Author: Elder and Estate Planning, Attorneys PA.

A Charitable Remainder Trust Can Protect Your 401k & IRA from the SECURE Act

Millions of Americans have worked hard, saved for retirement and planned to give their remaining assets to loved ones when they pass away. If those assets involve tax-qualified retirement accounts like 401ks or IRAs, however, then you may want to contact an experienced estate planning attorney and discuss a charitable remainder trust.

 

As of January 1, 2020, non-spousal beneficiaries who inherit tax-advantaged retirement accounts will no longer be able to “stretch” annual required minimum distribution (RMD) payments over the course of their lifetimes. This was a longstanding practice that was virtually eliminated last year by federal legislation known as the Setting Every Community Up for Retirement Enhancement Act of 2019, or the SECURE Act. The law is intended to boost retirement savings for more Americans by expanding access to 401ks and IRAs, along with a number of other provisions, but costly changes were also included. 

 

Prior to the SECURE Act, retirement account beneficiaries could opt for lifetime RMD payments and reap the benefits of continued tax-deferred account growth and reduced annual tax bills due to the lifetime period of distributions. Now, applicable retirement accounts must be liquidated within 10 years. That means less tax-deferred growth and higher tax liabilities for beneficiaries. 

 

A charitable remainder trust, however, can provide a solution. A charitable remainder trust is designed to generate income, reduce taxes and support philanthropic activity. Instead of bequeathing a tax-advantaged retirement account, like an IRA, directly to a non-spousal beneficiary, the account holder would make the charitable trust the beneficiary. Then, the account holder would select an individual, perhaps an adult child, to receive annual income payments from the trust for a specified period of time, including the adult child’s lifetime. 

 

This mirrors the pre-SECURE Act stretch arrangement and includes the benefits of tax-deferred asset growth and lower annual taxes. Plus, after the specified period of time or the death of the adult child, remaining assets in the trust would be donated to a charity to help others. 

 

We know this blog may raise more questions than it answers. If you or someone you know would like more information about charitable remainder trusts and how they might help protect your retirement accounts, do not wait to contact our law practice today.

COVID-19 Florida Supreme Court Administrative Orders and District Court

During this time of the Coronavirus pandemic, getting information is important. We are providing links to help you. Updated: 3/25/2020

Florida Supreme Court

 

Palm Beach County – 15th Judicial Circuit Court

 

Palm Beach County

Protecting Family Caregivers from the Coronavirus

We know that you and the Florida seniors you love may have concerns right now.  We also know that uncertain times can put all of us on edge. Often, even when we are inundated with information, the right knowledge from a trusted source can put our minds at ease. We can no longer ignore the fact that the COVID-19 virus is spreading at an alarming rate around the world. Even with its unprecedented spread, however, there are still many precautions that we can take right here in Florida to protect you, as well as your loved ones.

 By now we are all familiar with the most popular precaution which has been shared by the various health authorities around the world:

Make sure that you properly wash your hands! 

What does it mean to “properly” wash your hands? This means meticulously cleaning your hands for at least twenty (20) seconds with soap and water, or an alcohol-based hand rub.  You may find it interesting to learn that, according to the FDA, “the benefits of using antibacterial hand soap have not been proven.”  Washing your hands remains one of the best preventative measures that you can implement to safeguard yourself and your elder loved ones.  In addition, according to the World Health Organization (WHO) washing your hands helps to kill viruses that may be on your hands.

Let us share a few other suggestions from the WHO.

 1. Maintain social distancing. Maintain at least 1 meter (3 feet) distance between yourself and anyone who is coughing or sneezing.  This one is especially important because it is easy to breathe in the droplets of someone who is suffering from the COVID-19 virus. This is true for most viruses like the flu.

 2. Avoid touching eyes, nose and mouth. Remember, especially for our younger loved ones, touching many surfaces can cause you to pick up viruses. WHO states that, “once contaminated, hands can transfer the virus to your eyes, nose or mouth. From there, the virus can enter your body and can make you sick.”

 3. Practice respiratory hygiene. How do you practice respiratory hygiene?  Cover your mouth and nose with your bent elbow or a tissue when you cough or sneeze. Dispose of the used tissue immediately.

 4. Help “at risk” loved ones limit interactions with those who may be infected. First, understand who may be at risk using this article we want to share with you. Although social isolation can be hard, help these individuals try to make informed decisions about where they truly need to be. Routine check up? Maybe postpone it until the virus is under control as very ill people could be in the waiting room. Although these decisions are up to you and your family, think about how to best keep everyone’s health intact.

Another important precaution that can help everyone around you is to stay home if you feel unwell. Further, if you have a fever, cough and/or difficulty breathing, do not wait to seek medical attention. Be sure to call your healthcare provider in advance, if you can.

