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Special Needs Estate Planning: An Everchanging Area of the Law

Wed, 09 Jan 2019 08:02:00 GMT

Special Needs Estate Planning: An Everchanging Area of the Law

Special Needs Estate Planning is an ever-changing area of the law.

The rules applicable to special needs trusts and planning are constantly changing. For example, the Affordable Care Act now makes private health insurance an option for people with special needs. However, private insurance will still not cover the costs of long-term care and other services or equipment necessary for a loved one with special needs. Thus, even if the family chooses private insurance, the special needs beneficiary may still require Medicaid eligibility, necessitating a special needs trust. Please contact Desiree, Caslin & Cecil's Paralegal for Special Needs, (270) 684-8400, if you have questions about these options.

Planning for a special needs beneficiary requires particular care and knowledge on the part of the planning team. A properly drafted and funded special needs trust can ensure that a special needs beneficiary has sufficient assets to care for him or her, in a manner intended by loved ones, throughout the beneficiary's lifetime. Please contact Caslin & Cecil's Special Needs Section, (270) 684-8400, if you have any questions regarding planning for special needs beneficiaries.

Planning for the Future Providing a Meaningful Life for a Child with a Disability After Your Death

Wed, 09 Jan 2019 07:57:29 GMT

Planning for the Future Providing a Meaningful Life for a Child with a Disability After Your Death

L. Mark Russell and Arnold E. Grant. Planning for the Future - Providing a Meaningful Life for a Child with a Disability After Your Death. (Planning For The Future, Inc., 2005, p. 643)

Price varies; check Amazon at https://www.amazon.com/Planning-Future-Providing-Meaningful-Disability/dp/0912891203 *

If you have a special needs child and are worried about what will happen to that child when you die, Planning for the Future contains a wealth of information about securing the child's future.

Written by two attorneys and packed with detail, Planning for the Future is not a quick-reference book, but instead requires a careful reading. At the latest version of 642 pages, it is not brief.

The authors recommend starting with life planning - deciding where you want your child to live, what activities you want your child to participate in - and then writing a letter of intent. The book includes charts, worksheets, and sample letters to help you in this process. Other chapters delve into government benefits - including a thorough explanation of what disabilities are covered, estate planning, avoiding probate, gifting, and personal injury awards.

The authors emphasize trusts as an essential tool to ensure your special needs child is provided for after you die, and they explain the various types of trusts and how to set them up. The book also spells out how to protect your own money from nursing home expenses and estate taxes so that you have funds to leave to your child. Finally, Planning for the Future describes in great detail the tax deductions available for your child and for medical expenses.

Caslin & Cecil is well versed in all these planning requirements for a special needs family member. If you are interested, please call us at (270) 684-8400 for an appointment.

For more information go to our website: https://caslin.org/guardianship-and-conservatorship-resources/

*The book is also available from other sites, such as bookmasters.com and Google Books.

Guardianship System Needs Fixing, Report Concludes

Wed, 09 Jan 2019 07:33:33 GMT

Guardianship System Needs Fixing, Report Concludes

The Senate Special Committee on Aging hold's annual hearings on the nation's guardianship system in July. The special Committee will then issue a report around September.

In 2018 testimony centered around the how state systems can be improved to better protect individuals subject to these and similar arrangements from abuse, neglect, and exploitation. The bipartisan report addresses three key areas – the importance of guardianship oversight, alternatives to guardianship, and the need for improved data – and makes 13 recommendations.

The resulting report, "Ensuring Trust," concludes that the current guardianship system is fragmented, inconsistent and lacks even the basic information required for effective oversight.

To download a copy of the Senate Special Committee Report report in PDF format, go to: https://www.aging.senate.gov/imo/media/doc/Guardianship_Report_2018_gloss_compress. pdf (If you do not have the free PDF reader installed on your computer, download it here .)

At Caslin & Cecil we work with local families and encourage less restrictive alternatives including durable powers of attorney including voluntary petitions for limited guardianship and/or limited conservatorship, and supported decision making court orders. If you are interested, please call us at (270) 684-8400 for an appointment.

