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Elder Law Issues Podcast
13 minutes | Jan 30, 2022
Charitable Planning — During Life and After Death
We were listening to a local radio station‘s public service announcements about the concept of charitable planning. The radio station only had 30-60 seconds to explain what they were talking about. We have much longer in our podcasts, and no fixed time limit. So we decided to go through some of the charitable planning choices the radio station seemed to be alluding to. Of course you can make direct charitable gifts of cash during your life. It’s a good idea, and it allows you to support your favorite charities. It can also leave you with a warm glow of satisfaction. But the radio announcement talked about making various kinds of gifts that would take effect only at your death. Some of those, as the announcement suggested, can even produce lifetime financial benefits for you. What might they have been hinting about? In this discussion, we touch on charitable gift annuities, charitable remainder trusts, charitable lead trusts, and some of the other, creative ways you can satisfy both your charitable preferences and your desire to maximize the effect of your gifts. Another easy and obvious way to engage in charitable planning is to name your favorite charity in your will or trust. We can also help you with that –whether your favorite charity is that helpful radio station or a completely different organization. Oh, wait — you can even do all this in a way that lets you change your charity of choice later!
11 minutes | Jan 23, 2022
Case Management and Care Planning
Case management and care planning are central to our elder law practice. We have to actively monitor the care arrangements for the beneficiaries of our trusts. We also act as guardian (of the person) or conservator (of the estate). Both require us to manage care for vulnerable individuals. In this podcast episode, we discuss some of our experience with case management issues. If you are responsible for overseeing the care of an aging and vulnerable individual, we might have some insight to share about those techniques and goals. Of course, your goal in handling the affairs of another individual should be to support, but not necessarily control, the individual. Maintaining individual autonomy and balancing the need for safety can be challenging. Also rewarding.
12 minutes | Jan 16, 2022
Retirement Account Update for 2022
The last two years have certainly been disruptive. One thing you might not have expected to change, though, was your retirement plan. Turns out that a retirement account update for 2022 is very much in order. You probably realize that the SECURE Act of 2019 changed many retirement rules. The best-publicized change: most beneficiaries (other than spouses) have just ten years after the owner’s death to withdraw all of the funds from an inherited IRA, 401(k), 403b or even Roth account. That’s clearly bad news for most retirement account owners. But less discussed: there’s also some good news to share. First, there’s good news in the retirement account update for 2022. Your life expectancy just got extended! Well, most people’s life expectancy did, anyway. For a 75-year-old IRA owner, for example, pre-2022 life expectancy was another 22.9 years — or almost age 98. Now, the IRA owner turning 75 in 2022 has been given almost two extra years to live! The current 75-year-old is (actuarially) expected to live to age 99.6 — another 24.6 years. Want some quick illustrations? Imagine that you turn 75 this year, and you have accumulated a $100,000 IRA. Your minimum distribution amount: $4,065 and change. But if you had turned 75 in 2019, you would have had to withdraw a little more than $300 more — and pay the additional tax. Of course, if your IRA is $1 million you can multiply those numbers by ten. And all owners of IRAs, 401(k), and most other defined contribution plans get the same benefit. Not a huge difference, but there is some good news for 2022. There’s also some good news in the SECURE Act itself. Chief among the good news items is that the minimum distribution requirement doesn’t even start until age 72 — up from 70.5 in previous times. Of course, 2020 was a holiday for virtually all required distributions. And that holiday extended even the five- and ten-year distribution requirements by the missed year. The bottom line: there’s both good news and less-good news in the retirement account update for 2022. Join us for our podcast discussion of some of the changes.
12 minutes | Jan 2, 2022
Going Into 2022
Here we are, going into 2022. We’re also creeping up on the second full year of pandemic restrictions. What’s in our future? Who knows? But we have some observations to share about the new year, and the next chapter. Not, of course, about the course of the pandemic itself. We’re not qualified to make medical predictions. But join us for our podcast discussion of the effects of our past two years’ experience and the coming year.
