Richmond Virginia Estate Planning, Elder Law, And Asset Protection

Older couple social distancing

If Not Now, When? It is the Time for Estate Planning

What else could go wrong? You might not want to ask that question, given recent events. A global pandemic, markets in what feels like free fall, schools closed for an extended period of time—these are just a few of the challenges facing our communities, our nation and our world. The time is now, in other words, to be sure that everyone has their estate planning completed, advises Kiplinger in the article “Coronavirus Legal Advice: Get Your Business and Estate in Order Now.”

Business owners from large and small sized companies are contacting estate planning attorney’s offices to get their plans completed. People who have delayed having their estate plans done or never finalized their plans are now getting their affairs in order. What would happen if multiple family members got sick, and a family business was left unprotected?

Because the virus is recognized as being especially dangerous for people who are over age 60 or have underlying medical issues, which includes many business owners and CEOs, the question of “What if I get it?” needs to be addressed. Not having a succession plan or an estate plan, could lead to havoc for the company and the family.

Establishing a Power of Attorney is a key part of the estate plan, in case key decision makers are incapacitated, or if the head of the household can’t take care of paying bills, taxes or taking care of family or business matters. For that, you need a Durable Power of Attorney.

Another document needed now, more than ever: is an Advance Health Care Directive. This explains how you want medical decisions to be made, if you are too sick to make these decisions on your own behalf. It tells your health care team and family members what kind of care you want, what kind of care you don’t want and who should make these decisions for you.

This is especially important for people who are living together without the legal protection that being married provides. While some states may recognize registered domestic partners, in other states, medical personnel will not permit someone who is not legally married to another person to be involved in their health care decisions.

Personal information that lives only online is also at risk. Most bills today don’t arrive in the mail, but in your email inbox. What happens if the person who pays the bill is in a hospital, on a ventilator? Just as you make sure that your spouse or children know where your estate plan documents are, they also need to know who your estate planning attorney is, where your insurance policies, financial records and legal documents are and your contact list of key friends and family members.

Right now, estate planning attorneys are talking with clients about a “Plan C”—a plan for what would happen if heirs, beneficiaries and contingent beneficiaries are wiped out. They are adding language that states which beneficiaries or charities should receive their assets, if all of the people named in the estate plan have died. This is to maintain control over the distribution of assets, even in a worst-case scenario, rather than having assets pass via the rules of intestate succession. Without a Plan C, an entire estate could go to a distant relative, regardless of whether you wanted that to happen.

Reference: Kiplinger (March 16, 2020) “Coronavirus Legal Advice: Get Your Business and Estate in Order Now.”

 

Finalizing Estate Planning Documents while Social Distancing

After the initial shock of the COVID-19 pandemic, people now realize not just that they need to update their wills, but to change the people who have been named in important roles. In a recent article from The New York Times, “What to Know About Making a Will in the Age of Coronavirus,” one person said, “I think I still have my jerk brother as the trustee. I need to change that.” However, with social distancing now being the new norm, some necessary processes for executing estate plans are calling for extra creativity.

While lawyers can draft any necessary documents from their home offices, the documents need to be signed by clients and, depending upon the document and the state, by witnesses and notaries. These parties usually need to be in the same room for the documents to be considered legally valid.

New York’s governor issued an executive order last month that declared a disaster emergency in the state and temporarily gave notaries the authority to authenticate documents by videoconference. Other governors have also issued executive orders to allow video notarizations, including Connecticut, Iowa, New Hampshire and Washington. It’s safe to say that more states will probably permit this as time goes on.

Virginia was among the first states to allow electronic notarization, and I and other lawyers are lobbying Governor Northam to issue to issue emergency orders to address the need for relaxed rules for will and estate document execution. It is worth noting that living trusts are, in effect, will substitutes, and require fewer formalities to sign in Virginia, but other states have differing rules on that, as well. It is a challenge in every state to adopt new ways of practing law in the age of the pandemic.

