Wills, Trusts & Estates Prof Blog

Article on Validity of Caregiver Agreements

Sheena J. Knox recently published her note entitled Eldercare for the Baby-boom Generation: Are Caregiver Agreements Valid?, 45 Suffolk U.L. Rev. 1271 (2012).  The introduction to the note is below: 

Behind the current cacophony of concerns about the unemployment rate, slow economic recovery, and U.S. budget deficit, is the ever-present murmur of the impending economic impact baby boomers will have as they retire and rely on government benefits. In 2010 Social Security went “cash negative,” states threatened to drop out of the Medicaid program, and more individuals dipped into their 401k plans for current needs. The “silver tsunami” looms closer as the first members of the baby-boom generation turned sixty-five in 2011, and concerns over how to manage long-term care for elders increase at an individual, state, and federal level. State and federal governments' concerns come from the heavy burden long-term care for boomers will put on government-funded health services at a time when governments face pressure to cut these services to decrease deficits. Individuals' worries stem from the need to provide long-term care for themselves or for aging family members.

Individuals who care, or will care, for an aging relative must consider how long-term care duties can decrease both their earning potential in the workplace and their savings as they pay for an elderly relative's necessities. Caregivers often cannot afford to cut down their time or quit their job outside the home. In order to continue caring for an elderly relative, an increasing number of caregivers are asking elder-law attorneys to draw up agreements in which the caregiver helps the elder for a certain number of hours each week in exchange for an hourly wage. These caregiving agreements benefit both parties by relieving financial strain on caregivers and by keeping elderly relatives out of nursing homes.

While caregiver agreements may reassure individual caregivers, these same agreements are a concern for states. State Medicaid agencies claim these agreements are often a front for elders to gift assets to their children, impoverish themselves, and qualify for the state to pay for long-term care in a nursing home. The high price of nursing home care would quickly deplete most seniors' accumulated wealth; however, if elders can transfer their assets to their children via a “caregiver contract,” elders may qualify to have Medicaid pay for nursing home care, while ensuring that their posterity will receive an inheritance. States want to preserve scarce resources for those who truly cannot afford care.

This Note will explore the benefits and burdens of courts acknowledging and upholding caregiver agreements, ultimately arguing for more recognition of caregiving agreements to encourage greater numbers of caregivers for the burgeoning elder population. First, this Note will examine the parties to caregiver agreements and what influence their identities may have on a court's evaluation of the agreement. Parties to a caregiver agreement are typically family members, so the initial discussion of the parties' identities will lead to a discussion of the cultural and legal presumptions against family-member contracts. Then, turning more specifically to caregiver agreements, this Note will outline the considerations a Medicaid agency uses when deciding if an elder qualifies for benefits. State Medicaid agencies decide long-term care benefits; therefore, this Note will use Massachusetts as a case study to review caregiver agreements evaluated by the Office of Medicaid Board of Hearings and state courts. In light of the decisions in Massachusetts, this Note will propose clarifications to the Massachusetts Medicaid regulations to give Massachusetts and other states direction about how to allow caregivers who truly are rendering services to contract for their services, while avoiding giving elders Medicaid services if their “contract” was merely a gift. In addition, this Note will analyze current presumptions about family members and contracts. Finally, this Note will argue that acknowledging caregiver agreements will benefit caregivers, the elderly, and the state.

Ohio Man Hits Brother With Cremation Urn

Joel Perez from Lorain, Ohio was arrested for hitting his brother over the head with a cremation urn.  He broke the urn and created a cloud of human ashes as he struck his brother with it.  Perez was charged with domestic violence, felonious assault and resisting arrest.

See Ohio: Man Accused of Assault With Cremation Urn, The New York Times, Jan. 21, 2013. 

 

Pets Inherit From Owner's Estates

There has been an increase in the number of families who are contesting wills over money left to pets and animal charities.  In some cases, children are left out of their parents' wills in favor of charities--many times animal charities.

Some examples of rich pets are below: 

Ella Wendel's Poodle Toby: Ella Wendel is an American heiress who died in 1931, leaving an estimated $15 million of her family's estate to Toby.  The rest of her wealth went to churches and charities.

Maria Assunta's cat Tommaso: Maria left $13 million to her cat that she rescued after she found him roaming the streets of Rome.  

Leona Helmsley's Maltese Trouble: Leona was a New York property tycoon and hotelier who left $12 million to Trouble when she died.  She also stipulated that her entire $8 billion trust should be used to care for the care and welfare of dogs. 

Alexander McQueen's dogs Minter, Juice and Callum: The fashion designer's will put £50,000 into a trust for his dogs. 

