Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

A Member of the Law Professor Blogs Network

Saturday, October 18, 2014

Catching the Early Signs of Alzheimer's

SearchIt is important for estate and financial planning strategies to include a plan for if forms of mental disability develop, such as Alzheimer's. This was the topic of a recent symposium earlier this month, held in Cambridge, Massachusetts, entitled Financial Planning in the Shadow of Dementia. In addition to having plans in place, such as financial power of attorney, it is also important that estate planners know the early signs of mental disability. Early warning signs often include confusion or difficulty with understanding financial concepts and difficulty computing basic mathematical calculations. One message of the symposium, stressed the importance of planners noticing changes in a client's ability to understand financial concepts, and of having someone designated as the point of contact for the client who is familiar to the planner before the signs begin to develop.

See Richard Eisenberg, When Alzheimer's Strikes: Losing Your Money Mind, Forbes, Oct. 8, 2014.

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

October 18, 2014 in Disability Planning - Property Management, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Tuesday, October 14, 2014

Special Needs Estate Planning Considerations

ChecklistSpecial needs children often need additional medical care and financial assistance. In addition, they may need additional assistance throughout their adult life, which may be provided for by their parents in a will or trust. Here are four considerations when including special needs children in an estate plan:

  1. The amount of financial assistance that is needed in addition to the child's other financial options to adequately provide the needed care
  2. How an inheritance may affect the child's ability to receive benefits such as Supplemental Security Income or Medicare
  3. If the child's siblings will feel left out or treated unfairly if unequal inheritances are received
  4. What safeguards should be put in place to make sure the funds are used for the intended purposes

See Janet Brewer, 4 Considerations When Estate Planning with a Special Needs Child, JD Supra, Oct. 9, 2014.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

October 14, 2014 in Disability Planning - Health Care, Disability Planning - Property Management, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Monday, October 13, 2014

Estate Planning for the 30-Somethings

30 somethings

With thirty being the new twenty, the last thing this generation wants to do is plan for their demise.  Yet, financial experts suggest that his could be the best time to protect your family and your assets in case the unexpected occurs.  “It is imperative that those in their 30s have their estate plans in order, because they have as much to lose as their elders—in fact, sometimes more.”  To get started, experts recommend meeting with an attorney to get the following in place:

1. Last Will and Testament. A will establishes who will inherit your assets when you die, along with other vital aspects including information such as who you want to place in charge of administering your estate and who you want to be the guardians of your minor children.

2. Living Will. This outlines your wishes if you are incapacitated or death is imminent.

3. Power of Attorney. This will identify someone who can make financial decisions for you if you are incapacitated.

4. Health Care Proxy. You will specify a person to make medical decisions on your behalf.  “It even may make sense to have a conversation with the person you identify so that they clearly understand what your wishes are—God forbid these circumstances arise.”

5. Life Insurance. Term insurance is an effective way to cover current debts that you do not want to burden your significant other with should something happen to you.

6. Retirement Fund. It is vital that 30-somethings start saving for retirement, especially if their employers offer incentives such as profit-sharing or matching contributions to a 401(k).

See Michael Lerner, 6 Estate Planning Moves You Should Make in Your 30s, Daily Finance, Oct. 10, 2014.

October 13, 2014 in Disability Planning - Health Care, Disability Planning - Property Management, Estate Planning - Generally, Non-Probate Assets, Wills | Permalink | Comments (0) | TrackBack (0)

Wednesday, September 3, 2014

Article on Preying on the Graying: A Statutory Presumption to Prosecute Elder Financial Exploitation

Andrew McClurgAndrew Jay McClurg (University of Memphis Cecil C. Humphreys School of Law) recently published an article entitled, Preying on the Graying: A Statutory Presumption to Prosecute Elder Financial Exploitation , Hastings Law Journal, Vol. 65, No. 4, 1099-1143, 2014. Provided below is the abstract from SSRN:

Already widespread and with seventy-eight million baby boomers in or nearing retirement, elder financial exploitation has been labeled “The Crime of the 21st Century,” yet little is being done to address the problem. While states and the federal government have passed hundreds of laws protecting children based on the assumption they are vulnerable and unable to protect themselves, older at-risk adults have been comparatively ignored despite extensive research showing they too are vulnerable.