13 minutes | Dec 26, 2021
Beneficiary Deeds – Explanation and Discussion
Beneficiary deeds are very popular in Arizona. A property owner who signs such a deed can avoid probate and simplify administration of their estate. It’s pretty easy to create and sign a beneficiary deed — many people do it without involving a lawyer. We want to shed a little light on how the process works. We discuss who should consider taking such a step — and who should not. To be clear, we discuss only Arizona law. Other states may have a similar kind of document available. In fact, one source reports that something similar is available in 29 states (and the District of Columbia). We aren’t vouching for the accuracy of that list, and we don’t know how it works in those states. Your experience in another state could be very different. Check with a local estate planning attorney. But in Arizona, beneficiary deeds have been around for two decades. In fact, we reported about the then-new idea back in 2001. There have been some changes in the law since then, but the idea remains the same. The basic premise almost sounds too good to be true. You sign and record the document. Maybe the only cost is a $30 recording fee. When you die, the person listed on the document records a copy of your death certificate — and they own the property. But, as we discuss in this podcast episode, the beneficiary deed is not for everyone. People with complicated personal circumstances, particular intentions for their property, or large families might not be good candidates for a beneficiary deed. Here’s the thing: the difficult part is not preparing beneficiary deeds. It’s figuring out whether that’s the right approach. That’s when a qualified estate planning attorney should be involved. Come see us first if you are an Arizona property owner.
12 minutes | Dec 19, 2021
Christmas Gifts for Seniors
We have some ideas for last-minute Christmas gifts for seniors. Here’s the thing: we think your mother/father/grandparent would mostly like to hear from you. A regular message is better than candy — even better than flowers. We’ve made recommendations for gifts in the past. Some of those have come from our own experience with family members. Others are reports from clients about what has worked well. But our best ideas are more about regular contact than new stuff. Not that stuff won’t be appreciated. We also have some ideas about the best ways to visit with your aging family member. Consider the limitations they might have in vision or hearing. Give some thought to going to their place rather than bringing them to large family gatherings. But don’t skip getting together with them just because it can be challenging. Of course, in pandemic times you also have to be concerned with safety. It may be easier to maintain distance in a series of smaller visits to your elderly relative’s home or apartment. Spreading the visits out, and keeping them small, might be safer and more generous. Christmas gifts for seniors can be difficult, no doubt. Didn’t you give slippers last year? How much candy do they need. But there’s no limit to the amount of loving contact they can use.
11 minutes | Dec 12, 2021
Feel Strongly About Burial and Cremation?
Many of our clients feel strongly about burial and cremation. Over two-thirds of Arizonans, in fact, prefer cremation over burial. In this podcast episode we discuss some steps you should take to help assure your wishes are carried out. We often include burial and cremation directions in our estate planning documents. But, as we explain here, that’s not really the best way to direct your funeral/burial arrangements. What should you do? Several things: Discuss your preferences with your family. Include any family members you think might not agree with your choices. Make arrangements with a funeral provider. Sign any forms they offer to describe your wishes. And, most importantly, pre-pay for your chosen arrangements. Do you prefer cremation? Sign a cremation directive. Then put it with your other important documents. Do you intend to donate your body to science, or to a particular organization? Make sure that you have contacted them, discussed the process, and signed any documents necessary to accomplish the donation. Do you favor burial in a family plot, or with other family or loved ones? And make sure there’s a plot in your name, and make sure everyone knows the details. And prepay for transportation, and the actual burial arrangements. In your will and/or power of attorney, spell out your burial and cremation preferences. But that’s not sufficient all by itself — it just helps make sure your family knows you were serious. Cremation frequency is rising rapidly, with industry experts estimating that well over half of all Americans choose cremation. Interestingly, with a large increase in deaths in 2020, cremation rates appear to have accelerated somewhat. But if you want to direct burial or cremation you should take steps to ensure your wishes are carried out.
14 minutes | Dec 5, 2021
Household Payroll for Home Care Workers
One common concern for fiduciaries who oversee home care: how should they handle household payroll? Are in-home caregivers independent contractors? Or must the fiduciary withhold Social Security and taxes from their paychecks? As we explain in this week’s podcast, in-home caregivers are almost always employees. They simply do not meet the standards set out by the Internal Revenue Service for treatment as independent contractors. Join us as we review some of the considerations facing fiduciaries who hire caregivers, including: How complicated it actually is to manage a household payroll What liability the fiduciary (trustee, conservator, financial agent) might have for making the wrong choice The benefits to employees who are hired on payroll The distinction between “salaried” and “exempt” employees Once you’ve listened to this episode, you might have additional questions. Of course our podcasts are not individual legal advice, and we can’t represent you based on your online questions. But we do benefit from seeing our listeners’ questions — on this and other issues. Let us know what lingering concerns you have about household payroll for in-home caregivers, and maybe we’ll be able to address some of your questions in future discussions. Also: talk to your CPA about household payroll. They hold a unique position from which to advise you and help steer you to the right resolution.
