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Asking Aunt Sarah to Leave Her Home to Move to a Nursing Facility

This is one of the hardest parts of caring for a loved one with Alzheimer’s or who is simply no longer able to take care of themselves safely and properly.

It starts with an aide who comes by a few times a week to take care of an ailing parent, then gradually progresses until one day you realize that a round-the-clock team, from the initial aid to social workers, physical therapist, nurse and others, are going in and out of the house to provide needed care. At that point, says The Huffington Post’s recent article, “How to Convince a Loved One With Alzheimer’s to Move to a Nursing Home,” it becomes clear that your loved one does need to be moved to nursing home.

The primary caregiver must often work full-time and is unable to provide adequate care. People with Alzheimer’s—and many frail, elderly people without it—who clearly need to be in a long-term care facility typically want to remain in their own homes. They often don’t realize that their condition is such that nursing home placement would be the best option for them. Some family members will also be adamantly opposed to the idea. In many instances, it’s tough because the patient vehemently objects, which makes family members feel guilty.

It’s agonizing, but caregivers need to think about the fact that long-term care placement can be the most loving option. Caring for him or her at home is probably having a serious effect on their own health and well-being. A caregiver should think of themselves as a “care advocate.” A care advocate can be vigilant to ensure that their loved one is getting the appropriate treatment and care in the facility while preserving their own physical and mental health.

Many Alzheimer’s patients will just refuse to go. It is, therefore, necessary to try to convince them that it’s best for their own health and well-being. Another option is asking another family member or even the person’s physician or attorney to talk with them. Sometimes those with Alzheimer’s pay more attention to the advice of a person other than their primary caregiver. The services of a geriatric care manager can also help with this process.

Another approach is “compassionate deception,” where you tell the person to go for a week,  stretch it out to two weeks, then three weeks and eventually they adjust to being there full time. Those patients who are significantly impaired, may even forget they were supposed to go back home or may not be aware they aren’t at home.

If these don’t work, and you have power of attorney, you may have to ask for help from a social worker or law enforcement.  However, this should only been done as a last resort, when there is concern that the person may become a danger to him or herself or others. The person is usually taken to a hospital geriatric psychiatry unit for evaluation and treatment. He or she may then be released to a nursing home.

In the worst case scenario, you may need to ask the court to be appointed as the person’s guardian or conservator. An Elder Law attorney will be able to help you go through this process, which will ultimately give you the legal standing to make decisions. It won’t be easy, but you will know that you did the right thing for your loved one, and that he or she is getting the correct care.

Reference: Huffington Post (February 3, 2017) “How to Convince a Loved One With Alzheimer’s to Move to a Nursing Home”

Trusts and Home Owners Association (HOA): Not Necessarily a Good Match

Whether you are attempting to protect a townhouse in a condo development or a detached single-family home in a planned community governed by a HOA, you’ll need to know what the rules are before putting either home in a trust.

Whenever a home is part of a community with a HOA, determining how the home is owned requires a thorough examination of escrow documents, the title report, a deed to the property and the governing documents from the HOA itself. The style of the house or even of the community has no bearing on the legal ownership, as reported in The Los Angeles Times, “Trusts aren't a surefire way of making your HOA property judgment-proof.” One important point to keep in mind: regardless of how you decide to protect the asset against possible lawsuits from the HOA itself or an aggrieved neighbor, take action long before anything occurs.

There are several legal distinctions between condominiums and Planned Unit Developments (PUDS)—the ownership of common areas is one of the most cited.  However, whether a townhouse or a single-family dwelling is part of a PUD or condo development, both are deed-restricted properties subject to homeowner associations regulated by California’s Davis–Stirling Common Interest Development Act in the California Civil Code. A power reserved for the board of all common interest developments is the right to place a lien on the property of an owner who violates the covenants or fails to pay on some association-related debt. The lien lets the board foreclose on and take that property to satisfy the debt.

This is tough for estate planning, because if a lien is applied to the property and the owner passes away, the estate can be attached. This keeps the property from passing to the owner’s heirs until any outstanding debts are paid.

Unfortunately, the most commonly used trusts won’t protect these assets.

Revocable Trusts

When folks talk about a “family trust” or “living trust,” they usually mean a “revocable trust.” This is where the grantors maintain ownership and control over their property during their lives. At death, the control goes to a trustee who then further administers or distributes the assets without having to go through probate. These trusts are “revocable” because the grantors can make changes to the terms, distribute assets early, and even revoke the whole deal.  However, the assets in the trust are still subject to taxes and are not protected from creditors, litigation or foreclosure both during the lifetime and after the grantor’s death.

