How Trusts Can Help You Protect your Adult Children in the Event of Your Death

Mon, 08 Jun 2009 01:55:35 GMT

Parents do not stop worrying about or protecting their children once their children turn 18. While parents are living they can help their children by providing the financial support that they deem appropriate, if they able to do so. But, what happens if a parent passes away and still wants to protect his or her adult children? Is there any legal way to provide financial support to an adult child and maintain some control over it after your death? Certain types of trusts can be established to provide money to and to protect adult children.

Incentive Trusts

Incentive trusts are often used by parents to provide money to their children so long as their children do certain things. For example, a parent may not allow a child to access the trust money unless he graduates college or maintains a job for a certain amount of time. Similarly, a parent can refuse to allow a child access to trust money if she is abusing drugs or alcohol. It is a way for a parent to encourage certain behaviors even if the parent is not alive to do it himself. However, it is important for parents to think carefully about the incentives that they associate with the trust and to draft the trust document carefully. For example, if you require your daughter to earn a $100,000 of her own before accessing the trust would you be discouraging her from taking a job with a charitable organization or taking time off to be a stay at home parent? Some experts also warn parents to be careful not to set unreasonable expectations that may foster resentment among your children.

You Cannot Require a Child to Violate Public Policy

Incentive trusts allow you to attach certain restrictions to when your child may use the money that you have in his or her trust account. However, it is important that your trust not violate public policy. For example, you cannot require your child to divorce his or her spouse or to commit an illegal act. If you attach these provisions to your trust then a court will likely fund the trust null and void and allow your child full and unrestricted access to the trust funds.

Spendthrift Trusts

Parents may also establish spendthrift trusts for their children. Spendthrift trusts restrict the amount of trust money that may be spent by the trust beneficiary. Instead of the trust beneficiary making decisions about how the money is spent, an independent trustee has that authority and may provide money to the beneficiary as needed. Typically, as needed is defined as for the health and maintenance of the individual but may also include things such as education if the creator of the trust so desires.

Trusts are a valuable estate planning tool that allows parents to provide for their adult children and maintain some control over how the money is used or how the child lives his or her life. However, if a trust is not legally constructed then the parent’s intentions may not be honored. Therefore, it is important to make sure that your trust is legally drafted and compliant with state laws so that you can continue to protect your adult children after your death.

How to Care for an Aging Parent

Mon, 08 Jun 2009 01:57:46 GMT

Many adults are overwhelmed with the responsibility of caring for an aging parent. It is a fine line between allowing your aging parents to remain autonomous and in control of their own decisions and doing what is in their best interest. Accordingly, it is important for many families to make arrangements for care before a crisis happens.

Those arrangements often include:

· A Power of Attorney: a power of attorney appoints someone to act on your behalf if you lack the mental or physical capability to make your own decisions. The law requires that the person whom you appoint as your power of attorney make decisions that are in your best interest when you are unable to do so. For example, if you are in an accident or undergo surgery that leaves you unable to make your financial or business decisions, your power of attorney could do it for you. When you regain your mental capabilities then all of the decision making power reverts back to you and the person named in the power of attorney can no longer make decisions for you.

· Living Wills: A living will provides specific directions to health care professionals about how you wish to manage your treatment if you are no longer able to communicate those wishes to them.

· Health Care Proxies: A health care proxy appoints a person to make health care decisions for you should you become unable to make them yourself. The person appointed as your health care proxy must act as that person believes you would act if you were able to communicate your wishes and typically cannot contradict your living will.

· An Estate Plan: This includes trusts and wills and determines how financial assets and personal belongings are distributed.

If your parents are refusing to make the arrangements described above then you might need some help persuading your parents to discuss their options. In addition to describing the benefits of each of the arrangements listed above, you can explain what happens in the absence of each arrangement. Without a power of attorney, living will or health care proxy, for example, all medical and financial decisions will be made by the person named by state statute and your parent may not like or may not trust that person. Similarly, without an estate plan your parents’ assets will be distributed according to the intestate laws of your state and not necessarily according to their own wishes.

For the reasons, it is important for each of your parents to create a power of attorney, a living will, a health care proxy and an estate plan that reflects his or her wishes. That way your parents will remain in control of their lives and their assets.

