Monday, March 27, 2017

What's Mine is Yours and Yours is Mine: The Case for a Prenuptial Agreement

Erin A. Smith, Esq.
You’ve decided to get married. For years prior to meeting your sweetheart, you’ve grown a successful business. Perhaps you inherited a large sum of money from a relative. When you enter into marriage, it is important to discuss financial assets, debts, emotional issues tied to money, philosophy on investing, etc. If you have significant assets or liabilities, it is even more important to plan ahead for both death and a potential divorce. If you discuss the option of entering into a premarital agreement, it can bring many important financial issues to the surface.

Under Virginia law, it is nearly impossible to design an estate plan that leaves out your spouse as a beneficiary. There are a number of allowances and elections that a surviving spouse can claim against his or her deceased spouse’s estate, even if the deceased spouse did not provide for the surviving spouse in his/her will. In the case of a second marriage, especially where there are children from previous unions, this could be an issue. However, you can address these issues before the marriage in a premarital agreement where both parties can waive these statutory entitlements.

In settling divorces, Virginia judges rely on the statutory requirement to divide marital property equitably. First, the court must distinguish the different property rights. “Marital Property” is jointly-owned property and other property acquired by either party during the marriage from the date of marriage to the date of separation. “Separate Property” is property owned by one party prior to the marriage (and is kept separate through the duration of the marriage), property that was acquired after date of separation, or inheritance or a gift to one of the parties. “Hybrid Property” is separate property that has increased in value during the marriage due to contributions made by either party. This type of property could be considered part separate and part marital or purely marital. You can see how these classifications could lead to confusion, controversy and litigation.

Once the marital property is identified, the court can order property sold, order transfers, and grant monetary awards. The distribution that the court makes does not have to be equal. The court uses statutory factors to decide a fair distribution of the assets. The considerations include: monetary and non-monetary contributions of both parties, relative earning potential of either party, length of the marriage, age and condition of parties, tax consequences … to name a few.

Virginia’s Premarital Agreement Act allows parties to waive these rights upon death or divorce of their spouse by written agreement. A good premarital agreement clearly spells out the nature of their property and how they wish for it to be allocated in the event of divorce. Instead of relying on the discretion of a judge who barely knows you and your spouse, consider designing your own post-divorce arrangement. While it might be an unpleasant conversation, it will force you to talk about potential issues with money that may affect your new partnership. It will also provide asset protection for you both.

Monday, March 20, 2017

The March of Time

Barbara Armstrong, Paralegal
As we enter into spring, I cannot help but notice how time slips by.  Didn’t we just celebrate Christmas, and here we are ready to celebrate Easter?!

Working for an estate planning and elder law firm, I often receive calls from children of elderly parents who are concerned that their parents do not have any estate planning documents in place or have some major health issues which may deplete their assets.  The children are usually asking how their parents’ assets can be preserved in the event that they need long-term care in an assisted living facility or convalescent center.

By the time we receive this call, it may be too late to do anything about asset protection.  For example, Medicaid has a five-year look-back period on any transfer of assets, which means that an individual applying for Medicaid assistance to pay for institutional care will be penalized based on the assets that are given away during that time.  In contrast, anything gifted away before this five-year clock starts is off the record, no matter the size of the gift.  There are some measures that can be taken, and it is extremely important that the interested parties meet with an attorney who is knowledgeable and experienced in long-term care planning to take advantage of all possible asset-protection options.  The attorney would be able to look at the individuals’ situation and can assist in creating and implementing a plan to attempt to protect as much of clients’ assets as possible.  Any attorney fees that are associated in the long-term planning process can be counted in the asset spend-down process that Medicaid applications often require.

The bottom line is that everyone should have an estate plan in place before the need for long-term care planning takes effect.  No one wants to think that they will need long-term care, but the fact of the matter is the number of elderly individuals in our country continues to grow, as does the need for institutional assistance as they lose their independence.

So, as we enter into Spring 2017, have a talk with your parents – or each other – and make that call to an elder law attorney to discuss any concerns that you have and how best to prepare for the future.  

Monday, March 13, 2017

Life-or-Death Differences Between DNRs and Living Wills

Teresa M. Clemons, Office Manager
Make no mistake … there is a HUGE difference between a DNR (Do Not Resuscitate) and a Living Will.