A substantial roadblock to prosecuting elder financial predators is the inability to prove the financial transfers at issue were the result of exploitation rather than legitimate transactions. By their nature, most elder exploitation cases do not involve taking property by force or even stealth. Many victims “voluntarily” part with their assets. To outsiders, the transfers may look like gifts or loans, when in fact they occur because of undue influence, psychological manipulation, and misrepresentation.

Arising from a Florida criminal case involving the financial exploitation of the author’s 93-year-old father in a “sweetheart scam,” this Article proposes an aid to prosecuting elder exploitation in the form of state criminal statutes creating a permissive presumption of exploitation with regard to certain financial transfers from elders. The Article offers a specific statute and explains that it would be workable and constitutional. Preliminarily, the Article explores the scope of elder financial exploitation, discusses why it is grossly underreported and under-prosecuted, and analyzes practical, cognitive, and psychological reasons older adults are vulnerable, focusing on emerging research showing that even elders who lack obvious impairments are at risk.

September 3, 2014 in Articles, Disability Planning - Property Management, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Monday, September 1, 2014

New Form 2848

FormsThe new Form 2848 titled, Power of Attorney and Declaration of Representative, has been released by the IRS. The new Form now has room for the information of four representatives to be entered, but only two representatives will receive communications from the IRS.

See Mel Schwarz, Dustin Stamper, Shamik Trivedi, IRS Issues New Power of Attorney Form, Mondaq, Aug. 27, 2014.

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

September 1, 2014 in Disability Planning - Health Care, Disability Planning - Property Management, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Monday, August 25, 2014

Powerless with Power of Attorney

Power of attorney

Power of attorney has always been an inexpensive way to give someone the right to act on another person’s behalf.  Yet, the power is not absolute and when it fails, the consequences can be disastrous. 

For Christine, a 62-year-old woman in Connecticut, experienced the powerlessness power of attorney embodies.  After sorting out their parents’ estate, Christine’s older brother promised he would set his own affairs in order so they would not face the same messy process.  He drafted a will, titled accounts to transfer to them on death, and drew up a power of attorney should he become incapacitated.  Years later, when Christine’s brother began suffering from severe dementia, he needed indefinite care.  Christine knew there would be no problem paying for this since he had done well financially.  However, when she looked at the power of attorney, she noticed he used her legal first name, Carol, which she had abandoned.  It was not until she went to bank after bank explaining the situation, was she denied access to his accounts to pay for his care.  “They said ‘Go get your marriage certificate’ . . . . I had my birth certificate, passports, a driver’s license.  But they did not have the name my brother had on that form.” 

Estate planners say that Christine’s experience is not uncommon.  Banks routinely try to deny the appointed person any right to have access to accounts.  One valid reason for banks’ hesitancy is because a power of attorney can be used to commit elder fraud.  Banks have been sued for giving access to accounts without properly checking the person named in the power of attorney. 

A better option all around might be a revocable trust.  It allows people to put their property in a trust while they are still alive, using it as they normally would.  “Banks are more comfortable with this because you’re funding it now while you’re competent.”  Provisions can also be written into revocable trust documents that allow future trustees to put in assets that were forgotten when the trust was created. 

See Paul Sullivan, Power of Attorney Is Not Always a Solution, The New York Times, Aug. 22, 2014.

Special thanks to Matthew Bogin (Law Offices of Matthew B. Bogin) for bringing this article to my attention.

August 25, 2014 in Disability Planning - Health Care, Disability Planning - Property Management, Elder Law, Estate Administration, Estate Planning - Generally, Trusts | Permalink | Comments (0) | TrackBack (0)

Problems Arising Out of Power of Attorney

ProblemsFor many individuals, power of attorney is an inexpensive estate planning tool that allows for a trusted loved one to be able to take a decision making role if the person becomes unable to do so for themselves. However, the fear of elder abuse being committed through a power of attorney has caused many banks to create detailed rules for honoring the designation of power of attorney. Problems can occur when individuals go to a bank to enforce a power of attorney and find out for the first time that the bank requires the document to be on specific paper or the drafter used a variation of their name that does not match their official forms of identification. One possible solution is a revocable trust, which banks are more comfortable with.

