Are you dying to GO GREEN?

I cam across this article on a clean/green energy website:  www.cleantechnica.com.  Enjoy!

Dead People Will Provide Heat to Crematorium Facilities

Written by Ariel Schwartz

If you’re dead and worried about the carbon emissions created from your cremation, relax. The Swedish town of Halmstad has a solution. After an environmental review showed that Halmstad’s crematorium was pumping too much smoke into the air, the facility’s director decided to re-use heat from the cremations to warm up the crematorium’s buildings.

The plan will both eliminate the crematorium’s heating bill and allow it to save money on cooling smoke before it is released into the air.

Locals in the town of 55,000 approve of the crematorium’s system, so it should be up and running soon. If the plan is successful, the crematorium eventually wants to pipe heat from its facilities to area homes. And while some may protest Halmstad’s plan on moral grounds, I’m sure that the potential monetary savings for the town will ultimately keep them quiet.

http://cleantechnica.com/2009/01/05/dead-people-will-provide-heat-to-crematorium-facilities/

Fun Topic #132: How To Shop For A Nursing Home

Selecting a nursing home for a loved one is one of the most important and difficult decisions that you may be asked to make.  This decision is usually made during a time of crisis, frequently when a family member is ready to leave the hospital after a serious illness or operation.  It would be easier on everyone if this decision could be planned for.  Just remember, be nice to your kids… they are going to pick out your nursing home.

The first issue to decide is whether or not you really need a nursing home.  Would some type of home services be adequate?  This issue should be discussed with your physician, as well as other healthcare providers.  There are many types of services available for people who choose to remain at home, such as home health care, adult day care centers, respite care (where another person can provide the caregiver some relief to allow for shopping, errands, or just a little “down time”) and hospice in-home care.

An option for those individuals who do not need the level of care that nursing homes provide is an Assisted Living Community.   These communities provide many of the benefits of a skilled nursing facility but in a more home-like setting.  They do not provide skilled nursing care, but will assist the resident in various activities such as dispensing medication, cleaning their room or apartment, providing meals, as well as various activities.  Often the monthly cost of these communities is considerably less expensive than skilled nursing facilities, and may have special programs and special living arrangements for folks with cognitive impairments like dementia.

Once it has been determined that an individual needs care in a nursing home you should allow that person, if they are able, to be a part of the process of selecting a facility.  Ask professionals in the field, friends or acquaintances who have been in a similar situation for information.  The Connecticut State Agency on Aging has an Ombudsman program that can provide information on particular nursing homes, however you should also visit different homes to see what they are like.  Talk to staff members, other residents and their families.  You should visit each home more than once and at different times of the day.  Ask if they have activities for the residents.  Ask to see menus for daily meals.  Also, ask what the costs are at each home.  Another thing you may want to do is to just walk around the home and observe the condition of the facility and the residents.  Nursing homes have their own doctors.  You should find out about the doctors, their credentials, how often they visit and if they are willing to meet with the family to discuss plans for treatment.

Federal law requires that residents have the right to be free from restraints administered for the purpose of discipline or convenience and not required to treat medical conditions.  If you see residents in restraints, you should question the facilities staff about the nursing home’s policy on restraints.

Be sure to visit more than one nursing home before you decide.  You can be on a waiting list at many homes and then choose the home you want.  A little advanced planning can save you from having to make a quick decision when you are forced to find a nursing home in an emergency.

Special Planning for Special Needs: Part Two

Planning for disabled and special needs beneficiaries:  “part two.” In “part one” I discussed programs available for disabled and special needs individuals.  This week I will focus on how people can protect and provide for special needs and disabled beneficiaries through their estate plans.

As I wrote in “part one,” although it may seem like a good idea, I strongly discourage people from establishing custodial accounts or leaving cash outright to special needs beneficiaries. The distribution of assets outright may disqualify the beneficiary from government assistance, which is means-based.

When the assets of an individual with special needs exceed the governmental financial resource limits, the individual may be disqualified from both Supplemental Security Income (SSI) and Medicaid.

A more appropriate way to pass an inheritance to a special needs beneficiary is to utilize a Special Needs Trust.  Special Needs Trusts can be either self-settled Trusts, or third-party Trusts.  A self-settled Trust is a Trust set up with the disabled persons own assets.  The disabled individual is the Grantor and the beneficiary.  A third-party Trust is created by one person (the Grantor) for the benefit of another, so long as the Grantor is not legally responsible for providing support for the disabled individual.

