Wednesday, October 30, 2019

Happy Fall, Y'all!

RaShanta Jennings
Legal Assistant

Time to grab your jackets, boots and cozy socks: Autumn has arrived! I absolutely love when the season changes. Out of the four seasons, I have to say that Fall is my favorite. There are so many reasons to absolutely love this season, the weather is near perfect, and a couple of my favorite holidays (Halloween and Thanksgiving) are celebrated.

For me, this time of year is when I get to pull out my crock-pot recipes; plan fun, crafty, fall-ish things with my kiddos; and spend some time in my kitchen baking a few of my favorite desserts such as cobblers, cheesecakes and everything pumpkin-flavored! Needless to say, cheat days in my diet are most common during the fall. During this time of year, the comfort food is so rewarding. Believe it or not, it’s the perfect, yet easy way to entice the entire family over for dinner, not just on Thanksgiving Day. Sharing these moments with family and indulging in comfort food and desserts allows you to reminisce on the most enjoyable periods of your life. As they say, some of the greatest pleasures in life are simple, and what could be as simple as cooking a delectable meal and spending time with those you love most. I truly hope your Autumn is a memorable and happy time. Happy Fall, Y’all! 

Check out a few of my favorite fall recipes below!

Wednesday, October 9, 2019

It’s Never Too Early for Life Care Planning

Catherine E. Sears, Esq.

I regularly meet with clients who would be perfect candidates for TPC’s Life Care Planning program but just aren’t willing to accept it yet. For those who don’t know, Life Care Planning is a holistic approach to the concerns of aging that has the law firm at the center of your aging process. So often, families who are helping a loved one through the aging process make the same common mistakes.

Perhaps the estate planning documents are not in place, or, even if they are in place, the fiduciaries in the documents do not properly understand their role. Maybe long-term care planning or asset protection planning starts too late, many years after a diagnosis occurs. There might be misunderstandings regarding what the senior’s rights are when a hospital is getting ready to discharge him after a medical event, or a long-term care facility is getting ready to admit the senior as a resident. This might cause the senior’s care to be compromised, or for the senior to be moved from one location to another far more than is necessary, which can be very detrimental to the senior’s health. Or, perhaps the senior is experiencing isolation (and, therefore, more rapid cognitive decline) because she is trying to “age in place” in her own home, but has lost the ability to drive. Maybe loved ones are becoming burned out or are compromising their own health and wellbeing by trying to provide in-home care for the senior.

With a Life Care Plan, the law firm can help. Our Elder Care Coordinator, who has a background in geriatric social work, will visit with the senior and her family regularly to get to know the senior’s unique goals and wishes for her aging process and make sure that these goals are not compromised despite whatever changes might happen in the senior’s life. Additionally, the law firm provides the services necessary to ensure that all legal options are explored which could maximize the senior’s quality of life.

Additionally, with a Life Care Plan, the law firm can serve as the senior’s decision-maker for legal, financial, and medical affairs, which provides great peace of mind if the senior never had children, or is estranged from his children, or doesn’t believe that his children would make good decisions for him. Alternatively, if the senior does have family he would trust to make these decisions for him but the family members live far away or do not have sufficient time to devote to attending medical appointments or making regular visits, the Elder Care Coordinator can make these visits and report back to the family member to allow her to make an informed decision.

When I tell clients about Life Care Planning, they are usually excited about the program and feel it would be a good fit for them. However, they often tell me that they don’t need Life Care Planning yet because they are still able to take care of themselves and make their own decisions. However, this doesn’t mean that Life Care Planning is irrelevant to them; it actually means that it is the perfect time to begin Life Care Planning.

