Donor Advised Funds

There are many ways to leave a charitable legacy. One of the best is the increasingly popular donor advised fund.

Giving to charity is not as simple as writing a check and sending it in the mail. Sure, it can be done like that, but if you want to make sure you are getting the best possible tax benefit for the charitable gift, then you need to do more planning.

This is especially true for wealthy people, who would like to create a charitable legacy that will outlive them.

While you can create a charitable legacy through several different methods, donor advised funds are popular a good way to do so as the Wills, Trusts & Estates Prof Blog recently explained in “The Rise of Donor Advised Funds.”

With a donor advised fund, you can invest money now that will be used for charity later. The donor gets an immediate tax benefit and can invest however much he or she wants.

Contributions can be made over time or all at once, whichever is more beneficial. The donor does not have to actually advise how the funds are invested, if not interested in doing so. However, they can, if they are interested.

If you are considering a donor advised fund or any other type of charitable legacy, it is important to seek out the advice of an estate planning attorney. That way you can make sure you are leaving your legacy in a way that makes the most sense for your personal situation and the type of legacy you want to leave.

Reference: Wills, Trusts & Estates Prof Blog (May 18, 2017) “The Rise of Donor Advised Funds.”

New Dementia Treatment

A new virtual reality treatment is helping some elderly people with dementia recall their memories.

It has often been said that the cruelest thing about Alzheimer’s and other forms of dementia is the forgetting. People who suffer from dementia forget the important people, places and things in their life.

They do not just forget that the person talking to them is their grown-up child. They also forget the time they took that child to their first baseball game, for example.

Helping patients get back those memories, has proven to be a challenge.

Patients can be told about the memories, but that does not necessarily mean they will remember them.

Technology now might be able to help, as the Daily Mail reports in “Touching moment a virtual reality headset helps elderly people with dementia recall previous memories.”

A virtual reality therapy program has been created that lets patients virtually be at a scene.

A therapist asks a set of leading questions to help jog the patient’s memory. The article mentions that an elderly woman was shown a virtual reality beach scene and was then able to recall the time she visited a beach in Scotland as a child. It was a memory which had previously been lost to her.

There are twelve scenes in total, including a view of the Earth from the International Space Station.

For now, this virtual reality program is costly and not available to everyone. However, if it continues to show promise in helping dementia sufferers, then it is likely to soon be more widely available.

Reference: Daily Mail (May 16, 2017) “Touching moment a virtual reality headset helps elderly people with dementia recall previous memories.”

Online Social Security Changes Again

The last attempt by the Social Security Administration to increase online security was a disaster that did not last long. The agency is about to try again.

It is relatively easy to log in to the Social Security Administration and get access to all of the information about your account. A few basic details are all that is required.

This has led to concerns about privacy and identity theft.

Since it does not take much for a legitimate user to log in, it does not take very much for thieves to log in either. The agency attempted to fix this problem in 2016, by requiring a two-step verification process before account access was granted.

That was short-lived, however, as many people were unable to log in to their accounts.

The agency is going to try again with a modified process, as Investment News reports in “Social Security Administration steps up online security.”

In its last attempt, the agency sent users a code via cellphone to verify their accounts before they could log in. That was a problem, since many elderly people do not use cellphones.

This time around, the agency will let people choose to have the code sent by cellphone or email. It is assumed that if are trying to access their Social Security accounts online, then they will almost certainly have email accounts, even if they do not have cellphones.

This change is scheduled to take effect on June 10, 2017.

Anyone who has problems accessing their Social Security accounts online after that, should speak to an elder law attorney.

Reference: Investment News (May 15, 2017) “Social Security Administration steps up online security.”

Protect Your Digital Assets

Technology is changing so rapidly that people and the law are not keeping up. This creates problems in estate planning.

It was not that long ago when the Internet was new and primarily seen as nothing more than a source of entertainment for most people. That has changed dramatically.

More and more people are now conducting business online and our digital accounts have become a large part of our personal lives.

When planning their estates, however, people have not kept up with the pace of technology.