A Special Needs Trust containing certain provisions may be established to administer and distribute Trust assets to a beneficiary with special needs without otherwise disqualifying them from governmental benefits.  If drafted properly, the assets in the Trust are not counted for the purpose of determining eligibility for governmental benefits.  A properly drafted self-settled Special Needs Trust will require the Trust to pay back the government after the death of the special needs individual for governmental benefits provided to the individual.   If the assets are depleted then they do not need to be reimbursed.   Special Needs Trusts should be drafted with care.  The instrument should not direct the Trustee to make disbursements for a disabled person’s heath, maintenance or support as this will cause the Trust assets to be includable in determining eligibility for governmental benefits.  One way to accomplish this goal is to give the Trustee absolute discretion on disbursements.  When distributions are up to the Trustee’s sole and absolute discretion, the assets in the Trust are not counted when calculating eligibility for governmental benefits.

Special Needs Trusts can be a valuable tool in planning for disabled individuals.  The process requires consideration of many issues and should be approached with care by qualified professional.

Covering Your Assets

Please join George and I as we discuss cutting edge techniques that we employ to help our clients protect their assets from the ravages of the aging process. We will discuss proven methods that assist our clients in avoiding the financial devastation that often comes along with a long term illness.  Please contact my office   to reserve a seat.

Special Planning for Special Needs

This week’s post is part one of a “two-parter.” Planning for disabled and special needs beneficiaries is too important for just 500 words.

One of the more tragic situations I encounter in my work is when a person fails to adequately plan for a disabled or special needs beneficiary. Do you have a family member with special needs, or know someone who does? Parents of children with special needs face unique challenges in providing for their day-to-day needs while both parents are alive, and also face exceptional challenges in providing for them after both parents are deceased. This is true whether the children are minors or adults.

The financial costs of caring for a family member with special needs can be overwhelming. Specialized equipment and skilled professional assistance may be required for many daily tasks. Ongoing and expensive medical care is common, often without private insurance to cover the bills. Assistance is available from state and federal governments, namely the Supplemental Security Income (SSI) program, which is administered by the Social Security Administration, and Medicaid (Title 19). Both SSI and Medicaid are needs-based programs, and as such, assistance is subject to strict financial eligibility requirements.

SSI typically pays eligible beneficiaries a small monthly benefit. Often this amount is not sufficient to meet their monthly expenses. Any person receiving SSI also will also qualify for Medicaid, although you still have to apply for it. Medicaid picks up the tab for hospital visits, prescription medications, and doctor bills, as well as other healthcare costs. Medicaid (Title 19) is a means-based benefit system, meaning that how much a person has in assets figures into whether or not they are eligible for benefits under Title 19.

If there are special needs concerns in your family, the estate plans of parents and grandparents must be carefully thought out and monitored to meet objectives beyond probate avoidance and federal estate tax minimization. Parents and relatives of special needs children should have their estate plans designed to ensure adequate care throughout the lifetime of their family member, while at the same time not disqualifying them from any governmental assistance.

Although it may seem like a good idea, parents and grandparents are strongly discouraged from establishing custodial accounts or leaving cash outright to minor children with special needs. The reason for this is that once that child reaches the age of majority under state law (18 in Connecticut) the custodial account is distributed to the child. The distribution itself may have the effect of disqualifying them from government assistance, which is means-based.

Part II will focus on how people can protect disabled and special needs beneficiaries through their estate plans, stay tuned!

One, Two, Three STRETCH!

Stretching:  Most runners would tell you that stretching before a marathon is a good thing to do, many people may say that wearing stretch pants to an all you can eat buffet is also a good thing, but the best stretch for the majority of us, is one that the government has given us; the ability to stretch your Individual Retirement Account (IRA).

The IRS has said that even though you have the ability to withdraw from your IRA, you will only pay income tax on the money when you actually do withdraw it.  So, the money that you have in your IRA continues to grow tax-deferred until you make a withdrawal, and then the tax is only on the sum withdrawn while the balance continues to grow on a tax deferred basis.

Most of the clients I consult with have IRAs and after their real estate, their IRA is usually their largest asset.  This asset is unique in that it can be passed on to a spouse or to others, and if done properly, many of the benefits can continue for decades.

One of the major problems with IRAs is that most people, and even some folks in banking or financial planning do not understand all of the highly technical rules that must be followed to get the maximum benefits out of an IRA and its stretch ability. For example, let’s assume you had an IRA that grew to $100,000 before you died.  If you didn’t provide the proper beneficiaries for your IRA (let’s assume you named your estate as your beneficiary) your heirs could lose up to 79 percent of the value (depending upon the size of your estate and your tax bracket).  That same IRA which was worth the $100,000 at your death, could pay out over One Million Dollars if stretched properly. The stretching allows the beneficiary to take a yearly payment based upon their life expectancy, (the younger the beneficiary, the more it will grow).

