Richmond Virginia Estate Planning, Elder Law, And Asset Protection

Setting up a Power of Attorney in Virginia: Mistakes to Avoid

People often ask me as an estate planning lawyer how to set up a power of attorney in Virginia. It isn’t hard, but as with any legal strategy, it can be critical to consult an expert. Just like online wills, an online power of attorney can be a problem. Whether it’s done online or by an attorney, there are key mistakes to avoid.

First, to manage your affairs when you are disabled, you need the right power of attorney, not just any power of attorney. Many have a limit on gift-giving while you’re disabled. But those restrictions may leave your agent unable to make permissible or transfers that might help you or your parent qualify for Medicaid or VA benefits.

Second, I also see powers of attorney which name the wrong person to act as financial agent when a person becomes incapacitated. The person first named may have become disabled or have died since you signed it, and you may have failed to name a substitute agent in that case. Or the person named may now have become untrustworthy— more interested in helping herself than you. And that can be costly.

Third, is your power of attorney accessible, does your agent even know he’s named, or where your important papers are kept? Signing one is useless if nobody knows where it is when you need it.

You may know how to fix a carburetor, a leaky faucet or your laptop computer, or be able to teach your Yellow Lab to juggle. But don’t be penny wise and pound foolish when it comes to planning for your own disability, or that of a parent or other loved one.

And while you are Googling around about powers of attorney, you might look for a comprehensive plan for your disability, which could involve trusts, asset protection planning, and planning for medical decision making. A qualified estate planning lawyer or elder law attorney is often the best place to start.

 

Probate_estate_administration_Richmond_Virginia

C19 UPDATE: Is Your Estate Plan COVID19-Ready? Three Things to Review Now

Even if you have done comprehensive estate planning with the guidance of a qualified attorney, you may want to re-evaluate certain elements of your plan now, through the lens of the coronavirus pandemic. Why is that? There are two uniquely challenging aspects of this pandemic that your current plan may not adequately address.

  1. Medical treatment for severe cases of COVID19 frequently involves intubation and ventilator therapy to combat respiratory failure … and
  2. Quarantine and isolation orders blocking hospital visitors create some communication barriers between patients, doctors and family members.

How might these unique challenges impact your estate plan?

Living Wills. If your living will contains a blanket prohibition on intubation, you may want to reconsider that decision.

Durable Powers of Attorney (DPOA). Given the communication difficulties that may arise when a patient is hospitalized during this pandemic, you may want to revisit the terms of your DPOA to make it easier for your agent to act on your behalf.

Advance Medical Directive.  An advance medical directive is a health care proxy document which allows you to appoint someone else to act as your agent for medical decisions when you cannot act for yourself. Under normal circumstances, this person would likely confer with your attending physicians in person and again, these in-person communications may be difficult right now. You want to add language to expressly authorize electronic communication with your agent.

A qualified estate planning attorney, who focuses exclusively in this area of the law, can advise you on whether your current plans accurately represent your wishes during this uniquely challenging time.

Resource: ElderLawAnswers, Three Changes You May Want to Make to Your Estate Plan Now Due to the Pandemic, April 30, 2020

Am I Making One of the Five Common Estate Planning Mistakes?

You don’t have to be super-wealthy to see the benefits from a well-prepared estate plan. However, you must make sure the plan is updated regularly, so these kinds of mistakes don’t occur and hurt the people you love most, reports Kiplinger in its article entitled “Is Anything Wrong with Your Estate Plan? Here are 5 Common Mistakes.”

An estate plan contains legal documents that will provide clarity about how you’d like your wishes executed, both during your life and after you die. At a minimum, there are three key documents:

  • A will
  • A durable power of attorney for financial matters
  • A health care power of attorney or similar document
  • And don’t forget, your beneficiary designations are a part of your plan!

With the power of attorney and health care documents, you appoint someone you trust to help make decisions involving your finances or health, in case you can’t while you’re still living. Let’s look at five common mistakes in estate planning:

# 1: No Estate Plan Whatsoever. A will has specific information about who will receive your money, property and other property. It’s important for people, even with minimal assets. If you don’t have a will, state law will determine who will receive your assets. Dying without a will (or “intestate”) entails your family going through a time-consuming and expensive process that can be avoided by simply having a will.

A will can also include several other important pieces of information that can have a significant impact on your heirs, such as naming a guardian for your minor children and an executor to carry out the business of closing your estate and distributing your assets. Without a will, these decisions will be made by a probate court.