See Paul Sullivan, Power of Attorney is Not Always a Solution, The New York Times, Aug. 22, 2014.

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) and Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

August 25, 2014 in Disability Planning - Health Care, Disability Planning - Property Management, Estate Planning - Generally, Trusts | Permalink | Comments (0) | TrackBack (0)

Resource Guide: Money Smart for Older Adults

Money SmartThe Federal Deposit Insurance Corporation (FDIC) and Consumer Financial Protection Bureau (CFPB) have made available a resource guide entitled Money Smart for Older Adults. The guide provides information for financial planning and, avoiding and addressing elder financial exploitation. Provided below is the introduction to the guide:

With over 50 million Americans aged 62 and older1, Older Adults are prime targets for financial exploitation both by persons they know and trust and by strangers. Financial exploitation has been called “the crime of the 21st century” with one study suggesting that older Americans lost at least $2.9 billion to financial exploitation by a broad spectrum of perpetrators in 2010.2

A key factor in some cases of elder financial exploitation is mild cognitive impairment which can diminish an older adult’s ability to make sound financial decisions.

This epidemic is under the radar. The cases tend to be very complex and can be difficult to investigate and prosecute. Elders who lose their life savings usually have little or no opportunity to regain what they have lost. Elder financial abuse can result in the loss of the ability to live independently; decline in health; broken trust, and fractured families.

Awareness and prevention is the first step. Planning ahead for financial wellbeing and the possibility of diminished financial capacity is critical. Reporting and early intervention that results in loss prevention is imperative.

Money Smart for Older Adults is designed to provide you with information and tips to help prevent common frauds, scams and other types of elder financial exploitation in your community. Please share this information as appropriate.

August 25, 2014 in Books, Disability Planning - Property Management, Elder Law, Estate Planning - Generally, Resource Links | Permalink | Comments (0) | TrackBack (0)

Friday, August 22, 2014

Booklet Series on Managing Someone Else’s Money

CFPB_LogoThe Consumer Financial Protection Bureau has released a series of informative guides entitled, Managing Someone Else’s Money. Here is a description of the series from the CFPB website:

Millions of Americans are managing money or property for a loved one who is unable to pay bills or make financial decisions. This can be very overwhelming. But, it’s also a great opportunity to help someone you care about, and protect them from scams and fraud.

We are releasing four easy-to-understand booklets to help financial caregivers. The Managing Someone Else’s Money guides are for agents under powers of attorney, court-appointed guardians, trustees, and government fiduciaries (Social Security representative payees and VA fiduciaries.)

The guides help you to be a financial caregiver in three ways:

  • They walk you through your duties.
  • They tell you how to watch out for scams and financial exploitation, and what to do if your loved one is a victim.
  • They tell you where you can go for help.

August 22, 2014 in Books, Disability Planning - Property Management, Estate Planning - Generally, Guardianship, Non-Probate Assets, Professional Responsibility, Resource Links, Trusts | Permalink | Comments (0) | TrackBack (0)

Thursday, August 21, 2014

Online Toolkit Offers Estate Planning Help

ToolkitA comprehensive on-line estate planning toolkit service called Final Roadmap can assist with various estate planning needs, including storing and sharing estate planning documents. Membership to the site is available with a one-time purchase. Here is a description of the toolkit from the website:

Misunderstanding and confusion result from neglecting to plan ahead, leaving a painful and costly legacy to those you care about most.  Final Roadmap was created to make end of life planning manageable and affordable. The Toolkit allows you to create, compile and safely store documents and directives  – with the option to share the documents you select, with the individuals you choose, in the equivalent of an electronic vault.

August 21, 2014 in Death Event Planning, Disability Planning - Health Care, Disability Planning - Property Management, Estate Planning - Generally, Resource Links | Permalink | Comments (0) | TrackBack (0)