Irrevocable Trusts

By contrast, irrevocable trusts provide the creditor protection to the grantors, but only if they’re created for legitimate estate planning purposes. However, in an irrevocable trust, the grantors give up control over the assets placed in that trust—they can’t amend nor revoke the trust during their lifetimes. When the trust is created, the grantors must choose who they want to have their property when they die. That decision can’t typically be changed, and real property can be difficult or impossible to sell or refinance while it’s in the trust.

There is no way to completely protect residential deed-restriction property from litigation with an HOA, but any kind of property needs to have “loss assessment” coverage and a very large umbrella or catastrophe insurance policy as part of your personal homeowners insurance package. If you haven’t done so already, make sure to put all of this protection in place as soon as possible and don’t wait until an incident occurs.

Reference: Los Angeles Times (February 4, 2017) “Trusts aren't a surefire way of making your HOA property judgment-proof”

Leave a Legacy as Well as an Inheritance

Cash and investments are only part of the legacy you leave behind. Your family history, stories, values and personal items can also be shared across the generations.

Most people think about money and property when they hear the word “inheritance.”  However, in addition to passing along wealth and assets, families can take certain steps to preserve and protect legacies that are often overlooked and lost. Forbes’ article, “When You Pass Away, Don't Just Leave Assets to Your Heirs. Leave Memories,” provides a thoughtful way to share the family’s history so that it does not get lost from one generation to the next.

Share. Record yourself sharing the stories your parents, grandparents, and other relatives told you. Be sure to share the stories along with the values and lessons you learned from them. This should include what you’ve learned about life, and things like money, success, and faith. Include your rationale for certain life decisions, what you learned from your mistakes, the reasons for your successes, along with your failures—and perhaps what you might do differently, if you could.

Preserve your family's history by creating photo albums with names, dates, and descriptions. Another option is to develop a website to share photos and stories and allow family members to add their own to the collection.

Valuable “Things.” Consider items you own that have emotional instead of financial value. These are things like your grandfather’s watch, a family heirloom, or perhaps framed photos that have been in your family for generations. These are items that have value because of what they are, not what they’re worth. Use an experienced estate planning attorney to help you draft a letter to designate the specific items. Be sure to describe what those things mean to you and why you chose the recipients to have them, so that they’ll be able to pass on your family’s legacy to their descendants in the future.

Family Values. Remember to pass on your values. You can do this by creating an Incentive Trust to encourage or discourage specific behaviors, by placing conditions and incentives on the trust payouts. This will let you, to some extent, encourage your kids to embrace your values and beliefs. An incentive Trust could reward children who earn a college degree, perform charity work or match the child’s earnings.

By taking these simple steps to formalize your family’s history, from writing down or recording stories, protecting important heirlooms, creating family trees, providing details about people in photos and elaborating on the things that mattered to your family, you create an emotional and historical legacy that may well live long after the financial or real estate assets have been dispersed.

Reference: Forbes (January 30, 2017) “When You Pass Away, Don't Just Leave Assets to Your Heirs. Leave Memories”

Don’t Forget to Update Estate and Financial Plans for These Stages and Changes in Life

Life is all about changes, from starting a family, buying a house, building a business, retiring and building a legacy. Your estate and financial plan needs to follow along with these changes.

It takes planning and the help of skilled professionals to guide us through complex areas that include estate planning and building a successful financial strategy. Along the way, life happens, and that almost always includes changes in relationships and priorities.

NASDAQ’s recent article, “6 Reasons to Update Your Financial Strategy Now,” gives us some major life changes and stages that call for an update to your estate plan.

Marriage. It’s important that you both have an understanding of the family finances and be able to set goals together. Both of you should be knowledgeable about the monthly budget, insurance, estate planning and investments.

Divorce. Whether you are trying to maintain your financial situation or recover from the dissolution, there are some key areas that require updating, such as your financial status, a new budget, reviewing credit reports, adding to an emergency fund and analyzing your estate plan. Don’t forget to update your beneficiary designations.

Children. According to the U.S. Department of Agriculture, the typical middle-income, married parents of a child born in 2015 can anticipate spending $230,000 for food, shelter, and other necessities to raise a child up to age 18. That doesn’t include the cost of college. Review your insurance policies and estate plan to make sure that your family is protected.

