bernie Sanders and Rep. Jimmy Gomez. The bill’s current form is only 18 pages long, but its potential impact on federal estate and gift tax laws significantly affects estate planning. While it is impossible to determine if the bill will pass into law, some of the act’s key elements may inspire Congress to increase the estate tax using other mechanisms should this bill fail. They might also seek to remove well-known tools like trusts to bypass taxation upon your death to generate revenue for federal programs.

In a letter to Congress, 51 national organizations supporting Senator Sanders and Representative Gomez estate tax reform urge Congressional members to adopt the legislation. The letter cites that the richest one percent of Americans own nearly 32 percent of the nation’s wealth, and the bottom 50 percent own just 2 percent. This stark inequality creates constraints and financial growth limitations for the majority of Americans.

The Sanders-Gomez proposal wants to reverse this trend and increase the estate tax rate currently in place, topping out at 65 percent on estates over one billion dollars. In contrast, President Biden’s campaign estate tax plan would retain the 40 percent estate tax rate currently in place. Much is unknown, but one thing is clear; change is coming to the inheritable asset and gift tax classes.

The Joint Committee on Taxation (JCT) believes the Sanders bill can raise 430 billion dollars over ten years. Some of the bill’s main provisions that generate this revenue include:

  • Gift tax exemption reduction from 11.7 million dollars to 1 million dollars annually
  • Federal estate tax exemption reduction from 11.7 million dollars to 3.5 million dollars
  • Increase in gift and estate tax rates from 40 percent up to a top rate of 65 percent
  • Elimination of the short-term Grantor Retained Annuity Trust (GRAT) with no “grandfather” exemption for existing trusts
  • Grantor trust inclusion in a decedent’s estate. Many irrevocable trusts are grantor trusts for income tax purposes, although trust assets are excluded from the grantor’s estate for federal tax purposes. Enacting “For the 99.5% Act” into law will end the Grantor Trust type of estate planning. Additionally, without very careful planning, Irrevocable Life Insurance Trusts will no longer provide shelter for life insurance proceeds from estate taxation
  • Elimination of minority discounts on valuations for the transfers of non-business assets held in a business entity such as a partnership or limited liability company controlled by or majority-owned by members of the same family
  • Elimination of certain marketability discounts for passive assets not used in an active trade or business
  • The implementation of a federal 50-year rule against perpetuity will result in estate taxation at some point for Dynasty Trusts

The 99.5 Percent Act will provide beneficial valuation rules for small businesses and farms as well as land subject to qualified conservation easements. The Sanders-Gomez bill will give family farms extra protection by allowing lower assessed value on farmland up to three million dollars, exempting even more farms from tax.

There is overwhelming public support to raise taxes on Americas’ wealthiest. Still, some of these inheritance tax rate changes will affect the so-called “middle-class millionaires” who will need to restructure their current estate plans if the 99.5% Act is passed into law. The proposed tax rate of 45 percent on estates between 3.5 to 10 million dollars will affect family generational wealth more so than the top tax rates for mega multi-millionaires and billionaires.

If you have questions about this pending legislation and whether it could impact you, please don’t hesitate to reach out. We would be happy to discuss planning options with you to minimize your tax liability. Please contact our Reno office by calling us at (775) 853-5700.

Elder Living

Be the Best Caregiver You Can Be

There is a large number of Americans, 53 million in fact, that are the primary caregivers for family members. About 17 percent of the US population is a family caregiver, and most are losing sleep, worrying, losing income, struggling to balance caregiving tasks with their workload and other family responsibilities. These caregivers are often experiencing ill health of their own and putting their well-being at a lesser priority to their family loved one. The coronavirus pandemic further complicates matters as an October 2020 poll from The Associated Press-NORC Center for Public Affairs Research reveals that family caregivers provide 36 percent more care than one year ago due to the virus. Many family caregivers are exhausted, keeping their older loved ones safe and socially connected, often while working from home and supervising children during home school days. To be good to others, you must first be good to yourself. Making self-care a top priority allows you to be a more effective caregiver to your loved one. Here are ten strategies to implement today to ease family caregiver burnout.

Relentlessly add some “me time” into your schedule. There is time to enjoy life, visit (even if virtually) friends, read an enjoyable book, do some artwork, practice meditation, or just lay down and relax. Whatever it is that brings you joy and peace of mind (and it can be changeable!), put it in your schedule routinely.

Prioritize your healthcare. You cannot be an effective caregiver if you are unwell. It is a trap to spend all of your time managing your loved family member’s doctor appointments and medication while forgoing yours. When was your last checkup? Are you experiencing new symptoms under the stress of caregiving that you are not sharing with your doctor? Make those appointments for your well being today.