# 2: Forgetting to Name or Naming the Wrong Beneficiaries. Some of your assets, like retirement accounts and life insurance policies, aren’t normally controlled by your will. They pass directly without probate to the beneficiaries you designate. To ensure that the intended person inherits these assets, a specific person or trust must be designated as the beneficiary for each account.

# 3: Wrong Joint Title. Married couples can own assets jointly, but they may not know that there are different types of joint ownership, such as the following:

  • Joint Tenants with Rights of Survivorship (JTWROS) means that, if one joint owner passes away, then the surviving joint owners (their spouse or partner) automatically inherits the deceased owner’s part of the asset. This transfer of ownership bypasses a will entirely.
  • Tenancy in Common (TIC) means that each joint owner has a separately transferrable share of the asset. Each owner’s will says who gets the share at their death.

# 4: Not Funding a Revocable Living Trust. A living trust lets you put assets in a trust with the ability to freely move assets in and out of it, while you’re alive. At death, assets continue to be held in trust or are distributed to beneficiaries, which is set by the terms of the trust. The most common error made with a revocable living trust is failure to retitle or transfer ownership of assets to the trust. This critical task is often overlooked after the effort of drafting the trust document is done. A trust is of no use if it doesn’t own any assets.

# 5: The Right Time to Name a Trust as a Beneficiary of an IRA. The new SECURE Act, which went into effect on January 1, 2020 ends what’s known as the stretch IRA. This allowed non-spouses who inherited retirement accounts to stretch out disbursements over their lifetimes. It let assets in retirement accounts continue their tax-deferred growth over many years. However, the new Act requires a full payout from the inherited IRA within 10 years of the death of the original account holder, in most cases, when a non-spouse individual is the beneficiary.

Therefore, it can be very complicated to name a trust as the beneficiary of a retirement account (although some times, it is essential). It’s possible that either distributions from the IRA may not be allowed when a beneficiary would like to take one, or distributions will be forced to take place at a bad time and the beneficiary will be hit with unnecessary taxes. Talk to an experienced estate planning attorney and review your estate plans to make certain that the new SECURE Act provisions don’t create unintended consequences.

Reference: Kiplinger (Feb. 20, 2020) “Is Anything Wrong with Your Estate Plan? Here are 5 Common Mistakes”

Older couple social distancing

Helping Your Elderly Parents during the Pandemic

Considerable’s recent article entitled “4 things you can do for your aging parents during the coronavirus pandemic” reports that 8 out of 10 deaths reported in the U.S. related to COVID-19 have been in adults 65 years old and older, according to the Centers for Disease Control and Prevention (CDC). If your parents are in one of the vulnerable categories, here are four things you can do right now to help them through the pandemic.

  1. Shop or help them place orders online. With many areas experiencing a shopping frenzy in response to the coronavirus, personal care and household items have quickly disappeared from stores. You can help your parents by allowing them to stay home and going to the store for them and dropping off groceries on their door. You can also place online orders that can be delivered to their home.
  2. Contact them regularly. The CDC says the coronavirus is believed to spread primarily from person-to-person contact, particularly between people who are closer than six feet from each other. Therefore, you have likely already been separating yourself from your family members, including your parents. To avoid possibly exposing your parents, use Skype, FaceTime, or call them on the phone. Stay in close communication to keep their spirits up and check on how they’re feeling. This can help you to verify their mental and physical health, as the days of social distancing add up. You can set up a schedule with specific times you’ll call, so they have something to look forward to throughout the day.
  3. Watch for scams. We’re already hearing about the con artists coming out of the woodwork to prey on the elderly—and all of us in this medical and financial crisis. Speak to your parents about these scams, so they can protect themselves. The Federal Trade Commission has issued guidelines for avoiding scams, including the following:
  • Hang up on robocalls and don’t press any numbers.
  • Verify your sellers because many online sellers may say they have in-demand products in stock, when they actually don’t.
  • Don’t click on links from sources you don’t know.
  • Research before making donations, and if asked for donations by cash, gift card, or wiring money, pass!
  1. Keep ‘em busy. Seniors have unique challenges when they stay at home. The inactivity that can be linked to being confined in the home can cause declines in physical health and in physical abilities. The elderly are also at greater risk of developing depression in social isolation, and their elevated risk for bad outcomes from this virus can cause higher levels of anxiety and lead to sleep difficulties and other health issues. Encourage your parents to read, play a board game, do a puzzle, or take a walk, provided that they’re keeping distance from others. Many religious groups have also transitioned their services online, and there are plenty of movies and TV shows on-demand for home viewing.

