Wills, Trusts & Estates Prof Blog

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

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Wednesday, July 23, 2014

Dying Man's Will Rejected

Will On Tuesday, a Sacramento Superior Court judge refused to validate a will that a lawyer claimed to be the last wishes of a dying friend.  The will would have given all but a small portion of Joseph Herb O’Brien’s estate to a mutual friend. 

Judge Christopher Krueger said the will filed on behalf of local veterinarian Kenneth Pawlowski did not meet the standard of “clear and convincing evidence” that O’Brien was of a sound mental state when he signed his testament.  “Indeed, the evidence points to the conclusion that Mr. O’Brien was extremely weak and actually in the process of dying,” Krueger wrote.  The judge said there was significant evidence that O’Brien wanted to modify the will that he had left in a trust that provided for a stepson with drug problems.  However, the judge expressed there was a “very significant doubt on Mr. O’Brien’s capacity at the time of execution.”

Although no one exercised undue influence upon Mr. O’Brien, the proponent of the will was unable to show that the will in this case was intended by the decedent to be his will at the time he put his mark on it. 

See Andy Furillo, Sacramento Judge Rejects Dying Man’s Last-Minute Will, The Sacramento Bee, July 23, 2014.

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

July 23, 2014 in Elder Law, Estate Administration, Estate Planning - Generally, Wills | Permalink | Comments (0) | TrackBack (0)

Double Dipping Exceptions

Retirement benefits

Many baby boomers that are expecting to retire with ample social security benefits upon retirement, may have to think again.  Unfortunately, under the Windfall Elimination Provision (WEP), individuals may not be eligible for all the Social Security benefits that are expected.

Before 1983, people working in both public and private jobs could collect a full pension when they retired, in addition to Social Security, so long as they qualified.  However, the enactment of the WEP ended this “double dipping.” 

Yet, there is a big exception.  You are excepted from the WEP under certain circumstances—one of which is that you had 30 years or more of “substantial” earnings.  When calculating this number you must take several things into account including the fact the WEP will never be more than one-half your non-Social Security pension and living adjustments.  The age at which you take the benefits also comes into play; retiring at your full retirement age, or later, will change your benefit profile. 

See Amanda Alix, Social Security Twist for Boomers with Public, Private Jobs, USA Today, July 21, 2014.

Special thanks to Laura Galvan (Attorney, San Antonio, Texas) for bringing this article to my attention.

July 23, 2014 in Elder Law, Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0) | TrackBack (0)

Tuesday, July 22, 2014

The Shortcomings of Joint Accounts

Joint accountWhile many people may view joint accounts as an effective way to avoid probate since joint property passes automatically to the joint owner at death, there are several drawbacks to joint ownership of investment:

  1. Risk. Joint owners of accounts have total access and the ability to use the funds for their own purposes.  Additionally, the funds are available are available to the creditors of all joint owners and could be considered as belonging to all joint owners should they apply for public benefits or financial aid. 
  2. Inequity. If a senior has one or more children on certain accounts, at death some children may end up inheriting more than others.  There is no guarantee that all of the children will share equally.
  3. Unexpected. If a child passes away before the parent, a system based on joint accounts can fail.  It may be necessary to seek conservatorship to manage funds or they may pass to surviving children with nothing or a small portion going to the deceased child’s family. 

Joint accounts are not entirely cumbersome and can work well in several situations.  When a senior has just one child and wants everything to go to him, joint accounts can be a great way to provide for succession and asset management.  Also, joint accounts can be useful to put one or more children on one’s checking account to pay customary bills and have access to funds in the event of incapacity or death. 

See Three Reasons Why Joint Accounts May Be A Poor Estate Plan, Elder Law Answers, July 18, 2014. 

July 22, 2014 in Disability Planning - Property Management, Elder Law, Estate Planning - Generally, Non-Probate Assets | Permalink | Comments (0) | TrackBack (0)

Monday, July 21, 2014

529 Plans for Grandparents


Many grandparents want to help their grandchildren pay for college, but do not know the best way of going about it.  According to a Fidelity Investments study, nearly half of grandparents expect to contribute to their grandkids’ college savings, with more than a third expecting to give $50,000 or more.  While very generous and thoughtful in nature, these contributions can also have significant tax and estate planning benefits for grandparents. 