11 minutes | Nov 28, 2021
Gifts to Grandkids — and Other Young People
The end of the year is upon us. So is the holiday season. You might be considering making gifts to your grandkids. Or perhaps to other people who are minors (or just young). First a bit of good news. For the past four years, the federal gift tax exclusion amount has been $15,000. That has meant that a gift to virtually anyone — minor or not — under that figure meant no tax filings, no taxes and no liability. As of January 1, 2022, that exclusion figure will increase — all the way up to $16,000. But that begs the real question: how do you make a gift to a minor? They can’t have their own bank accounts, sign their own tax returns or make investments of their own money. So how do you give them a substantial gift? And, by the way, what is “substantial”? In this week’s Elder Law Issues podcast, we discuss some of the options — including UTMA accounts, 529 plans or other educational accounts, and establishment of trusts. Which is right for your circumstance? The classic lawyer’s answer applies here: it depends. Who knew it would be so hard to make gifts to grandkids? We did, that’s who. But we’d like to try to make it a little easier for you to figure out.
9 minutes | Nov 21, 2021
Reimbursement to Fiduciary — A Practice to Avoid
We see this practice when we represent trustees, conservators and other fiduciaries, and we always counsel against it. A trustee, for instance, might pay trust bills from their own funds and then make a reimbursement to themselves as fiduciary. It can seem simple and unobjectionable. The person handling another’s financial affairs pays for something themselves, or puts it on their own personal credit card. Then they make reimbursement to themselves as fiduciary, and make a note documenting the transaction. Yes, it’s permissible. Even if you file the accounting with a court, they are likely to approve it. But it’s still a bad practice. As we discuss in this week’s podcast episode, a fiduciary needs to keep meticulous records. When the fiduciary writes checks to themself it is automatically suspect. Unless each transaction is thoroughly documented, the likelihood that someone may object increases. In the real world we find that recordkeeping is often spotty. You may be able to total up all the transactions and show that the reimbursements are justified, but a skeptical observer may find the paper trail inadequate. It’s easier — and safer — to simply avoid the conflict and make payments directly to vendors. When you use a credit card, pay the credit card bill directly rather than writing a reimbursement to the fiduciary. Help keep the transactions clear.
12 minutes | Nov 14, 2021
Record Keeping in Estate and Trust Administration
When you administer a trust or estate, you need to pay particular attention to record keeping. That may seem like an obvious statement, but too often books and records are kept poorly -- or not at all. In this podcast episode, we discuss record keeping for trustees and other fiduciaries. We talk about the importance of contemporaneous records. And we urge fiduciaries of all kinds to carefully document what they do. Fiduciaries need to understand the tax effect of decisions they make -- particularly the income tax consequences. They need to be aware of what documents the IRS and state taxing authorities will require. And they should understand that income tax problems may not arise for months or even years. Every trustee should review the difference between trust accounting income and taxable income. Will the trust pay an income tax, or will tax liability pass through to the beneficiary (or beneficiaries)? When does the trust even need to file an income tax return? The rules for record keeping differ among trusts, probate estates, conservatorship accounts and other fiduciary arrangements. It is important for every fiduciary to get good legal and accounting advice, and to maintain regular records. Those records should clearly identify income, expenditures, time spent by the fiduciary and tasks accomplished. Not planning on charging a fee? It doesn't matter. Keep contemporaneous records of what you do, how long it takes, and what information you collect. Our basic message: always act as if a judge will be looking at your files and records. Because sometimes she will.
12 minutes | Nov 7, 2021
Living Expenses in Trusts and Conservatorships
Imagine that you are conservator (of the estate) for a person who needs protection. Or, perhaps you are trustee of a trust for someone who has difficulty handling money. How do you handle regular living expenses? You might think that your obligation is to be as protective as possible. In that case, you would never make cash directly available to the person whose funds you are handling. You would also not let them handle a checking account, a debit or credit card., Even prepaid or gift cards would be problematic. As we explain in this podcast episode, that's not the right way to think about your obligations as fiduciary. Whether you are a trustee, conservator, or agent under a power of attorney, your focus should be on the individual. You should be thinking about how to accomplish the goals of the relationship, maximize the dignity and autonomy of the person you are dealing with, and improve the quality of their life. As we outline, you might encourage the individual to take responsibility for some of their own living expenses. It might be prudent -- or even necessary -- to monitor their expenditures, but that does not mean you can't give them some leeway. We talk about prepaid debit cards (and especially a particular type that we often use: the True Link card). We also favor regular, though modest, distributions of cash or even a small checking account. Of course, some trusts will prohibit such arrangements. Other circumstances may prevent liberal use of alternative arrangements. We certainly do not mean to say that they are required in every case. But your job as fiduciary should include assessing (and reassessing) the use of alternative arrangements to enhance autonomy.