Most significantly, make certain that your parents are taking the pandemic seriously and emphasize the importance of social distancing.

Reference:  Considerable (April 8, 2020) “4 things you can do for your aging parents during the coronavirus pandemic”

 

C19 UPDATE: How Nursing Homes Can Do Better at Protecting Residents from COVID19

It’s no secret that nursing homes across the country have been hard-hit in this pandemic and residents and their families are rightly concerned about safety.

Here are two developments you will want to watch.

  1. Commission on Medicare and Medicaid Services (CMS) on April 30 announced a new independent commission, Coronavirus Commission for Safety and Quality in Nursing Homes, to conduct a comprehensive assessment of the nursing home response to the 2019 Novel Coronavirus (COVID-19) pandemic. The Commission will provide independent recommendations and report to CMS to help inform immediate and future responses to COVID-19 in nursing homes.
  2. Centers for Disease Control and Prevention’s (CDC) updated guidelines for nursing homes and long-term care facilities in regard to preparing for COVID-19. You can review the guidelines and additional resources on the CDC website at https://www.cdc.gov/coronavirus/2019-ncov/hcp/long-term-care.html. You also can watch a 30-minute pre-recorded CDC webinar, Preparing Nursing Homes and Long-Term Care Facilities for COVID-19 on YouTube.

Resources: CMS.gov, CMS Announces Independent Commission to Address Safety and Quality in Nursing Homes, April 30, 2020; NPR, Trump Announces Panel to Look at Nursing Home Responses to Coronavirus Outbreak, April 30, 2020; Centers for Disease Control and Prevention, Preparing for COVID-19: Long-term Care Facilities, Nursing Homes

Suggested keywords: Coronavirus Outbreak in Nursing Homes, COVID19 in Nursing Homes

How to use Telemedicine during the Pandemic..and After

On Friday I spoke with a friend who lives in a Richmond retirement community now on total lockdown. Several residents of her building have died from COVID-19. She’s coping well, but she is very careful. I’m very concerned for her. As you know, the COVID-19 pandemic is taking lives not just here, but all over the country. State and local leaders have issued stay-at-home orders to try to thwart the spread of the disease. COVID-19 can cause serious complications in the elderly and in those, like my friend, with underlying health conditions.

A Midwestern friend recently sent me an article from Missouri’s News Tribune  titled “Telemedicine helps elderly patients stay home during pandemic,” which explains that, for some services, health care providers have found telehealth can assist many patients, including some of the most vulnerable, who can stay in the comfort of their own homes. (It is ironic that she sent me this article. I’ve got my first “telemedicine” appointment myself this week!)

Many healthcare providers are launching telemedicine or video visits. Those patients who want to participate in video visits with their physicians, should contact their physicians’ offices for more information about the availability.  In my own case, I had a routine check-in scheduled for over a year, and my doctor’s office called to say the doctor wanted to do the appoint by “Zoom”.

This is a trend. The federal government announced an expanded use and relaxed rules for Medicare telemedicine in response to the coronavirus pandemic, effective March 6, 2020. Rural and site limitations have been removed, and telehealth services can now be provided, regardless of where the Medicare patient is located geographically and by type of site. This allows a patient to be at home and communicate with their doctor.

Medicare also expanded the list of eligible services provided via telehealth. Medicare patients can now get a wider range of healthcare services from their doctors without having to travel to a doctor’s office, and these telehealth services are not limited to health issues related to patients with COVID-19.

It’s a win-win. Healthcare professionals are able to take care of patients and keep staff on-site. Staff are getting more hours.

At some facilities, the need for patients to see their doctors, while not exposing them to the COVID-19 virus, is a motivating factor for the expansion of telehealth offerings.

The use of online resources allows patients to meet with their providers remotely from their homes.  It includes care for many common illnesses and injuries, preventive care, mental health conditions and a range of other medical needs.

Poeple seeking to avoid medical office right now should contact their doctor’s office to see if telehealth is an option for them.

Reference: News Tribune (April 12, 2020) “Telemedicine helps elderly patients stay home during pandemic”

Do You Have an Estate Planning Blueprint?

That warning is applicable to people of all ages. Your assets can go to one of four spots:

  • Your family
  • Your friends
  • Charitable organizations or
  • The government.