Career or Job Change. Whether you were unemployed due to termination, merger, or layoff, important financial concerns include loss of income, medical insurance and other benefits.

Retirement. Plan properly to avoid the risk of not outliving the retirement that you thought you would have to see you through.

Loss of a Spouse. This sad reality can be overwhelming from both an emotional and financial standpoint. An estate planning attorney will be able to help you through the process of tasks and legal issues to be resolved.

An estate plan is not a set-it-and-forget-it document. Changes in life and changes in the law, necessitate a review on a regular basis. If you have not reviewed your estate plan in the last four years, now would be a good time to schedule a meeting with your estate planning attorney.

Reference: NASDAQ (January 26, 2017) “6 Reasons to Update Your Financial Strategy Now”

Brother and Sister Fighting over Multimillionaire Father’s Estate

Prolific spending gave Del Dunmire a high profile in his hometown, but he was also generous, supporting a number of charitable organizations.

Locally famous for overcoming an unsuccessful bank robbery and founding what became an international aviation parts company, Kansas City’s Del Dunmire had a reputation for throwing extravagant parties while also supporting Children’s Mercy Hospital, the Salvation Army and Kansas City’s Vietnam Veterans’ Memorial Fountain. His legacy is now tangled and somewhat tarnished in an estate battle between Debra Dunmire Hedenkamp and Mark Dunmire, two of his children.

The Cass County Democrat Missourian explains in “Children of Del Dunmire may clash in court over rightful heir to fortune,” that Del dreamed of remodeling the Harrisonville square into an arts and entertainment venue. He spent $10 million to purchase 80% of the square’s properties. Hedenkamp alleges that her brother wrongly influenced their father to amend his will and the details of his trust. Those moves cut her out as a beneficiary and bequeathed all of their father’s fortune to her brother Mark.

A trust created by Del in 2008 named three people as the beneficiaries to his fortune: Hedenkamp and her two half-siblings, Joshua and Jasmine Dunmire. His sister claims that Mark was upset that he had been excluded as a beneficiary, and that in 2014, he wrongly influenced their father to change his will and trust in order to be named as the sole beneficiary.

One petition alleges that Mark exerted an “undue influence” and committed fraud to obtain Del’s signature and alter the millionaire’s 2008 will. Another petition makes similar claims against Mark concerning an alteration to Del Dunmire’s 2008 trust.

Among the exhibits in the case, is a document allegedly written by Mark to his father. Hedenkamp claims to have found the document while cleaning out Del’s apartment after he died. The typewritten document, signed “Mark” and addressed to “Dad,” reads in part, “I have left estate planning documents prepared according to your wishes as you have expressed to me many times. ... Witnesses are easy to come up with, just keep in mind that they may be called upon to testify on the veracity of your signature and your capacity when you signed them, so please choose well.”

The document’s legitimacy has not been confirmed. Hedenkamp’s petitions allege that Mark exploited his father’s bipolar disorder to persuade him to change his will and trust. The petitions also allege that Mark tried to convince his father that the shares to be left to Joshua and Jasmine Dunmire, should instead go to a charity.

“Such representations were intended to and did deceive Delbert L. Dunmire,” Hedenkamp claims in one petition.

Mark Dunmire’s attorney says that Del had the mental capacity to update his will and that the evidence will clearly show that was his intent.

Hedenkamp’s petition asks the court to remove Mark as the personal representative of the estate and to appoint a disinterested person to manage it. She also claims that Mark isn’t the sole beneficiary and that Hedenkamp is entitled to the one-third share left to her in accordance with Del’s 2008 will and trust. Her share is worth over $4 million.

The petition further alleges that Mark Dunmire did not disclose personal property at his father’s home at the time of death, including gold and silver bars, coins, guns and other items, with an estimated value of $500,000.

Reference: The Cass County Democrat Missourian (January 27, 2017) “Children of Del Dunmire may clash in court over rightful heir to fortune”

Timing is Everything, Even in Estate Planning

When both spouses die at the same time, whether as the result of an accident or natural disaster, sticky estate planning questions must be resolved concerning which spouse died first.

Here’s one you didn’t see in the movie! When the Titanic sank in the icy waters of the North Atlantic, there were estate issues created by the fact that many couples both perished. If both spouses die at the same time, it must be determined who died first before the estate can be settled.