A 529 plan is a college savings investment account that provides tax-free growth as long as the money is put toward tuition and most types of college expenses such as fees and books.  Grandparents can use 529 accounts to procure tax deductions or diminish the value of their taxable estates. 

One way to showcase 529 accounts is to highlight their advantages over other savings strategies.  For example, grandchildren who receive Series EE bonds as gifts can later be inundated with federal income taxes on the interest if they do not use funds for college.  Contrastingly, a 529 plan provides for tax-free distribution.  It also allows grandparents to give the funds to another grandchild if the intended recipient does not go to college. 

One of the caveats of a 529 plan is that it could make a grandchild ineligible for financial age.  This is because once the money is withdrawn for the beneficiary, it will count as income that schools use to determine financial aid awards.  However, grandparents can avoid this problem by waiting until their grandchild’s junior or senior year to distribute the money. 

See Robyn Post, Your Practice—Selling Grandparents on the Perks of 529 College Savings Plans, Reuters, July 18, 2014.

July 21, 2014 in Elder Law, Estate Planning - Generally, Gift Tax, Income Tax | Permalink | Comments (0) | TrackBack (0)

Mickey Rooney’s Heartfelt Speech On Elder Abuse

Mickey RooneyAs I have previously discussed, Mickey Rooney, who died earlier this year, was the victim of elder abuse. He spoke publically about his experience at a Senate hearing in 2011. Part of his testimony can be seen here.

Rooney used the platform he had to talk boldly about the terrible experience he was put through, call for an end to the problem of elder abuse, and told fellow victims that they are not alone and plead for them to speak out about their elder abuse.

See Alana Karsch, A Former Movie Star and Veteran Gave a Passionate Speech About a Topic No One Wants to Discuss, Upworthy, July 2014.

Special thanks to Laura Galvan (Attorney, San Antonio, Texas) for bringing this article to my attention.

July 21, 2014 in Current Affairs, Elder Law | Permalink | Comments (0) | TrackBack (0)

Tuesday, July 15, 2014

Estate Planning for Alzheimers

Old people holding hands

Alzheimer’s is a devastating disease that affects many Americans every year.  If diagnosed early enough, a person with Alzheimer’s disease will likely retain the mental capacity to sign an estate plan.  These documents should include a Power of Attorney for healthcare, Power of Attorney for property, and a will.  It is vital that these documents are signed in a timely manner, as any delay could prevent the patient’s meaningful input as the cognitive impairments worsen. Provided below are a few steps to guide an Alzheimer’s patient when creating a plan:

  1. Power of Attorney Documents.  These designate to a loved one to make healthcare and asset management decisions when the person affected with Alzheimer’s is no longer capable of making decisions for themselves.  When naming someone to hold Power of Attorney, select an individual you trust to carry out your wishes and act in your best interests.
  2. Last Will and Testament. A will allows the Alzheimer’s patient to finalize their legacy and distribute their estate.  The will should include burial and funeral wishes as well.
  3. Time is of the Essence. Since Alzheimer’s is a progressively declining illness, prompt action is required.  The longer the passage of time from diagnosis to document signing, the more likely the Alzheimer’s affected person will be deemed incompetent.
  4. Finalizing the Plan. Sit down and have a conversation with family and loved ones to discuss healthcare plans and wishes, including discussion of nursing home placement or in-home care.

See Maria Shriver, Life Ed: Protecting Wishes And Assets of Alzheimer’s Patients, NBC News, July 14, 2014.

July 15, 2014 in Disability Planning - Health Care, Disability Planning - Property Management, Elder Law, Trusts | Permalink | Comments (0) | TrackBack (0)

Minnesota Addresses Thefts by Court-Appointed Guardians

MinnesotaAfter the discovery of abuse by court-appointed guardians in Minnesota, the state audited 24 random accounts handled by Alternate Decision Makers, Inc. The findings uncovered problems with ten accounts ranging from missing documents to possible indications of theft. Allegations of theft by the guardians include unreasonably high fees accessed, missing property, and personal items sold off after the protected person died. The suspicious accounts discovered by auditors are being sent to judges for review and to be remedied.