Therefore, to avoid the last choice, sit down with an estate planning attorney and ensure that your assets are being allocated how you want them to be.

Forbes recent article entitled “How To Create An Estate Planning Blueprint” reminds you to make sure your plan is optimized, so your beneficiaries can avoid probate and make the most of the gifts you plan to leave them.

Here are some ideas on how to make sure your estate is as planned as possible.

Set Regular Check-Ins. Estate planning isn’t a “set it and forget it’ task.” It needs regular reviews. Your estate is constantly evolving because of life events, changing laws and your financial circumstances. You need to talk to your attorney to make certain that all your assets, as well as circumstances, such as the birth or adoption of a grandchild, are recognized in your will. These meetings should be held every few years—but may be more frequent due to occurrences, such as a births, deaths, or divorces.

Think of the Future. Forecasting into the future can give you peace of mind now and make things easier for your beneficiaries. Failing to plan can create future problems for your heirs.

Look at Your Options. If you decide to create a trust, know your options and discuss different setups—and their tax implications—with an experienced estate planning attorney. Working through the pros and cons of options, can help you to determine the best options for you and your situation.

Tell Your Beneficiaries about Your Wishes. Let your beneficiaries know what you’re planning, so there are no surprises or hurt feelings. There’s no need to detail all of the financial details. Just give a summary of what you anticipate, as well as details about who will be the trustees and executors of your estate.

When it comes to your estate, paying for the professional services of a qualified estate planning attorney now, can help you and your family avoid issues in the future.

Reference: Forbes (April 1, 2020) “How To Create An Estate Planning Blueprint”

 

C19 UPDATE: Keeping the Most Vulnerable Safe as the Economy Slowly Reopens

A lot of communities are easing social-distancing restrictions originally put in place to fight the spread of coronavirus. Virginia is looking at addressing restrictions one community at a time. Even as stay-at-home orders begin to expire, it’s especially important for people at higher risk to remain vigilant.

High-risk groups include:

  • People who are 65 or older
  • People of any age who
    • Live in a nursing home or long-term care facility
    • Have chronic lung disease or moderate-to-severe asthma
    • Have serious heart conditions
    • Are severely obese (body mass index >40)
    • Have diabetes
    • Are undergoing dialysis for chronic kidney disease
    • Have liver disease
    • Are otherwise immunocompromised

In addition to reducing exposure, one of the best ways to keep yourself and at-risk loved ones safer is recognizing the symptoms of COVID-19 and getting appropriate medical help.

COVID-19 symptoms include fever, cough, and shortness of breath.

Emergency warning signs for COVID-19 requiring immediate medical attention include:

  • Difficulty breathing or shortness of breath
  • Persistent pain or pressure in the chest
  • New confusion or inability to arouse
  • Bluish lips or face

Kaiser Health News also warns that doctors also are reporting instances of unusual symptoms in seniors “who present without the typical cough, fever and shortness of breath. Instead, these elders may simply appear off; sleeping more, losing appetite and becoming confused and apathetic. Sometimes they are dizzy, stop speaking or simply collapse.”

Recognizing possible early symptoms of COVID-19 can help seniors get needed help quickly and prevent further spread of the virus.

Resources: Kaiser Health News, Seniors with Covid-19 show unusual symptoms, doctors say, April 23, 2020; Administration for Community Living, What do Older Adults and People with Disabilities Need to Know?

Giving your home away

Handing Kids Keys to Your Home Is Never Good Estate Planning

Giving your home away to an adult child may seem like a simple approach for avoiding having the house go through probate, or even qualifying easily for Medicaid. But this seemingly simple solution comes with a lot of problems, including extra taxes, and possibly for years of delay for qualifying for Medicaid or VA benefits. That’s the advice from the article “Don’t Give Your Adult Kids Your House” from Nerd Wallet.

There are a lot of other ways to transfer a house to family members. AS the saying goes, “Do not attempt this at home!” Estate planning and elder law attorneys will be able to help you accomplish this, without creating extra problems for your family.

First, if you leave the house to your children in your will, which means they don’t get it until you die, they receive something called a “step-up in basis.” This means that all of the appreciation of the house that occurred during the time that you owned the house until your death is not taxed.

Here’s an example. A financial planner advises his client not to let his mother gift him the family home. She paid $16,000 for it back in 1976, and the current market value of the house was close to $200,000. None of that increase in value would be taxable if the son inherited the house. However, she signed a quitclaim to give her son the house while she was living and died shortly afterwards. The estimated tax bill was about $32,000.