Are Medicare Advantage Plans Steering Enrollees to Lower-Quality Nursing Homes?

Tue, 22 May 2018 07:15:07 GMT

Are Medicare Advantage Plans Steering Enrollees to Lower-Quality Nursing Homes?

A new study has found that people enrolled in a Medicare Advantage plan were more likely to enter a lower-quality nursing home than were people in traditional Medicare. The study raises questions about whether Medicare Advantage plans are influencing beneficiaries' decision-making when it comes to choosing a nursing home.

Medicare Advantage plans, an alternative to traditional Medicare, are provided by private insurers rather than the federal government. The government pays Medicare Advantage plans a fixed monthly fee to provide services to each Medicare beneficiary under their care, and the services must at least be equal to regular Medicare’s. While the plans sometimes offer benefits that original Medicare does not, the plans usually only cover care provided by doctors in their network or charge higher rates for out-of-network care.

The study, conducted by researchers at Brown University School of Public Health, examined Medicare beneficiaries entering nursing homes between 2012 and 2014. Using Medicare’s Nursing Home Compare website as the measure of quality, the study found that beneficiaries in Medicare Advantage plans tended to enter lower quality nursing homes than beneficiaries in original Medicare. This was true even when the researchers took into account the beneficiaries' distance from the nursing home and other decision factors. Even beneficiaries enrolled in highly rated Medicare Advantage plans were more likely to enter a low-quality nursing home compared to original Medicare beneficiaries.

The study does not draw any conclusions about whether the Medicare Advantage beneficiaries fared worse than original Medicare beneficiaries, only that they tended to enter facilities that had higher re-hospitalization rates and worse outcomes. The study concluded that Medicare Advantage plans may be influencing beneficiary decision-making around nursing home selection. According to Skilled Nursing News , one of the study’s authors speculated that a Medicare Advantage plan "might be incentivized to send patients to a given nursing home regardless of what the quality ratings are, because of a relationship with that nursing home or because they have a lot of patients in that nursing home and can better manage their care."

Information on exactly why this is happening is “of vital policy importance,” according to the study's authors. They recommend gathering more information about Medicare Advantage nursing home claims and re-hospitalization rates and requiring Medicare Advantage plans to be more transparent about the quality of nursing homes in their networks.

To read the study, which was also published in the January issue of the journal Health Affairs, click here .

If you have questions about Medicare, Medicare Supplements and Medicare Advantage and how they pay for nursing home care then call for an appointment at (270) 684-8400.

Can't Figure out what you need to retire?

Tue, 22 May 2018 07:13:12 GMT

Can't Figure out what you need to retire?

Finding a retirement calculator

Figuring out how much to save for retirement and when you can safely stop working can be difficult. A growing number of online retirement calculators, many of them free, are available to help. Although these calculators can yield vastly different results, they can still be useful tools.

Based on information about you and your finances, retirement calculators try to predict how much you need to save to achieve your retirement goals. There are many different types of calculators. Some are web-based while others require you to download a program or an app. The amount of information needed also varies from calculator to calculator.

While retirement calculators can be useful, you need to keep in mind that results can vary significantly and they are not always accurate. A 2009 study found that while such calculators "can provide a rough idea of whether the user is on target for retirement," they inadequately assess the risk of running out of money. It may be a good idea to use several different calculators to obtain a range of predictions.

Before getting started with any retirement calculator, you will need to gather information about your finances to have at your fingertips. Even the most basic calculator will want to know how much you currently have saved for retirement and how much you are saving each month. More advanced calculators might require more detailed investment information.

To help you find the best calculator for you, below are three sites that evaluate these financial tools. You can decide how much detail you want to provide and receive.

Can I Retire Yet? has a long list of retirement calculators with details about cost, platform, and how well it reproduces reality.
The Balance provides its own assessment of the accuracy and usability of what it considers the best retirement calculators.
Forbes shares information on five free retirement calculators, ranging from simple to more complicated.

For more information about how much money you will need for retirement, click here .

Our attorneys will team with your financial planners or CPAs at no extra cost to you. We add the important life planning options with detailed power of attorneys (financial and medical), beneficiary designations, long term care considerations and estate planning. Call with questions, Caslin & Cecil, (270) 684-8400.

