The first issue to decide is whether a nursing home is necessary.  Would some type of home services be adequate?  This issue should be discussed with your health care 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 and hospice in-home care.

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.

Do you need a help desk to talk with your parents?

According to recent research conducted by insurance “mega-company” The Hartford, it seems like many baby boomers would rather see their dentist for a root canal than talk to their aging parents about estate planning.   Research indicated  71% of parents of baby boomers were comfortable discussing estate planning with their children, whereas only 54% of their children were comfortable having such discussions. It turns out that parents are more comfortable discussing estate planning than are their baby-boomer children-who knew? This “communication gap” can have serious consequences for your parents and family.  The lack of planning can have devasting effects on the finances, relations and spirit of a family.

Talking about your parents dying is not a fun topic to explore- except for a few of you “sickos” out there. Although it may be a hard conversation to have, it can make such a difference if your parents should become seriously ill and especially after your parents are gone. This is too important of a conversation not to have.

Getting the conversation started is the hardest part. A few simple guidelines can help turn this conversation into a positive experience. The most important rule (in my experience) is to include ALL of your siblings in the conversation. Nothing works quicker to undermine your intentions than excluding someone (even if they are an incredible pain in the…um…neck). Group discussion fosters a free exchange of ideas.  Try to listen more than you talk.   Choose a comfortable and private setting for this family meeting that is free from distractions.

The family is assembled, in a comfortable, private, space…then what? How do you actually start the conversation? A good way to start is to discuss your own plan. Discuss with your parents what your estate planning experience was like. Talk about what your estate plan contemplates. Another way to start the conversation is with an article or book on estate planning. If your parents are readers this is a terrific place to start.

Assuming that you have created an opportunity to talk to your parents about their “exit plan” you should discuss several different aspects. Remain focused on the fact that you are trying to help your parents maintain independence and control over assets that took a lifetime to accumulate. Focus on long term care: have they considered what would happen if one or both of them had to spend time in a nursing home? Nursing home costs can quickly eliminate your parent’s life savings. Ask about what type of estate plan they have in place. Make sure the plan fits their estate. Explore whether their estate plan contemplates tax issues, probate costs, or beneficiaries with disabilities? Don’t neglect to focus on lifetime planning. Make sure your parents have updated Powers of Attorney and Living Wills, these simple documents are worth their weight in gold when you really need them.

Remember, most parents want to discuss their estate plan with their adult children. Finding out that your parents have planned their estate will be very comforting. Finding out your parents have not made a plan is a great opportunity to help them get their affairs in order.

It is important that everyone take charge of their own personal finances. No one should care more about your finances than you! A large part of taking charge of your personal finances is hiring the right professionals to help you make your investment decisions. The big question is: How do you know if you are hiring the right person?

You should be prepared to ask a lot of questions when shopping for a planner. A good place to start is to ask your planner-What experience do you have? Ask him/her planner to describe how long they have been in practice and what types of companies they have been associated with. Don’t be afraid to ask about their work experiences and how that experience relates to their planning approach.

Another good question is- What are your qualifications? Ask if they have ever been licensed? Once you get this information don’t be afraid to do a little poking around on the internet. A good website to do a little checking on your financial adviser is www.finra.org. This website allows you to know what licenses your adviser has earned, whether or not they have had disputes with clients and whether or not they have ever been disciplined. A little background information can go a long way in helping to discover if your financial planner is who he or she claims to be.

Beyond your planners experience and qualifications you should also ask about what types of services they offer, and what their approach to financial planning is. You want to make sure that their approach is not too aggressive or too cautious for your personal situation. Another important question to ask is how their services are paid for. Some advisers are paid a salary by the company they work for, others are paid by commissions from the products they sell, and some charge an hourly rate. Your planner should be able to clearly articulate how he or she is paid and should also be willing to put this in writing.

The above are just a few ideas on how to find a good financial planner. The best advice is to set goals, ask questions, get a plan together, and keep your eye on the ball… and on your financial planner

Next week I will publish my private list of local financial planners to avoid-  just kidding!  But if any not so good financial planners are reading this (and you know who you are)-  shape up or ship out.

It’s time to answer another reader question:

Dear Attorney Guertin:

            My mother is law is 86 years old.  In December she moved in with us after her husband passed away.  She has dementia, although we did not know this when she moved in.  Sometime down the road she may need nursing home care.  If she gives away $13,000 to each of her children and grandchildren, will this be taken away from them if she runs out of money in 2-3 years? 

M

North Branford

            M- It is true that the IRS allows any person to gift up to $13,000 to any single person.  This means that any person can give up to $13,000 to any number of individuals without having to file a gift tax return or paying any gift taxes on the transfer.  However, when the question is framed in the context of nursing homes and Medicare it might not be a good idea to gift money out of your estate to “real people.”  Although it is permissible to give funds away under the Internal Revenue Code, the State of Connecticut may be looking for those funds should your mother-in-law need nursing home care provided by Medicaid.

