Saving for College: What If There Is Money Left Over?

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Setting money aside for your children’s or grandchildren’s education is a great way to provide for their future. However, it is possible that not all of the money you have set aside will be used for college expenses. For example, your child may receive a large scholarship and will not need to use all the money you have saved, or your grandchild may choose a trade school that is less costly than you expected. Alternatively, your child or grandchild may decide to join the workforce immediately upon graduation. When confronted with this scenario, you may wonder what you can do with the excess money. The answer depends on how the money is managed.

Trusts Created by You

Health education exclusion trust. The purpose of a health education exclusion trust is to provide for the education and medical needs of multiple beneficiaries over more than one generation (typically grandchildren and great-grandchildren), and if money is left over because one beneficiary did not need all of it, it will not affect the operation of the trust. For example, a different beneficiary may decide to go to medical school and thus utilize the perceived excess.

Irrevocable gifting trust. If you work with an experienced estate planning attorney when creating an irrevocable gifting trust, your attorney can help you include instructions for how the trustee should handle the remaining funds if the beneficiaries do not need them. You are free to include instructions in the trust document that allow the beneficiary to use the remaining funds to purchase a house, start a business, or save as a nest egg for retirement. Alternatively, you could name a different beneficiary (e.g., a family member, friend, or charity) to receive the remaining amount.

Revocable living trust. Similarly, if you choose to add a provision to your existing revocable living trust to provide for the education expenses of your child or grandchild upon your death, you can include instructions for what will happen to the remaining money if the entire amount is not needed. Additionally, with a revocable trust, you can change your mind and draft additional contingencies into your plan until your death or incapacity.

Revocable education trust. Like a revocable living trust, a revocable education trust can also be changed up until your death or incapacity. Because the funds held by the trust will likely be distributed during your lifetime, you can amend or revoke the trust if your or the beneficiary’s life circumstances change. You can add or remove beneficiaries, transfer money to or withdraw money from the trust, or create a different set of criteria for making distributions to the beneficiaries.

Accounts Created by Statute

Accounts established pursuant to a state’s Uniform Transfers to Minors Act or Uniform Gifts to Minors Act are set up to hold money and property on behalf of a minor. They impose no education-specific requirements for use of the money, and the only generally understood prohibition is that the money should not be used for expenses that are normally deemed to be parental obligations (e.g., food, clothing, shelter, etc.). Once the minor reaches the age of majority (eighteen or twenty-one depending on the state), the money is turned over to the owner to use freely. If the minor passes away with funds remaining in the account, it will be distributed according to the state’s intestate statute.

State or Federal Education Plans

Internal Revenue Service Publication 970 sets forth similar regulations regarding 529 plans and Coverdell education savings accounts (ESAs). The money held in 529 plans and Coverdell ESAs can be rolled over from one account to another of the same type, and the designated beneficiary on the account can be changed to a member of the beneficiary’s family. A rollover can be for the benefit of the same beneficiary or another member of the beneficiary’s family (e.g., a spouse, child, stepchild, sibling, parent, etc.) who is under age thirty. However, the age limitation does not apply if the new beneficiary is a special-needs beneficiary.

While there are no federal tax consequences for rolling over an account, it is important to check with your tax advisor regarding the state income tax consequences if you received state tax breaks for your prior contributions and are now rolling the account over to an account in a different state. If there is no one likely to use the funds for qualified education expenses, the funds can be withdrawn and used for nonqualified expenses; however, they will be subject to income tax on the investment earnings as well as a 10 percent penalty.

We Are Here to Help

There are many different options for funding your family’s education future, and what happens to any unused funds largely depends on which option you choose. We are here to assist you and your financial team in choosing the best strategy for your unique situation to ensure that your wishes are carried out. Please contact our office by calling us at (405) 241-5994 to schedule a virtual or in-person meeting.

Education Funding Flexibility in Light of COVID-19

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When it comes to returning to school in the fall, the details may still be unknown. Will students be attending classes in person, or will classes continue to be online? Will college students be allowed on campus, or will they be bunking with mom and dad for the fall semester? One thing is certain: education will still be costly. In times of uncertainty, it is important for your planning to be as flexible as possible while still meeting your needs.