However, besides needing notarizations, wills in New York State and other documents require two unrelated witnesses in the room when the document is signed. That also goes for the health care proxy, which gives a person the ability to name someone to make medical decisions on their behalf, if they become incapacitated.

One New York attorney used a video conference to watch two clients and their witnesses, located more than 100 miles away from his home office, sign new financial powers of attorney and health care proxies. He used his laptop to record a video of the proceedings, while clients used their phones. The client couple sat on the enclosed porch of a friend’s house in a distant county and signed the documents, while their friends stood six feet away. When the couple finished signing, they stepped away and their friends moved in to sign the documents, all in view of the attorney and all, of course, wearing vinyl gloves.

The documents were then scanned and sent to the attorney by email and he notarized them. They will also be mailed to him at his home, and then he will authenticate the documents.

In New Jersey, for example, notaries need to be physically present at the signing of documents. One lawyer took extra steps for two ER nurses, both single mothers and on the front lines of the coronavirus outbreak. He met them in the front yard of one of their houses, where a table had been set up and rocks were used to hold down the documents from blowing away in the wind. Everyone wore gloves and brought their own pens. One nurse served as witness for each other, and another friend was a witness for both. After each person signed, they stepped away, while another stepped up to the table.

Not every state is making changes to permit these documents to be witnessed and notarized, so there may be many new ways of executing estate plans in the weeks and months to come, including more outdoor, parking lot or front porch signings. Speak with your estate planning attorney, who will know the laws that apply to your state.

Reference: The New York Times (March 26, 2020) “What to Know About Making a Will in the Age of Coronavirus” 

Scammers Beef Up Efforts in a Crisis

As if the elderly didn’t have enough to endure, now comes word that scammers who typically prey on seniors are upping their game. Stating that Social Security offices around the country are closed, which is true, scammers are targeting seniors with letters threatening the suspension of their Social Security payments due to pandemic-related office closures due to COVID-19.

It’s true that the offices across the country are closed, but Social Security employees are continuing to work, says the My Prime Time News article “Inspector General Warns Public About New Social Security Benefit Suspension Scam.”

What’s more, the Inspector General notes that the Social Security Administration (SSA) will not suspend or discontinue benefits because their offices are closed. The Inspector General has received reports that beneficiaries are receiving letters that advise them to call a phone number referenced in the letter.

Scammers then talk the callers into providing them with personal information or make arrangements for the seniors to send them retail gift cards, wire transfers, internet currency or even sending cash by mail. Otherwise, they tell the seniors that their benefits will be cut off until the office reopens.

Any communication that is received with that message, by mail, phone or email, is fraudulent and should be dismissed. Social Security will never:

  • Threaten with benefit suspension, arrest or legal action, if a fine or fee is not paid,
  • Promise a benefit increase or other help in return for direct payment,
  • Request or even accept payment by retail gift card, wire transfer, internet currency or prepaid debt card,
  • Demand secrecy about payments, or
  • Send letters or reports with personally identifiable information through the U.S. Mail.

Anyone who receives a letter, text, call or email that concerns an alleged problem with a Social Security number should not respond. The challenge is that the communications sometimes include a person’s Social Security number, or contains names, addresses or other information that is accurate. This is because scammers have purchased information illegally, not because the information is legitimate. Anyone receiving any communication from Social Security that demands immediate attention or threatens the end of benefits, should not respond directly to that communication.

Instead, report the scam to the Social Security Administration through its website. If you have any doubt about the validity of the letter or email, speak with a trusted friend, family member, or estate planning attorney. Don’t fall for it—especially during these tense times.

Reference: My Prime Time News (March 28, 2020) “Inspector General Warns Public About New Social Security Benefit Suspension Scam”

 

C19 UPDATE: Should You Bring Mom Home from the Nursing Home Now?

If you have a loved one currently living in a nursing home, you’re probably worried about them right now. You may not be able to visit them or check in on their care. You may be afraid that the next COVID19 outbreak will strike their facility.  And … you may be struggling with the decision about whether it’s best for them to stay in the facility, or if you should bring them home.