The last tip we will share is also extremely important as we continue to battle this deadly virus. Make sure that you stay informed and follow any advice given by your healthcare provider. Do not rely simply on the news or secondhand information. Staying up to date can arm you with the right information to make the best decisions for yourself and your loved ones.

If you would like to learn more about how you can protect yourself and your loved ones check out this WHO article that goes into detail about preventative measures that we can follow in the fight against COVID-19. Know that we are here for you, both now and in the future. Do not hesitate to contact our law practice to learn more about how to protect and advocate for yourself and those you love.

All Local Social Security Offices Closed Due to COVID-19 – Notice

All local Social Security offices will be closed to the public for in-person service starting Tuesday, March 17, 2020. This decision protects the population we serve-older Americans and people with underlying medical conditions-and our employees during the Coronavirus (COVID-19) pandemic. However, we are still able to provide critical services.

Please read our press release to learn more, including how to get help from the Social Security Administration by phone and online. You can also visit our Coronavirus (COVID-19) information page to learn more and stay up to date.

Please share this message with your friends and loved ones.

When Should I Come Back to Re-Evaluate My Florida Estate Plan?

The only thing worse than not having a Florida estate plan is having a plan that’s no longer current. For this reason, it’s recommended that you re-evaluate an existing plan every few years, or more frequently if you’re an aging adult. An even better way to ensure your plan is consistent with your life circumstances, however, is to re-evaluate it after a significant life change or external events, such as a new tax law.

Remember, estate planning has many benefits and you most certainly don’t have to be rich to enjoy them. In fact, estate planning involves much more than just divvying up assets to family members after you pass away. Although wills and trusts are common features, estate planning also includes:

  • Power of attorney documents
  • Guardianship designations for minor children
  • Instructions for special needs family members who rely on government benefits
  • Directions relating to business ownership or equity stakes
  • Advance health care directives or living wills
  • Letters of intent

Significant life events require various aspects of a plan to be re-evaluated, and the closer to the event the better. For example, beneficiaries often pass away prior to the drafter of a will or trust. In some instances, the beneficiary may even be the drafter’s spouse. Not only would will or trust documents need to be re-evaluated, but so would any other estate document that includes the deceased spouse. Conversely, a marriage or birth of a child in the family would require estate revisions to include the new family members, if desired, as well as provide for potential contingencies, like divorce. 

Remember that changes to state and federal laws can impact you as well. For example, a new tax law, like the SECURE Act of 2019, further demands a re-evaluation, especially if a 401k or IRA is part of your estate. Other significant reasons to consider re-evaluating an estate plan can include, but are not limited to, the following:

  • A devastating health diagnosis
  • Catastrophic injury
  • A large increase or decrease in the estate value
  • Moving to a state with different tax laws
  • Children or grandchildren who reach age 18
  • Dramatic market changes

Finally, you can re-evaluate an estate plan simply because you changed your mind since the last time it was updated. Goals and investment strategies may change, or perhaps a close relationship evolved for better or worse. Maybe you want to designate a new trustee or personal representative to your estate plan. 

Whatever you decide, keep in mind that a good estate plan should always reflect the wishes of the person making it. We know this article may raise more questions than it answers. If you or someone you know would like more information about re-evaluating an estate plan, do not wait to contact our law practice. We look forward to discussing your planning needs with you now, or in the future.

Helping Your Aging Parent Decide to Leave Their Home

One of the biggest challenges for parents and adult children is adjusting to the inevitable role reversals that come with age. As our parents get older, they may find it harder to do some of the things they once took for granted. They may also find it harder to admit that day-to-day tasks are becoming more challenging. As their adult children, it is then up to us to help them make difficult decisions. One is deciding when it is time to leave their home.

Some facts and figures to ponder. 

Before you talk to your parents about a permanent move, consider the following

  • Approximately 90 percent of the participants in a recent survey are planning on staying in their current homes for the next five to 10 years. Of these, a significant number, 85 percent, are convinced they can do so without making any major changes to their homes.
  •  The top two reasons for aging at home given by survey participants were proximity to friends and family and staying in a home they like.
  •  More than 60 percent of seniors between age 60 and 70 reported finding it “very easy” to live with little or no assistance. On the other hand only 43 percent of those over 70 do so. 

What to look out for as an adult child. 

As an adult child, you may feel the need to walk a very fine line. How do you know when it is time to talk to your parents about certain concerns, and when is it time to intervene? This may be especially difficult if you do not live near your parents and only see them occasionally. The following are clues that it could soon be time for your parents to leave their home: 

  •         Trouble getting around
  •         Noticeable decline in health, especially due to chronic illnesses
  •         Poor hygiene
  •         Disheveled appearance
  •         Poor nutrition
  •         Slower recuperation from illness or injury
  •         Failure to take medications as prescribed
  •         Difficulty with household chores and maintenance
  •         Ignoring mail
  •         Failing to pay bills on time
  •         Evidence of difficulty driving
  •         Confusion or becoming easily disoriented in familiar surroundings
  •         Difficulty caring for pets

We understand the challenges of finding a new place to live and being able to afford it as you age.