There are several strategies to ensure that your estate is handled properly, if something like that happens to your intended beneficiaries. Motley Fool’s article, “Protect Your Estate Plan with a "Titanic" Clause,” explains that the simultaneous-death clause is designed for two people who are leaving some or all of their assets to each other. If both spouses die at once, or if it's impossible to determine which spouse died first, the clause kicks in and names one of them as the first to die.

This can be very important in estate planning in order to ensure the orderly dispersion of the assets of the one deemed to have died first. It may also reduce or even eliminate estate taxes. The simultaneous-death clause could dictate that the wife is deemed to have died first. As a result, her estate would be transferred to her husband's estate before it’s distributed. This dramatically reduces the amount of estate tax due.

Those couples who don't have the simultaneous-death clause in their wills and die simultaneously, may be subject to the Uniform Simultaneous Death Act. This law says that when two people who are leaving any assets to each other die within a certain period of time (many states say 120 hours and others say 120 days), then it’s legally deemed that both members of the couple predeceased each other.

Estate planning attorneys will advise you to add another clause in your will that requires your beneficiaries to survive you for a minimum period of time before they can receive your assets, for example, six months. This can keep your assets from going through probate more than once in a relatively short time—and possibly having two estate tax hits with large estates.

Finally, there’s the "Armageddon," the "Titanic" or an "all dead" clause. This provision is a failsafe in case all of your primary and contingent beneficiaries die before receiving your assets. Under the “Titanic clause,” you designate a final beneficiary to receive all of your assets in the event that none of your previous beneficiaries lives to collect them. Many folks name a qualified charitable organization or another institution because the death of any single person can’t prevent an institution from receiving the assets.

Unlike the simultaneous-death clause, the Titanic clause covers all of your beneficiaries, not just the primary ones. For instance, if every member of your family is listed as primary and contingent beneficiary and you all die at the same time in a freak accident, there would still be a Titanic beneficiary who would distribute your assets as directed by your will.

Reference: Motley Fool (January 27, 2017) “Protect Your Estate Plan with a "Titanic" Clause”

Trust Fund Battle Heading to Federal Court, if Parties Can’t Settle Dispute

At issue is whether or not the owner of the New Orleans Saints can take his ownership shares out of trust funds that had been created for family members, when they were all on speaking terms. Sadly, the family is now fractured.

Having had a change of heart about who he wants to inherit full ownership of the New Orleans Saints, team owner Tom Benson is embroiled in a battle that pits him against trustees overseeing his heirs’ trust funds. If they can’t come to an agreement, U.S. District Judge Jane Triche Milazzo is ready to move the case to into court.

The trial won’t affect control over the sports teams because the financial shares at issue are non-voting stock. Benson maintains control by owning all of the voting shares in the team.

New Orleans Times-Picayune explains in its article, “Saints owner Tom Benson's ownership lawsuit 1 week away from trial,” that Benson announced in January 2015 that he would cut off Renee, Rita and Ryan and intends to leave full ownership of the Saints to his wife Gayle.

Benson had been grooming his granddaughter Rita LeBlanc to take control in the future, but “The Three Rs,” as they're known, haven’t talked to Benson since the fallout.

The family split was highlighted by a failed attempt in 2015 by Rita, her mother, and her brother to have Benson declared incompetent, claiming that he’s being unduly influenced by his third wife and an inner circle of Saints executives. Benson's daughter Renee and grandchildren Rita and Ryan challenged New Orleans Civil District Judge Kern Reese's decision that Tom is competent to make decisions about his affairs, including those concerning the ownership of his teams.

When Benson changed his mind about his fortune's future, he wanted to remove ownership shares in the Saints and Pelicans from his heirs' trust funds in exchange for other assets. This type of move is typically permitted under the trusts, as long as the assets are of equal value.  Therefore, the big question at trial is the value of the Saints and Pelicans, and how much Benson is offering in exchange. The trustees blocked Benson's asset swap. They say that Benson isn't offering enough to support the exchange.

With an estimated value of the team at $1.75 billion, according to Forbes magazine, any court case concerning the value of the team will necessitate involvement from both the NFL and the Saints. Neither the NFL nor the Saints organization, is likely to appreciate having their business made public.