To utilize the program best, you should clearly still be able to make your own decisions. An important benefit of the program is that you have already created a plan, while you are healthy, to govern what decisions will be made while your health declines. If you wait until your health or your cognition begins to decline before starting Life Care Planning, there are still ways we can help, but you are limiting our ability to help. By allowing us to get involved once decline has already begun, you may already have compromised some of your standard of living or may already have fallen into some avoidable pitfalls. Just as you purchase a life insurance policy long before you think you will die, or you might purchase long-term care insurance many years before you anticipate needing long-term care, you can best utilize Life Care Planning by signing up before you need any help.

So, even if you don’t think you need Life Care Planning yet, consider scheduling a free Life Care Planning consultation with me and with our Elder Care Coordinator so you can learn more about the program and all the benefits it can provide you. Additionally, contact our office to RSVP for a special seminar about Life Care Planning on November 14th at the Holiday Inn & Suites Historic Gateway on Bypass Road. We look forward to seeing you soon!

Friday, September 13, 2019

Caregiver Agreements

Catherine E. Sears, Esq.

Just as you have the opportunity to choose your own mechanic or your own attorney, a Medicaid applicant has the opportunity to choose who to hire to provide caregiving services. Of course, the applicant may choose to hire a professional in-home caregiving company; however, if certain criteria are met, the applicant may, alternatively, hire a trustworthy family member to serve as a caregiver. The applicant and the family member might understand between themselves that the family member would ordinarily provide such caregiving services out of the goodness of her heart for no cost, and that being part of a family means helping your loved ones without expecting anything in return.
However, by paying a family member to serve as a caregiver, the Medicaid applicant can still spend-down his resources in order to qualify for Medicaid, and, instead of having that money go to a professional company, can keep the money in the family. Additionally, even though this money will now legally belong to the family member and not to the Medicaid applicant, there can be an acknowledgement within the family that these funds are still the applicant’s money because the family member would have been willing to provide assistance free of charge.
Once a senior actually receives long-term Medicaid, all of her income, with the exception of the $40.00 “personal needs allowance,” will go towards paying the cost of her health insurance premiums and the patient-pay responsibility at the long-term care facility. Therefore, any other expenses which go beyond the scope of the cost of the long-term care facility (including new glasses or hearing aids, new clothes if the senior’s clothing size fluctuates due to her medical condition, tasty snacks to supplement the food provided by the long-term care facility, etc.) must be paid from the personal needs allowance or out of the goodness of family members’ hearts. These expenses can add up, and having family members pay for these “supplemental needs” out of their own pockets can have a significant impact on family members’ own finances. However, if a family member had previously been paid for serving as the senior’s caregiver, then that family member can use that “extra” money to pay for these supplemental expenses instead of using her personal assets. Then, if there is any money left over after the senior dies, the remaining funds can be distributed to the senior’s family members to pass some assets on to the next generation.
There are some practical factors to consider in determining whether a caregiver agreement between a parent and a child is an appropriate strategy for your client. First, the caregiver child must be trustworthy to maximize the likelihood that he will, in fact, use these funds for his parent’s supplemental needs. It is wise for the caregiver child to create a separate bank account and deposit the funds into that account instead of commingling the assets into an existing joint account with a spouse. It is also wise for the caregiver child to update his own estate planning documents to say what will happen to the assets in case the caregiver child predeceases his parent. Additionally, because the money from serving as a caregiver will be considered earned income for the caregiver child, he will need to report and pay income taxes on the income. Since the money will legally belong to the caregiver child, there will be gifting ramifications for any money he returns to the parent during the parent’s lifetime and any money he gives to his siblings or other beneficiaries after his parent’s death. Depending on the amount gifted to a particular individual within a calendar year, he may need to file a gift tax return, and any amount gifted could create a penalty period if the caregiver child himself needs long-term care Medicaid within five (5) years of making the gift. If the caregiver child is also serving as Agent under the parent’s durable power of attorney or as Trustee of the parent’s revocable living trust, then it is also important to make sure that the power of attorney and/or trust document give the caregiver child the power to engage in self-dealing.
There are also a number of factors that need to be met to ensure that a caregiver agreement between a parent and a child will be treated as compensation for services and not as an uncompensated transfer which will create a penalty period. The rules that govern these requirements are extremely detailed, so it is important to have an experienced elder law attorney draft a precise, custom-tailored contract for your family to avoid accidentally failing to meet one of Medicaid’s many criteria.
If a family member is providing caregiving services to a Medicaid applicant, this can be an extremely effective way of transferring assets to such family member without creating a penalty to the applicant. However, for this strategy to work correctly and not penalize the Medicaid applicant, it is imperative that all parties treat the arrangement as the formal, legal matter it is and not as an informal arrangement simply because it involves family members.