What Happens If Your Long-Term Care Insurance Company Fails?

Wed, 04 Apr 2018 07:52:02 GMT

What Happens If Your Long-Term Care Insurance Company Fails?

l, every state has an insurance guaranty association that protects consumers. The purpose of the guaranty association is to take over the policies of an insurance company that is experiencing extreme financial difficulties and ensure that claims are paid. The guaranty association may provide insurance coverage directly to consumers. Alternatively, the association might facilitate the sale of the policies to another insurance company. It is also possible that policyholders will be given the opportunity to cash in their policies.

The downside of the state guaranty association is that it provides coverage only up to a certain limit. Each state caps the maximum amount its guaranty association will pay out, and the figure is typically between $100,000 and $500,000 per policy, with most states offering $300,000.

In a recent blog post , Phyllis Shelton, author of Protecting Your Family With Long-Term Care Insurance , called the failure of a long-term care insurer "an extremely rare situation."

If your policy is purchased by another company or taken over by a guaranty association, it is important to continue to pay your premiums. Failure to pay premiums could result in the termination of your policy.

For the Web site of the national guaranty association, click here.

For more information about long-term care insurance, click here.

Caslin & Cecil has several clients who requested reviews of Penn Treaty policies and the options that the Kentucky Guaranty Association was offering them.

Call us for your review 270-684-8400.

How to Reduce Long-Term Care Insurance Costs

Wed, 04 Apr 2018 07:47:13 GMT

How to Reduce Long-Term Care Insurance Costs

While long-term care insurance can be a good way to pay for a nursing home stay or a home health care worker, it doesn't come cheap. Annual premiums vary significantly, depending on your age, health, and the type of policy, but policies can run as high as $5,000 per year. You do not need to pay that much, however. The following are some ways to reduce your costs.

Shorter benefit period. The most significant cost-saving step you can take is to not purchase a lifetime policy. Unless you have a family history of a chronic illness, you aren't likely to need coverage for more than five years. In fact a new study from the American Association of Long-term Care Insurance shows that a three-year benefit policy is sufficient for most people. According to the study of in-force long-term care policies, only 8 percent of people needed coverage for more than three years. By purchasing coverage for three, four, or five years instead of a lifetime, you can save thousands of dollars in premiums. If you do have a history of a chronic disease in your family, you may want to purchase coverage for 10 years, which would still be less than purchasing a lifetime policy.
Buy younger . Long-term care insurance premiums rise as you age, so the younger you buy, the cheaper your premiums. Be careful, however, because insurance premiums can, and often do, increase considerably from your initial purchase price. Even if you have a policy that is "guaranteed renewable," your premiums can still increase. For more information, click here.
Shared care policy. If both you and your spouse are purchasing long-term care insurance, a shared care policy might be able to give you more coverage for less money. With a shared care policy, you buy a pool of benefits that you can split between you and your spouse. For example, if you buy a five-year policy, you will have a total of 10 years between you and your spouse. If your spouse uses two years of the policy, you will have eight years. A shared care policy may cost more than separate policies with the same benefit period, but it will allow you to buy a shorter policy, knowing that you have a pool of benefits to work with.
Longer elimination period. Most policies have a waiting period before coverage begins, typically 30-90 days. The longer you make this waiting period, the cheaper your premiums. Keep in mind, however, that you will have to pay for your care out of pocket until the waiting period is over and the insurance begins its coverage.
Reduce the daily benefit. Instead of purchasing the maximum daily benefit you might need in a nursing home, you can consider paying for a portion of the daily benefit yourself. You can then insure for the maximum daily benefit minus the amount you plan to pay. A lower daily benefit will mean lower premiums.
Inflation protection. Inflation protection increases the value of your benefit to keep up with inflation and is almost always recommended. But you can save on premiums by which method of protection you choose: compound-interest increases or simple-interest increases. If you are purchasing a long-term care policy and are younger than age 62 or 63, you will need to purchase compound inflation protection. This can, however, more than double your premium. If you purchase a policy after age 62 or 63, some experts believe that simple inflation increases should be enough, and you will save on premium costs.