Some techniques for funding education expenses require that the funds be spent only on certain items to take full advantage of tax breaks and incentives. Other tools are less restrictive regarding how the money can be spent, allowing for more flexibility—which is important during these uncertain times.

Qualified Education Expenses Only

Coverdell education savings accounts. Money that is invested in a Coverdell education savings account must be used for “qualified education expenses.” These expenses can be incurred at eligible postsecondary schools as well as eligible elementary or secondary schools. For elementary and secondary education, qualified education expenses include tuition and fees, books, and supplies. If the school requires or offers them, room and board, uniforms, and transportation may also be deemed qualified education expenses. For postsecondary schools, tuition and fees, books, supplies, and equipment are deemed qualified education expenses. Additionally, room and board may be considered education expenses if the student is enrolled at least half-time at the institution. Items such as computers and internet access are also considered qualified expenses for students at all grade levels as long as they are primarily used by the beneficiary (and for students in elementary or secondary institutions, the beneficiary’s family) during any years the beneficiary is enrolled in the eligible school. However, this does not include expenses for software that is not predominantly educational in nature.

529 plans. A 529 plan, also known as a qualified tuition program, requires that the funds be used for qualified education expenses to avoid paying income tax and a 10 percent penalty. For 529 plans that are used to save for elementary and secondary institutions, the funds can only be used to pay for up to $10,000 in tuition. Similar to a Coverdell education savings account, tuition and fees, books, supplies, and equipment are deemed education expenses for postsecondary education at an eligible institution. Additionally, room and board may be considered an education expense if the student is enrolled at least half-time.

Tuition Only

In order for payments on the beneficiary’s behalf from a health and education exclusion trust (HEET) to be excluded from gift and generation-skipping transfer taxes under Internal Revenue Code Sections 2503(e)(2)(A) and 2611(b)(1), the funds must be paid directly to the educational organization for tuition. With respect to a HEET, education expenses can include tuition for any grade level, from preschool to postgraduate, for part-time or full-time students. However, room and board, books, and other related expenses are not deemed education expenses eligible for the tax exclusion.

Education Expenses Are Your Choice

Revocable education trusts and revocable living trusts.  A revocable education trust or a provision in your existing revocable living trust can provide you with significant flexibility. As the person creating the trust, you can allocate the money and property to cover any expenses related to education. This includes not only tuition and institutional fees, but also room and board and other personal needs associated with attending school. An additional benefit of these planning tools is flexibility: if you need to change the amount of money you have given the trust, add or remove beneficiaries, or terminate the trust entirely, you have the ability to do so without any adverse tax consequences. A significant downside of revocable trusts is that there are generally no income or gift tax benefits available for setting them up.

Irrevocable gifting trusts. Similarly, an irrevocable gifting trust allows you to define what expenses can be covered by the beneficiary’s share of the trust. The main difference is that by placing money and property into an irrevocable trust, you no longer have control over it. However, irrevocable gifting trusts can provide some tax advantages that revocable trusts cannot. The rules listed in the trust document will be used for the entirety of the trust’s existence, with some limited exceptions. Therefore, it is important to work with an experienced estate planning attorney to make sure that you plan for as many contingencies as possible.

No Major Restrictions

Lastly, a Uniform Transfers to Minors Act or Uniform Gifts to Minors Act account does not impose any major restrictions on the use of the funds. When one of these accounts is created, the money or property is held by a custodian for the benefit of the minor. Because this property is technically owned by the minor, the custodian has the responsibility to manage, invest, and where appropriate, use the property for the benefit of the minor. While there are no statutorily enumerated uses for the account, it is generally understood that these funds should not be used to pay for expenses that would normally be considered parental obligations, such as food, clothing, and shelter. As soon as the beneficiary reaches the age of majority (eighteen or twenty-one depending on the state), the beneficiary is free to do whatever the beneficiary wishes with the money, with no restrictions.