Another major problem associated with IRA’s is that the ability to stretch is usually up to the beneficiary.  If you give a young person the option of taking $100,000., now or taking a smaller amount each year with the possibility of getting 1 Million by the time of their death, guess which option most will choose.  AARP did a study a couple of years ago and found that over 70% of beneficiaries “took the money and ran.”  They ran to the auto dealers, to the travel agencies, and to the real estate agents.  When the IRS wanted the tax due on the distribution, those same folks wanted to run to the nearest rock and hide under it.

The IRS has recently approved a particular technique which allows the owner of an IRA to set up a unique type of trust agreement where, upon the death of the owner, the IRA goes into this trust for the benefit of the children, grandchildren, etc. of the IRA owner.  The Trustee of this trust then either distributes out all of the annual distributions to the beneficiaries (conduit trust) or distributes out, at his or her discretion, a portion of the amount received by the IRA and accumulates the remainder (accumulation trust).  These Trusts can not only “force” the stretch, but can also provide for protection for the beneficiaries from their “creditors and predators”.  These Trusts are used successfully for children with special needs, children who may have addiction problems,  as well as children who are in careers where they tend to be sued (such as Doctors), and many other similar situations.

The IRA rules are very technical and unforgiving.  A mistake made by you, the IRA custodian, your CPA, financial advisor, or attorney could cause your beneficiaries to lose thousands of dollars.  Please consult with someone who is knowledgeable in this area.

Wouldn’t it be more cost effective to skip law school and start ripping off people as soon as possible?

I mean really! Why shell out the big bucks for a law degreewhen you just plan on ripping people off. There is a name for people like this: criminals…. From Today’s New Haven Register:

Attorney accused of using dead aunt’s ATM card:

NEW BRITAIN (AP) — A Vernon attorney is facing charges of forgery, larceny and theft and other charges after police say she withdrew money from her dead aunt’s checking account and used her debit card at Kmart, Target and Toys “R” Us.

Thirty-three-year-old Heather Kaufman’ aunt died in December. According to court documents, Kaufman allegedly used her aunt’s debit card days to make cash withdrawals and shop. They say she also wrote a $1,000 check to her boyfriend.

Court documents show that Kaufman told police that the check and cash withdrawals were to help defray funeral expenses. She says the purchases were for presents for family members that the aunt would have wanted them to have.

A relative assigned by a probate judge to handle the estate told police that more then $3,000 was missing.

So Many Roads: Baby Boomers move from “Ohmmmm” to “Oh, my aching back”

The new mantra of the baby boomer generation is beginning to sound something like:  “I’m getting older, I’m not in the best of health, I’m worried about the costs of long term care, and I’m scared to death.”  This is the kind of stuff that keeps people (including myself) up at night.  It’s enough to make you crazy.  I wish that I could tell my clients not to worry, that it’s going to be alright, but often times it’s not alright, the effects of aging take over and many people end up in a nursing home and then the financial pain begins.  A long term stay in a nursing home can completely exhaust your estate, leaving nothing for your heirs.

The sooner you plan for this possibility the better.  Time can be both your worst enemy and your biggest ally, depending on how you approach the problem.   Often I am contacted by the families of people who are literally on their way to a nursing home- at this point time is not on their side.  Sure, we can preserve some assets but only a fraction.  I call this approach the “emergency planning mode.”  It is kind of like being on a game show, but the prize is your own “stuff” and you win by getting the privilege of keeping some of your own “stuff.”  Emergency Planning Mode is, of course, not the best approach to the problem.

The best time to plan is well in advance of needing nursing home care.  Given enough time and proper planning all of your assets can be preserved and sheltered from the costs of nursing home care.   Many people utilize irrevocable trusts to protect and preserve assets long term.  This is the best option for dodging the nursing home cost bullet, which can be financially devastating for you and your family.   Irrevocable trusts are also a great way to avoid probate and to ensure that you can pass something on to your heirs or favorite charity.

If you’re worried about the cost of long term care, get out in front of the problem.  Make an appointment with a qualified estate planning attorney and see what can be done to protect your assets.   Just because you can’t take it with you doesn’t mean that you have to give it to the nursing home.

If anybody would like to discuss their option, please contact my office for a free estate planning consultation:  203-234-7400.  If a one on one with an attorney is too much to start,  my firm will be hosting asset protection seminars in October and November,  please contact my office to reserve your spot.

Are You Planning On Dying or Living?