You should also remember that your premiums may be tax-deductible. Premiums for "qualified" long-term care policies will be treated as a medical expense and will be deductible to the extent that they, along with other unreimbursed medical expenses (including "Medigap" insurance premiums), exceed 7.5 percent or 10 percent of the insured's adjusted gross income, depending on the tax year and the taxpayer's age.

For more on long-term care insurance, click here.

If you would like your policy reviewed call for an appointment 270-684-8400.

Care Planning

Wed, 04 Apr 2018 07:43:23 GMT

Care Planning

Thinking about a time when you will need help taking care of yourself is not fun. That is why most people put off discussing long-term care until it can't be ignored. But it is better to start long-term care planning early. Here are some reasons to start planning now:

People are living longer and are more likely to need long-term care. Life expectancies keep increasing, which means you are more likely to need help at some point. At least 70 percent of people over age 65 will require some long-term care services at some point in their lives, according to the U.S. Department of Health and Human Services.
Care expenses are high. Whether you receive care in a nursing home or at home, expenses are rising. According to the 2010 MetLife Market Survey of Long-Term Care Costs, in 2010 the average cost of a room in a nursing home was $83,585 a year and home care aides averaged $21 per hour. Those figures aren't going to start going down.
Family caregivers may not be available. In more and more households, both partners work. In addition, children often move far away from their parents. This means that your adult children may not be able to easily take of you when the time comes.
The earlier you plan, the better . By planning ahead, you may be able to preserve your assets instead of using them all up paying for long-term care. In addition, if you plan early, you may have more options for care.

To start planning for long-term care, talk to your elder law attorney. Planning steps may include executing advance directives and a power of attorney, putting assets in a trust, purchasing long-term care insurance, getting a reverse mortgage, creating a caregiver contract with an adult child, or transferring a house to children. Caslin & Cecil can help you figure out the best plan for you.

For more information on the importance of long-term care planning, click here .

Long-Term Care Hybrid Products Give Buyers More Options

Wed, 04 Apr 2018 07:20:54 GMT

Long-Term Care Hybrid Products Give Buyers More Options

With many people unwilling to purchase long-term care insurance policies due to the cost, insurers are rolling out new products that combine long-term care insurance with either a life insurance policy or an annuity. These new products have been on the market for a while, but they are gaining in popularity as distributions from life insurance and annuities became tax free when used to pay nursing home costs in 2010.

Even though long-term care costs continue to rise, long-term care insurance purchases are not popular. Long-term care insurance is expensive and many people do not want to pay premiums for something they might not need. A hybrid product has the benefit of combining two products into one. If you don't use the long-term care insurance, you can still benefit from the life insurance or the annuity.

The products vary in the details, but the general idea of a hybrid life insurance policy is to allow a buyer to purchase a cash-value life insurance policy and to use a portion of that policy for long-term care benefits, if necessary, and keep the rest as a death benefit that will be paid to the purchaser's beneficiary. If long-term care benefits are used, the death benefit may be reduced.

Hybrid annuity products also vary significantly, but in general they allow a buyer to purchase a fixed deferred annuity with a long-term-care rider attached. The annuity may pay out for a specific number of years or for life. For example, a purchaser could deposit $150,000 into an annuity. The annuity would provide approximately $4,700 a month of long-term care benefits for 36 months. For an additional cost, the purchaser could get the $4,700 monthly benefit for life.

While a two-for-one product may seem attractive, these products are not for everyone. For one thing, you may have less flexibility with a combined product than you would with a stand-alone product. Hybrid products may not cover home care or include inflation protection, for example. In addition, hybrid products may not offer enough long-term care coverage for what you need. It is impossible to predict exact coverage needs, but click here for more information on how to figure out how much insurance to purchase. A hybrid product is likely less expensive than purchasing two separate products, but it is often more expensive than purchasing a stand-alone long-term care insurance policy.

As with any major purchase, you need to evaluate it carefully before purchasing. Before deciding what to buy, get advice from an impartial investment adviser not a sales agent who makes a commission off the sale of policies.