If you need additional assistance caring for your aging parent then please contact an estate planning attorney or elder law attorney in your state. These attorneys are familiar with the emotional issues that often arise while making arrangements for the care of an older parent. They can help families understand the impact of their decisions and make the decisions that are in their best interest.

How to Help Your Parents Obtain Medical Care

Mon, 08 Jun 2009 01:55:00 GMT

Medical care is expensive in the United States. Many people assume that they will have adequate coverage through Medicare once they turn 65 years of age. However, Medicare Part A may not cover as much medical care as you think. As people age and typically require more health care, it is especially important for the elderly and their adult children to understand how to obtain appropriate medical coverage.

Medicare Coverage for the Elderly

Medicare is a federal government health insurance program for people age 65 and older. Medicare Part A is hospital coverage which is provided to most people who are over age 65. Most people do not need to pay premiums to have coverage under Part A. However, in order to obtain the benefits of Medicare Part B (medical insurance), Medicare Part D (prescription drug insurance) or a Medicare Advantage Plan (similar to an HMO or PPO) most people do need to pay premiums in order to receive coverage. The Medicare website has a good description of each Part’s benefits and costs which you can review with your parents. The employees at your local social security office can also help your parents obtain medical care.

It is important to know and to advise your parents that the cost of Medicare Part B may go up significantly if they do not initially enroll in Part B at age 65. The initial enrollment period for Medicare Part B is seven months long. It begins 3 months before one’s 65^th birthday and ends 4 months after one’s 65^th birthday. If an individual does not sign up for Part B benefits during this time and the person is retired then the monthly premiums may increase by 10% for every year that the individual was eligible for coverage and chose not to enroll in the Part B program. For example, if your parents did not enroll in Part B at age 65 and instead enrolled at age 75 then their monthly premiums would be double what they would have been had they enrolled in Part B at age 65. Although your parents will pay the monetary penalty, they can enroll in Medicare Part B at their local social security office from January 1 – March 31 of any calendar year. The 10% annual penalty may be waived if your parents are still working at age 65.

Supplemental Care

Individuals may also choose to enroll in a Medicare Advantage Plan. Several plans are available in each state. The plans vary in cost and in the coverage that they provide. Individuals may view a comparison of the plans for their state on the Medicare website. The comparison includes the monthly premiums, annual deductible, summary rating, telephone number and link to the health plan website.

While Medicare Part A may cover most of a patient’s costs if the patient is admitted to the hospital, it will not cover the majority of outpatient health care expenses. According to an article published on the National Institute of Health’s website, people typically spend more than $300,000 on health care over the course of their life time and nearly half of that amount is incurred after a person turns 65. Therefore, parents and their children should carefully plan for the likelihood of significant medical expenses during an individual’s elderly years and secure the most cost effective health insurance possible to deal with the probable health care costs.

The Rights of Nursing Home Patients

Mon, 08 Jun 2009 01:54:18 GMT

No one should be afraid to lose his or her autonomy when entering a nursing home. A nursing home is not a jail. Nursing home residents have rights which the nursing home must legally respect. Many of these rights were granted to nursing home residents in the Nursing Home Reform Amendments of OBRA 1987. Those rights include:

· The Right to Live Without Abuse or Neglect: No resident should be physically abused, mentally abused, or neglected while in a nursing home. This includes the unwarranted use of medication, physical restraints and seclusion for reasons other than medical necessity. Medication and restraints may only be used upon the written recommendation of a medical doctor and if they are necessary to treat the resident’s medical symptoms or ensure his safety.

· The Right to Receive Medical Care: Every resident has the right to receive medical care from the physician of his or her choice. Every resident has the right to be informed about the medical options and to refuse any treatment or medication.

· The Right to Privacy: this includes both medical and personal privacy. Medical conversations and records must be kept confidential. Residents also have the right to have private written and verbal communications with whomever they chose. Residents may also decide which religious, community and familial functions they will participate in if they are physically able to do so.

· The Right to be Informed about the Costs of Your Care: Residents are responsible for the costs of their care. Therefore, they are entitled to understand what those costs are and whether they are reimbursable by Medicaid or private insurance.