People do not think about how they want any digital assets that they have to be passed on to their heirs.

Laws have also not kept pace, as Investment News discusses in “Most estate plans aren’t dealing with digital assets properly.”

By default, what happens to digital accounts and assets after we pass away is a patchwork of the individual terms of services of the different websites that we use.

Every website has different rules about the accounts and whether they can be passed to heirs and under what circumstances they can be passed down.

Some states have attempted to address this problem by adopting proposed uniform laws, but there is a long way to go for the law to catch up with technology.

If you would like to have a say in what happens to your digital accounts after you pass away, it is important that you speak with an estate planning attorney about it, so you can make appropriate plans.

Reference: Investment News (May 11, 2017) “Most estate plans aren’t dealing with digital assets properly.”

Massive Medicare Fraud Alleged

Every few years it seems the federal government needs to do something to fix Medicare or risk running out of available funds for the program. One attempt to fix Medicare was undertaken in the early 2000s. It is now known as Medicare Advantage.

The program privatized parts of Medicare by turning things over to insurance companies. The idea was that insurers would do a better job of controlling costs in the program than the government.

Instead of doing that, however, a whistle-blower alleges that insurers have used the program to make billions of dollars from Medicare they are not entitled to, as The New York Times reports in “A Whistle-Blower Tells of Health Insurers Bilking Medicare.”

The alleged fraud is a relatively simple one.

Insurers are said to have used the medical coding system to make patients look sicker than they really are. As a result, the insurers easily collect more money from the government than they actually should.

The government has already announced plans to sue one insurer based on these allegations and more lawsuits against other companies are expected.

It is important for the government to stop this fraud, if true, and any other Medicare fraud.
The Medicare system is yet again close to running out of funds and in need of a fix. The government cannot afford to lose billions to fraud.

Reference: New York Times (May 15, 2017) “A Whistle-Blower Tells of Health Insurers Bilking Medicare.”

Handling Death in the U.S.

Studies continue to show that the how and when Americans would prefer to pass away, is not how they actually pass away. That needs to change.

Most of the time, the medical profession treats its patients in keeping with what the patients want. If someone has a broken leg, for example, then doctors set the leg, put a cast on it and let it heal.

That is what people want.

When we get sick, doctors give us the best known treatment for whatever disease we have and everyone is satisfied. However, this does not necessarily hold true when people are at the end of their lives.

What medical professionals do at the end of their patients’ lives, is not what studies suggest patients necessarily want, as The New York Times reports in “We’re Bad at Death. Can We Talk?”

The disconnect at the end of life between doctors and patients, stems from the fact that doctors are trained to do everything they can to sustain life. On the other hand, most patients would prefer to be let go with the least amount of pain and discomfort.

This leads to terminally ill patients being placed in intensive care units on artificial life support, when they would prefer to be placed in palliative care or return home so that they can pass away in peace.

This is something that needs to be addressed by the medical community.

There is something you can do about it for yourself. You can get advanced medical directives to let doctors know what you want, when you are terminally ill.

Reference: New York Times (May 10, 2017) “We’re Bad at Death. Can We Talk?”

Just Living Together After 50

More and more elder Americans are choosing not to get married to their partners. Instead, they are just living together.

The trend over the last few decades has been for people to get remarried late in life. This has created many issues for estate planning and the families of the people who do get remarried.

That trend is starting to reverse, but that does not mean people are not finding companionship in their retirement years.

Today, rather than getting married, many elderly people are just moving in together and foregoing a marriage certificate, according to The New York Times in “More Older Couples Are ‘Shacking Up’.”

While this might solve some problems, such as getting around the laws of intestate and spousal election to make sure that any assets go to the children and remain in the family, it does not solve all of the problems. Instead, it creates a different set of problems that need to be worked through in an estate plan.

If two elderly people are living together, it becomes important to create estate plans that do not leave one of them in a bad position when the other passes away.

You do not want to create a situation where a partner is unable to afford the rent after you pass away or gets kicked out of the property you own by your heirs.

These do not need to be major problems with proper estate planning, but they can be without that planning.