Hybrid life/long term care insurance policies are very popular today with consumers and you may be attracted to the guarantees that hybrid long term care policies will provide to you namely fixed guaranteed premiums, long term care benefits if care is needed, and life insurance benefits if care is not needed. This being said, you still deserve to get your money's worth for your premium deposit. Just because an insurance company is promising to give you your money back should you never need long term care, does not warrant a foolish decision to accept benefits of $5500 month when your same premium outlay can buy you $10,000 monthly benefit. You still need to be smart and obtain the best value for your premium outlay.

For more information on long-term care insurance, click here.

For more information hybrid long-term care insurance policies, click here.

If you would like your policy reviewed call for an appointment 270-684-8400.

Avoid Sibling Disputes Over Caregiving By Putting It in Writing

Wed, 04 Apr 2018 07:18:30 GMT

Avoid Sibling Disputes Over Caregiving By Putting It in Writing

Caring for an elderly parent can be stressful for families. Siblings may disagree over how to provide care or where a parent will live, and if these squabbles escalate into a guardianship battle, it can cost the family thousands of dollars. To avoid this, lawyers have begun drafting sibling agreements (also called family care agreements).

If a parent becomes incapacitated and can no longer take care of him- or herself, questions can come up between siblings over where a parent should live, who should manage the parent's money, or who will assume primary caregiving duties. A sibling agreement can address these issues and provide consequences if the agreement is not followed.

Sibling agreements are not meant to replace a trust or a power of attorney. Instead the agreement can complement these valuable estate planning tools by providing guidance for the trustee or the holder of the power of attorney. The following are some examples of topics an agreement might cover:

Which sibling has primary care of a parent and how caregiving duties will be divided among siblings
Whether a sibling will be reimbursed for caring for a parent
Where the parent should live -- with a child, in assisted living, in a nursing home?
How to decide whether a parent should move into a nursing home
How the parent's money will be managed
Whether the siblings will contribute financially to the parent's care

If the siblings can't reach an agreement, a geriatric care manager or mediator can help draft the agreement. Mediators can also help if one of the siblings breaches the agreement. Consequences for breaching a sibling agreement could be losing a power of attorney or a reduction in inheritance.

To draft a sibling agreement, talk to your attorney.

Prevent Your Power of Attorney from Being Ignored

Wed, 04 Apr 2018 06:57:52 GMT

Prevent Your Power of Attorney from Being Ignored

A durable power of attorney is one of the most important estate planning documents there is. It allows someone you appoint -- your agent or "attorney-in-fact" -- to act in your place for financial purposes when and if you ever become incapacitated. However, many people experience difficulty in getting banks or other financial institutions to recognize the authority of an agent under a power of attorney.

Banks are often reluctant to accept powers of attorney for fear of being sued if the power of attorney isn't valid. A certain amount of caution on the part of financial institutions is understandable. Still, some institutions go overboard, for example requiring that the attorney-in-fact indemnify them against any loss.

To prevent problems later, contact your bank when you execute your power of attorney to find out what information it needs to accept the document. Many banks or other financial institutions have their own standard power of attorney forms. If this is the case, get the bank's form and sign it in addition to your own power of attorney form. While it isn't legally necessary, signing the bank's form can save your agent a lot of trouble and time down the road. In addition, you can provide the bank with copies of your power of attorney. It is also a good idea to update your power of attorney frequently so the bank knows it is current.

If a bank is giving you a hard time about accepting a power of attorney, you can try talking your way up the chain of command. You can also have the lawyer who prepared the power of attorney call the bank. If that doesn't work, you may have to have a lawyer deal with the bank. In addition, your state may have enacted a law that allows for sanctions against institutions that unreasonably refuse to accept a power of attorney. Current changes in Kentucky power of attorney laws are pending.

If you need assistance call 270-684-8400.

Make Sure Your Power of Attorney Complies with Federal Privacy Law

Wed, 04 Apr 2018 06:53:55 GMT

Make Sure Your Power of Attorney Complies with Federal Privacy Law

A power of attorney (POA) and a health care proxy are two of the most important estate planning documents you can have, but in some instances, they may be useless if they don't comply with the federal privacy law.

