Christopher B. Kroll & Associates – Elder Law Solutions

 What happens if you die without a Will while you are:

1. Married with children: Many people falsely believe that the surviving spouse/parent would take all the deceased spouse’s property, especially if the children are young. That is not the case. In this situation, the law of most states awards one-third to one-half of the decedent’s property to the surviving spouse, and the remainder to the children, regardless of age.

2. Married with no children: Again, there is a popular misconception that the intestate decedent’s surviving spouse would take all. Most states, however, give only one-third to one-half of the estate to the survivor. The remainder generally goes to the decedent’s parent(s), if alive. If both parents are dead, many states split the remainder among the decedent’s brothers and sisters.

3. Single person with children: When a single person with children dies without a Will, state laws uniformly provide that the entire estate goes to the children.

4. Single person with no children: In this situation, again, most state laws favor the decedent’s parent(s) in the distribution of his/her property. If both parents are deceased, many states divide the property among the brothers and sisters.

If you want to decide who will inherit your assets, contact an estate planning attorney to discuss your wishes and how best to accomplish your goals.  Please feel free to call our office with questions.

     A Special Needs Trust is a legal document that allows a person with a physical or mential disability to retain an unlimited amount of assets in trust for his or her benefit, without those assests being includable in the beneficiary’s estate for the purposes of meeting need qualification requirements of certain governmental programs.  The Special Needs Trust will provide additional resources for extra care above and beyond what may be provided by government assistance.  The Special Needs Trust will also protect the trust assets from being subject to creditors or seizure.

     All Special Needs Trusts must be irrevocable, provide that distributions are at the discretion of the trustee, and include that the benefiuciary is not entitled to receive either income or principal.  The trust must also state that the trustee is prohibited from making any distributions that would jeopardize the beneficiary’s eligibility for benefits.  A disabled individual must be the sole beneficiary of the trust during his or her lifetime.

Medicare and Medicaid sound the same, but they are very different.

Few people realize the limitations of Medicare—which winds up costing them a substantial loss of dignity if or when they get hit with long term care expenses.  Medicare is the federal health insurance program provided on behalf of persons who are over the age of 65, blind, and/or disabled.  Medicare does not provide long term care benefits (nursing home care, for instance).  Medicaid, which is a poverty health care program, pays for 50% of the nursing home care in America today.

Medicare only cares about short-term or “acute care” health care.  Medicare only cares about your health care expenses if you can get well! Medicare does NOT provide care when a person is diagnosed with a long-term illness and needs nursing home care.  Essentially, our senior citizen health care is based on a “diagnosis lottery.”  If you are “lucky enough” to have a heart attack or diabetes, then you are covered by Medicare.  You are out of luck if you are diagnosed with  Alzheimer’s, Parkinson’s, Huntington’s disease, or anything else that lands you in a nursing home.  If  you need a nursing home and you are not impoverished, you are on your own dime!

Medicaid is the safety net for the impoverished.  Once you become sufficiently impoverished, then Medicaid is designed to provide care for you.  To qualify for Medicaid nursing home benefits you must be very ill and have no more than $2,000 total assets.

An elder law attorney knows the ins and outs of the public benefit system and can provide the client with solutions that help to fulfill the requirements of the law and still provide a better future for themselves or their loved ones.  .  If you want more information regarding a specific client situation, please contact us.

The Michigan Office of Financial and Insurance Services (OFIS) today urged seniors to carefully check the credentials of individuals holding themselves out as “senior specialists.”"Individuals may call themselves a ‘senior specialist’ to create a false level of comfort among seniors by implying a certain level of training on issues important to the elderly. But the training they receive is often nothing more than marketing and selling techniques targeting the elderly,” said Linda A. Watters, OFIS Commissioner.”These sales people and the alphabet soup of letters after their names can be confusing, and in some cases, may even be deceptive to seniors,” Watters said.

Bogus senior specialists commonly target senior investors through seminars where the specialist reviews seniors’ assets, including securities portfolios and typically recommends liquidating securities positions and using the proceeds to purchase indexed or variable annuities products or other investments the specialist offers.

In many jurisdictions, including Michigan, these recommendations may be viewed as providing investment advice for compensation. In Michigan, Investment Advisors are registered by OFIS, as are Insurance Counselors. Michigan also allows certified financial planners who can make recommendations about taxes and wills and other financial documents, but cannot make recommendations or give advice about investments or insurance without being licensed or registered by OFIS.

Before doing business with any investment professional, all investors, especially senior investors, should contact OFIS by email or toll-free at 1-877-999-6442 to determine whether the individual is properly licensed and if there have been any complaints or disciplinary problems involving the individual or his or her firm

     Having power of attorney over a family member is a big responsibility and sometimes it makes sense to share that responsibility with someone else. But when two people are named co-agents under a power of attorney, conflicts can arise. Unfortunately, if the conflict can’t be resolved, it may be necessary to get a court involved.  If you are acting as a co-agent under a power of attorney, but you and your fellow agent disagree on a course of action or one party has stopped participating in decision making, what can you do? The first thing is to check the wording of the power of attorney document to see if it sets up a procedure for resolving disputes. If the power of attorney itself doesn’t help, you should contact an elder law attorney. The attorney can tell you if your state’s power of attorney laws offer any guidance. There may be a state statute that deals with disputes. If the dispute still cannot be resolved, the final step may be to file a petition in probate court to let the court decide it. Or if the court finds that one of the agents is not acting according to the incapacitated person’s best interests, it can revoke the agent’s authority. Unfortunately, taking the matter to court takes time and money.