See James Eli Shiffer, Conservator’s Thefts Prompted 24 State Audits, Star Tribune, July 14, 2014.

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

July 15, 2014 in Current Affairs, Disability Planning - Health Care, Disability Planning - Property Management, Elder Law, Guardianship, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Monday, July 14, 2014

Article on Financial Abuse of Elders

Kristen lewis

Kristen M. Lewis (Smith, Gambrell & Russell, LLP) recently published an article entitled, Financial Abuse of Elders, Probate & Property, Vol. 28 No. 4, 11-15 (July/August 2014).  Provided below is the article’s introduction:

Elder financial abuse (EFA) is a societal blight resulting in estimated losses to victims of $2.9 billion annually.  Attorneys who advise elders and other at-risk adults must strive to recognize their clients’ risk for EFA and endeavor to design protective estate plans that will help prevent it.  Victims of EFA include a pro bono client living alone in her government-subsidized studio apartment and Brooke Astor in her opulent Park Avenue home surrounded by family members.  Studies have shown that one of every six adults over the age of 65 has been a victim of EFA, and that women are twice as likely as men to be victims.  Nationally, 30% of adults with disabilities who use personal assistance services report one or more types of abuse by their primary care provider.  

July 14, 2014 in Articles, Elder Law, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Sunday, July 13, 2014

End of Life Planning with POLST

Hospital care

Physician Orders for Life-Sustaining Treatment (POLST) is another approach to end-of-life care that incites discussions between patients and their health care providers.  The idea behind POLST is to give patients the ability to choose their course of treatment, and ensure those preferences are respected. 

With POLST, patients and doctors discuss diagnosis, prognosis and treatment options.  Based on these conversations, patients and health care providers complete a POLST form, which documents the patient’s wishes with respect to end-of-life care.  The form is signed by the patient’s health care provider and becomes part of the patient’s medical record. 

It is important to note that POLST does not replace an advance directive or a durable power of attorney for health care.  Rather, the POLST form supplements these other documents.  Where advance directives and durable power of attorney provide instructions for future treatment, POLST gives medical orders for current treatment. 

The POLST form is standardized by state and studies indicate it is making a difference in safeguarding patients’ wishes.

See Anne Jump and Doug Stanley, Planning with POLST, Bryan Cave, July 9, 2014.

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

July 13, 2014 in Disability Planning - Health Care, Elder Law, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)

Wednesday, July 9, 2014

Planning for Medical Expenses in Retirement

Medical expensesMany Americans do not realize that medical care can consume a large portion of their retirement budget.  According to the Employee Benefits Research Institute (EBRI), Medicare currently covers roughly 62 percent of an individual’s medical expenses.  Unfortunately, EBRI says the percentage covered is likely to decrease in the future.  With healthcare costs on the rise, it is more important now than ever to plan for these expenses in retirement.  Here are some steps you should take ahead of time to prepare for medical expenses:

  1. Understand Medicare.  While you do not have to be an expert in Medicare, understand that Medicare is similar to a government-sponsored health insurance plan for seniors.  Seniors can choose to be covered by Original Medicare, which is broken into two parts (A and B) or a Medicare Advantage plan (part C).  To cover prescription drug gaps, Medicare users can pay for Part D, which is the Medicare Prescription Drug Plan.
  2. Estimate Future Healthcare Costs.  According to a 2011 guide to healthcare and retirement costs, the average annual health care cost for a 65-year-old in poor health and on Medicare was $4,760.  For a healthy 65-year-old on Medicare, the average cost was $4,450.  By age 75, those numbers increase by about $1,000. 
  3. Look at Your Options.  There are many ways to save, earn or otherwise obtain the funds you will need to pay for medical expenses during retirement.  Some employers will provide medical coverage after retirement.  You should also continue to save and invest as much as possible to help pay for future out-of-pocket medical expenses.

See Scott Holsopple, How to Factor Medical Expenses into Your Retirement Plan, US News, July 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.

July 9, 2014 in Disability Planning - Health Care, Elder Law, Estate Planning - Generally | Permalink | Comments (0) | TrackBack (0)