by Bill Miller | Mar 28, 2021 | Blog, Estate Planning
The worst part of being an estate planning attorney is telling those in need that it is too late to address whatever issue they may have. Unfortunately, this happens all too often and worse still, frequently such cases could have been prevented with just a little bit of foresight. Take, for instance, the following situation which recently came through our office.
Mrs. Anderson [name changed for privacy reasons] called to discuss a delicate matter. Her stepfather was on a ventilator and was not expected to live much longer. While not her natural father, Mrs. Anderson’s stepfather had raised her since childhood. He also had another, biological child who had been estranged from the family for a long time. When Mrs. Anderson’s mother died a few years ago, Mrs. Anderson stepped into the role of care-taker for her stepfather, buying him groceries, ensuring he took his medications, and generally looking after his well-being.
Prior to being hospitalized the stepfather had prepared no estate planning documents and, in particular, no HIPAA release and no medical power of attorney naming Mrs. Anderson. For this reason, his medical team would not share any information with Mrs. Anderson and so she came to us for advice. She wanted to know about options that would allow her to ensure her stepfather’s treatment aligned with his wishes and values and, further, she was concerned about what might happen to his assets should he die.
Ever since childhood, Mrs. Anderson’s stepfather had promised she would inherit certain assets. Further, he had expressed that he would like to leave her the majority of his estate and wished to pass certain sentimental items to her children, which he considered his own grandchildren. None of this existed in writing, however, and Mrs. Anderson was worried that upon his passing, her stepfather’s estranged son would reappear and try to get everything. She wanted to know what could be done to avoid this.
Unfortunately, for Mrs. Anderson it was simply too late. In his current condition, her stepfather was unable to sign a medical power of attorney or a will and without these documents, neither of her worries could be resolved. In order to intervene in his treatment, Mrs. Anderson would need to file for a temporary guardianship and then try to get permanent guardianship—an impractical solution. With no will in place, the distribution of her stepfather’s assets would be determined by Alabama’s intestate succession statutes and these dictate that his entire estate, including sentimental items, would pass to his son.
Mrs. Anderson was devastated. Even if she did gain guardianship allowing her to help her stepfather make decisions while still alive, nothing could be done about what would happen to his estate upon his passing.
These are never the kinds of conversations an estate planning attorney wants to have and they need not happen. Putting basic estate planning documents in place, including a will and advance directives, is a painless, expedient process and is worth doing right now. After all, the only thing worse than losing a loved one is losing their legacy in the process.
Call Miller Estate and Elder Law today to get started on your estate plan and save yourself and your loved ones the grief of ending up in a situation like that described above. Our phone number is 256-472-1900 and we can also be reached via the contact form on our website.
by Bill Miller | Mar 17, 2021 | Blog, Probate
You have probably heard that probating a will in Alabama can be a taxing and costly process. In many instances this is true but it need not always be the case. In fact, there are situations in which administering an estate through probate is the most painless of the available options—but only if you are prepared. In order to shed light on the subject and ensure your estate is optimized for the easiest possible administration, we have prepared the following breakdown detailing when (and when not) to probate.
When You Might Seek to Avoid Probate
Probate can get messy when your estate includes complex assets such as stocks, other types of investments, or fine art, when a family is feuding, or when no estate plan exists. In either of the first two cases, a trust-based plan may be the way to go as this option sees to it that your assets pass directly to heirs without intervention by the courts.
Another situation in which probate may cause problems is when your spouse or dependents have no income of their own. Probating a will can take weeks or even months, after all, and during this time beneficiaries will not be able to access your money. This means that funeral costs, household utilities, property insurance, taxes, and possibly even storage fees may need to be paid out of pocket while probate runs its course—a burden which can sometimes make meeting even basic needs difficult for loved ones.
Finally, you might want to avoid probate if you are worried about prying eyes. As a state court procedure, probate records are public records which means that anyone interested can access information about your assets, liabilities, beneficiaries, and personal representatives. Worse, nowadays many states make such information available online meaning the curious need not even visit the courthouse to gain insight into your private affairs.