These are all reasonable concerns. There have been more than 5,670 coronavirus deaths in long-term care facilities nationwide, according to state health data reported by NBC News on April 15.

But would Mom or Dad fare better, even with all due social distancing, in the family home?

Some issues to carefully consider if you are struggling with this question now:

  • Are you prepared to shoulder the entire burden of care for your loved one now? If not, are there other family or community resources that could help – and can you access them in the current situation?
  • What does your loved one want? Do the benefits of moving them out outweigh the stress of disruption and displacement?
  • Can you really keep your elderly loved one safer at home … especially if they have chronic conditions such as heart, lung, or kidney disease?
  • How long will you be able to keep up with your loved one’s care at home … and
  • Will your loved one be able to return to the facility if you cannot keep up … or after the danger has passed?
  • Will your loved one lose their Medicare or Medicaid benefits if they leave the nursing home?

These questions, and more, should be addressed before making the decision to remove your loved one from a nursing facility. Check with an elder law attorney who is familiar with your situation, state and federal laws, and nursing home policies who can explain your options and guide you to an informed decision.

Resources: NBC News, Coronavirus deaths in U.S. nursing homes soar to more than 5,500, April 15, 2020; March 18, 2020;

 

Grandson of Walt Disney’s Longstanding Inheritance Battle

Even visionary Walt Disney could not have imagined the struggle his grandson Bradford Lund has endured trying to claim his share of the Disney family fortune, reports California’s Daily Bulletin in a recent article titled “Walt Disney’s grandson locked in legal battle for personal freedom, millions in inheritance.” It’s been fifteen years since the start of Lund’s estate battle with estranged family members, probate and courts to prove that he is mentally able to manage an inheritance of hundreds of millions of dollars. He’s had to repeatedly prove that he does not have Down syndrome and can manage this kind of money. This battle could have been avoided had Mr. Disney’s daughter done more effective estate planning for her special needs child.

Her son is now fighting for his freedom as well as his fortune.  A Superior Court judge from Los Angeles County has appointed a temporary guardian ad litem to make legal decisions on his behalf.

Judge David Cowan said he was not going to give $200 million to someone who may suffer, on some level, from Down syndrome. Even after he was given evidence that Lund does not have Down syndrome, the judge refused to retract his statement.

Lund is fighting against a probate system with high profile attorneys–the former White House counsel Lanny Davis is one of three on his legal team. They have filed a federal civil rights lawsuit accusing Judge Cowan of appointing the guardian ad litem without due process. Suing a judge is almost never done, but the complaint alleges that a judgment was rendered that left them no choice but to take action.

One of Lund’s main opponents is his twin sister, Michelle Lund. The twins attended special-needs schools as children, reportedly for learning impairments. When Lund was 19, his mother created a trust fund now valued at $400 million for him, his sister and another sister, Victoria. She appointed four trustees. The grandchildren were to receive part of their shares at ages 35, 40 and 45, with the remainder kept in trust and then given to them gradually over time.

Lund’s mother died, as did his sister Victoria. Some of the trustees resigned, with others who did not know the family taking their places.

When Brad turned 35, the trustees voted against paying him part of his inheritance, saying they did not believe he was financially or mentally competent. Four years later, sister Michelle suffered a brain aneurysm, but she received her share as scheduled. In 2009, Michelle and her two half-sisters sought an order in an Arizona court that would place Brad under a guardianship for his legal decisions. They claimed that he had chronic deficits and mental disorders. The case went on for seven years and ended with a judge declaring Brad able to make his own decisions.

While the Arizona case was still underway, Lund filed a court petition in Los Angeles County to remove his trustees for various violations. That is when Judge Cowan entered the picture. The judge was presented with a settlement agreement between Lund and his trustees, in which he would pay them $14.5 million, in exchange for their removal and replacement.

The monetary exchange was approved, but Cowan would not agree to letting Lund replace the trustees. That’s when the temporary guardian ad litem was appointed.