Figuring out where your parents may live after they move out of their house may also pose its own set of challenges. The decision is usually based on several factors, including their overall health and what they can afford. Options for seniors who still have significant independence include smaller homes or apartments and senior/retirement communities. Other options include assisted living and long-term care facilities, such as skilled nursing homes.

Starting to think about these issues well in advance can help alleviate some of the stress and heartache that you and your parents may face during this transition. We want you to know that we are here to support you now and in the long-term. Please feel free to call our law firm to schedule a meeting at any time.

Did You Know Legal Forms from an Office Store May Fail?

Do you need a legal form such as a Florida durable power of attorney, or a last will and testament? If so, finding one is simple. All you need to do is visit your local office supply store. If you have a computer, laptop, tablet or smartphone with a reliable internet connection, you can purchase these forms on the office store’s website. You should be aware, however, that either approach carries definite risks. This is due to the likelihood the “document” will fail, leaving you or your family to cope with unintended consequences.

 

We frequently receive questions from our clients, friends, and advisors we work with as to why the simple option cannot work. Let us share some critical information that you need before making the choice to use forms instead of an estate planning and elder law attorney.

 

First, the legal forms found at office stores are usually generic versions of documents that attorneys use in practice areas ranging from business law to contract, real estate, family, and estate law. For the purposes of this article, we will concentrate on the latter. In addition to those we have already mentioned, common types of forms are: 

 

  • Living trust agreement 
  • Living will 
  • Power of attorney for healthcare 
  • Revocation of living trust 

 

Of course the cost will vary depending on what you need, but you can generally expect to spend less than fifty dollars.

 

This may lead you to a second question such as: are these forms valid? The short answer to this question is, “technically, yes.” This is because legal forms available at office supply stores can serve as frameworks that can be supplemented with your personal information. There is significant danger, however, with basic, “boilerplate” forms. As such, they do not allow for any degree of flexibility and do not take your needs into consideration. 

 

Take a Florida durable power of attorney form from an office supply store as a case in point.  Unlike the formal version used by an attorney, the store-bought variety does not allow you to include contingencies for unanticipated circumstances. Hypothetically, this could preclude you from naming someone else to act on your behalf if something happened to your original agent. Further, this document, in almost all circumstances, does not include the critical superpowers you need in Florida. Unfortunately, since it does not accommodate specific language, this type of power of attorney form could cause you to make costly mistakes. These include giving your agent too much authority, or failing to give him or her enough power to act on your behalf.

 

To put it plainly, taking shortcuts when it comes to your future and your legal rights is never a good idea. Why not let us help you create a plan that will serve you best in the short term and the long run? Do not wait to contact our office to plan forward for what you need both now and in the future. 

3 Reasons Why Updating Your Florida Long-Term Care Planning Should Be a New Year’s Resolution in 2020

A new year is an exciting time for all of us. No matter what your resolutions are, this is the time to set your ideas in motion for what you want to achieve not just this year, but this decade. As a Florida senior, however, do you have concerns about your health or a potential need for long-term care in the future?

We understand this concern. Many of our clients share with us that they did not know that they could plan forward for long-term care issues until it was too late. We are here to tell you that you can be proactive and start Florida long-term care planning now. You can work with both your elder law attorney and your loved ones to ensure that you are protected under all circumstances. 

Let us share with you three reasons why updating your Florida long-term care planning, or creating it for the first time, should be at the top of your to do list this year.

  1. Your life can change unexpectedly. None of us are guaranteed a future. We are also not guaranteed to be healthy in our future. Health care crises can occur overnight and, unfortunately, when we least expect them. Formally healthy aging parents, spouses, and friends, can suddenly find themselves facing significant health concerns. Knowing what you want to do and how you will handle a crisis is critical to ensuring that you are able to access the best care possible should this happen to you or to a loved one. Do not put off thinking about the unexpected and take the time you need to complete Florida long-term care planning.
  2. Medicare does not pay for most long-term care needs. For many Florida seniors and their loved ones, they are relying on Medicare to help pay for most healthcare costs. Medicare, however, is an acute payor system. This means that it is not set up to pay for long-term custodial care. In a crisis you may need to pay for care out of pocket or seek to become eligible for public benefits programs, such as Medicaid. Learning what you will need when it comes to Florida long-term care planning early, can help everyone involved.
  3. Estate planning is not enough. Many of us have estate planning. We believe, mistakenly, that this will be enough to protect us in the event of a long-term care issue. Unfortunately, it is not enough. While estate planning is critical, and you need it to ensure you and your loved ones are protected, it is equally important to plan with your elder law attorney to understand how you will be able to find good care and afford it in the event of a crisis.