My dear 82-year-old friend was admitted to the hospital with some stomach issues by the attending ER physician.  Before moving him to his room, hospital staff members came to ask him a couple of questions.  Their last question: do you have a DNR?  Not completely understanding, he said, “If I start to go, don’t bring me back.  I would never want to live hooked up to tubes or as a ‘vegetable.’” This “vegetable” status is what came to his mind when thinking about a “failed” resuscitation.  They explained a bit more, “If you go into cardiac arrest, we will not use the paddles or CPR to revive you.”  Again, he connected that to living in a state that he would never want to be.  He said that he signed the form, thinking that the matter was resolved, and they put a wrist band on him with “DNR” in bold, red letters.

In hearing about this, I told some of my co-workers about his situation. They mentioned that DNRs, especially for a relatively healthy man, are definitely not the norm.  I made a few calls and discovered that my friend had a Living Will. This document states that if he were to enter a persistent vegetative state with NO chance of recovery, he did not want any heroics to keep him alive. Instead, in that situation, he would just want pain management and comfort care.  However, for the Living Will to go into effect, the patient would first need to be in a vegetative state.

This is a HUGE difference from the DNR he had signed.  Compare two patients, one with a DNR, one without.  Both patients are relatively healthy, but have a heart attack out of the blue.  The non-DNR patient would receive routine health-saving treatment, and would therefore have a good chance of recovery.  The DNR patient, however, would not receive this treatment and would be left to die, despite the strong likelihood that he could return to a relatively normal lifestyle if the treatment had been administered.

My friend’s daughter called the hospital, told them the situation, and asked them to take off the bracelet.  The nurse told her that it is not that easy.  The daughter quickly went to the hospital with a copy of his Living Will.  The staff took it and left the room. Again, the daughter told them to take the bracelet off, and my friend requested this as well.  Finally, the nurse asked everyone in the room to be silent.  She looked directly at my friend and asked if he was freely requesting this change because this was his wish, and not because he was being told what to do.  He said yes, and clarified that he thought the ER staff had been referring to the terms of his Living Will when he signed the DNR form.

Please make yourself and your loved ones aware of the major differences between a Living Will and a DNR.  Fortunately, the confusion was resolved quickly enough for my friend so there was no harm done.  However, this could easily be a real “life or death” mistake.

Monday, March 6, 2017

Making Aging More Comfortable with Technology

Cathy Sears, Law Clerk
We all know that advances in medicine have made it possible for people to live much longer than in past generations.  However, as wonderful as a longer life is, it is also important to ensure that individuals have the best possible quality of life in the extra time that he or she has thanks to medical advancements.

In the past month alone, I have learned about at least two developments in making advanced age more bearable. 

First, I saw a heartwarming video showing the impact that music therapy can have on an individual with Parkinson’s disease.  This disease of the nervous system causes a loss of mobility in patients, rendering it difficult for them to walk.  However, there is evidence that playing music can help increase a patient’s mobility.  By concentrating on certain rhythms, Parkinson’s patients like the man in this video may find it easier to regain some control over their movements.  Click here to watch the video:

A few days later, I saw a second development which also deals with increasing seniors’ mobility.  Poor posture and increased achiness are common complaints about aging.  Therefore, the company in this video is in the process of creating and selling a redesigned walker that would help its user maintain good posture.  The walker’s design is intended to help reduce neck or back pain that may accompany the use of regular walkers.  Its higher handles prevent the hunched posture that so often plagues people who use traditional walkers.  Though this particular model is not yet available, the company hopes to begin selling it sometime in 2017.  Click here to see an infomercial about this redesigned walker:

Both of these videos came to my attention through yet another source of technology: Facebook.  Social media can certainly be a valuable tool to share information – if we at TPC didn’t think so, we wouldn’t be blogging, after all!  However, many of the people who could benefit from these innovations may not have access to a computer and likely do not have a significant online presence.  Therefore, it is important for those of us who use the internet frequently to tell our parent, grandparent, friend, or neighbor about any technological updates that may make them more comfortable or enhance their quality of life.

Most of us probably already do this intuitively.  However, it is equally important to ensure that the information we are giving to our loved ones is reliable, especially if that information relates to a product that can allegedly fix debilitating problems.  As we discussed in our blog last week (see below), there are many scams designed to prey on individuals when they are at their most vulnerable, whether due to concern for a loved one or a physical or cognitive ailment.  Therefore, take a cue from the scientists who have helped increase the human lifespan and do your research.