Elderly Children Taking Care of Elderly Parents

One of the consequences of increased life spans is that when people reach retirement age they might still have elderly parents that need to be cared for.

Taking care of an elderly parent can be difficult. As people age they need more and more attention and care in most cases.

With human life spans getting longer and longer the people trying to take care of their elderly parents are now reaching retirement age themselves and are finding that they are no longer physically capable of doing everything that they used to do.

One possible way to handle this situation was recently written about in the New York Times article "A Twist on Caring for a Parent: Move Into the Home."

The article tells the story of a 71-year-old man who moved into the same continuing care retirement community as his 96-year-old mother. It allows the man to help his mother while still having the facility staff to do what he is not able to do. All chores, such as cooking, cleaning and laundry, are done by the staff.

Obviously, this is an expensive solution to the problem and many families will not be able to afford to have two generations living in the same retirement community. How to take care of an ever aging population is something that elder law experts and legislatures will have to eventually address.

Having elderly children care for their elderly parents is unlikely to work in the long term.

For now, it is best to plan ahead. Through proper retirement and estate planning it is possible to ensure that elderly family members, including yourself, will have proper care. To learn more about Elder Law, visit our website at www.OCElderLaw.com, or call 714-525-4600 to speak with one of our Elder Law attorneys directly.

Reference: New York Times (Jan. 4, 2016) "A Twist on Caring for a Parent: Move Into the Home."

ABLE Act Basics vs. Special Needs Trusts in Orange County

Families with children with special needs often have to make extraordinary efforts in their estate plans to make sure that the children are still cared for after the parents pass away. The ABLE Act makes that less necessary.

Everyone who has a child with special needs knows that it takes a lot more money to care for the child. And it certainly takes much more than is covered by monthly Supplemental Security Insurance payments.

This has long created an issue for these parents as they worry about what will happen to their child if the parents pass away.

Parents could not just leave money to the child in their estate plans because that could make the child ineligible to receive SSI. Instead, special needs trusts had to be created by the parents. These were often less than ideal as they could only be created by a parent and required a trustee other than the disabled person to handle the money.

The Achieving a Better Life Experience Act seeks to make things easier.

Recently, the Centre Daily Times reviewed the basics of the Act in "Elder law: Understanding the ABLE Act."

These specifics include:

·        A person who became disabled prior to the age of 26 can create and maintain the account for him or herself.

·        Funds in the account are not used to determine SSI eligibility as long as they are less than $100,000.

·        Account income is not subject to income tax.

·        Funds must be used for qualified disability expenses.

·        When the account holder passes away, account assets must be used to pay back the government for benefits received unless they are rolled over into the account of a family member who is also disabled.

It is advisable that families still consult with an estate planning attorney to learn about the restrictions on ABLE accounts and whether a special needs trust would still be better for their family situations. To speak with one of our attorneys, call 714-525-4600, or visit our website at www.OCElderLaw.com to fill out a request.

Reference: Centre Daily Times (Jan. 9, 2016) "Elder law: Understanding the ABLE Act."

With Loopholes Closed What to Do About Social Security in Orange County

In a surprise move Congress closed popular Social Security loopholes for married couples, but that does not mean that all Social Security strategies are gone.

The United States Congress takes a lot of heat for not doing very much. However, sometimes they do make important legislative changes. Recently while elder law and Social Security experts were not watching, Congress closed a couple of Social Security loopholes as part of a larger piece of legislation to ensure the nation does not default on its debts. 

The loopholes, known as "file and suspend" and "restricted applications," are complex. 

What did they do? They basically allowed married couples to accrue a little bit more money out of the system by carefully filing the appropriate paperwork in a specific order at specific times. The majority of Americans did not take advantage of the loopholes either for practical reasons or because they did not know about them.

That these loopholes have been closed does not mean Americans can no longer plan to maximize their potential Social Security income. 

This was the point of a recent article in Time entitled "There's One Simple Social Security Strategy You Can Still Take to the Bank." 

The strategy suggested is to delay receiving Social Security benefits for as long as you possibly can. The longer you delay benefits, the more benefits you will receive. 

On the other hand, many people cannot afford to delay benefits for the maximum amount of time.

To speak with an expert in Social Security planning, call one of our elder law attorneys in Orange County at 714-525-4600, or visit our website at www.OCElderLaw.com. 

Reference: Time (Dec. 31, 2015) "There's One Simple Social Security Strategy You Can Still Take to the Bank."

Trump Under Fore Over Actions Surrounding Father's Estate

It is impossible to read a newspaper or watch the news on TV without hearing some mention of Donald Trump's campaign for president. The latest headlines illustrate how family feuds over estates can have unintended consequences.

Donald Trump is well known for his blunt, off-the-cuff comments. He does not seem to have an internal filter like most politicians. It is one of the reasons his supporters like him and his detractors do not. 

Given this temperament it should come as no surprise that a challenge to his father's will caused Trump to act out of anger. Consequently, he is now having to answer questions about it.

Trump's older brother was not interested in the family real estate business. He instead became a pilot until alcoholism forced him out of the sky. He died from the disease in 1991. 

When Trump's father passed away in 1999, Fred Trump III, Donald's nephew from his brother, spoke at the funeral. That night Fred III's child was born with cerebral palsy. Donald Trump pledged that the Trump family would take care of the child's medical needs. 

However, when his father's will was read it was discovered that his brother's family was cut out of the will. 

Donald Trump had helped create the will. 

His nephew's family claimed Donald and his other siblings had unduly influenced their father who suffered from dementia. They challenged the will. This angered Trump and he cut off support for the child with cerebral palsy. 