We Are Here to Help

We are living in uncertain times, but we understand that providing for your family is always a priority. Having a plan in place designed for your family’s unique circumstances can provide substantial peace of mind. We are available, via telephone, video conference, or in person, to discuss the options available to you and your family as you navigate the current conditions and plan for your family’s education and financial future.

The Costs of Care with Alzheimer’s

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Health care and long-term care costs for individuals with Alzheimer’s Disease and Related Dementias (ADRD) are staggering as dementia is one of society’s costliest conditions.The Alzheimer’s Association has published its 2020 report entitled Alzheimer’s Disease Facts and Figures (alz.org). The findings give pause when contemplating the future of many Americans who will be living with crippling dementia.

The year 2020 sees total payments for all individuals with dementia diseases to reach an estimated 305 billion dollars. This substantial sum does not include the value of informal caregivers who are uncompensated for their efforts. Of this 305 billion dollars Medicare and Medicaid are projected to cover 67 percent of the total health care and long-term care costs of people living with dementia, which accounts for about 206 billion dollars of the total cost of care. Out of pocket expenditure projections are 22 percent of total payments or 66 billion dollars. Other payment sources such as private insurance, other managed care organizations, as well as uncompensated care account for 11 percent of total costs or 33 billion dollars.

The Centers for Medicare and Medicaid (CMS) cite that 27 percent of older Americans with Alzheimer’s or other dementias who have Medicare also have Medicaid coverage. As a comparison, the percentage of those Americans without dementia is 11 percent. The addition of Medicaid becomes a necessity for some as it covers nursing home and other long-term care services for those individuals with meager income and assets. The extensive use of CMS services, particularly Medicaid, by people with dementia translates into extremely high costs. Despite the high rate of expenditure by federal social and health services, Americans living with Alzheimer’s and other forms of dementia still incur high out-of-pocket expenses compared to beneficiaries without dementia. Much of these costs pay for Medicare, additional health insurance premiums, and associated deductibles.

Older Americans living with Alzheimer’s or other forms of dementia have twice the number of hospital stays per year than those without cognitive issues. Dementia patients with comorbidities such as coronary artery disease, COPD, stroke, or cancer, to name a few, have higher health care costs than those without coexisting serious medical conditions. In addition to more hospital stays, older Alzheimer’s sufferers require more home health care visits and skilled nursing facility stays per year than other older people without dementia.

Cost projections for Medicare, Medicaid, and out of pocket costs for Americans living with Alzheimer’s disease or other forms of dementia continue to increase. The average life span of an American with Alzheimer’s is 6 -8 years, and as the disease progresses, so do the requirements of care and support. This care and support include medical treatment, prescription medications, medical equipment, safety services, home safety modifications, personal care, adult daycare, and ultimately residence in a skilled nursing facility. Disease-modifying therapies and treatments remain elusive, and there is no cure for Alzheimer’s and other dementia diseases. ADRD imposes a tremendous financial burden on patients and their families, payers, health care delivery systems, and society.

In the absence of a cure, the Alzheimer’s Association predicts the total direct medical cost expenditures in the US for ADRD will exceed 1 trillion dollars in 2050 because of increases in elderly population projections. Health policy planners and decision-makers must gain a comprehensive understanding of the economic gravity that Alzheimer’s and other dementia diseases present to the US population. The direct and indirect total medical and social costs and accompanying solution-driven mandates must be identified to CMS, private insurance groups, facilities with dementia units, and family systems that function as non-compensated caregivers.

We help families plan for the possibility of needing long term care, and how to pay for it. If you or a loved one would like to talk about your needs, please do not hesitate to contact our office by calling us at (405) 241-5994.

The New Age of Long-Term Care Insurance

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Nursing-home care can be extremely expensive if you become seriously ill or injured. You might also know that Medicare would cover only a minimal amount of those costs. Private insurance doesn’t seem like a good bet either, if you’ve heard horror stories about skyrocketing premium costs and difficulties in even obtaining long-term care (LTC) insurance in the first place.