While it is true that strategies to avoid probate such as placing assets in a revocable living trust come at an upfront cost, often they save you money in the long run—especially in cases of complex estates which require equally complex court proceedings
When You Might Consider Probate
Despite its bad reputation, probate has its place. In the case of smaller estates with simple assets, for instance, going through the courts can be an efficient, cost-effective process. This is especially true for very small estates that qualify for Summary Distribution of Small Estates—a shortened form of probate specific to Alabama.
Probate may also be beneficial in instances where creditor claims are a concern. Opening a probate case shortens the time that creditors have to file their claims and if they these claims are not filed properly and in a timely matter no payments need be made.
Lastly, probate may be useful when transparency is a concern as the courts require full disclosure of all information and costs. This means that during the probate process, beneficiaries gain the peace of mind of knowing that the executor or personal representative is laying everything on the table.
Ultimately, the decision to probate or not to probate is personal and yours to make. At Miller Estate and Elder Law we are happy to sit down, talk about your unique needs, and upon this basis craft a plan that work for you—no matter the direction you choose. To get started give our office a call at 256 251-2137 or reach us through the contact form on our website.
by Bill Miller | Mar 1, 2021 | Blog, Medicaid, Medicaid Planning, Medicaid Qualification
A change in government inevitably means changes in legislation and the new administration is no exception. On his first day in office, President Biden signed ten executive orders which address a range of topics including vaccine production, testing, and access to healthcare. One, entitled “Executive Order on Strengthening Medicaid and the Affordable Care Act” is of special relevance to long-term care planning—a subject which concerns everyone, especially as Covid-19 continues to threaten communities.
Medicaid-Specific Changes
The central message of policy introduced by the new administration is that Medicaid will operate as a cornerstone of the Affordable Care Act and, according to Jocelyn Guyer, managing director at Manatt Health, “a primary vehicle for coverage for people, particularly during the pandemic.” This will be achieved in two principle ways.
First, states given ten-year expansion waivers which exempt them from certain provisions of federal law in state Medicaid programs may see those revoked. In turn, these states could receive increased federal funding aimed at expanding the program. Areas where significant gaps in low-income coverage exist are the most likely to be affected by such shifts in policy.
Second, the new administration is likely to act against block grants approved by the previous administration. These grants, which permit states to transform their Medicaid programs into demonstration projects that seek to develop alternative coverage options stand in the way of Medicaid’s expansion.
What Does This Mean for Individuals?
None of the changes mentioned have yet become policy and yet the Biden administration’s priorities are clear. Access to Medicaid looks set to expand and policies that undermine protections for patients with pre-existing conditions, create barriers to coverage, or reduce affordability will likely be eliminated. This means that even more so than before, Medicaid is the best way for most US families to gain protection from the crippling costs of long-term care.
The sooner you begin planning, the easier it is to ensure you qualify for Medicaid when you need it. After all, one aspect of the program that is sure not to change regardless of who sits in the Oval Office is the five-year lookback period employed to dissuade applicants from making inappropriate gifts or transfers for the purpose of meeting Medicaid’s asset and income limitations. This rule means that individuals who strategically shuffle around finances within the five-year period preceding their need for Medicaid are subject to a penalty period inhibiting their access to the program. If planning begins more than five years prior, however, access can be assured.
There is nothing wrong with arranging assets to make sure you are covered in your golden years. As a rule of thumb, in 2021 an individual must have income less than $2,382 per month and no more than $2,000 in in assets to qualify for nursing home Medicaid. While these limitations do not count an individual’s house, they are nonetheless stringent enough to exclude most middle-income families. Nonetheless, most middle-income families will struggle to pay the average $8,700 monthly cost of nursing home care and so planning to ensure you aren’t stuck with such a bill is crucial.
At Miller Estate and Elder Law we offer free estate planning and asset protection workshops designed to educate clients about how best to plan for their individual long-term care needs. We also bring years of experience to the planning process, itself, and so whether you are looking to get started or simply learn more about how Medicaid is changing in 2021, don’t hesitate to give our office a call at 256 251-2137 or contact us through our website.
by Bill Miller | Feb 19, 2021 | Blog, Estate Planning
Estate plan planning documents are like pieces furniture: everyone needs them and as you age, the pieces you collect tend grow in number and relative importance. An eighteen-year-old college freshman, for instance, might only own an Ikea bed and dresser set because that is all they require; likewise, their estate plan may only consist of a healthcare directive and durable financial power or attorney. A middle-aged adult with kids, on the other hand, will own enough furniture to fill a home and, similarly, a full suite of estate planning documents. A person approaching their twilight years, meanwhile, will have more furniture than they know what to do with and, if they have planned properly, more estate planning documents than they had earlier imagined needing.
