National Grandparents Day

September 8, 2016

generations-handsSince 1978 the United States has celebrated grandparents on National Grandparents Day.  The day falls on the first Sunday after Labor Day.  This year, National Grandparents Day will be celebrated on September 11th, a day when many will pause to reflect on the terrible and tragic events that occurred 15 years ago in New York, Pennsylvania and outside Washington, D.C.  A day when grandparents may have been taken from their families or when grandparents became the solid foundation for those who lost parents.  Thus, this year in particular National Grandparents Day allows us to remember the impact grandparents may have had in our lives, but also reminds us the time marches on, and that the memories and stories that our elders have will be lost unless captured by the next generation.   Those memories and stories may help plan or shape our journey.  So in recognizing grandparents on National Grandparents Day, it is a chance to bring the generations together to build a legacy.  What is it that you want your legacy to include?  #GrandparentsDay #Buildalegacy #estateplanning #September11th #NeverForget @bgnthebgn

Facing a Tough Diagnosis – Four Lessons of Gene Wilder

September 1, 2016

flowers-2With Gene Wilder’s death, the family released a statement that revealed to the world that Gene Wilder had died due to complications from Alzheimer’s disease.  The family also stated that Wilder had not wanted to reveal his diagnosis earlier and risk “one less smile in the world.”  In releasing the statement as they did, the family has provided us with a few valuable lessons about planning. 

  1. What should ‘the public’ know?  From the statement, it seems clear that in receiving an irreversible diagnosis, Wilder’s family talked about how to handle the news both publicly and privately.  Families that have received terrible news of a terminal or debilitating illness are aware of the difficulties surrounding such information.  Questions about who should be notified are common as well as discussion regarding how much information should be disclosed.  In addition, the ‘public’ for each person is different.  This means for some only immediate family members while friends, neighbors and colleagues have a less detailed picture.  Immediate family may include certain close friends and may very specifically exclude others.  What about professional advisors?  How much information should they have?  Each of us has various circles and those circles have to be evaluated to determine who should know and what should be known, which is important to clarify to avoid confusion in the dissemination of information.
  2. What is the care plan?   Certainly from a medical perspective there is a prognosis and then treatment plans that are outlined with various degrees of outcomes and complications.  But what about the plan to care for minor children, if necessary?  Or a caregiver spouse or partner?  Who are or will be the caregivers?  Has respite care been discussed for those caregivers?  Are there modifications to a residence that are needed?  What about access to financial information? Should such access be limited or restricted?  Has there been discussion about involving a care manager?  These are just a few of the questions to consider to determining the plan of action.
  3. Your final moments.  Are friends and family present?  Is music played?  Is a spiritual leader, such as a priest, rabbi or pastor present?  Will the final moments be at home, wherever that may be at the time?  The final moments are not only for the person dying, but the family and friends who are part of that passing.  Discussions such as these are key in determining end of life care. 
  4. How to be remembered?  An earlier article outlined six questions to ask surrounding the details of how you want to be remembered.  Providing some information about wishes and desires regarding a funeral or service is a relief for family members because decision-making at this difficult is clouded by emotions and shouldn’t be overshadowed with the thought of “Is this really what was wanted?”

Thus, as many of us remember Gene Wilder and the various roles he played in the movies, we can also pause to reflect on how we would face such tough diagnosis with our family, and when the time comes, be prepared to have the important conversations. #GeneWilder #incapacityplanning #estateplanning #advancemedicaldirective #livingwill @bgnthebgn

Three Key Documents Every College Age Child Needs to Sign

August 25, 2016

ClassroomThe middle of August is a time when families look towards Fall sports, cooler temperatures and the kids going back to school.  For those families with children starting college, this time is fraught will all sorts of emotions, checklists, logistics and large bills.  It is also often a time that parents forget that their little one, who has now grown to an adult, is treated as an adult in the eyes of the law.  Moreover, this is also a time when adult children are not yet entirely independent of their parents, but their parents may not be permitted to help because the child is deemed to be an adult.  Age 18 is the age of majority for pretty much every activity, including signing contracts and making healthcare decisions.  Thus, to avoid circumstances where parents and their children are separated by legal requirements, here are three key documents every 18-year-old should have. 