9 minutes | Oct 31, 2021
Trust Income Tax Discussion
Do you have to file a trust tax return for the trust you manage? It depends. In this episode of Elder Law Issues, we review the trust income tax filing rules. Spoiler alert: not every trust requires a separate tax return. Even trusts with an EIN (Employer Identification Number) may not actually have to file a federal income tax return. Join us for our discussion of which trusts need to file a federal return, and what it means to be classified as a "grantor" trust. We explain what rules apply to trust tax filing, and who has to prepare them. Caution: the entire area of trust income tax filings is complex (yes, we did notice our pun) and particular to your situation. Please discuss your situation with your own attorney and/or certified public accountant. Your mileage, as they say, may vary. And state laws may be different, so make sure you get your advice from a local (and qualified) expert. A related question that we touch on: when does your trust actually require an EIN? Another spoiler alert: it's not when the trust is irrevocable, or someone other than the grantor is trustee -- though those are both important questions to consider.
11 minutes | Oct 24, 2021
What State Law Governs Trust Administration?
Imagine (and it's not much of a stretch) that a Maryland resident wrote a trust for her Pennsylvania daughter naming an Arizona trustee. What state law governs the trust's administration? Trust situs, governing law, jurisdiction and venue are all confusing topics. In this podcast episode, we try to unpack some of the terms. We discuss how the governing law might be different from proper court to bring any action. State taxation of the trust's income may be different yet again. Mobile individuals, multiple trustees, and multiple beneficiaries can all complicate state law considerations. If you are a trustee, you need to understand the effect of this interplay. If you are the settlor of a trust, you need to appreciate how complicated that interplay can be. What state law governs administration of a given trust? The answer can be difficult, surprising -- or even altogether unclear. An experienced attorney can help parse the question in your individual facts. A qualified Certified Public Accountant may also be able to offer insight. The answer is not always found in common-sense considerations or (sometimes) even in the document itself.
9 minutes | Oct 17, 2021
Modifying Trusts – Some Observations
Modifying trusts used to be very complicated. But in recent years, the law of trusts has changed -- in Arizona and in many other U.S. jurisdictions. Of course some trusts are fully revocable and amendable. But not all. Many trusts -- particularly after the death of the person establishing the trust -- are irrevocable. That might also mean unamendable, but not necessarily. State law varies -- a lot. But in Arizona, at least, irrevocable trusts are often amendable. Most often the decision to amend lies with the trustee, but there might be a trust protector or other official with authority to make changes. Sometimes a change can be as simple as a trust restatement. Why might you want to undertake a trust change? There are any number of reasons, from change in the beneficiary's status to unanticipated tax law effects. Do not undertake modifying trusts lightly or without full consideration. You probably want to engage the services of a qualified lawyer and consult an experienced Certified Public Accountant. In this podcast episode we discuss trust modification. We review why you might consider a change, and paths you might take. We give some pointers and cautionary suggestions for trustees and beneficiaries considering modifying a trust.
10 minutes | Oct 10, 2021
2021 Year End Planning
As the this extraordinary year winds down, we all start thinking about 2021 year end planning. In the tax and estate planning world, that might mean quite a lot of potential concerns. Many news sources have inundated you with information about possible changes in estate tax law, income taxation and other new developments. Some commentators add a sense of urgency. If you don't do something right away, you might lose important opportunities! In this podcast episode, we discuss the importance of planning. But, for the vast majority of Americans, changes being discussed in Congress will not mean they need to rush to modify estate plans. Except for the wealthiest individuals, few of the proposed changes are likely to require immediate action. And remember: there is no state estate tax in Arizona. Yes, potential changes in federal law might mean you need to revisit your estate plan. But for most clients, that reconsideration will work just fine after the first of the year. You might want to check in with us (or your own estate planning attorney, if you have a relationship established), but we might tell you to wait until we know just what's happening before rushing to make changes. So let us help you assess whether you need to make 2021 year end planning decisions. But if you do need to make plans, please don't wait until the very end of the year.