There may be a better way. “Hybrid” policies essentially combine life insurance or an annuity with LTC coverage. (The benefits can be known as “accelerated death benefits” or “living benefits,” or the coverage can be called “life/long term care,” “linked benefits,” or a “combo” policy.)

This type of policy will pay if you need nursing care, but, if you never need that, then the policy functions like standard whole-life coverage. It’s a win-win. Say, for example, you buy a hybrid policy with a $100,000 death benefit. You eventually need $50,000 of that coverage to pay for LTC. Then, when you pass, your beneficiary would receive a $50,000 payout from what’s left of the original $100,000 coverage.

Some plans offer tax-free death benefits to your heirs if your LTC benefits are not fully used or needed. They may return your premiums if you change your mind down the road. Premiums can be locked in from the initial purchase date, with a guarantee that they will never increase. Those who already hold a legacy policy with a large cash value may be able to roll that value over, tax free, into a new hybrid policy.

For those who can afford to pay premiums in a lump sum in advance, LTC coverage could amount to as much as twice the face value of the policy. Compare that with simply setting money aside for LTC expenses at a rate of five percent interest. It could take as long as thirty years to save for what this policy offered on its face.

There is a wide range of coverage, depending on the policies. They may cover different services, delivered at-home, in a facility, or both. The monthly or daily benefits can vary. Some policies require an elimination period (a delay between the time a doctor qualifies you for coverage, and actual payment); some do not. Some provide inflation protection. Some provide adjustable rates, depending on how much the insured might need LTC as against the death benefit.

Always also remember that the carrier must have the long-term financial stability to pay claims, and to remain in business, for decades to come.

To sort through all these intricacies, the National Association of Insurance Commissioners has issued a free and comprehensive Shopper’s Guide to LTC Insurance. It provides especially helpful shopping tips at pp. 31-36. Find the publication here https://www.naic.org/documents/prod_serv_consumer_ltc_lp.pdf

We can create a long-term care plan that incorporates a hybrid plan like this with an irrevocable trust that will protect all of your bank accounts and real property (like your home) in the event you need long term care. If you are interested in protecting your savings and your home, we would welcome the opportunity to discuss a plan that works for you. Please do not hesitate to contact our office by calling us at (405) 241-5994.

HELP! This Probate Is Taking Forever!

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After a loved one dies, their money and property must be distributed to the right people, either according to their will or the state’s default distribution scheme (found in its “intestacy” statute). While most people want the settlement process to be done ASAP, probate can take between 18 and 24 months. Yes, you heard that right. The time delays create unnecessary stress, especially for families who need access to those accounts or property.

5 Reasons Probate Takes So Long

There are many reasons why the probate process takes so long. Here are five of the most common:

  1. Paperwork.

    Managing probate-required paperwork can be a monumental undertaking with structured timelines and court-imposed deadlines.

  2. Complexity.

    Estates with numerous or complicated accounts or property simply take longer to probate, as there are more items to be accounted for and valued.

  3. Probate court caseload.

    Most probate courts are dealing with high caseloads and limited staff.

  4. Challenges to the will.

    Heirs, beneficiaries, and those who thought they’d be beneficiaries, can object to and challenge the will’s instructions and legal requirements. While state law dictates the length of the time period during which they must object, will challenges can add years to the probate process. Some of the most common challenges include assertions that the will maker was:- Lacking testamentary capacity (i.e., lacking the legal or mental ability to make a will)

    – Delusional

    – Subject to undue influence (wrongful pressure to do something they didn’t want to do)

    – A victim of fraud

  5. Creditor Notification.

    The deceased person’s creditors must be notified of the deceased person’s passing and the probating of their estate so they have time to submit any legal claims for debts. This time period also varies from state to state, but it is generally four to nine months.

The bottom line is that, while most state probate laws are designed to keep the process moving along in a timely manner, that’s more of a plan than a reality.

Simply Put, Avoiding Probate with a Trust Is Better

Simply put, had the deceased person created a trust to hold their accounts and property, the long, complicated probate process could have been avoided. By creating and funding a trust, those accounts and property are no longer viewed as being owned by the deceased person and are not subject to the supervision of the court. Their distribution is controlled by the instructions left in the trust agreement. Administering a trust instead of a probate is usually quicker – meaning that beneficiaries receive assets more quickly, costs are reduced, and stress levels are kept to a minimum.