We know this article may raise more questions than it answers. There is never a wrong time to plan forward for both Florida long-term care planning and estate planning. We encourage you not to wait to get the advice you need. You may contact us to schedule a meeting at any time with us now, or in the future.

When Was the Last Time You Revised Your Estate Plan?

When was the last time you thought about your estate plan? Was your newest grandchild born?  When your son finally completed his divorce? After the death of a parent? Life throws so much at us that it can be easy to lose track of things.  Even something as important as your estate plan.  

We know it takes a significant amount of time and effort to prepare your estate plan. Once the documents are complete, however, your job is not finished. It is critical for you to review your estate plan, at least annually, because as your life changes so do your needs. Further, laws can change over time that can impact the planning goals that you have for yourself and your loved ones.

Estate plan strategies may change depending on circumstances. 

Estate Planning - Photo of a Happy Mature Couple planning their estate.

You may be richer or you may be poorer. One asset in your portfolio may have increased significantly, but what happened to everything else?  If there are significant changes in value or in the circumstances surrounding your beneficiaries, you may decide you want to make changes to who inherits from you in the future. 

What happens to your estate planning, however, if you or a loved one get sick or faces significant long-term care challenges? Alzheimer’s Disease or stroke related dementia may not presently be concerns but any estate plan needs to be updated to be flexible enough to deal with these types of catastrophic events. In fact, there are special types of trust that can be used to diminish the impact of these issues and their impact on your loved ones.  For example, a special needs trust could be used in situations like these. In this example, as well as in this type of planning, the funding of the special needs trust gives the trustee the ability to pay for nursing and rehabilitative services that are not paid for by the federal or state government. 

Fortunately, not all situations are this drastic but there are so many options available to use in planning and so many variables at play that it is a necessity to revisit your estate plan on an annual basis.  We would love to answer your questions about your estate plan, discuss any changes you have, and help with any planning that might be needed in the New Year.

Do not wait to contact us to schedule an estate plan meeting with attorney Anne’ Desormier-Cartwright.

Elder Care & 3 Steps to Better Assessing Our Elder Loved Ones Driving Abilities

Keeping in mind that with elder care and driving that age is not the sole predictor of driver safety, but it has a lot to do with it.

Research shows that nearly 290,000 adults, ages 65 and older, were injured in auto accidents in 2016. This equated, on average, to about 20 seniors killed and 795 injured, every day. Last year, Older Americans amounted to 19 percent of all vehicle fatalities, as accident rates spike after age 70.

Let us share more about this dilemma right here. Many seniors rely on driving to meet their basic needs and are essentially stuck in their homes without the freedom it provides. Knowing this, and the associated risk with elder care and driving, what can we do?

Solutions were widely discussed during Older Driver Safety Awareness Week earlier this month, and while the event has passed one of the more important ideas offered was the need for adult family members to begin talking with senior loved ones about their driving before an accident occurs.

While this sounds simple, it is not an easy conversation to have with an aging one. We know just how challenging the “taking the keys” away can be.  We also know that not every situation requires that the Older American’s driving privileges are completely removed.

Elder Care & Assessing Our Aging Loved Ones Driving Abilities

Let us share three steps for you to consider for yourself, or for your aging loved ones

1. Collect Information. If you are concerned about an elder loved one’s driving, chances are others are also concerned. Ask them about warning signs and make note of them while exploring other potential red-flags.  According to AAA Senior Driving, two of the biggest predictors of senior accidents are traffic tickets and “near-miss” collisions. Do these apply? The goal should be to get a complete picture of driving risk.

2. Outside Assessment. An outside evaluation of a senior adult’s driving ability accomplishes several objectives: It identifies risks and provides recommendations, it takes the onus off concerned family members, and it can save a senior loved one’s life. Determine if there are companies, support groups, or a doctor the senior has connections with who could assist you with this task.

3. Have The Conversation. Armed with information and a plan, it may be time to talk with an elder parent or senior loved one. Above all, approach this person with compassion and respect.  Focus on the driving, not his or her age, and keep to the primary objective of ensuring continued health and safety.

Earning a senior loved one’s trust is critical to keeping him or her safe on the road. Although health is always the main concern, a number of legal considerations are also relevant when it comes to unsafe senior driving, and should be discussed.

Do not wait to contact our office to schedule a meeting to discuss this or any of your elder law concerns. We are here to support you and can provide you with the valuable guidance you need.