A POA allows someone you designate (your "agent" or "attorney-in-fact") to make decisions for you if you become incapacitated. A health care proxy specifies who will make medical decisions for you. For these documents to be effective, your agents may need to be able to access your medical information. However, medical information is private. The Health Insurance Portability and Accountability Act (HIPAA) protects health care privacy and prevents disclosure of health care information to unauthorized people. HIPAA authorizes the release of medical information only to a patient's "personal representative."

HIPAA can be a problem especially if you have a "springing" power of attorney. A springing POA doesn't go into effect until you become incapacitated. This means your agent doesn't have any authority until you are declared incompetent, but, under HIPAA, the agent won't be able to get the medical information necessary to determine incompetence until the agent has authority.

To make sure your agent doesn't get caught in this "Catch-22", your POA and health care proxy should contain a HIPAA clause that explains that the agent is also the personal representative for the purposes of health care disclosures under HIPAA. You should also sign separate HIPAA release forms that explain what medical information can be disclosed, who can make the disclosure, and to whom the disclosure can be made.

Contact your elder law attorney at (270) 684-8400 to make sure your POA and health care proxy do not conflict with HIPAA.

Hospital Trying to Revoke Daughter's Power of Attorney

Wed, 04 Apr 2018 06:47:08 GMT

Hospital Trying to Revoke Daughter's Power of Attorney

In an effort to discharge an elderly patient, a Chicago hospital was going to court to revoke the power of attorney of the patient's daughter and substitute it with a guardianship.

Dolores Bedin, 86, has terminal pancreatic cancer. Northwestern Memorial Hospital maintains that Dolores has been able to leave since September 18, and the hospital is absorbing the cost of her care because Medicare regards the hospitalization as medically unnecessary.

But Janet Bedin, who is her mother's agent under her power of attorney, strongly disagrees that her mother is able to go home and has so far successfully blocked the hospital's discharge attempts. Janet, a businesswoman whose work involves travel, worries that she won't be able to adequately care for her frail mother at home. Unless her mother impoverishes herself and goes on Medicaid, there is little help the state can offer. The situation is further complicated by the fact that the elder Bedin has been the primary caregiver for a disabled son.

The hospital is asking the court to appoint a public guardian for Dolores on the grounds that Janet is not acting in her mother's best interests by cooperating with the hospital's efforts to discharge her mother.

"She's my daughter," Dolores says of Janet. "I want her to make decisions for me. She's backing me up. They want to give me somebody who doesn't know me."

"You have a complicated situation," Suzanne Mintz, president of the National Family Caregivers Association , told the Chicago Tribune . "It's about logistics. It's about services. It's about money. (Caregiving) is a very difficult thing to figure out, especially if you're working. It's difficult enough to figure it out for one person. (Janet Bedin is) figuring it out for two people."

To read the entire Chicago Tribune article, click here .

UPDATE: Faced with losing power of attorney over her mother, Janet Bedin agreed to allow Dolores Bedin to be discharged from the hospital. For details, click here .

Guardianship and Conservatorship

Wed, 04 Apr 2018 06:42:17 GMT

Guardianship and Conservatorship

Every adult is assumed to be capable of making his or her own decisions unless a court determines otherwise. If an adult becomes incapable of making responsible decisions due to a mental disability, the court will appoint a substitute decision maker, often called a "guardian," but in some states called a "conservator" or other term. Guardianship is a legal relationship between a competent adult (the "guardian") and a person who because of incapacity is no longer able to take care of his or her own affairs (the "ward").

The guardian can be authorized to make legal, financial, and health care decisions for the ward. Depending on the terms of the guardianship and state practices, the guardian may or may not have to seek court approval for various decisions. In many states, a person appointed only to handle finances is called a "conservator."

Some incapacitated individuals can make responsible decisions in some areas of their lives but not others. In such cases, the court may give the guardian decision making power over only those areas in which the incapacitated person is unable to make responsible decisions (a so-called "limited guardianship"). In other words, the guardian may exercise only those rights that have been removed from the ward and delegated to the guardian.