· The Right to Make Your Own Decisions: this includes the right to choose your own physician and to make informed decisions about your own medical care. It also includes the right to form or join social groups with other residents of the facility. Nursing homes are required to allow social groups to form among residents and to allow residents to participate in activities which are safe for them given their medical limitations.

· The Right to Entertain Visitors: Residents have the right to immediate visits from their personal physician and from relatives. Other visitors must be permitted “subject to reasonable restriction.”

· The Right to Transfer or Leave the Facility with Proper Notice: residents have the right to remain in the facility unless their transfer is required because the facility can no longer meet their needs or because their presence threatens the safety of other residents. Prior notice is required. 30 days prior notice is preferred but that time may be shortened in an emergency situation.

There are, unfortunately, nursing homes in the United States that do not honor all of these resident rights. These nursing homes are not only acting unethically but also exposing themselves to legal risk because residents may sue nursing homes that violate their rights.

Residents, relatives and nursing homes should work together to make sure that all of the resident rights are consistently honored and that residents are consistently respected and well cared for in our nation’s nursing homes.

The Top Ten Legal Steps to Take Before You Die

Mon, 08 Jun 2009 01:56:25 GMT

No one likes to think about dying. Yet we all know that it is inevitable. Perhaps some of our anxiety about dying could be alleviated if we take the necessary steps to protect our families and our assets. Below, are the top ten legal steps that you should take to protect your family and your assets before you die.

1. Hire an Estate Planning Attorney: An estate planning attorney knows all the tools of the trade and can best advise you on how to protect your assets and those you love by creating legally valid documents such as a will and trusts.

2. Write a Will: A will is the cornerstone of most estate plans. It may allocate specific provisions to specific beneficiaries and distribute the rest of your assets that are not specifically named elsewhere in your will or estate plan.

3. Purchase Life Insurance: Whether you work outside the home or you stay at home, it is important to consider the income or services that you provide to your family and provide your family with the money necessary to replace the income or services should you die.

4. Create Trusts: you may create trusts for specific purposes or with certain provisions. For example, you may hold money in trust for your children until they reach a certain age. In some cases, there are also tax advantages to creating trusts.

5. Appoint a Guardian for Your Minor Children: This is among the most important things that you can do to protect your family in the event of your death. You will be secure in the knowledge that your children will be cared for by the person whom you choose to care for them and not by the person whom the state statute or a probate judge assigns for them.

6. Create a Power of Attorney: A power of attorney will be able to handle your business and financial affairs if you become incapacitated.

7. Create a Living Will and Health Care Proxy: These documents will allow doctors to provide the medical care that you want provided in the event that you are unable to verbally direct them to provide that care. A living will provides specific directives as to what medical care you do or do not want in certain situations and a health care proxy appoints a specific person to make medical decisions on your behalf should you become incapacitated.

8. Consider Charitable Contributions: You may provide certain assets to the charity of your choice either in the form of a trust or in your will. If have a favorite charity that you want to support and / or need a tax deduction then you might consider charitable contributions.

9. Make Sure Beneficiaries are Named on all Assets Which Pass Outside of the Estate: this may include life insurance policies and certain retirement accounts such as some IRAs.

10. Review Your Estate Plan Every Few Years: As your family and financial situations change, so should your estate plan. For example, you might get married and wish to provide for your new spouse or you may have a child with disabilities whom you wish to provide more for financially than your other children. Similarly, your net worth may dramatically increase making it more important to use appropriate estate planning tools to minimize your estate tax and maximize the amount of money that goes to your beneficiaries.

These ten steps will make sure that all of your legal and financial matters are taken care of should anything happen to you and provide security and predictability for your family and beneficiaries.

What retirement benefits are available through the Social Security Administration?

Mon, 09 Feb 2009 02:35:01 GMT

Looking to retire soon? The Social Security Administration is the place to go for answers about the amount of retirement benefits that you can receive, the age at which you can receive those benefits, and whether you should continue to work at this point in your life.

By visiting any local Social Security office, you can get information that you may need in order to answer these and other questions that you have about retirement benefits.