While the size of the assets involved is larger than life, estate battles among siblings and half siblings are not unusual. When the family includes an individual whose capacity may be challenged, extra steps are needed in estate planning to protect their interests.

Reference: Daily Bulletin (March 22, 2020) “Walt Disney’s grandson locked in legal battle for personal freedom, millions in inheritance”

 

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C19 UPDATE: CDC Recommends Care Plans for Both Older Adults and Caregivers

Quick. You or your senior loved one is running a fever, coughing and struggling to breathe. You suspect COVID-19 and a full-blown medical emergency develops. Medical professionals will need to quickly know the patient’s health conditions, medications, healthcare providers and emergency contacts. Will you be ready?

The Centers for Disease (CDC) recommends developing a Care Plan now as part of your emergency preparedness.

What is a Care Plan?

A care plan is a document that summarizes a person’s health conditions and current treatments for their care. The CDC offers a handy form you can use, Complete Care Plan. This is a fill-able form you can complete on your computer or print and complete by hand.

How Do You Develop a Care Plan?

The CDC offers these tips

  • Start a conversation about care planning with the person you take care of.
  • Talk to the doctor of the person you care for or another health care provider.
  • Ask about what care options are relevant to the person you care for.
  • Discuss any needs you have as a caregiver.

And remember, care plans can reduce emergency room visits, hospitalizations, and improve overall medical management, especially during a medical emergency.

Resource: Centers for Disease Control, Coronavirus Disease 2019, https://www.cdc.gov/coronavirus/2019-ncov/need-extra-precautions/older-adults.html

 

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Nursing Home Care Costs and Applying for Medicaid

Medicaid provides several programs funded through a state-federal agreement, explains the article “Planning a must: Medicaid and paying for nursing homes” from The Dallas Morning News. One of the programs provides long-term nursing home care benefits to pay for nursing home or approved residential care facilities (“skilled nursing care”) for elderly and disabled people who qualify. However, requirements to qualify for Medicaid vary widely from state to state. Medicaid does not pay for assisted living costs. It’s best to speak with an elder law attorney, who will be able to help you plan in advance for needed care.

In Virginia, for example, you must have a medical need and fall under the asset caps, which can change yearly. Our asset (“countable resource”) amount is $2,000 for a single person. For a married person, your spouse can have an amount of countable resources that ranges from $25,728 to the maximum is $128,640, depending on circumstances. There is a monthly maintenance needs allowance for a non-disabled spouse.  If this sounds like not much money, that’s right.  However, there are some assets that do not count. The well spouse may continue to maintain the family home. A car, burial plots and prepaid funeral arrangements are also permitted.

For most people, this presents a bad situation. Their assets are too high to qualify for Medicaid, but they don’t have enough money to pay for nursing home care. That’s where Medicaid planning with an elder law attorney comes in. The attorney will know where assets can be properly shielded to protect the well spouse and how to work within the Medicaid requirements.

A word of advice: Don’t start giving away assets because you think that you can do this yourself. The first rule: there is a five-year lookback period, and if assets have been distributed within a five year period of the person applying for Medicaid, their eligibility will be delayed. The good news? Virginia allows unlimited transfers between spouses, and the five-year rule does not apply. The rules about gifting assets are complicated and mistakes are non-negotiable. Check with a qualified elder law attorney before making gifts or transfers.

Be careful of elder exploitation. Planning for Medicaid is one thing, being convinced to impoverish yourself so someone else can have a luxurious lifestyle is another. There’s a fine line between the two. Be aware of the difference. An attorney can play an important role here, since they have a legal and ethical responsibility to protect their client’s interests.

Be certain that you have a Durable Power of Attorney in place. Why? If you become incapacitated during the process of Medicaid planning, your agent will be able to help with Medicaid planning and file for the Medicaid application.

In general, this is not a time to sell your home. In most states, the primary residence is a protected asset for Medicaid for limited periods (or as long as your spouse lives there).  If you sell it before applying for Medicaid, however, the proceeds of the sale are considered a personal asset and will be counted.