Awaiting inheritance: Oprah Winfrey's dogs: Oprah has set aside over $30 million in a trust fund for her four dogs and various other pets. 

See Hannah Osborne, Leaving Pets a Fortune Causes Family Fur To Fly, International Business Times, Jan. 19, 2013. 

Reviewing 2012 Changes In Family Wealth Transfers

Now that the rush to make wealth transfers has come to a halt, clients who made those last minute transfers might want to take this opportunity to review their estate planning documents. In particular, clients might to examine who they have chosen as the trustee of their trusts and talk to their children about any money they might been have given to them. Sometimes a younger sibling is left out of being chosen to be the trustee, the older more money-savvy child often become the trustee to the detriment of the younger child. It is possible to change the trustee but it can be difficult. Additionally, parents might want to examine the amount of money they have given to their children through a FLP. Often parents forget that they need money to live and support themselves. Luckily for parents, a parent can instruct the general partner to withhold any distributions assuming that the child has taken any the distribution.

There are other technicalities that should be taken care of at this time. Clients might want to consider checking to see whether the appropriate gift tax return were filed with their income tax. For attorneys, it is important to remember that "some clients still need valuations for their assets, such as real estate, which was transferred into an irrevocable trust." An attorney might also want to consider making a flow chart of the transfers for his or her client. It is important for the client to understand where their money has gone.

See Susan R. Lipp & Dawn S. Markowitz, Revisiting 2012 Family Wealth Transfers, Wealth Management, Jan. 15, 2013.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

Autopsy on Urooj Khan's Body

I previously blogged about how an autopsy on Urooj Khan was set for Friday, January 18, 2013.  On Friday, Khan's body was exhumed from a cemetery and taken to the Cook County Medical Examiner's Office. Pathologists collected samples of hair, nails, and most body organs, along with contents of the stomach. These tests may determine how Khan was exposed to the cyanide--whether he inhaled it, swallowed it, or was injected with it. 

The medical examiner, Stephen Cina, said that even though the body was in a state of advanced decomposition, they were able to identify the major organs and get the samples they needed from those. However, Cina also said that given the length of time Khan was in the ground, he did not know whether investigators would ultimately be able to determine how he ingested the poison. Even after the two hour autopsy though, Cina maintained that however Khan was exposed to the poison, he was a victim of homicide. Authorities remain quiet about who they suspect poisoned Khan. 

See Jason Keyser, Autopsy Conducted on Body of Ill. Lottery Winner, abcnews.com, Jan. 19, 2013.

Outline of Estate Tax Changes

Ronald D. Aucutt (Partner, McGuire Woods, LLP) has published a very informative outline entitled Estate Tax Changes Past, Present and Future.  For a detailed and up to date exploration of the estate tax, please click here to read this outline. The introduction to the outline is below: 

This outline is a selective and still evolving review of the history of the federal estate tax. It originated in the context of the attempts to repeal the estate tax in President Clinton’s second term and accelerated with the one-year (2010) “repeal” included in the Economic Growth and Tax Relief Reconciliation Act of 2001. A discussion of the most current developments begins on page 74. (State estate and inheritance taxes are summarized [here].

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

 

Reminder: Fifth Annual EPJ Seminar Is Fast Approaching: Register Now!

The Estate Planning & Community Property Law Journal is hosting The 2013 Estate Planning & Community Property Law Journal Seminar on March 1, 2013. The event will be held in the Mark & Becky Lanier Professional Development Center at the Texas Tech University School of Law in Lubbock, Texas. Provided below is the information for the CLE:

The Estate Planning & Community Property Law Journal is excited about its upcoming Fifth Annual Estate Planning and Community Property Law Journal Seminar.  Our annual seminar has grown tremendously over the years.  Originally, the seminar’s speakers consisted of a small group of local Lubbock practitioners. Today professors and practitioners fly to Lubbock from across the country to give presentations about up and coming issues in estate planning and community property.

This year the seminar will be held on Friday, March 1, 2013, in the Mark & Becky Lanier Professional Development Center.  Breakfast will begin at 7:30, and the speakers will present from 8:30 until 4:30.  Eight speakers will be presenting at the event.  Our speakers include Jim Hartnett, Jr. of the Hartnett Law Firm; Professor Stanley Johanson from the University of Texas; Professor Linda Whitton from Valparaiso University; Professor Susan Gary from the University of Oregon; Professor John Martin from Ohio Northern; Professor Thomas Andrews from the University of Washington; Harold Evensky of Evensky & Katz Wealth Management; and our own Professor Gerry W. Beyer.