Friday, June 28, 2019

Mosquito Magnets

Teresa M. Clemons, Office Manager

My son and I are both “mosquito magnets”! We can be sitting outside with my husband and the only ones getting bitten … are us! Bites get better within a few hours for most people. But if you’re highly sensitive, like we appear to be, symptoms can last for several days. With years of itching and scratching, I wonder: why us?

Studies suggest that about twenty percent of people are "high attractor types" who are especially appealing to the female mosquitoes seeking out blood for the extra protein they need to lay eggs. There are 150 different species in the United States of these blood-sucking creepy crawlers.

Is it the color of our clothes? Could be. Mosquitoes have discerning fashion taste. Or at least, they're more likely to spot you as a target if you stand out from your environment. Dark colors, especially, will attract more of the insect. 

Do we squirm too much? Could be. The more you move, the easier you are to identify as a living receptacle bursting with delicious blood. 

Are we too hot? Could be. As they get closer, it’s your body heat that draws the mosquito in. 

Do we drink too much? Could be. People are not sure how mosquitoes sense the presence of ethanol, but drinking as little as one can of beer will significantly increase the attention you receive from the pests. 

Is it genetic? Could be. A very high percentage of your susceptibility to mosquito bites has nothing to do with what you're drinking or wearing, it's genetic.  The composition of your skin bacteria that naturally and healthily exists can be the attractor, as can acid and other substances present in your sweat.  

Is it the wrong blood types? Could be.  People with blood type O are more prone to mosquito bites, than those with type B, with type A folks bringing up the rear. Picky little bugs, aren’t they?

Well, we fall into most categories so, mystery solved…

Monday, June 10, 2019

The Family Limited Partnership

Helena S. Mock, Esq.
Estate Planning is a complex area of the law because it deals with so many different issues, from asset protection to taxation and almost everything in between. There are a variety of different legal strategies and tools that have been developed and are regularly used to assist in reducing the value of an estate for estate tax purposes while maintaining control and keeping the assets in the family. 

One of these strategies is the use of the Family Limited Partnership (“FLP”) or Family Limited Liability Company (“FLLC”).  With this strategy, a property owner can give away the underlying equity interest in an asset while still retaining managerial control over that asset.  FLPs are most commonly used as vehicles for making gifts of interests in real estate and family-owned business interests.  With an FLP, you title assets in the name of the FLP and then gift partnership interests in the FLP to others. It is like giving away pieces of a pie. However, because each piece is valued individually, the sum of the parts does not necessarily equal the whole. The fractional ownership of property by multiple individuals allows for the artificial “discounting” of the value of each individual’s share upon their deaths, thereby reducing estate taxes. 

But why are discounts for these interests available? Very simply, it’s because no buyer would pay full price for a fractional interest in a closely-held FLP since profits are shared with the other partners, and the buyer may not have control over how the FLP is managed or when it will be dissolved or the assets sold.  The overall value of the property is only artificially diluted by this process, however, because at any time, the partners can agree to dissolve the FLP, and upon termination of the partnership, the assets almost magically return to their full underlying value.

This can also be a way of giving interests in property to beneficiaries who may not yet have the ability to manage assets wisely.  Since the FLP allows for centralized management, the individual owners of the separate interests have little to no say in management, development, or sale of partnership property. It is also more difficult for creditors to get at the assets when they are in the FLP than if they were held outright by the beneficiaries. In fact, many experts believe this one document has more important lawsuit and asset protection features than any other estate planning strategy. It can be the fortress protecting your hard-earned wealth.