Eat a healthy diet and get enough exercise. Neglecting the very basics of a healthy lifestyle encourages health problems to present themselves in you. A healthy diet coupled with exercise will bring balance to your well-being, and from there, all things become possible. Ditch the fast food, drop the daily glass of alcohol, and practice a healthier lifestyle.

Connect with other caregivers. It is so helpful to address your caregiving frustrations out loud to others in a similar situation. You might find they experience similar feelings to your own. It is not a failure on a caregiver’s part to have these feelings. You are human and, as such, have frailties. Never try to be invincible. If you feel you need more help than this, seek professional counseling. A counselor can help you sort through the complexity of your situation and feelings, providing tools to navigate family caregiving’s complex emotions. Select a therapist who specializes in helping those who are caregivers and the associated dynamics.

Learn more about your loved one’s health condition to better prepare for what lies ahead. You can’t know the future, but a medical prognosis and additional research can go a long way to addressing uncertainty that increases stress levels. Understanding possible future scenarios will let you plan and reduce the number of surprises that can catch you off guard.

Learn to set boundaries and don’t let old family dynamics dominate today. As your aging loved one requires more care, your downtime can become non-existent. Stay true to your schedule and your needs. If your loved one requires more help, it is time to call in other family members for financial or hands-on assistance or hire a service to provide additional care. Also, do not fall into child mode and allow your parent to push your buttons as they may have in earlier years. Stay in the present and focus on the task at hand. If you find it hard to separate then and now behaviors with your parent, seek support groups or find a counselor to learn ways to combat falling into old patterns.

Get help and get it sooner than later. It is not your destiny to go through this alone. Talk to your family or your doctor to strategize about ways to reduce your workload and stress. Bring in professional care, even if just a couple of times a week for some relief. Ask for help and then accept it! Your family members may be willing to help financially and spend time remotely with your loved one while you take a well-deserved break. When someone steps in to help, do not hover or micro-manage the situation. Walk away and clear your head. The world will spin without you being the family caregiver for a few hours or even a few days. Do not delay. Take good care of yourself to be your best for others.

Make sure you have a plan. If something should happen to your health, have you put into writing who should make decisions for you, who should manage your affairs, and what your wishes are regarding your care? If not, the time couldn’t be better. We can help, and would welcome the opportunity to make sure your wishes are properly documented. If you’d like to discuss your particular situation, please contact our Reno office by calling us at (775) 853-5700.

Elder Law, Elder Living, Estate Planning, Healthcare

How Do the Stimulus Payments Affect Medicaid?

The federal government has issued direct payments, “stimulus checks”, to most Americans to invigorate the economy after the devastating coronavirus pandemic. This money is to ease the pain of the Covid pandemic and to jump-start the economy.

The stimulus money should have arrived in the same way that Social Security payments or tax refunds are made, either direct-deposited into a bank account or mailed as a paper check. If the money has not arrived, or for guidance in general, consult the IRS website:

https://www.irs.gov/coronavirus/economic-impact-payment-information-center#more. Other options are to call 800-919-9835 or 800-829-1040, or you can visit your local Taxpayer Assistance Center.

Those who are receiving means-tied government assistance, like SSI, VA benefits, or Medicaid to pay for long-term care, need not worry that stimulus money will be counted against them for eligibility. As long as recipients spend the money within twelve months, the money will not push them over the maximum amount they are permitted before they are penalized.

Recipients may use the money to buy new clothing, cell phones or televisions, toiletries, snacks, dental treatment, or improved quality of medical supplies. They may buy an irrevocable funeral trust, to avoid future expenses to family members. They may give the money away to family or charities. The money might pay for updating estate-planning documents, or for consulting a geriatric care manager. (Some commentators believe that you could give the money away to family or charities. While this may be OK under federal law, it’s probably best not to take chances with how the states may interpret it. Spend the money, don’t donate it.)

Provided that the money is not spent on what could be called an asset or an investment – like, for example, rare coins or stocks or bonds – the money will not be counted against the asset limit for Medicaid eligibility. And, again, the money must be spent within twelve months. It must not be forgotten about or left unnoticed in a bank account.

It also must not be misappropriated by nursing homes or assisted-living facilities. If this has happened to you or your loved one, inform the facility manager that the money must be refunded to the resident. Cite the law that carves out the payment from being counted toward federally assisted programs like Medicaid: 26 U.S.C. § 6409.  Or, show them a handout downloadable from the Congressional Research Service.

If the facility will not refund the money, contact your state’s attorney general. Then lodge a complaint with the Federal Trade Commission.

Recipients of assistance, like anyone else, are free to spend their stimulus money. The money is theirs. It is tax-free. It is intended to be spent, and it should be spent, in any way the recipient would like (subject to the conditions above).

This is one time when spending is unquestionably a good thing – for buyers and sellers.

If you have questions or would like to discuss your situation in a confidential setting, please don’t hesitate to reach out. Please contact our Reno office by calling us at (775) 853-5700.