Take Action Now

First, if you need help settling a probate estate, we can help you move the process along and remove some of the burden so you can move on with your life. Second, we can help you make sure you never burden your loved ones the way you’ve been burdened. How? We’ll show you how to avoid probate with a trust. Give us a call today. As an added convenience to our clients, we are able to meet via video conferencing if you prefer.

Planning for When an Ill Spouse Leaves Home

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Much as you want to and hard as you try, you just can’t take care of your ill spouse at home anymore. At this emotionally difficult time, the last thing you need is the stress of not knowing where to find the money to pay for the steep costs of institutional care.

Advance planning is a must. As soon as you can – ideally at least five years before serious health problems arise – take advantage of many elder attorneys’ willingness to talk with you for free, or for a modest initial-consultation charge.

We are here to help you navigate the complexities of the Medicaid program. This is a governmental fund available to meet the staggering expense of institutional care, but the ins and outs of the qualification rules are complicated and mistakes can be costly. Here’s a thumbnail to help you grasp what your attorney will be telling you.

 

“Resources” and “Income”: The Difference

Medicaid assistance is available only to those who own very little. The Medicaid rules determine what “owning very little” actually means. A person can only own around $2,000.00 of what Medicaid calls “resources.”

Resources include cash in the bank, CDs, the cash value of insurance policies, investments, and the like. Income includes regular paychecks, Social Security, or payments received for child support. Both income and resources are potentially “counted” by Medicaid as “available.” To qualify for assistance, available income and resources must be carefully spent or transferred away.

 

Exempt Resources

Some resources are not counted or, in other words, are exempt. This means the Medicaid rules exclude them from adding up to the $2,000.00 limit. These resources are sheltered from Medicaid’s requirement that the applicant must spend down almost everything before assistance will be available.

A married couple’s residence, one motor vehicle, household goods and furnishings, medical equipment, jewelry, and other items are exempt. This means that an ill spouse can still qualify for Medicaid assistance even if the couple owns those resources. There’s no need to give them away or sell them to qualify.

The distinction between “exempt” and “non-exempt” assets can be tricky, though, and should first be assessed by a qualified elder-law attorney before any action is taken.

 

What the Well Spouse Can Keep

The Medicaid rules permit a spouse who remains at home to keep a portion of the couple’s resources. This is known as the “community spouse resource allowance” (CSRA). Of course you’d like to see the well spouse keep as much as possible within the CSRA limits. Planning can arrange the distribution of resources to make that happen.

Here is where the difference matters between “resources” and “income.” Medicaid distinguishes between the well spouse’s income and the couple’s resources. Resources over the CSRA limit must be spent down or carefully transferred. As to income, the well spouse can keep it up to a certain level, so he or she will have enough money to live on. The Medicaid rules call this the “monthly maintenance needs allowance” (MMNA).

For example, if the well spouse gets Social Security benefits of only $500.00 a month, but her allowed MMNA is as high as $2,000.00, it makes sense to convert some of the couple’s resources into raising her income up to the MMNA limit. This is not a simple matter, though, and should be done only on the advice of a qualified elder-law attorney.

Planning for Medicaid eligibility can be complicated. Please consult an elder-law attorney as soon as possible. The sooner you plan, the more strategies are available to protect your resources. An initial consultation with a qualified elder-law attorney, for free or for a modest amount, could save you many thousands of dollars.

Don’t delay. Please do not hesitate to contact our office by calling us at (405) 241-5994.

 

Modernizing Medicare

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Many seniors who are financially stable and choosing to age in place already have a “smart” home employing the sorts of technology that can prolong their independent living circumstances. Family caregivers are freer to move about their daily lives knowing they can check remotely on their loved one and that the loved one has a set of controls at their disposal to monitor their environment. Some of these seniors are also tracked directly by medical staff that can assess if any of the patient’s medical vital signs are outside of a safe range. While corporate competition for senior market dollars has made many of these devices within reasonable price points, Medicare is attempting to catch up to the market demand for the use of these products and include them as refundable medical expenses. Private enterprise and public policy are not in synch.