The result of this strategy is that the family’s assets have greater protection from a personal judgment against any family member. If the limited partnership had not been used, all the family’s assets, including the business or property in the FLP, would have been lost. The laws protecting partnership assets from the reach of creditors of individual partners have been around for many years. In fact, these provisions date back to the English Partnership Act of 1890 and were later adopted by the Uniform Partnership Act which has been the law in America since the 1940s.

There is always the possibility that a judge may not like the fact that a legitimate creditor can’t get paid because of the partnership rules and may take it upon himself to find a way to satisfy the judgment. Perhaps in close cases, a judge may rule that the partnership was set up to defraud creditors and thereby ignore the protection. Or the legislature may decide to change the law.  Several years ago, the IRS cracked down on this strategy; however, more recent cases have upheld FLPs as a viable estate planning strategy when they are properly structured and administered.

While FLPs and other advanced planning strategies may not be for everyone, they can be a good tool to minimize estate taxation and maximize asset protection. However, you should seek the advice of an experienced estate planning attorney in determining whether an FLP is appropriate for you and for assistance in setting up and administering the FLP.

Wednesday, April 17, 2019

The Ethical Attorney

Meredith H. Maust
Associate Attorney
If I were to say “ethical attorneys” in front of a group of people, I am likely to hear a joke or two that will, inevitably, conclude with the idea that this phrase is an oxymoron. Oh, the discomfort that comes when I casually remind the jokester that, not only am I an attorney, but not all attorneys are corrupt.

So, you have suspended reality to consider that not all attorneys are corrupt, but the jokes about attorneys exist because there are unethical attorneys out there. You know the type: lawyers who perform unnecessary tasks to create more billable hours from their clients; those who are dishonest and misrepresent the reality of a case to their clients; those who fail to communicate once they have your retainer; and those who seem more focused on representing their personal interests and financial gain rather than those of the clients’. I am not unfamiliar with attorneys who fall into these categories.

Well, if I can admit lawyer jokes have merit, why is it that I am so unwilling and unable to graciously accept the humorous denigration of my chosen profession?

It is as simple as this: a lot of attorneys dedicate their practice to upholding a tradition of integrity, client loyalty, honesty and a commitment to ethical standards. We work hard to fight for our clients, for an outcome that we believe in and we do so without exploiting the system and those whom we represent. 

We work hard to stay true to ourselves, to maintain our ideals and ethical practice of the law. As such, the generalization hurts. Not all lawyers are created equally. Not all doctors deserve a license to practice medicine, not all mechanics are trustworthy and, well, perhaps I should altogether stay away from commenting on politicians at any level. There are bad apples in every lot, in every profession, but that should not affect those of us who take genuine pride in their commitment to providing the best service to those in need.

Ask an attorney why they decided to become a lawyer. The attorneys with whom I associate will provide a genuine response that has nothing to do with making money. Many of us chose this profession to make a difference and to help others. Many of us have personal reasons for choosing our specific practice area.  These are the lawyers that put time and effort into providing individualized service and attention to clients, who maintain ethical standards of practice despite going up against opposition that pays no heed to the regulated codes of conduct to which all lawyers are required to adhere. It takes true commitment to provide zealous representation of our clients without devolving into the lawyer who condones the unprincipled tactics of unethical opposition by choosing to retaliate with similar practices.

I can admit most attorneys are competitive know-it-alls. We are constantly engaging in some sort of challenge or debate. Whether it is over the interpretation of the law or a simple dispute over the facts, attorneys want to be the one with the answers, want to be right, and want to win. The difference is, there are lawyers who will resort to any means necessary to win and those of us who want the win for our client; those of us who believe we can achieve a positive outcome without sacrificing our integrity.