Incapacity

The standard under which a person is deemed to require a guardian differs from state to state. In some states the standards are different, depending on whether a complete guardianship or a conservatorship over finances only is being sought. Generally, a person is judged to be in need of guardianship when he or she shows a lack of capacity to make responsible decisions. A person cannot be declared incompetent simply because he or she makes irresponsible or foolish decisions, but only if the person is shown to lack the capacity to make sound decisions. For example, a person may not be declared incompetent simply because he spends money in ways that seem odd to someone else. Also, a developmental disability or mental illness is not, by itself, enough to declare a person incompetent.

Process

In most states, anyone interested in the proposed ward's well-being can request a guardianship. An attorney is usually retained to file a petition for a hearing in the probate court in the proposed ward's county of residence. Protections for the proposed ward vary greatly from state to state, with some simply requiring that notice of the proceeding be provided and others requiring the proposed ward's presence at the hearing. The proposed ward is usually entitled to legal representation at the hearing, and the court will appoint an attorney if the allegedly incapacitated person cannot afford a lawyer.

At the hearing, the court attempts to determine if the proposed ward is incapacitated and, if so, to what extent the individual requires assistance. If the court determines that the proposed ward is indeed incapacitated, the court then decides if the person seeking the role of guardian will be a responsible guardian.

A guardian can be any competent adult -- the ward's spouse, another family member, a friend, a neighbor, or a professional guardian (an unrelated person who has received special training). A competent individual may nominate a proposed guardian through a durable power of attorney in case she ever needs a guardian.

The guardian need not be a person at all -- it can be a non-profit agency or a public or private corporation. If a person is found to be incapacitated and a suitable guardian cannot be found, courts in many states can appoint a public guardian, a publicly financed agency that serves this purpose. In naming someone to serve as a guardian, courts give first consideration to those who play a significant role in the ward's life -- people who are both aware of and sensitive to the ward's needs and preferences. If two individuals wish to share guardianship duties, courts can name co-guardians.

Reporting Requirements

Courts often give guardians broad authority to manage the ward's affairs. In addition to lacking the power to decide how money is spent or managed, where to live and what medical care he or she should receive, wards also may not have the right to vote, marry or divorce, or carry a driver's license. Guardians are expected to act in the best interests of the ward, but given the guardian's often broad authority, there is the potential for abuse. For this reason, courts hold guardians accountable for their actions to ensure that they don't take advantage of or neglect the ward.

The guardian of the property inventories the ward's property, invests the ward's funds so that they can be used for the ward's support, and files regular, detailed reports with the court. A guardian of the property also must obtain court approval for certain financial transactions. Guardians must file an annual account of how they have handled the ward's finances. In some states guardians must also give an annual report on the ward's status. Guardians must offer proof that they made adequate residential arrangements for the ward, that they provided sufficient health care and treatment services, and that they made available educational and training programs, as needed. Guardians who cannot prove that they have adequately cared for the ward may be removed and replaced by another guardian.

Alternatives to Guardianship

Because guardianship involves a profound loss of freedom and dignity, state laws require that guardianship be imposed only when less restrictive alternatives have been tried and proven to be ineffective. Less restrictive alternatives that should be considered before pursuing guardianship include:

Power of Attorney . A power of attorney is the grant of legal rights and powers by a person (the principal) to another (the agent or attorney-in-fact). The attorney-in-fact, in effect, stands in the shoes of the principal and acts for him or her on financial, business or other matters. In most cases, even when the power of attorney is immediately effective, the principal does not intend for it to be used unless and until he or she becomes incapacitated. (For more on powers of attorney, click here.)

Representative or Protective Payee. This is a person appointed to manage Social Security, Veterans' Administration, Railroad Retirement, welfare or other state or federal benefits or entitlement program payments on behalf of an individual.

Conservatorship . In some states this proceeding can be voluntary, where the person needing assistance with finances petitions the probate court to appoint a specific person (the conservator) to manage his or her financial affairs. The court must determine that the conservatee is unable to manage his or her own financial affairs, but nevertheless has the capacity to make the decision to have a conservator appointed to handle his or her affairs.