The Daily Mail has more on this story in "Donald Trump admits cutting off medical treatment for his nephew's sick baby after will dispute with alcoholic brother's family."

Undoubtedly this story will be used for political reasons as long as Donald Trump remains a presidential candidate. 

There is, nevertheless, a non-political lesson in all of this.

When families feud over estates, the feuds have a way of affecting others, like the medical treatment of a sick child.  If you would like to review your estate plan and minimize problems for your heirs, please call one of our estate planning attorneys at 714-525-4600, or visit our website at www.OCElderLaw.com. We are here to help.  

Reference: Daily Mail (Jan. 3, 2016) "Donald Trump admits cutting off medical treatment for his nephew's sick baby after will dispute with alcoholic brother's family."

Guardianship Laws and Elder Abuse in Orange County

Guardianship laws are meant to protect people who cannot take care of themselves. However, many people think that the laws do not do enough to protect elderly people from abuse.

The process for what happens when an elderly person can no longer handle his or her own affairs and does not have powers of attorney in place is more or less the same in every state. A guardianship petition is submitted to probate court. If the court agrees that the person is legally incapacitated, then the court will appoint someone as a guardian. This person will then be responsible for the elderly ward's financial and personal affairs.

Many people believe there is an inherent bias in most states' guardianship laws.

Guardians are required to make regular reports about the financial affairs of the ward. Although it does not always work, this helps prevent the guardian from taking financial advantage of the ward. However, most of the time guardians are not required to report on the well-being and care of the elderly person.

Consequently, courts do not know if the ward is being abused or neglected unless a third-party makes a report.

Some states are attempting to change this bias by updating their laws to add new reporting requirements.

As the Jackson Free Press reports in "State Eyes Changes to Guardianship Laws," Mississippi has appointed a task force to consider changing its requirements.

Changing guardianship laws to make elder abuse less likely is good and important work. No elderly person should have to suffer from financial or personal abuse.

However, it is also important not to rely on guardianship laws as the only way to take care of incapacitated elderly people. Everyone should get the necessary powers of attorney in place before they become incapacitated to make it less likely that a court will see the need to appoint a guardian in the first place.

For more information about guardianship issues in California, visit our website at www.OCElderLaw.com or contact our office in Orange County at 714-525-4600 for a consultation with an estate planning attorney.

Reference: Jackson Free Press (Dec. 22, 2015) "State Eyes Changes to Guardianship Laws"

What to Do after an Alzheimer's Disease Diagnosis

If you or a loved one is diagnosed with Alzheimer's disease, it is important to take immediate steps to ensure that end-of-life care is as comfortable as can be.

There is a common myth that people with Alzheimer's are completely incompetent and cannot be trusted to make their own decisions. It is not true as the early stages of the disease are relatively mild.

People who are diagnosed with the disease early enough can still make their own decisions. However, as the disease progresses most do eventually lose the ability to make their legal decisions as NorthJersey.com points out in "Planning becomes vital following Alzheimer's diagnosis."

The article suggests that people who receive an Alzheimer's diagnosis should get a general durable power of attorney, a health care power of attorney and a living will.

The powers of attorney will allow the person to appoint someone else to handle financial and medical affairs, respectively, when the Alzheimer's patient is no longer able to do so. The living will is used to give advanced directives about what type of treatments doctors should employ to keep the patient alive.

These are important documents to have.

Getting them after an Alzheimer's diagnosis is solid advice. However, even better advice is not to wait until after receiving such a diagnosis. All three documents are part of general estate planning. There is no need to wait until you know you will need them to get them.

For more information on Durable Powers of Attorney in California, please visit our website at www.OCElderLaw.com or contact our office in Orange County at 714-525-4600 for a consultation with an estate planning attorney.

Reference: NorthJersey.com (Dec. 27, 2015) "Planning becomes vital following Alzheimer's diagnosis."

Suggested Key Words: Durable Power of Attorney in Orange County 

Tax Consequences of Inheriting an Annuity

If you inherit a non-qualified annuity, then before you decide what to do it is important to understand the different options and tax implications.

Annuities have become an extremely popular tool in people's retirement plans. Like any other asset, these contracts can be the subject of an inheritance.

If they are inherited then the beneficiary needs to know what the options are for handling the annuity and what the tax consequences are. First, if a spouse inherits the annuity, then he or she can almost always continue the annuity contract as it is and thus face no immediate tax issues.

As the Motley Fool discussed in an article entitled "Tax Rules for an Inherited Non-Qualified Annuity," non-spouse heirs typically have three options, including:

·        Take a Lump Sum – If an heir chooses a one-time payment, then the heir will need to pay income tax on any appreciated amount over the original premium payments the deceased made.

·        Arrange for Smaller Payments Over Time – By accepting smaller period payments, the heir can avoid a large one-time income tax payment. However, income tax will still be owed on any appreciation of the annuity.

·        Switch to a Different Annuity – The person who purchases an annuity can switch to a different provider without paying income tax. However, it is unclear if someone who inherits the annuity can do the same. In a private letter ruling the IRS allowed one heir to do so, but many annuity providers do not wish to rely on the ruling as it technically only applies to the person who asked for it. Some providers will work with heirs on switching providers though.

If you inherit a non-qualified annuity and have questions about what to do with it, talk to an estate attorney about these options and which is the best choice for you.  For more information, please visit our website at www.OCElderLaw.com, or schedule an appointment with one of our attorneys at 714-525-4600.

Reference: Motley Fool (Dec. 19, 2015) "Tax Rules for an Inherited Non-Qualified Annuity"