I advise people looking for legal representation to meet with a few different attorneys before retaining counsel. You will be able to tell who is a good fit for you and, by reserving judgment, you will find those of us who are here to help.

Wednesday, March 27, 2019

Losing a Loved One

Helena S. Mock, Esq.
Change is always difficult, but a death in the family can be especially traumatic. It may feel as though the world should stop to mourn your loss, but it doesn’t. The world keeps turning, the day still follows night, people around you continue to go about their normal routines as if nothing has happened.  For those suffering, this can seem callus until you realize that your loss is not theirs.
When the loss of a family member occurs, whether sudden or expected, your world can feel as if it has been turned upside down. This loss is combined with the additional burdens of settling the decedent’s estate.  Thus, it is helpful to have a “to do” list handy so that you do not overlook anything in the panic and grief of the moment. The following is a list of “action items” that will help guide you following the loved one’s passing:
  • In the hours immediately following the death, make sure family members have friends or loved ones with them. Arrange care for any children or adults needing assistance.
  • Call the funeral home and clergy to set up appointments to discuss final arrangements. Before the meeting, be sure to check and see if the decedent left behind any memorial or burial instructions.
  • Obtain several copies of the death certificate, at least 5; you can always get more later.
  • Let people know what has happened. Notify immediate family members and close friends. If the decedent was employed, notify his employer and any important business colleagues.
  • In the days immediately following the death, gather the decedent’s important papers, including the Will or Trust, deeds, bank and brokerage statements, tax returns for 3 years prior to death, all life insurance and/or annuity contracts and retirement plan documents.
  • Schedule an appointment with an experienced estate planning attorney – one who focuses her practice in estate planning. Working with someone who is knowledgeable about estate and tax issues will avoid potential problems. The person named as the executor (“Personal Representative”) or trustee should attend this conference.  The employment of legal counsel is an expense of administration. Failing to retain competent counsel can result in the fiduciary being personally liable to the decedent’s estate.
  • The Trustee and/or Personal Representative will then take over the decedent’s assets and finances and manage them throughout the administration period. Be mindful of the Prudent Investor Rule. Just because the decedent held a certain asset does not mean it is appropriate to maintain that asset in the estate; it might be time to restructure the investments.
  • If the decedent was still working, contact his employee benefits department to begin processing any benefits that are due. They will likely need an original death certificate.
  • Contact the local Social Security office. If the decedent was married, his spouse may be eligible for benefits. A disabled child of the decedent may also be eligible for benefits.
  • If there was any life insurance, determine the beneficiaries.  Only the beneficiaries can claim any death benefits (the insurance company will usually refuse to speak with anyone other than the beneficiary.)  Each insurance company will require an original death certificate in order to process the claim.
  • If the decedent was ever in the military, contact the Veterans Administration to see if surviving family members are eligible for any benefits due to the death.
  • Keep a record of any expenses you or anyone else pays on behalf of the estate (funeral expenses, qualification fees, etc.) for purposes of reimbursement and possible deductions on the estate or trust tax returns.  Do not pay any debts until you are sure the estate is solvent enough to be able to pay all debts.
  • Inventory the decedent’s assets and note how each asset is titled (individually, joint with someone else, in trust, etc.).
  • File the decedent’s final personal income tax return (IRS form 1040) and corresponding state income tax return, if any, by April 15th of the year following the year of death.  A tax return for the estate and/or trust will also be due but may be filed on either a calendar or fiscal year. Consult with your attorney to determine which is best.
  • Do not change the title to assets, claim any benefits, or roll-over any retirement accounts without consulting with your estate attorney. Changing a title can have unexpected income, estate, and property tax consequences.
The process of administration of a loved one’s trust or estate is complicated considerably by emotion. In addition, there can be difficult and complex family and financial issues that arise during this time. However, there are resources available to help you navigate through the rough waters.  Most important, don’t delay. Although normally there is nothing that needs to be done immediately, delaying too long can cause problems which may be difficult or impossible to fix later.