The amount of retirement benefits you are entitled to receive from Social Security is based in large part on the age at which you choose to retire, as well as your work record at the date of your retirement. While you can opt to begin receiving retirement benefits at age 62, you will not be eligible for full retirement benefits until a later age, which varies according to the year in which you were born. There are also certain circumstances where your spouse and/or children may be entitled to Social Security benefits based on your work record. However, these benefits may be reduced or not available if you elect to start receiving retirement benefits prior to your full retirement age.

Plus, if you continue to work past full retirement age, you may be eligible to receive an even higher amount of monthly benefits. Once you reach full retirement age, you can work and earn as much as you want, and still receive your full retirement benefits. If you haven’t reached full retirement age yet, then your retirement benefits may be reduced by the amount of money that you are earning at work.

Whenever you choose to begin receiving retirement benefits, or whatever your retirement age, though, you should be sure to apply for Medicare benefits three months before you turn 65. Otherwise, your Medicare benefits may be delayed, or you may be charged higher premiums. Since Medicare is likely to be essential to your life after retirement, it is important to keep this deadline in mind as you plan for retirement.

Medicare can provide you with hospital coverage, medical insurance, and prescription drug coverage. There are also Medicare Advantage plans through which you can receive medical care at designated provider organizations in certain areas. Most people become eligible for free Medicare hospital coverage when they turn 65, with some exceptions. Other people can become eligible for such coverage by paying a monthly premium. If you’re eligible for free Medicare hospital coverage, then you also eligible for Medicare medical insurance if you pay a monthly premium. Also, if you have either hospital and/or medical coverage, you can pay an additional monthly premium for Medicare prescription drug coverage.

If you can’t afford to pay the monthly premiums for Medicare medical insurance and/or prescription drug coverage, you may be eligible for assistance with these costs through state programs. So, be sure to check with your state or local medical assistance agency, or Medicaid agency, to see if your state has such a program available to you, and, if so, to see if you qualify for benefits under that program.

You can apply for both retirement benefits and Medicare coverage online at www.ssa.gov, in person at your local Social Security office, or by phone.

Why Everyone, Even Young People, Need an Estate Plan

Mon, 08 Jun 2009 01:57:04 GMT

Many young people are hesitant to consult an attorney about creating an estate plan. They may believe that death is far away or that they don’t have enough assets to make estate planning important. However, estate planning is important for all adults regardless of age or assets.

An Estate Plan Can Help You if You Injured or Ill

A properly drafted estate plan can help provide for you and your family if you become temporarily or permanently disabled due to injury or illness. For example, it is important that your estate plan include:

Health Care Proxy: a health care proxy allows you to appoint a person whom you trust to make medical decisions for you should you become incapacitated. Your health care proxy is legally obligated to make the health care decisions that that person believes you would make for yourself in the given situation.
Power of Attorney: like a health care proxy, the person whom you appoint as your power of attorney has the responsibility to make decisions on your behalf should you become incapacitated. Your power of attorney will make your business and financial decisions for the period of time that you are unable to do so yourself. The power of attorney may be the same person as your health care proxy or a different person.
Disability Insurance Coverage: It is important to consider what will happen to you and your family if an illness or injury prevents you from working. How will your income be replaced? Who will care for the children and clean the house? All of these things should be considered and an appropriate level of disability insurance coverage should be obtained so that you will have the money that you need should you become unable to work.

An Estate Plan Can Protect You if the Unthinkable Happens

Unfortunately, tragedy sometimes strikes and people die at a young age. While you put all of your energy into preventing that kind of tragedy it is important to plan for its unlikely occurrence. Careful planning will allow you to:

Appoint a Guardian: You can choose anyone whom you want to raise your minor children in the event of your death. However, your choice must be clearly stated and legally executed. Otherwise, the state will decide who gets your kids and it may be a relative of whom you do not approve.
Distribute Your Own Assets: If you don’t decide who will get your assets including your savings, your home, your jewelry and your car, for example, then the state will decide for you.

If you fail to develop and execute an estate plan that covers all of the elements described above, then the state will decide who gets to make your health care decisions, who will take care of your children and how your assets will be distributed. You likely have more at stake then you think that you do so don’t take any unnecessary chances. Instead, plan for the unthinkable and hope that it doesn’t happen for many years to come.