In order for an asset not to be considered when a person is applying for Medicaid, it needs to be out of the applicant’s estate for five years.  Imagine a situation where assets are gifted out in year 1 and in year 3 those assets are needed for nursing home care.  If the person does not have the money to pay for their care they will need to apply for Medicaid.  When you apply for Medicaid, the State will ask for all sorts of information about your assets, including questions about transfers you have made- and believe me, they will investigate.  Funds that were gifted out will count as an available asset if they were gifted within the five year window.  What happens if those assets that were gifted out have been spent, or were lost in a lawsuit or a divorce?  If the assets are not available (to pay for your care) a penalty period will be assessed against the Medicaid applicant.  Imagine that nursing home care in Connecticut costs 15,000 per month.  If the applicant gifted out $45,000 the year before they applied for Medicaid they would be assessed a three month penalty- meaning they would need to pay for their own care for three months.

Gifting to a “real person” is not the best idea and is quite risky.  A better idea would be to gift those funds to an entity such as an Asset Protection Trust.  An Asset Protection Trust is irrevocable by nature.  The grantor (the person who funds the trust) will have no control over the Trust.  Typically, a trusted family member serves as Trustee and manages the assets in the Trust.  The Trust has beneficiaries which will take under the trust after you die.

Asset Protection Trusts are better recipients of the gifted assets because they don’t get sued or get into car accidents or divorced.  If funds are needed to pay for your care they are available through the Trustee.  If you want to play it completely safe an Asset Protection trust is the way to go.

If you would like to learn more about what an Irrevocable Asset Protection Trust can do for you and your family, Guertin and Guertin, LLC will be hosting a no cost, informational workshop on protecting assets on November 2, 2011 at 6pm. If you would like to attend,  please call our office at 203-234-7400.

I’ve been having this reoccurring dream:  I am in my office and my phone rings.  I answer.  On the other end is my dog, Ernie and he talks.  It is funny, in my dream, I do not seem to be phased (at all) by the fact my dog is on the phone.  The conversation goes something like this:

Ernie/Dog:  “Marc, I’m going in for surgery in the morning…I’m just a little worried.  What will happen if I  die?”

Marc/Lawyer:  “Ernie, have you ever seen the movie All Dogs Go to Heaven?”

Ernie/Dog:  “I don’t watch TV.  What’s going to happen to my stuff if I die?”

Marc/Lawyer:  “Let me check your file.  I’ll give you a call back.”

Most of the time, I wake up at that point.  When I am awake and on the job, I get similar calls from my clients.  Being a sympathetic person, I bite my tongue and resist the urge to mention the bad results of planning during the 11^th hour

Time can be your best friend, or your worst enemy, and when you are planning or trying to understand the ramifications of your plan on the way to the hospital, time is not on your side.  There is a line in a Bob Dylan song “Time is an ocean, but baby it’s at the shore.” When you are having surgery in the morning, time is “at the shore.”

Trying to pull a plan together in a day or a week before some sort of major surgery is risky.  It is certainly not a big picture approach and there are many reasons why it is inadvisable.    Two major reasons are Contemplation and Cost.

This approach usually lacks the contemplation (on the part of both the client and the attorney) that is necessary to create a plan that is comprehensive and correct.  To get the most benefit out of your estate plan, lots of thought should be put into its’ design, which is difficult to do in an extremely short time frame.

This approach also costs more (note:  other lawyers hate when I talk about how jobs are priced, I mean they want to charge you lots of money- but they are generally horrible at communicating the reasons why).  On pricing, an old, salty lawyer once said to me “You can have it Fast, Correct and Cheap- Pick two out of three.”  If you want it, Fast and Correct- it is not going to be cheap.  If the attorney has to interrupt his schedule to create, draft and properly execute a plan under the gun, before you go under the knife, it is going to cost more, much more.  If the attorney then has to leave, his office to see you at the hospital, it’s going to cost you much, much, much, much more.

You can get a much better plan for less money if you do not wait until the last minute.  If you’ve got surgery planned, make sure your plan is in place long before you go under the knife.

At its core probate is the process of removing a decedents name from property and assets that person owned when they were alive. So, it follows that if your name is not on any property or assets when you die- there is no need for probate.  Revocable Living Trusts help people to do just that.

A Trust acts as a legal container that holds property for the benefit of the beneficiary of the Trust, who is usually a person, an institution or a charity.  Trusts are legal agreements between three different parties:  The Grantor (sometimes called a Trustmaker or Settlor) who establishes the Trust, the Trustee who administrates the Trust, and the beneficiary, who receives some sort of benefit (usually income) from the Trust.

Imagine a Revocable Living Trust as an “open box.”  You can put assets into the box and you can take assets out of the box.  The box is a alter ego for yourself.  You can manage the assets in the box or appoint someone else to do that for you.  You have total control- just as you would if you owned the assets outright (outside of the trust).  Assets owned by the Trust (most likely managed by you for your benefit) will not have to be probated when you die- because you don’t own them- the Trust does.

Revocable Living Trusts are a great method of avoiding probate and the costs, lack of privacy and time associated with probating an estate.  By using a Revocable Living Trust you can put your assets into your beneficiary’s hands in days instead of months, minimize the cost of transferring the assets, and do so privately.