General Durable Power of Attorney – This document permits the child to name his or her parents to help make financial decisions.  It allows the parents to deal with financial institutions, housing issues, such as speaking with a landlord, insurance questions, like car insurance or renter’s insurance, and generally stand in the shoes of the child, if the child is unable to act.  It also allows parents to speak with the educational institutional, which typically means that grades can be accessed.  This may be a downside for the child and he or she may hesitate to sign the financial power of attorney.  However, most other sources on the subject argue that if the parents are footing the bill for the education, the parents have a right to make certain demands and receive certain information like the child’s grades.  But, regardless of the motive, the discussion surrounding the need for a financial power of attorney should hopefully generate some thoughtful discourse between parents and children regarding how financial transactions and other legal, contractual transactions will be handled.

HIPAA – The Health Insurance Portability and Accountability Act of 1996 (“HIPAA“) regulates the use and disclosure of protected health information.  HIPAA was intended to add a layer of protection for individuals so that their medical history or health status could not be wrongfully used against them.  However, HIPAA brought with it many more hoops to clear in order to receive medical information.  Having a familial relationship, like parent and child, does not get around the requirement that a child has to have given their parents access to their medical records.  So, if a child is in a car accident and ends up in the hospital unable to communicate, if there is no HIPAA release in place, the parents may be left in the dark regarding their child’s status.  A separate HIPAA release allows the child to nominate individuals who can give and receive medical information.  It does not necessarily mean that those same people have a right to make medical decisions.  However, at a minimum, it allows parents to be present.  

Advance Medical Directive – This document permits the child to name his or her parents to make medical decisions.  College is a time when lots of new adventures occur, and sometimes, those adventures go awry.  There are times when accidents do indeed just happen, like car accidents or a slip and fall.  In those circumstances, if a child is at a medical center on campus or off campus, the parents have no right to find out what is going on and to help make decisions unless their child has given them access and authority to do so.  Access can be granted by way of the HIPAA release mentioned above, which could also be a part of the Advance Medical Directive.  But, actual authority to make decisions is only granted by way of a Advance Medical Directive or healthcare power of attorney, if the child is unable to communicate.  Without it, parents may be able to be present, if a HIPAA release is in place, but have no right at the decision-making table.  Thus, similar to the financial power of attorney, the discussions surrounding the need for a healthcare power of attorney should help enlighten parents and children about medical wishes and desires.  It is also a good time to talk about extraordinary measures if a catastrophic event occurs, which may lead to conversations supporting the creation of a Living Will (a fourth document).  Although, for an 18-year-old, it may be too difficult to focus on that specific possibility.

So, if you are part of a family with college bound children, having these key documents in place will help avoid added stress during emergent situations, which is when these documents are most likely necessary.  Moreover, both parents and children get to plan their journey during life’s next chapter.  Therefore, speak with your professional advisor about getting these important documents in place, and if your child has already left, Homecoming, Fall break and Thanksgiving are right around the corner!  #estateplanning #collegebound #incapacityplanning #powersofattorney @bgnthebgn

The Increase of Crowdfunding in Estate Planning

August 18, 2016

Crowdfunding seems to be everywhere, but does it have a place in estate planning?  Wikipedia defines crowdfunding as “the practice of funding a project or venture by raising monetary contributions from a large number of people…”  Thus, it seems that in the beginning crowdfunding was a form of venture capitalism with the public at large.  Websites like Kickstarter and GoFundMe allowed for individuals to present an idea and raise capital to get the project off the ground.  However, in relatively recent history, crowdfunding has taken on a prominent role in response to any tragedy.  Now it seems that if there is a sudden illness or death, crowdfunding appears to help defray costs.  But for those both using or donating through a crowdfunding website, there are a few questions to consider.

Are there any tax consequences to a donation? – In general, giving to a fund that benefits an individual is not a taxable gift so long as you stay below certain thresholds.  An individual can give up to $14,000.00 per year to each of any number of different people under current law without incurring any gift tax consequences.  Typically in crowdfunding, the fund is set up and smaller contributions are requested or simply contributions of any amount, big or small, are accepted, so hitting that threshold is not an issue.  Also, keep in mind that your contribution to such a fund is typically not tax deductible.  If the contribution is not to a public charity or other qualified tax-exempt organization, then you are not otherwise allowed to deduct your contribution from your personal income taxes.