It’s also important to understand that Medicaid does not pay for all nursing home stays. Medicaid pays for a nursing-home designated “Medicaid bed” in a semi-private room. Depending on where you live, there may not be as many Medicaid beds as there are people who need them.

An elder lawyer will be able to help you and your family with planning for Medicaid, and with an application. You’ll be better off relying on the help of an experienced attorney.

Reference: The Dallas Morning News (March 15, 2020) “Planning a must: Medicaid and paying for nursing homes”

 

Coronavirus Scams are Surfacing

Maryland U.S. Attorney Robert K. Hur is encouraging the public “to be aware of individuals attempting to profit from the coronavirus pandemic,” reported Marcia Murphy, a USAO spokeswoman. The Cecil Whig’s recent article on the fraud schemes entitled “Maryland U.S. attorney warns of COVID-19 scams; Cecil County remains vigilant” cautions that coronavirus scams are being uncovered around the country.

It was only a matter of time, wasn’t it?

Scammers have been sending e-mails to people claiming to be from local hospitals offering coronavirus vaccines for a fee. However, no vaccine is currently available for the coronavirus. Some of these criminals are using websites that appear to be legitimate but are actually fake websites that infect the users’ computers with harmful malware or seek personal information that can be later used to commit fraud. Many of these scams prey on the most vulnerable, especially the elderly.

Seniors need to contact the police, if they think someone has targeted them for a scam and to educate themselves on the COVID-19-related scams by checking official government websites, like the CDC.gov for information.

Seniors need to scrutinize anyone who makes a contact with them about a COVID-19 vaccine—which does not exist—and to report any such interaction to law enforcement.

Late last week, the Justice Department sent a memo to all U.S. Attorneys, in which it made the investigation of these scams and the individuals perpetrating them a priority. Therefore, federal, state and local law enforcement agencies are prepared to investigate these frauds.

The Federal Trade Commission has consumer information about coronavirus scams on its website, including a complaint form to report scammers. Elderly victims can also call the newly launched Elder Fraud Hotline at 833-FRAUD-11 (833-372-8311), if they believe they are victims of a coronavirus scam—or any other type of fraud.

In addition to selling bogus cures and infecting computers by using COVID-19-related communications, other examples of coronavirus schemes include:

  • Phishing emails from entities posing as the World Health Organization or the Centers for Disease Control and Prevention
  • Those asking for donations for fraudulently, illegitimate, or non-existent charitable organizations; and
  • Scammers posing as doctors, who ask for patient information for COVID-19 testing and then use that information to fraudulently bill for other tests and procedures.

The Justice Department asks the public to report suspected fraud schemes related to COVID-19, by calling the National Center for Disaster Fraud (NCDF) hotline (1-866-720-5721) or by e-mailing the NCDF at disaster@leo.gov.

Reference:  Cecil Whig (March 23, 2020) “Maryland U.S. attorney warns of COVID-19 scams; Cecil County remains vigilant”

 

How Do I Do the Most with My Inheritance?

Studies have shown that when people suddenly come into money — whether through gift, inheritance, lottery winning or signing bonus — they’ll treat and spend it differently than the money they’ve earned. “A fool and his money…”, as my mother might say.

Forbes’ recent article entitled “5 Important Steps To Maximize An Inheritance” says that even the most financially astute consumers can get inundated with their newfound wealth. People can feel pressure to use the cash to purchase new vehicles, bigger homes, or even take their families on dream vacations. Others may feel that they can safely quit their jobs and live the life of luxury.

Many people regret jumping into major purchases after getting an inheritance. Others will give away much of the money or even make bad investments that are completely wrong for their goals and financial needs. If you don’t get expert financial guidance to develop a plan for your inheritance, or take the time to do it yourself, you may find yourself worse off than you were before you became wealthier via an inheritance.

Here are some financial planning tips for anyone who is receiving an inheritance or another windfall.

Do Something Fun. Set aside an amount to splurge on something fun. However, figure out how much you want to spend and on what. Without that, you may find that one small splurge turns into many, and next thing, a big chunk of your inheritance could be spent.