Medicare’s modest step forward in the proposed approval for funding and use of technology, specifically remote monitors for at home Medicare recipients to track blood pressure and other vital signs, is on a slow trajectory. There are two important limitations associated with the proposals. The first is a constraint on the devices eligible for use and the second is there is no provision for Medicare recipients who do not use home health agencies. The Centers for Medicare and Medicaid Services (CMS) will also not directly reimburse home care companies but allow for the expense to be considered when setting overall reimbursement rates. In other words, the bureaucratic acceptance and ability to merge even the most basic of medical technology tools into the mainstream is cumbersome at best.

While it has not been proven that these monitoring devices improve health outcomes (and may explain why CMS is moving so cautiously), the advocates for the technology make the case that the tools allow the elderly, frailer individuals the ability to continue living at home rather than moving to an assisted living or nursing facility. There is less financial strain on CMS outlays when older adults age in place. Currently, the CMS proposal only allows for technology that monitors and collects physiological data which typically includes blood pressure, glucose monitoring, and electrocardiogram (ECG). All of this data is digitally stored and can be transmitted by the patient and the caregiver. However, this sort of monitoring is currently happening, and what CMS has come up with is merely a payment change and exclusion of those Medicare recipients not associated with home health agencies. Not exactly a significant foray into at home medical technology. Technology can streamline and make effective the remote monitoring process however it becomes less effective when government policy continues to add layers of bureaucracy and exclusions that make the adaptation to remote monitoring technologies at home needlessly complicated.

What happens to the latest tech tools that can detect how well a senior is moving around their own home, forgotten to turn off the stove, or a senior who is unable to swallow a pill or answer a phone? For the many chronically ill seniors who are regularly monitored and have stabilized prescription medical approaches for their condition, it might be far more advantageous to approve of technologies that can prevent a house fire or data analytics that can be predictive about the increased risk of an unintended fall. Mobility trackers and smart home devices are as important as at home biometric devices for the senior who is choosing to age in place.

Given that technology will have to be the offset for the growing shortage of personal care workers and their associated expense, remote monitoring will become pervasive in the care of the elderly with chronic conditions. However if the senior does not have financial stability, and many of them do not, how will the costs for these home technologies be addressed?

What are the benefits of the changes CMS has made to the Home Health Prospective Payment System (PPS)? The belief is as put forward by Seema Verma, “The redesign of the home health payment system encourages value over volume and removes incentives to provide unnecessary care.” What this means is if a Medicare recipient uses a home health agency then the remote monitoring tools become an allowable cost on the Medicare report form. The expectation is to use home health agencies as the vehicle to foster the adoption of emerging technologies which is all in support of advancing the Administration’s MyHealthEData initiative. These benefits are doubtful to keep pace with market-driven forces for innovation in the field of at home biomedical devices because healthcare is taking up an increasing share of the US economy. The CMS Office of the Actuary projects that by the year 2026 one in every five dollars in America will be spent on healthcare.

Another benefit CMS has put into place is the release of the Blue Button 2.0 application programming interface (API). Blue Button is a digital platform that is now the standard for Medicare beneficiaries to receive claims data in a digital format so it can then be securely and privately used in applications (apps) developed by third parties. This platform standardization by CMS is encouraging software developers to leverage its digital architectural design for claims data from Blue Button 2.0.

CMS has taken some cautious steps to ensure that certain Medicare beneficiaries will be able to take advantage of and be reimbursed for the advances in the technologies for home health care. The US healthcare spending is forecast for continued growth reaching over $1 trillion by 2026. There is not a lot of time to get this right. Large government agencies move far more slowly than agile, market-driven technology companies. Thankfully technology developers and CMS are both starting to find ways to blend effectively and efficiently for the benefit of Medicare recipients, but it is a long road ahead. Please do not hesitate to contact our office by calling us at (405) 241-5994.