11 minutes | Oct 3, 2021
Financial POA Form
Say you need to get authority over your father's finances because you don't think he can manage them himself any longer. You know you need a power of attorney (POA). Can't you just go online, download a financial POA form, and get your dad to sign that? Last week we talked about Arizona's online health care power of attorney form. It was put on the web by the Arizona Attorney General, and it's based on the Arizona statute for health care powers of attorney. While we don't exactly recommend you use it, it certainly is available, recognized and effective. So why can't you find the same kind of form for financial powers of attorney? Because they're dangerous. That's why. They're dangerous for your father to sign, and they can even be dangerous for you to use. In this week's podcast episode, we talk about financial powers of attorney and why it makes sense to involve a lawyer in their preparation. We also explain why the Arizona state government doesn't have a financial POA form online for you to download.
13 minutes | Sep 26, 2021
Online Health Care Power of Attorney Form
If you look around, there are a number of places you can download an online health care power of attorney. Some will assure you that they are valid in Arizona. A few are Arizona-specific. For example, the Arizona Attorney General's office provides a set of online form documents (they call it "life care planning"). Those forms come straight from the Arizona law on advance directives. The packet of documents includes a health care power of attorney, a living will, a mental health care power of attorney, and even a pre-hospital medical care directive (Arizona's so-called "orange form"). Do these online health care power of attorney forms work just as well as attorney-drafted documents? Can you save legal fees by just downloading the forms, completing them and getting them properly witnessed? As we discuss in this week's podcast episode, that might work just fine. But we customize your documents to cover your actual wishes. We assure that they are properly completed and distributed. We think we add value. But here's our biggest tip: once you've completed documents, don't just sign whatever your doctor's office, or the hospital admissions worker, puts in front of you. Make sure your advance directives properly reflect your actual wishes.
11 minutes | Sep 12, 2021
Listener’s Questions About Self-Settled SNTs
A month ago, a podcast listener asked us a series of detailed questions about self-settled SNTs (special needs trusts). We tackle the questions in this episode. Actually, the listener's questions didn't specify whether their questions were about self-settled special needs trusts or third-party trusts. And the answers differ quite a bit depending on which trust type is involved. So in two earlier podcast episodes (here and here), we addressed the questions for third-party SNTs. Those trusts hold a third-party's money -- like an inheritance set up by a parent of grandparent, for instance. When the money was once directly available to the beneficiary, though, the trust has to be different. This comes up with personal injury settlements, direct inheritances (money left outright to a beneficiary with a disability) or accumulated wealth. It is harder to qualify for Supplemental Security Income and Medicaid benefits, and when a trust is created the options tend to be more restrictive. So we back up and tackle the same questions, about self-settled SNTs. We do love to hear/read questions from our listeners. Of course, we can't give individualized legal advice based on those questions. But they often give us an opportunity to explain a key part of the elder law that we practice -- and love.
11 minutes | Sep 5, 2021
Staff Profile: Purchasing Cars with Ashley
Purchasing Cars with Ashley? Wait: does Fleming & Curti, PLC, have a personal shopper for auto acquisition? Not exactly. But because of our unusual service mix, one of the things we often deal with is setting up transportation for trust beneficiaries and others. That frequently means we use trust (or conservatorship) funds to buy or replace automobiles. Meet Ashley Cooper. Ashley is one of the hard-working and thoughtful Fleming & Curti, PLC, employees, and usually is the main contact for vehicle acquisition, titling and replacement. And no, her name doesn't indicate that we have any special deals with a leading automotive marque. Of course that's not all Ashley does. Join us for a review of some of the unusual duties Ashley has taken on in our fiduciary administration practice. Consider the challenge: we need to make sure that transportation is available and reasonably priced. But vehicle management (and driving itself) is one of the main risks affecting many drivers and vehicle owners -- not to mention trustees. So we have to regularly deal with buying, maintaining, insuring and replacing vehicles. And that doesn't even address how to take title and (sometimes) assuring that someone can actually drive. That's why we think Purchasing Cars with Ashley is an interesting problem. Join us for this episode of Elder Law Issues, in which we talk with Ashley about her unusual job description and experiences at Fleming & Curti, PLC.
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