Taxes on Your Inheritance. It’s uncommon for someone to get an inheritance big enough to trigger the federal estate tax. However, estate taxes will vary at the state level, so check with your estate planning attorney. Depending on the type of assets you inherit and how they’re held, you may owe taxes on some of your newfound riches.

Quitting Your Job. This sounds tempting, but before you take this big step, make sure you’ve thought it through and that you have a plan to replace your income. It’s not hard to underestimate how much money you’ll actually need to provide a nice standard of living for the rest of your life.

Take Care of Yourself. When you come into money, you’ll hear from relatives you never knew you had. They’ll all be asking for money. Make sure your own finances are in order, before you commit to take care of others beyond your immediate family.

Consult Experts. An inheritance can be stressful and overwhelming, so talk to an experienced estate planning attorney. He or she can help with tax filing deadlines and provide strategies to protect that wealth.

Reference: Forbes (Feb. 26, 2020) “5 Important Steps To Maximize An Inheritance”

 

Do I Need a Revocable Living Trust?

A revocable living trust is a legal document you create that names a trustee to manage and administer your property. If you’re a competent adult, you can establish an RLT. As the grantor, or creator of the trust, you can name any competent adult as your trustee, or you can use a bank or a trust company for this role. The grantor can also act as trustee throughout his lifetime.

Investopedia’s article from last fall entitled “Should You Set up a Revocable Living Trust?” explains that after it’s created, you must retitled assets—like investments, bank accounts, and real estate—into the trust. You no longer “own” those assets directly. Instead, they belong to the trust and don’t have to go through probate at your death. However, with a revocable living trust, you retain control of the assets while you’re alive, even though they no longer belong to you directly. A revocable living trust can be changed, and any income earned by the trust’s assets passes to you and is taxable. However, the assets themselves don’t transfer from the trust to your beneficiaries until your death.

Avoiding probate is a major benefit of a living trust, but other benefits like privacy protection and flexibility make it a good choice. A living trust can be used to help control a guardian’s spending habits for the benefit of minor children. It can also instruct another individual to act on your behalf, if you become incapacitated and need someone to make decisions for you. Should you become impaired or disabled, the trust can automatically appoint your trustee to oversee it and your financial affairs without a durable power of attorney.

Although there are several advantages to establishing a revocable living trust, there also some potential drawbacks:

Expense. Establishing a trust requires legal assistance, which is certainly an expense.

Maintaining Records. Over time, you will need to monitor the trust and make adjustments as needed (they don’t automatically adapt to changed circumstances, like a divorce or a new grandchild). There’s the trouble of ensuring that future assets are continuously registered to the trust.

Re-titling Property. When your RLT is established, property must generally be re-titled in the name of the trust, requiring additional time. Fees can apply to processing title changes.

Minimal Asset Protection. Despite the myth, a revocable living trust offers little asset protection beyond avoiding probate if you retain an ownership interest, such as naming yourself as trustee. (Please note, though, that an estate planning lawyer may recommend a different type of living trust that can provide you with asset protection.)

Administrative Expenses. There can also be additional professional fees, such as investment advisory and trustee fees, but that’s normally true only if you decide to appoint a bank or trust company as the trustee.

There’s No Tax Break. Your assets in the RLT will continue to incur taxes on their gains or income just as they do now, and be subject to creditors and legal action, just as you are now.

Compared to wills, revocable trusts provide much greater privacy, more control and flexibility over asset distribution; not just what you leave, but how you leave it. With a revocable living trust, you and your attorney do most of the work up front, making the disposition of your estate easier and faster –and less stressul — after your death. However, an RLT requires more effort, and there is an expense in creating and maintaining it. Typically, the overall cost of trust-based planning is substantially less that planning by will and probate.

Work with an experienced estate planning attorney, if you are considering a revocable living trust.

Reference: Investopedia (Oct. 31, 2019) “Should You Set up a Revocable Living Trust?”

 

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