Our seminar would not have grown over the years and would not be possible without the generous donations from our sponsors.  We would like to specially thank the following sponsors for their contributions to the Seminar: Field, Manning, Stone, Hawthorne & Aycock, P.C.; Cotton Bledsoe Tighe & Dawson, PC; Davis, Gerald & Cremer, PC; Jackson and Jackson; Mullin Hoard Brown; Decker & Arrott, P.C.; and Professor and Mrs. Gerry Beyer.

To register for this year’s seminar, you may register at link provided above.  You may also contact Lindsay Nichols to register for the seminar or with any questions regarding the seminar at lindsay.nichols@ttu.edu.  We look forward to seeing you soon!

Assisted Suicide For The Elderly

This question of whether assisted suicide is okay has been raised before, but an incident in a small town in California has brought the question to light once again. An 86-year-old firefighter named George Taylor and his wife made a suicide pact. The agreement was that they were to die together when the time came. George succeeded in assisting his wife in her suicide attempt but failed in his own attempt. The county where George and his wife resided found George guilty of aiding and abetting the suicide and sentenced him to 2 days in jail and probation. What was strange was that there seemed to be no reason for the suicide because the couple was not suffering from illness and they were financially stable. The only thing that makes sense about this situation is that the couple seemed to be an advocate of physician-assisted suicide, including the teachings of Dr. Jack Kevorkian.

What is intriguing from this stand point is the light sentence that was given to George. At the time of the sentencing George had already spent 2 days in jail, which means that the only consequence in this instance was probation. Some believe that the court's light sentence may be the result of a shift in philosophy in "that elderly people do have a right to die, even if assisted by a loved one." Does this equate to a shift in public opinion? Some do not think so, considering that this debate has drawn sharp lines in sands between people. Most of the discontent arises from "differences in [people's] personal, religious and moral beliefs." Regardless of the controversy surrounding life and death decisions, it is difficult to judge George Taylor and his wife especially because we know very little about what led them to take their own lives. Maybe they wanted to make their own decision about when they wanted to end their life. Really, is that such a controversial thought?

See Carolyn Rosenblatt, Is It Ever OK To Assist An Elder To Commit Suicide?, Forbes, Jan. 19, 2013.

Top SSRN Downloads

Here are the top downloads from November 21, 2012 to January 20, 2013 from the SSRN Journal of Wills, Trusts, & Estates Law for all papers announced in the last 60 days.

Rank	Downloads	Paper Title
1	140	Valuation Discounting and the Lottery Cases Wendy C. Gerzog, University of Baltimore - School of Law, Date posted to database: November 20, 2012 Last Revised: November 20, 2012
2	80	Occupy the Tax Code: Using the Estate Tax to Reduce Inequality Paul L. Caron, James R. Repetti, University of Cincinnati - College of Law, Boston College - Law School, Date posted to database: January 14, 2013 Last Revised: January 14, 2013
3	73	Resident Rights and Responsibilities in Virginia's Continuing Care Retirement Communities: Building Trust and Stronger Communities Katherine C. Pearson, Pennsylvania State University - Dickinson School of Law, Date posted to database: December 2, 2012 Last Revised: December 2, 2012
4	55	Extinguishing and Amending Tax-Deductible Conservation Easements: Protecting the Federal Investment after Carpenter, Simmons, and Kaufman Nancy A. McLaughlin, University of Utah S.J. Quinney College of Law, Date posted to database: December 27, 2012 Last Revised: December 27, 2012
5	46	Fiduciary Duties and Exculpatory Clauses: Clash of the Titans or Cozy Bedfellows? Louise L. Hill, Widener University School of Law, Date posted to database: November 29, 2012 Last Revised: November 29, 2012
6	46	Would Enactment of the Uniform Premarital and Marital Agreement Act in All Fifty States Change U.S. Law Regarding Premarital Agreements? J. Thomas Oldham, University of Houston - Law Center, Date posted to database: December 9, 2012 Last Revised: December 9, 2012
7	44	Sex Post Facto: Advising Clients Regarding Posthumous Conception Benjamin C. Carpenter, University of St. Thomas School of Law (Minnesota), Date posted to database: December 4, 2012 Last Revised: December 8, 2012
8	31	Charitable Insolvency and Corporate Governance in Bankruptcy Reorganization Reid K. Weisbord, Rutgers University School of Law - Newark, Date posted to database: December 14, 2012 Last Revised: December 14, 2012
9	21	Perpetuity As (and Against) Rule: Law, Tradition, Juris-Diction Justin Richland, University of Chicago, Date posted to database: November 16, 2012 Last Revised: November 24, 2012

Martin Luther King, Jr. Died Intestate

Today we celebrate the life of Martin Luther King, Jr., one of the main leaders of the American Civil Rights Movement.