   If you have been appointed the trustee of a trust, this is a strong vote of confidence in your judgment and integrity. Unfortunately, it is also a major responsibility. Following is a brief overview of your duties:

1. Fiduciary Responsibility. As a trustee, you stand in a “fiduciary” role with respect to the beneficiaries of the trust.  As a fiduciary, you will be held to a very high standard, meaning that you must pay even more attention to the trust investments and disbursements than you would for your own accounts.
2. The Trust’s Terms. Read the trust itself carefully, both now and when any questions arise. The trust is your road map and you must follow its directions, whether about when and how to distribute income and principal or what reports you need to make to beneficiaries.
3. Investment Standards. Your investments must be prudent, meaning that you cannot place money in speculative or risky investments. In addition, your investments must take into account the interests of both current and future beneficiaries.
4. Distributions. Where you have discretion on whether or not to make distributions to a beneficiary you need to evaluate his current needs, his future needs, his other sources of income, and your responsibilities to other beneficiaries before making a decision. Often the most important role of a trustee is the ability to say “no” and set limits on the use of the trust assets. 
5. Accounting. One of your jobs as trustee is to keep track of all income to, distributions from, and expenditures by the trust. Generally, you must give an account of this information to the beneficiaries on an annual basis, though you need to check the terms of the trust to be sure.
6. Taxes. Depending on how the trust was established, the trustee will have to file an annual tax return and may have to pay taxes.  You will need to keep good records and turn this over to an accountant to prepare.
7. Delegation. While you cannot delegate your responsibility as trustee, you can delegate all of the functions described above. You can hire financial advisors to make investments, accountants to handle taxes and bookkeeping for the trust, and lawyers to advise you on questions of interpretation.
8. Fees. Trustees are entitled to reasonable fees for their services. Determining what is reasonable can be difficult.   It would make sense to consult with a professional experienced with trust work to determine what would be normal fees.

In short, acting as trustee gives you an opportunity to provide a great service to the trust’s beneficiaries. Just keep an eye on the responsibilities described above to make sure everything is in order so no one has grounds to question your actions at a later date.

      Individuals engaged in estate planning often get panicky when they hear the word “probate.”  When the term hasn’t been fully explained by a probate lawyer (and sometimes even when it has), it conjures visions of long waits, loss of inheritance, and many other hassles for heirs of an estate.

     To calm these fears (and to avoid working with an attorney), many people consider the idea of adding one or more of their children to their bank accounts.  Generally speaking, each “joint tenant” of an account has complete access to the money, but when one dies, the entire amount becomes the property of the other joint tenant(s).

There are potential pitfalls to adding children to assets:

• As it has already been mentioned, all joint tenants have access to the funds in the account.  This means that either party can withdraw money at any time.  If the child added to the account is not entirely trustworthy, this can be a devastating reality when the money is used inappropriately.

• In a case where the parent passes away, any money received by the child can be considered a gift, which means that it is subject to a variety of laws and may be taxed.  

• Creditors for both parties can have access to this account.  That means that if one joint tenant dies (even the one who is not in debt), the other’s creditors can go after the money they jointly held. 

• Money left in the event of the parent’s death will only be accessible to the other named tenant(s).  If one child has been responsible for the majority of a parent’s elder care and therefore is on the account, he or she will likely have no legal responsibility to share those funds with other siblings.  Again, trustworthiness is an important issue.

If you are considering adding a loved one to a bank account as a means to avoid probate, it’s important to at least talk to an  attorney about your options. 

When is someone considered incapable of making their own decisions?  Old age or physical disabilities are not sufficient reasons to appoint a guardian or conservator; there must be evidence that the individual is unable to make informed decisions or to manage his or her affairs effectively.  Often, a physician is asked to give an opinion or a clinical judgment on a person’s capacity.  The assumption is that the physician will make a thorough evaluation of the individual’s physical, cognitive, and psychological levels of functioning.  Ultimately, it is the probate court that considers the medical evidence and makes a determination of capacity or incapacity and whether or not someone needs a guardian or conservator.  The court evaluates the individual’s ability to handle day to day activities,  what level of daily assistance is required, and the individual’s decision-making process.  There is no single legal standard that can be applied when legal capacity is at issue.
The probate court follows a two step process in evaluating an individual.  First, a determination is made as to the individual’s ability to make informed personal or financial decisions. There must be clear and convincing evidence that the individual is impaired.  Second, the court makes a determination if the appointment of a guardian or conservator is necessary to protect the individual.

     For many clients, the revocable living trust can be used to avoid probate, provide lifetime management in the event of disability, and to save taxes. The trust is established during the client’s lifetime.  The trust can be amended and revoked at any time.  The client usually serves as the initial trustee and has complete control over the trust property.

     Should the client become incapacitated and not able to handle trustee responsibilities, a successor trustee is named.  Property held by the trust is distributed by the successor trustee upon the client’s death according to the terms of the trust agreement.