Are there fees associated with crowdfunding? –  The answer is it depends on the site being used to support the fund.  Kickstarter applies a 5% fee and then there are processing fees of approximately 3-5% if the campaign is successful.  GoFundMe charges a 5% fee and then approximately an additional 3% processing fee.  The fees are charged against each contribution.  The donor or person contributing is not charged the fees, but the person receiving the funds does not receive 100% of the monies contributed.  Thus, if I give $100 to a GoFundMe fund to help pay for costs associated with the illness of a friend’s child, my friend will only see $92 of my gift.   This reality then begs the question as to whether it is simply better to write a check directly to my friend.  That way my friend receives $100.  Of course the theory behind crowdfunding is that if everyone else is contributing then you will want to do so as well, and therefore, perhaps the fees are worth it if in the end more monies are raised.

How do you determine that the request is legitimate? – You need to be careful that you are going to the actual fund page.  Spoof pages can pop up or emails that look legitimate can arrive in your inbox. You may click through and donate not realizing that you are not donating to the actual cause or person that you intended.  Thus, you should take care to ensure that the URL for the fund that you are using is from a source you know and trust.

Overall, it appears that recently during times of hardship and tragedy, crowdfunding has become a way that people can express their sympathy and/or support for others.  I would expect that any monies received are welcomed and appreciated, but may not be enough.  Furthermore, crowdfunding is not a substitute for financial and estate planning where questions relating to life insurance, disability insurance, retirement assets, fiduciaries, guardianship and the like are discussed and analyzed to ensure that in the event of the unexpected, covering expenses does not create additional stress.  So the question to ask yourself is, what preparations have you made for the unexpected?  #crowdfunding #estateplanning @gofundme @kickstarter @bgnthebgn

The Marriage of Divorce and Estate Planning

August 11, 2016

In case you missed the series about the impact of divorce on estate planning, here is a brief recap of some points to consider.

1.  The Property Settlement Agreement may require that you maintain life insurance for any minor children.  If that is the case, then have you revisited your estate plan recently?  What obligations to maintain life insurance do you have?  Does the Property Settlement Agreement have certain requirements for the creation of a trust, and if so, what are those requirements?  Have the requirements of the Property Settlement Agreement been fulfilled or incorporated through your estate plan?  Are there any provisions of the Property Settlement Agreement that will survive death?

2. When was the last time you updated your beneficiary designations on qualified retirement accounts (e.g., 401(k) or IRA accounts), annuities, life insurance or payable on death or transfer of death designations on bank or brokerage accounts?

3.  What should happen to your real and personal property?  Are there steps you need to take to ensure your real and personal property are distributed to the individuals or entities you want to have benefit?

4.  If you are divorcing and have a disabled child, how is that child being provided for upon the incapacity or death of a parent?  Is eligibility for public benefits preserved through a properly structured special or supplemental needs trust?  Who has authority to make healthcare decisions for the child and in what manner?  Has guardianship been determined and the terms in which parents plan to share guardianship specified, if applicable?

5.  What happens if an estate plan already exists and you do nothing to update it?

#estateplanning #divorce @bgnthebgn

ALERT – Valuation Discounting Impacted By New Regulations

August 4, 2016

Estate planners and valuation experts have been advising clients for the last year that the IRS and Treasury would be issuing new regulations that would make it harder to transfer business interests without incurring estate or gift tax.   The proposed regulations are now here and will reduce the availability of discounting for transfers of business interests that are subject to certain restrictions (e.g., restrictions on marketability).  The proposed regulations will go through a 90 day public comment period and a public hearing is scheduled for December 1, 2016.  The proposed regulations will be effective as to transfers that occur on or after the date the regulations become final, and in certain circumstances, as to transfers occurring 30 or more days after the regulations become final.  Thus, those who hold interests in closely held businesses should contact their professional advisors to determine whether they need to take action before the regulations are finalized.  #valuationdiscounts #2704regulations #businessvaluations #estateplanning #businessplanning @bgnthebgn

New Fair Labor Standards Act Regulations May Change How You Do Business

July 28, 2016

(h/t to my colleague, Fran Dwornik, for her informative presentation on this issue.)

Enacted in 1938 in response to the Great Depression, the Fair Labor Standards Act (“FLSA” or the “Act”) regulates Federal minimum wage, overtime and child labor standards.  All employees are covered unless they are deemed to be exempt (i.e., certain executives, administrative, professional, outside sales, computer specialists and highly compensated employees as defined within the Act).   To be exempt, certain requirements must be met that look at the basis for the salary paid, salary level (currently $23,660 per year) and the duties of the employee. 