Estate Planning with Your Parents

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It is essential that as your parents’ age, you have conversations with them about their finances. To broach the topic, you might bring up current events like the coronavirus pandemic, its effect on economic conditions, and how it relates to the security of their financial future. The conversation should come from a calming place of love and concern. Speak to them respectfully about how the coronavirus pandemic has you thinking about the importance of their planning and preparedness.

Once you begin the conversation, move away from the pandemic as your introductory technique as you do not want to create a sense of panic or fear.  Instead, delve into legal and financial reviews, processes, and parameters. US News reports that your parents’ financial analysis should include essential legal documents, financial accounts, and associated vital contacts, long-term care decisions, and claims. If you live apart, lay the groundwork to help them with their finances remotely.

It is generally most comfortable to begin your conversation with legal documents that hopefully your parents already have in place like a will, trust, living will, and a health care proxy. If your parents do not have these documents, they must retain an attorney and create the ones that best suit their needs. If you need to help your parents manage their finances, you must have a durable power of attorney. A durable power of attorney allows you to make financial decisions for your parents in the event they become incapacitated. This is an essential estate planning document. In the absence of a durable power of attorney, the courts become involved, and solving health or financial issues becomes a lengthy, expensive process over which you have little control. If your parents already have their legal documents drawn up, find out where they keep them and review them carefully. If any documents need to be amended, suggest that your parents meet with an attorney to make the relevant changes. Be sure their documents reflect the state law in which they reside.

Once you have assessed your parents’ legal documents, it is time for some financial discovery. Even if your parents do not currently need help, having an overview of their finances and a durable power of attorney to help them in the future is crucial to their aging success. Begin by listing all of their accounts, account numbers, usernames, and passwords as well as employee contact names. Include insurance policies, the agent’s name, and where the policy is, as well as how they pay their premiums. Include any online medical accounts or list their doctors’ names and office numbers. The idea is to create a comprehensive list of all of these accounts. Gather your parents’ Medicare and Social Security numbers and their drivers’ license numbers. Know where they keep this information so that in the future you will know where to look. Also, learn about any online bill paying or automated, re-occurring activity. These usually include monthly bills like electricity, natural gas, water, etc. but may also include quarterly payments or annual subscriptions.

If your parents still live in their long-time home, discuss if it is viable that they live out their days there, or if downsizing to a retirement community or moving closer to where you live appeals to them. Help them come to a decision that is best for their set of circumstances.  If they do not have long-term care insurance or some other mechanism to aid them in times of need, talk about the topic, and try to come up with a solution. If they do have long-term care, be sure you have a copy of the policy, contact information, and the name of the insurer and agent. Review the requirements for receiving benefits so you can help them when they need to file a claim as most policies have a waiting period of 30 to 90 days before benefits begin. Know what to expect.

Digital technology has made oversight of parents and their finances easier than ever as long as you have a durable power of attorney and access to their account information. If they do not yet pay their bills online, or use auto payment, help them set up this option for their monthly bills. Remind them you will provide oversight to ensure proper billing. Offer to help them with their annual tax filings. Your help relieves some pressure on them and provides you with information about the goings-on in your parents’ accounts. For your parents’ peace of mind, you can establish a monthly video chat to let them know their bill payments are progressing normally. Your involvement will allow you to identify any abnormalities in account activity, which may indicate scam attempts.

Having these financial and planning conversations with your parents today can help them live more securely and with less stress as they age. Most parents will try to avoid these discussions with their children because they may not be adequately prepared for what can lie ahead. Conversations that focus on proper legal documents and gathering financial account information will give you the data you need to help protect your parents.

We would be happy to help you and your parents with critical planning documents. We are open and taking new clients, and we hope to talk with you soon about your particular needs.

If you have questions or need guidance in your planning or planning for a loved one, please do not hesitate to contact our office by calling us at (405) 241-5994.