Reference: New York Times (May 8, 2017) “More Older Couples Are ‘Shacking Up’.”

Death Has Changed A Lot

How, when and where people pass away has changed in the last 100 years. Evidence suggests that people are not entirely happy about that.

A long time ago, most people passed away in their homes. There were not many hospitals or hospices for people to go to, when they were terminally ill.

There are now many of those places and most people pass away in some sort of facility.

That has been both good and bad.

People generally like that they do not die as young and from as many diseases as people used to, but most people would still rather die in their homes than in a facility, as the Economist reports in “How to have a better death.”

In fact, the majority of people are not happy that they cannot choose when and where to die. People are often given life-saving treatment by doctors that they do not want.

At other times, people with little hope of long term survival are not given the opportunity to choose the timing of their own deaths, which leads them to linger on in pain.

This is the primary reason for the movement to legalize physician-assisted suicide, which is slowly picking up steam, as more and more states consider it.

Since it will not be an option for everyone for a long time, however, it is important that people take some matters they can control into their own hands.

Everyone should have advanced medical directives, at a minimum, that dictate what procedures doctors can and cannot use to prolong their lives.

Reference: Economist (April 29, 2017) “How to have a better death.”

Forced to Pay for Your Parents

It is well-known and accepted that parents are required to provide care and support for their minor children. What is less well-known, is that in over half the states, adult children can be required to provide care and support for their elderly parents.

There are many laws on the books that receive very little attention because they are very rarely used. If few ever bother to attempt to enforce a law, then there is usually no reason for people to bring it up.

However, sometimes those laws do eventually become important, because of a general change in circumstances that sees those laws starting to be used more frequently.

An example of this is filial-responsibility laws.

These are laws that have been passed in 28 states that require adult children to provide financial support for their elderly parents, if the parents are unable to pay their own bills, as the Wills, Trusts & Estates Prof Blog discusses in “Filial-Responsibility Laws Could Cost You.”

These laws were not used much in the past because government programs for the elderly such as Social Security, Medicare and Medicaid provide financial support for the elderly.

Today, with people saving less and living longer, many elderly people are not able to afford the costs of their own care, which is increasing.

Nursing homes in states with filial-responsibility laws are increasingly looking to enforce them against children with parents who do not pay their bills.

This is yet another reason to make sure that you plan for your retirement and estate. If you do not, your children might be required to pay for you.

Reference: Wills, Trusts & Estates Prof Blog (May 3, 2017) “Filial-Responsibility Laws Could Cost You.”

Estate Tax Uncertainty

President Trump has made an official proposal to repeal the estate tax entirely, as expected. That raises more questions than it answers.

While campaigning for the Presidency, Donald Trump frequently said that, if elected, he would repeal the estate tax entirely. As with all political campaign promises, that did not necessarily mean he would follow through soon on the promise, if he did at all.

However, President Trump recently released a tax reform proposal that calls for a total repeal of the estate tax, among other things.

That does not mean that anyone should make plans for the end of the estate tax, as Investment News points out in “Trump tax proposal leaves advisers in the dark on estate tax repeal.”

The biggest issue is how an estate tax repeal will get passed in Congress, if it can be at all.

Ordinary legislation requires 60 votes in the Senate to pass without a filibuster. It is unlikely that any large tax cut on the wealthy will be able to get those votes, since Democrats have vowed to block them.

The budget reconciliation process can be used so that only 50 votes are needed to pass an estate tax repeal, but there are many restrictions on that process. The most important one is that anything passed must be revenue neutral, which means that any cuts have to be offset with tax increases elsewhere.

If the cuts are not revenue neutral, then the law must sunset after 10 years.

The estate tax would come back.

President Trump has previously proposed changing capital gains taxation to offset the estate tax repeal, but it is not known how much support that idea has in Congress.

Both the President and Republicans in Congress, would like to see many more tax cuts that also have to be paid for, which might mean the estate tax repeal could be dropped for other priorities.

Reference: Investment News (April 27, 2017) “Trump tax proposal leaves advisers in the dark on estate tax repeal.”