The similarity between estate planning and furniture goes further than the fact that your collection of both grows with age, though. Another commonality is that every once in a while, both require an update. After all, furniture wears out or goes out of style and, in a sense, estate planning documents do the same. It could be, for instance, that five years ago you thought your ex-spouse’s name looked good on your will but now you think otherwise. Similarly, it may have been all the rage back in 2008 to make substantial gifts in order to qualify for the federal estate tax exemption but not as popular to do so in 2017 when the limit was raised.
The long and short of this comparison is that an estate plan is no more a one-time investment than a furniture set. Your need for both evolves over the years and with this evolution comes the need to revisit what you have.
When to Update Your Estate Plan
In general, it is wise to revise your plan every three to five years or any time a significant life event occurs. Such events might include the following:
1. A new marriage.
2. A divorce.
3. The death of a person named in your estate.
4. The arrival of a new child or grandchild.
5. Your assets or liabilities change.
6. You move to a new state.
Another time your estate plan requires updating is when a new administration takes office as change in government inevitably means change in federal estate planning law.
Changes Proposed by the Biden Administration
1. Lowering the Federal Estate Tax Exemption
Under President Trump, estates valued under $11.7 million were exempt from paying federal estate tax. The new administration has floated the idea of lowering this bar to $5 million or even $3.5 million. While most middle-income families will not be affected by this change, those with greater assets will and should therefore talk to their attorney about updates to their planning.
2. Eliminating the Step-Up in Cost Basis Rule
“Cost basis” refers to the amount originally paid for an asset and is the basis used to determine how much capital gains tax is owed on the asset should it appreciate in value. Under current legislation, when an asset is passed on through inheritance, its cost basis is stepped up to the current market value such that should a beneficiary sell the asset immediately, no capital gains tax need be paid. President Biden may eliminate this provision, a move which would affect everyone no matter their income bracket.
Detailing how best to respond the changes the new administration may implement or those life may throw your way is an individual matter. Each person’s family and financial situation is unique, after all.
Should you have questions about how you might best respond to changing legislation or changing life circumstances, do not hesitate to give our office a call at (256) 251-2137 or reach out to us via our website.
by Bill Miller | Feb 8, 2021 | Blog, Elder Law, Estate Planning
The holiday season is now officially over, school is back in session, and 2021 is off to the races. As routine sets in, now is a good time to look back on the past year, think about what you may have learned, and set that knowledge in motion to ensure this next year is better. Ask: If this were January 2020 all over again, what would I do? Alongside buying up Tesla, Amazon, and Etsy stock (Etsy? Yes, Etsy), moving to the country, and stockpiling hand sanitizer, finally getting that estate plan in order should be on your list. After all, 2020’s big takeaway was that being prepared is paramount because nobody knows what tomorrow may bring.
Getting Started on a Plan
While your plan’s composition will depend on your personal, family and financial situation, foundational documents always include a Will, Advance Medical Directive, Living Will, and Financial Power of Attorney. Whether you go the Trust-Based or Will-Based route will determine whether you sign a Last Will and Testament or a Pour Over Will together with a Revocable Living Trust. If that all sounds like a lot to absorb, it is. But don’t worry; you don’t need to worry about any of it.
An experienced estate planning attorney will do the work of determining the composition best-suited to your needs and goals. They will explain each element and its purpose and will work with your input to ensure your plan is the best possible fit. Instead of thinking about documents, then, you need to think about the following:
1. Your Net Worth
The first step to launching a plan is figuring out what it will include. This means totalling the value of bank and investment accounts, personal property, retirement plans (401ks, IRAs), life insurance benefits, business interests, and real estate and then subtracting the total of your liabilities. As you do so, you should also list any items of sentimental value and make note of passwords to your online accounts.