At least once a week a client comes into my office desperate to execute a Last Will and Testament as soon as possible. This may be motivated by an upcoming vacation, or a recent death in the family, among other things. If you are planning on dying soon, a Last Will and Testament is a must have. Wills contemplate your demise and fall under the category of “Death Planning.” Death planning takes care of your estate after you pass away. One important question for people to consider is: What if you plan on living? Wills take care of your affairs after you pass away, but what happens if you don’t die but become incapacitated in some way? Incapacity does not just strike the elderly; it does not discriminate between old and young. Planning for incapacity is what I like to call “Life Planning.” Life planning takes on many different forms. One of the core documents in a “life plan” is a Durable Power of Attorney. A Durable Power of Attorney is a written legal instrument in which you (the principal) appoint another person or institution (the attorney-in-fact or agent) to act on your behalf. By appointing an attorney-in-fact or agent you are NOT giving up the right to also act on your own behalf as you would normally. You are merely deputizing someone else who can also act as you would.

If a person becomes incapacitated and has not executed a Durable Power of Attorney, the Court can appoint someone to act on their behalf, similar to the way an agent acting under a Power of Attorney would act. The Court appointed person is called a Conservator. There are two types of Conservators: Conservators of the Person and Conservator of the Estate. Often the two roles will be filled by the same appointed person. There are two types of Conservatorship proceedings: Voluntary and Involuntary. In a Voluntary Conservatorship the individual to be conserved knows that they are having difficulty managing their affairs, and requests that the court appoint someone to assist. In an Involuntary Conservatorship someone other than the individual to be conserved requests that they be appointed because they believe the individual is unable to manage his/her affairs.

The process of having yourself or someone else conserved is quite complicated and certainly more expensive than executing a Power of Attorney. The major advantage in having a Conservator appointed is that the Court oversees the actions of the Conservator through periodic accountings and reviews. To involuntarily conserve an individual the court must find clear and convincing evidence that the person is incapable of caring for himself/ herself, and is unable to manage his/her financial affairs. Involuntarily conserving an individual involves several attorneys and doctors, as well as multiple hearings at the Probate Court.

The Conservatorship process can be costly and time consuming. Conservatorship proceedings can be avoided by executing a properly drafted Durable Power of Attorney. Plan for the future but don’t forget to plan for the present. A balanced plan should reflect both “life” and “death” planning.

Shopping Price For Your Estate Plan May Cost You

At least once a week I get a call from a potential client.  The question is always the same:  “How much does X document cost?”  This is always a perplexing question.  Usually the answer is “I don’t know.”  It is nearly impossible to quote somebody a price over the phone.  I know of an attorney who agrees to quote the client a price over the phone if they can answer one simple question:  “What color tie am I wearing today?”    Usually, (good)lawyers don’t ask questions they don’t already know the answer to.  This lawyer knows that people will protest-  “how can I know what color tie you are wearing if I am not there?”  The lawyer then points out (if the client has not gotten it already) that both questions are similar.   The lawyer is not one of those scanners at Target- he’s not reading the barcode on the back of the document and spitting out the suggested retail price.  A quick conversation over the phone  does not usually provide enough information to adequately assess what is needed to be able to give a good quote.

Get ready folks:  Here’s where I pull back the curtain and you get to look into how attorneys price out a job.  Most attorneys either charge by the hour or a flat fee for the specific project.  Now there is a time and place for the hourly rate.  Some firms worship at the altar of the billable hour, and this is okay, however one could argue that the hourly rate certainly benefits the slow, inexperienced attorney in that the more time he or she takes to do the job, the more money they can charge.  The hourly rate can also be abused by doing needless work that certainly sounds important and necessary but really is not.   Lawyers who bill a flat fee take several things into consideration when determining their fee.  The process involves fact finding:  learning about your situation and goals.  Your attorney should ask lots of questions.  It also involves thinking about what course would be appropriate to accomplish your goals.  Estate planning attorneys then consider the work involved in putting your estate plan into place:  the writing, revising, explaining and execution of your plan.  With the flat fee you know from the start the total price for the work agreed upon.

If your shopping for price understand that the lawyer who charges either a flat fee or by the hour will be hard pressed to give you a price over the phone, it takes time to collect information and to think about what needs to be done.  If you can find an attorney who can quote you a price over the phone- think twice.  An attorney (or any professional) who can blindly quote you a price over-the-phone may not be thinking about what is really involved in the job.  If the attorney is not thinking too much about the price, which is important to his or her bottom line, how much time will they put into thinking about your case.  I suggest that  you look tothe value, not the price when deciding on an attorney.  What value or benefits will you receive for the fee charged?  Regardless of what price you are quoted, you can be sure that there is another attorney in town who can and will do it cheaper.  But are you getting the same value from the cheaper priced attorney?  Do they charge you for telephone calls, additional consultations, copies, faxes, postage, or any other hidden fees?  Do they offer a guarantee?  What happens if once you complete the process, you are not satisfied?  All of these issues should be taken into consideration when choosing an estate planning attorney.  Price is an important factor (especially in this economy)  but it should not be the only factor considered.  Shop for value not price when you’re looking for an attorney.