If you would like to learn more about Trusts, including Revocable Living Trusts, Guertin and Guertin, LLC is hosting two workshops:  Trusts (in general) –October 6^th and on Revocable Living Trusts-October 13^th .  The workshops will begin at 6pm at our offices located at 26 Broadway in North Haven.  Please call 203-234-7400 to reserve your place.

A long term stay at a nursing home can be financially devastating for you and your family.  Connecticut Nursing home care rates of $12,000-$15,000 per month can quickly eliminate a lifetime’s worth of hard work.  Long term care in a nursing home can devour your savings and force your home to be sold at a “fire sale” price to pay for your care.

When people are faced with choosing between preserving their assets and paying for care, there really is no choice, unless the costs of long term care in a nursing home are planned for.  Giving away your money (to a child, for example) before needing long-term care may sound like a good idea, but it can be risky.  Children get divorced, sued, have creditor issues, or can become catastrophically ill.  The assets gifted to your child could be lost through divorce, lawsuits, etc. and would not be available to you.  Furthermore, due to restrictive gifting laws, you may not qualify for Medicaid because you gave your money away.

An Irrevocable Asset Protection Trust (IAPT) provides an opportunity for individuals, both single and married to protect their assets long term.  These assets could be available to you at sometime in the future to pay for things that Medicaid does not, or for an individual’s spouse or as a legacy for future generations, without the risks associated with giving these assets away to another individual.

An IAPT is a legal entity separate from the person who creates it (the Grantor).  It is created by signing a Irrevocable Trust Agreement where the Grantor irrevocably transfers assets to a third person called the Trustee (often the Grantor’s children or other relative) who holds that property in Trust for the benefit of the people who are named as beneficiaries.

Timing is extremely important when establishing an IAPT.  “Beat the Clock” is the name of the game.  In order for an IAPT to work it must be set up well in advance of anticipated nursing home care (currently 5 years).  After the passage of enough time the assets held by the IAPT will be insulated from the ravages of a long term stay in a nursing home, as well as creditor issues, and lawsuits.  Furthermore, the assets held inside of the trust will pass to your beneficiaries probate free and within weeks, as opposed to months if these assets were to pass through the probate process.

If you would like to learn more about protecting your assets, Guertin and Guertin, LLC offers a free consultation on protecting your assets.  Give us a call at 203-234-7400 to schedule your appointment today.  We also will be hosting informational workshops on this topic and others this fall- be on the lookout for dates and times.  If you’d like to be added to our mailing list (to be notified of future workshops) drop us a line at info@guertinlaw.net.

If you have questions that you’d like answered here, please  email me at marc@guertinlaw.net.

Marc Guertin, is a partner at Guertin and Guertin, LLC, a law firm dedicated to Estate Planning, Elder Law, Trust and Probate Administration.  He is co-author of Planning for the Future:  A Practical Guide to Estate Planning and Avoiding Bad Heir Days. Visit us on the web: www.guertinandguertin.com.   Call us at 203-234-7400 for a free consultation. Read Marc’s blog at: www.deathslittleinstructionbook.wordpress.com. Guertin and Guertin, LLC is located at 26 Broadway in North Haven, Connecticut

According to the United Network for Organ Donation, almost 100,000 people are currently in need of a life-saving organ transplant.  That’s a lot of people and the number is growing.  Every 12 minutes another name is added to the national organ waiting list.  Unfortunately, not everyone on the waiting list will be matched with an organ and on average 18 people will die each day due to the lack of organs available for transplant.  It seems like such a shame that every day plenty of viable organs are not getting to the people who desperately need them.

When planning your estate, and contemplating the legacy you want to leave, consider donating your organs.  Even people with modest or no estate at all can literally save someone’s life with the gift of an organ, bone marrow or body tissue.  It may shock you to know that although 90% of Americans say they support organ donation, only 30% know the essential steps to become a donor.  Leaving life as a legacy is quite a thing to do, but how does one go about making sure their organs are donated?

One way Connecticut residents can become an organ donor is through the Department of Motor Vehicles.  When applying or renewing your driver’s license or state identification card add an organ donor notification.  If you already have a driver’s license, there is an area on the back of the license where you can indicate that you are a donor.  The problem with organ donation through your driver’s license is that at the time you pass away and your organs become viable for donation- who knows if your driver’s license will be available and if it is who knows if it will be checked?  If you do indicate your donor status on your driver’s license, be sure to notify your family of your intent.  They may be able to speak for you if you are unable to speak for yourself.

Another method for becoming an organ donor is to execute an advanced health care directive (a living will).  Within a living will people can donate organs as well as specify uses for the organs donated.  Some people want to donate for transplant purposes only; others want to donate for transplant and scientific research.   Living wills are filed with your doctor, which will serve as notice to your doctor your wishes on the subject of organ donation.  Making your wishes known in a legal document takes the burden off of your family to make this decision during a very difficult time.

Although in Connecticut there is no legal requirement for your family to consent, it is always a good idea to let your family know your intentions on organ donation.  Tell as many people you can that you want to donate your organs and encourage them to do so as well.   Leave the legacy of life through your estate plan.

 The first issue to decide is whether or not a nursing home is really necessary.  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.  And remember…  be nice to your kids!