2. Your Family’s Needs
Step two in the estate planning process is sitting down with loved ones and chatting about needs and goals. This is the time to address such delicate issues as unequal inheritances (and why fair doesn’t always mean equal), sentimental items, retirement goals, and long-term care wishes. It is also the time to determine the people best-suited to serve as executor, medical power of attorney, and financial power of attorney. In having this chat, nothing need be finalized; instead, the goal is simply to get everyone on the same page.
Once you have taken care of these two preliminary steps, the hard work is done. From here, you pass the ball to a qualified, trusted attorney. In conversation with you, they will assess all of the information you have gathered and get to work designing a plan which will you ensure you peace of mind not only for this coming year, but for many years to come.
If finally getting your estate plan in order is on your 2021 to-do list, do not hesitate to give us a call at 256-472-1900, register for one of our workshops, or send us a note through our website.
by Bill Miller | Feb 1, 2021 | Blog, Elder Law, Estate Planning
On Friday, December 11 the Food and Drug Administration (FDA) approved Pfizer’s Covid-19 vaccine for emergency use. Over the next week, an initial shipment of 2.9 million doses will be sent around the US and highly vulnerable people will begin to breathe easy for the first time in almost a year. This wonderful news brings nation-wide relief and yet it comes with the lurking danger that we forget the lessons Covid-19 has so rudely taught.
Everyone has heard the age-old adage that you never know what tomorrow may bring and that prevention is the best medicine and yet for many, it took a pandemic to grasp the profound truth of these statements. Covid-19 ravaged (and continues to ravage) communities, provoking unexpected deaths and causing thriving businesses to shutter. Individuals have been able to do little beyond wear a mask, maintain social distance, and plan for the worst while hoping for the best.
If it is true that most Americans will be vaccinated by June, masks and social distancing will soon be a thing of the past but the importance of planning will remain—especially for the aging and the vulnerable. After all, even in a post-Covid world, you still never know what tomorrow holds. Having an estate plan in place means that while you cannot control the future, you can ensure your life’s work is protected and your family is secure.
Four Estate Planning Tips for Seniors (And Any Other Mortal Adult)
1. Start Now
As obvious as this one may sound, its importance cannot be overstated. Not only has the future not yet been written but many of the most powerful estate planning legal instruments work best if employed with foresight. Ensuring you qualify for Medicaid is a prime example. Some 70% of folks over 65 will need long-term care services in their remaining years and yet most will neither be able to shoulder the cost nor qualify for Medicaid. Advance planning provides a solution but because Medicaid employs a five-year look-back period when assessing candidates, time is of the essence.
2. Talk to Family and Loved Ones
Estate planning begins with a conversation between you and your loved ones. Should tension and fallings out be avoided down the road, it is crucial that you talk about goals and plans now. List your assets and seek input on how they might be divided, explain any sensitive decisions you might make, and determine who is best suited to serve in the roles of executor, medical, and legal power of attorney.
3. Seek Out an Experienced Attorney
Fancy Pinterest cookies are a DIY project; estate planning is not. While the internet is rife with websites that offer low-cost will, power of attorney, and other legal documents, these services do not keep up to date with constantly changing legislation and are rarely state-specific. While failed cookies might mean a ruined evening, a failed estate plan can mean years of ruinous consequences for your life’s work and your loved ones.
4. Think Long-Term
A DIY kit may seem like the obvious choice at a time when in-person meetings are limited and the need for a plan is urgent, but such short-term thinking often creates problems down the road. A poorly-drafted plan can result in unintended tax consequences, the bank refusing to accept your power of attorney, failure to properly exclude family members you wish to disinherit, and a host of other issues. If cognitive decline sets in and your medical power of attorney is improperly drafted, loved ones may have difficulty advocating for you when you need it most. And should you die before rectifying these issues, the financial and emotional cost of doing so can be enormous. While there is no denying that working with an experienced estate planning attorney is an expense, in the long term it is often cheaper than not doing so.
At Miller Estate and Elder Law we are only interested in working with clients to whom we can bring value. That means that if we chat and we determine we cannot be of assistance in your case, you will not see a bill. If we can help you secure a brighter, more peaceful future, however, it would be our pleasure to work together.
Should you like to learn more or gain greater insight into our practice, check out our free workshops, which are currently available both live and in pre-recorded format so that you can enjoy them from the safety and comfort of your own home. You can also contact us to set up your consultation.