Reference: New Orleans Times-Picayune (January 30, 2017) “Saints owner Tom Benson's ownership lawsuit 1 week away from trial”

Changes to Estate and Tax Laws in the Garden State

When estate and tax laws change, it’s best to sit down with an estate planning attorney before making any major changes, since there are likely to be other implications that you may not be aware of.

Now that New Jersey’s new tax and estate laws are in effect, many people are wondering if they need to make changes to their estate plan, and more specifically, if they need to continue to keep trusts in place. For most people, trusts are usually part of a larger strategy. Don’t do anything without discussing the trust with your estate planning attorney.

NJ.com’s article, “Biz Brain: Changes to N.J.'s estate tax and you,” says that part of the question to consider is whether the trust has been funded. If it’s been funded, then before you terminate a trust that was created as part of your overall estate plan, you must look into the tax consequences of the income and transfer tax of a termination.

Even if there is no immediate tax consequence, there could be other reasons to maintain the trust even though the state will repeal its estate tax effective in 2018.

It's possible that by 2018 or after, the state legislature could reinstate the estate tax.

Another possibility is that you could move to a state that has an estate tax. In that case, you'd need to recreate the trust. In the end, keeping the trust intact doesn’t hurt anything.

A trust may also be established for reasons unrelated to taxes.

Some trusts are designed for management and creditor protection of assets. If a beneficiary is disabled or is receiving certain government assistance, a trust may have been created as a special needs trust. Terminating that trust and the payment of monies outright to the beneficiary could cause a beneficiary to lose governmental benefits.

Although New Jersey will eliminate its estate tax effective January 1, 2018, there’s still a federal estate and gift tax subject to an exemption of $5.49 million effective January 1, 2017.

Your trust may have been created for a variety of reasons, some of which having little or nothing to do with reducing your estate tax. Best bet: speak with an experienced trust and estate attorney who is familiar with the laws in your state before making any changes. You don’t want to undo something that still works, and you don’t want to create unnecessary problems.

Reference: NJ.com (January 3, 2017) “Biz Brain: Changes to N.J.'s estate tax and you”

Muhammad Ali Estate Could be Shining Example of the Power of Good Planning

It’s not over until the last papers are signed, but if the truce between his widow and many children holds, this estate could stand as a planning model for large blended families. Far less complicated estates have taken longer to settle.

Compared to other celebrity estate disasters, the Muhammad Ali estate has been relatively straight-forward, as long as the heavyweight champ’s nine children don’t pull together to battle their stepmother, Ali’s widow. Writing the checks and some venting of personal grievances are the only things outstanding, according to TrustAdvisor in a recent article, “Muhammad Ali Kids Fight Stepmom Over $80 Million Estate Plan.”

Most of Ali’s kids—children of several different mothers—aren’t too friendly with their dad’s widow Yolanda or “Lonnie.” They claim that she tried to isolate Ali as his Parkinson’s disease progressed. Another sore point: the will reportedly gives Lonnie a double share of the estate.

Only the youngest of the kids, Asaad, is on Lonnie’s side. She adopted him as a baby, and they’ve always been close. The other kids resent her, especially since she’s going to get $12 million from the estate … compared to their $6 million apiece.

The kids dislike each other only a bit less, so chances are good that a unified front against stepmom Lonnie will fade. But Ali’s estate plan at least eliminates most of the classic disagreement that drives families apart permanently. All of the Champ’s kids get an equal share, so there’s no favorite and no special treatment.

Yolanda’s double share is much less than it would have been naturally. Ali’s attorneys helped him make some decisions when he was still in his peak earnings cycle.

Ali died in Arizona, where he and Lonnie had lived since 2005. It’s a community property state, so Lonnie could simply claw back half of the money Ali earned since he married her 30 years ago—like the $50 million Ali earned for selling his personal brand and a secondary $2 million rights package he cashed out three years before his death.

Lonnie was Ali’s third wife, and his lawyers insisted she sign a prenuptial contract. However, Ali refused to enforce it. She ended up with the house, the art collection and half of a $2 million bond portfolio. He kept the real estate, so the proceeds from the eventual sale of those assets go to the kids, not Lonnie. They also get their share of his holding companies.

Ali had done a lot of planning over the years with skilled estate planning attorneys who understood how to manage both the legal and personal aspects of a big estate and a complicated blended family. This made all the difference for his family and his legacy.

Reference: TrustAdvisor (January 9, 2017) “Muhammad Ali Kids Fight Stepmom Over $80 Million Estate Plan”