Caring for Yourself with the Right Estate Planning Prescription

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To all front-line and “essential” workers: Thank you for all of your hard work—day in and day out (and often evenings, nights, and weekends). You tirelessly give of yourself to care for some of the most vulnerable people in our society. Whether you are caring for them in a hospital, therapy room, or patient’s home, you are there to protect and help the patient gain a better tomorrow.

However, one important question remains. What have you done to prepare for your own care? Working together, we can craft the best possible estate planning prescription that will protect you today, tomorrow, and well into the future using the best legal tools available.

A revocable living trust is an excellent way to manage and protect your money and property. Contrary to what some may think, you don’t have to have lots of money and property to benefit from a trust. The two major players involved in a trust are the trustee and the beneficiary. During your lifetime, as long as you are able and choose to do so, you can act as the trustee and can control all money and property in the trust. However, when you are managing the money and property, you are now doing so as the trustee and not as the individual owner. In addition to serving as the initial trustee, you are also the beneficiary. This means that although you have transferred your money and property into the trust, you are still the one receiving the benefits of that money and property.

In the event you are unable to act (i.e., you become incapacitated) or pass away, the individual you have named as your successor trustee will step in and manage the money and property according to the instructions you have included in the written trust agreement. Even if you are still alive when the successor takes over, it will be the successor trustee’s responsibility to manage and use the money and property for your benefit. Then, upon your passing, the successor trustee is required to hold or distribute the money and property in the trust according to the instructions in the trust instrument. This transition of trusteeship between you and your successor trustee happens without court involvement, making it quick and private.

A financial power of attorney allows the trusted person you choose (your “agent”) to handle your financial matters on your behalf. The agent can handle a wide variety of transactions from signing checks to opening a bank account to filing your taxes, depending upon the authority you grant that individual in the power of attorney. This can be a helpful tool if you are incapacitated, bedridden, or just unavailable to engage in the necessary transaction. The beauty of this document is that you can customize it so that you will have the assistance you need, when you need it, based on your individual situation and wishes.

As you are probably well aware, a medical power of attorney allows you to name a trusted individual to communicate your medical wishes in the event you are unable to do so. It is important that you choose someone you trust because you will not be able to oversee your agent’s decisions. It is equally important that you convey your wishes to this individual clearly. This can be accomplished through the use of a living will or advanced directive.

Additionally, you can execute a HIPAA authorization in the event you would like other trusted individuals to have access to your medical information (i.e., to get a status update on your condition or obtain test results for you) but do not want them to have the ability to make decisions. In a stressful situation, the dissemination of reliable information straight from the healthcare provider can be a way to ease tensions and allow everyone to process what is going on with a level head.

We understand that you are busy and your time is valuable. To better assist our clients, we are available to meet by telephone or video conference. We may also be able to use remote procedures for the signing and executing of your documents, eliminating the need for you to come into our office at all. Your estate planning should not have to wait until you have a day off. Give us a call so we can get started caring for you right away.

Conducting Your Estate Plan Online

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As you have probably heard by now, keeping physical distance between us is crucial to stop this virus. Call or email us to find out how we can help you complete your estate plan without taking a single step outside your safe home.

Formerly, most states required that important legal documents must be signed in person. During the course of this epidemic, then, we have been doing all we can to follow that law, to get your documents signed in person and still protect your health.

Recently, however, an increasing number of governors have issued emergency orders to change that law. Ask us whether our state is one of those that has suspended the requirements for in-person signing. If so, we can offer you the entire estate-planning process, start to finish, all completed while you stay safe at home and connected with us by internet instead.

Please consider that especially under these circumstances, it would be most wise to get your plan done. You will have made sure that trusted people can step in for you, to take care of bills and health-care decisions if you become unable. At the same time, you will have taken care of your heirs, to protect your family’s legacy as smoothly as possible when the time comes.

How quickly things change. It may be that now we can do it all by internet, to get you to the peace of mind that doesn’t change. You will know that a trusted person can pick up the reins for you, so you or your loved ones get the care you need, and you will know that your estate legacy will be preserved and protected.

If you have questions or need guidance in your planning or planning for a loved one, please do not hesitate to contact our office by calling us at (405) 241-5994.

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