Revocable trust . A revocable or "living" trust can be set up to hold an older person's assets, with a relative, friend or financial institution serving as trustee. Alternatively, the older person can be a co-trustee of the trust with another individual who will take over the duties of trustee should the older person become incapacitated.

Do You Have the Right Fiduciary?

Wed, 04 Apr 2018 06:40:14 GMT

Do You Have the Right Fiduciary?

When creating an estate plan, an important decision is who to name as your fiduciary. A fiduciary is a fancy legal term for the person who will take care of your property for you if you are unable to do it yourself, such as the executor of an estate, the trustee of a trust, or an attorney-in-fact under a power of attorney. Your first instinct might be to name one of your children as a fiduciary, but if you want to avoid conflict among your children, this might not be the best option.

When naming a fiduciary, it is important to be able to trust the individual, which is why people often name family members as fiduciaries. However, problems can arise when a parent with two or more children names one child as a fiduciary. According to Tim O'Sullivan, an attorney from Wichita, Kansas, who spoke on the issue of family harmony at a conference for elder law attorneys, a child is often not the best fiduciary for several reasons:

It is hard for a child to be completely objective.

Children often disagree over many things, including how long the estate should take to complete, the selling of assets, and the division of personal property.

Children often don't communicate with each other well.

O'Sullivan says that, in his experience, when one child is named as fiduciary problems arise between family members about one-quarter to one-third of the time.

An alternative is to hire a professional fiduciary. A professional fiduciary can be a bank with trust powers, a certified public accountant, or a trust company. The attorney who is drafting your estate planning documents can recommend a good one in your area. A professional fiduciary will charge a fee, but the fee should be explained ahead of time. In addition, because a professional is experienced in managing money and property, your assets are more likely to increase under this person's or institution's guidance.

To ensure that your family has some input, you can include a provision that allows one or more family members to discharge the fiduciary if they feel the professional is not doing a good job. This will allow your family to make sure the fiduciary is performing properly without having the burden of acting as fiduciary.

An attorney can help you make sure you have the right fiduciary for your family. To an appointment with an elder law attorney near you, call Caslin & Cecil 270-684-8400

Couple Makes Basic Planning Error and Loses Life Savings

Wed, 04 Apr 2018 06:22:34 GMT

Couple Makes Basic Planning Error and Loses Life Savings

A Pennsylvania couple may have lost their life savings by making a fundamental estate planning mistake.

John DeStefano, 79, and his wife, Adeline, 83, have health problems. Four or five years ago they decided that in the event they became incapacitated and needed someone to pay their bills, they'd like their daughter, Cindy, to have access to their money. So they added Cindy's name to their bank savings and checking accounts.

Until recently, there was $77,362.20 in the accounts -- the DeStefano's life savings. Now all the couple has is a check for $22.99 from the bank. The story of how this happened illustrates why it's so important to consult with a professional before making estate planning decisions.

As soon as Cindy's name was added to the accounts, the money became available to pay her creditors. Cindy and her husband, Scott Opdyke, took out loans at the bank for their trucking business. The couple later became estranged, but Cindy believed her soon-to-be ex-husband was making payments on their loan.

Unfortunately, he was not, and so the bank took the money it was owed from an account it found that had Cindy's name on it and had sufficient funds to repay the loan. Although the DeStefanos had neither cosigned the loans nor had any interest in the corporation Cindy and Scott Opdyke created, putting Cindy's name on her parents' accounts essentially made their money hers.

The DeStefanos made a fundamental planning mistake by adding their daughter's name to their bank accounts.

Not only did it put the account assets at risk to Cindy's creditors, Marshall said, but it also could create an added tax problem if their daughter preceded them in death.

"Here's what they should have done," Jeff Marshall, attorney reported. "They needed to put her on as power of attorney, not as co-owner."

With a power of attorney, Cindy would have been able to write checks and have access to her parents' accounts without being a co-owner.

"If you have parents who have bank accounts and they want to put you on for convenience, don't do it," Cindy told the Times Leader.

To fully understand caregiving responsibilities, set an appointment with Caslin & Cecil.