Dr. King devoted all of his income and talent to the movement. He died intestate, leaving less than $30,000 in his estate. Some of that money was already earmarked for the movement.

Additional information about Dr. King’s legacy is available on NPR’s Talk of the Nation entitled The Legacy of Martin Luther King Jr.

Estate Planning Focused on Long-term Care and Elder Law

Wealth Management reported on a speech at the Heckerling Institute on Estate Planning relating to elder law planning. Speakers Lawrence Frolik and Bernard Krooks pointed out that estate planning work with a tax-planning focus may not be as prominent anymore since only about 4,000 estate tax returns filed will actually owe a tax. However, seventy percent of people will need long-term care, so focusing on long-term care might be a better way to secure work as an estate planner.

 The speakers expanded the definition of elder law to generally mean quality life planning for clients in the last 20 to 30 years of their lives.  Potential for dementia as clients age raises questions such as who will manage the client's affairs when he can no longer manage them.  Addressing the financial needs of long-term care is also a major concern. Lastly, the speakers touched on questions of legal capacity that might accompany cases of dementia.

See Martin M. Shenkman, Elder Law Fundamentals, WealthManagement.com, Jan. 14, 2013.

Two Men Accused of Forging Will

Two men in Ireland are accused of forging the will of an 82-year-old farmer. The farmer, Matthew Hayes, passed away on Christmas in 1998. The men, Noel Hayes and William O'Leary, have denied all wrongdoing and deny that they forged Matthew Hayes' will. The will in question would have left Matthew's entire estate to Noel. William and his brother Charles were the executors of the Matthew's estate. The allegations claim that all three, William, Charles, and Noel, were involved in the forging.

The Wexford Circuit Court recently heard that Charlie pleaded guilty for his role in the forgery "and was given an 18-month suspended sentence and had to pay €30,000." His brother and Noel are still on trial for the forgery. Charlie testified in court that day against his brother and Noel. In his testimony, Charlie stated that Noel and his brother came to his office before Matthew's death and told him that Matthew would likely die soon. He stated that Noel believed that Matthew's property should belong to his father through his paternal grandmother. Charlie also testified that Noel had a copy of a check signed by Matthew. Following the death of Matthew on Christmas, Charlie agreed to help his friend forge a will. Charlie admitted in open court that he wrote the will. Because Noel had reportedly been practicing replicating Matthew's signature, he signed it. At the time of the signing, Matthew was already dead for a week. While there were disagreements over the price of Charlie's services, he admitted that he received £12,500 for the will. The case is still on-going.

See Two Accused of 'Complete Deception' Over Man's Will, RTE News Ireland, Jan. 17, 2013.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.

Deadlines Every Married Person Needs To Know

One of the best parts of the American Taxpayer Relief Tax Act of 2012 (ATRA) was that it made the portability provision permanent. According to Forbes, "Starting for deaths in 2011, and now going forward, they can carry over the estate tax exemption of the spouse who died most recently and add it their own." Under the current unified credit, this means that a married couple transfer a total $10.5 together tax-free. In addition, the portability provision has not detracted from the marital deduction, so spouses can still transfer property both during the couple's life and at death without incurring any tax. For couples wishing to take advantage of the portability provision, timing is key. The executor of the decedent's estate must file an estate tax return, even if the decedent will likely not incur an estate tax. The return will be due 9 months after the death of the decedent. There is the possibility of an extension.

The question arises as to whether a person can still transfer a portion of a deceased spouse's exemption without the taxpayer filing the necessary estate tax return because they simply forgot or their attorney was not aware of the portability option. Some experts on this claim that the taxpayer is simply out of luck because the deadline to file the estate tax return was May 1, 2012. A taxpayer could file a 9100 relief, which provides forgiveness for late elections. Unfortunately, it is expensive and basically requires that the  professional adviser admit fault. This is not available for the portability election because it has a deadline and 9100 relief is not available in those instances. The only hope is that the IRS might make an exception because its the first year. For attorneys and financial advisors, mistakes like this could be problematic for a client; therefore, it is important for both to inform their clients of the changes in the law to prevent problems like the ones above.

See Deborah L. Jacobs, The Deadline Every Married Person (And Financial Advisor) Needs To Know About, Forbes, Jan. 17, 2013.

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.