Some families who realize the impact of this when it’s almost too late, scramble to give the house back to the parents. They do a last-minute deed change, before it’s too late. There isn’t always time for this.

When it comes to transferring the house, so a parent can qualify for Medicaid, there’s a five-year look back that prohibits any transfer of assets, especially of a house. That can lead to a penalty period, so the senior who needs long-term care will not be eligible for Medicaid.

Transferring a home to an adult child with financial or marital problems is asking for trouble. If the house becomes the child’s asset, then it can be attached by creditors. If a divorce occurs, the home could be an asset to be divided by the couple—or lost completely.

As for the family in the example above, the man was almost stuck paying taxes on a $184,000 gain. A tax research firm he engaged learned of a workaround, Section 2036 of the Internal Revenue Code. If the mother retained a life interest in the property, which includes the right to continue living there, then the home would remain in her estate, rather than be treated as a completed gift. The son, as executor of the estate, filed a gift tax return on her behalf to show that he was given a “remainder interest” or the right to inherit, when his mother’s life interest expired at her death.

There are less stressful and less costly ways to avoid the family home being part of the probated estate. Let an experienced estate planning attorney help your family before costly, time-consuming and stressful mistakes are made.

Reference: Nerd Wallet (April 3, 2020) “Don’t Give Your Adult Kids Your House”

man thinks about how to take care of father with Alzheimer

What are the Alzheimer’s Signs?

Considerable’s recent article entitled “These are the 10 Alzheimer’s signs to watch out for, provides a list of symptoms but cautions that it’s important to note that every one of these 10 symptoms can be applied to other problems. The Alzheimer’s Association explains that there are 10 warning signs and symptoms of Alzheimer’s disease of which older adults should be aware. However, it’s also important to remember that for every one of these 10 symptoms of Alzheimer’s, there is also a typical age-related change that is not indicative of Alzheimer’s disease.

If you see any of these warning signs, don’t ignore them, especially if they’re impacting your life dramatically. See your doctor. (And, of course, an elder law attorney!)

  1. Memory loss that upsets daily life. If you’re experiencing significant memory loss that’s interrupting your daily life, it could indicate Alzheimer’s disease. However, the typical age-related change is that sometimes you forget names or appointments, but you remember them later on.
  2. Trouble planning or solving problems. You have changes in your ability to develop and follow a plan or work with numbers, but it’s not a sign if you make a few errors when managing finances or household bills.
  3. Difficulty finishing regular tasks. Those with Alzheimer’s can begin having issues completing familiar tasks like driving to church, recalling the rules of a favorite game, or organizing a grocery list. However, it’s a typical age-related change to occasionally require assistance using a microwave or figuring out how to record a TV show.
  4. Confusion with time or location. If you’re always losing track of dates, seasons, and the passage of time, you should see your physician and have an Alzheimer’s test. You can, however, get confused about the day of the week and later recall.
  5. Trouble understanding visual images and spatial relationships. Some people will have visual issues that indicate Alzheimer’s, which is different than the typical age-related change of your sight related to cataracts.
  6. Recent issues with words in speaking or writing. If you stop in the middle of a conversation and have no clue how to continue, it can be a sign of Alzheimer’s. The same is true if you have trouble remembering the name of a common object and frequently repeat yourself. However, it’s a typical age-related change to occasionally have difficulty finding the right word.
  7. Misplacing things and losing the ability to retrace steps. If you put things in unusual places and can’t retrace your steps to find them, or if you accuse people of stealing from you, this may indicate Alzheimer’s disease. It is, however, a typical age-related change to misplace things from time to time and retrace your steps to find them.
  8. A lack of sound judgment. If you’re often experiencing difficulty with decision making and using poor judgment, see your doctor to be tested for Alzheimer’s. However, making an occasional bad decision or mistake is normal.
  9. No interest in work or social activities. Those with Alzheimer’s might feel unable to hold or follow a conversation and as a result withdraw from work or social activities. It is, however, a typical age-related change to occasionally feel uninterested in family or social obligations.
  10. Change in mood and personality. If you think your mood and personality are shifting, it may be a sign of Alzheimer’s. This could include confusion, suspicion, depression, fear/anxiety and becoming easily upset. However, it is a typical age-related change to develop specific ways of doing things and to get upset, when your routine is disrupted.

Reference:  Considerable (March 4, 2020) “These are the 10 Alzheimer’s signs to watch out for”

 

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