Effective with the pay period including December 1, 2016, the new FLSA regulations will increase the salary level to $47,476 per year, which will then be updated every 3 years beginning January 1, 2020.  This means that as an employer, if your employee is salaried and not earning $47,476 annually, then either the salary will have to be increased to the new minimum to continue to classify the employee as exempt or the employee will need to be switched to hourly pay and you will have to track hours and pay overtime as appropriate.  There are quarterly catch-up payments that can be made to cure an issue, but you first have to recognize that an issue exists.

Also changing on December 1, 2016 is that the salary threshold to classify an employee as a ‘highly compensated employee’ will increase from $100,000 per year to $134,000 per year, provided the employee performs at least one exempt duty.  This threshold will also increase every 3 years beginning on January 1, 2020.

What does this mean for business owners and employers.  First, employers who are subject to FLSA need to review and analyze their employee records and salaries to determine who will be exempt and who will not be exempt under the new regulations.  Next, employers will have to make some decisions regarding whether to convert currently salaried employees to hourly employees or increase the base salary to the new minimum to maintain exempt status.  If the employer converts employees to hourly pay, this may mean that employees will lose some level of flexibility in their day-to-day jobs as hours will now be tracked.  For example, working from home may no longer be an option for a once salaried employee who now is paid hourly as an employer may want to be able to visibly track hours and time in the office.  If the employer increases base salaries to the new minimum, this may result in an overall reduction of other benefits to cover the increased salary.  More part-time jobs may be developed by employers where there are middle management exempt employees who will no longer be exempt (e.g., retail and restaurant industries). 

Ultimately, the impact of the new regulations is not yet fully determined.  However, if your are an employer subject to FLSA, then you should review your records and sit down with your professional advisor to ensure you are or will be in compliance with the new regulations. #businessplanning #FLSA #newregulations @bgnthebgn

 

Elder Law Update – Changes to Laws Impacting Virginia’s Seniors and the Disabled

July 21, 2016

On July 1st (unless otherwise noted) a number of new laws took effect in Virginia that may have an impact on you.  Below is a summary of a few key pieces of legislation of which you should be aware.

Section 51.5-44.1 – It is a now a Class 4 misdemeanor to misrepresent your dog as a service dog to gain access to public areas with the animal.

SB 553 – Requires the Board of Health to promulgate regulations relating to audio and visual monitoring of residents in a nursing home by July 1, 2017.  The regulations are to address privacy, notice, disclosure, liability, responsibility for equipment, costs and security, among other items.

Section 63.2-1806 – An assisted living facility is not required to provide or allow hospice care at the facility so long as this is disclosed to the resident prior to admission and is otherwise allowed by Federal law.

Section 64.2-2019 – A guardian of an adult incapacitated person is not permitted to ‘unreasonably restrict’ an incapacitated person’s ability to communicate with, visit, or interact with others with whom they have had an ‘established relationship’.

Sections 37.2-817, 37.2-837 and 37.2-838 – A person being discharged from involuntary admission in general or to mandatory outpatient treatment who does not have an advance medical directive must now be provided with a written explanation of the process for executing an advance medical directive and a form of an advance medical directive.

Sections 64.2-2011 and 64.2-2014 – The Department of Medical Assistance Services must now be notified of guardianship appointments, modifications and terminations.

Sections 64.2-2001 and 64.2-2009 – In a petition for a guardianship and/or conservatorship of an incapacitated individual who has not reached age 18, the statute clarifies that the court may enter an order for such guardianship/conservatorship appointing a guardian or conservator prior to age 18, but the court order should state whether the order is effective immediately or when the person turns 18.

Section 63.2-1605 – When investigating financial exploitation of an individual age 6o or older, if the department of social services or adult protective services believes there is ongoing exploitation totaling more than $50,000, then the police are required to be told so an investigation can ensue.

Section 8.01-220.2 – The principal residence held by tenants by the entireties (i.e., ownership between spouses) cannot be used to pay for one spouse’s debt incurred for emergency medical care unless the property is refinanced or transferred to new owners.

Section 23-38.81 – ABLE savings accounts are excluded as countable resources for means-tested public benefits. (Effective October 1, 2016.)

#elderlaw #guardianship #Virginialaw #incapacityplanning #specialneeds @bgnthebgn

 

Digital Assets Under Virginia Law

July 14, 2016

In an earlier post, there was a discussion about Maryland’s Fiduciary Access to Digital Assets Act.  But what has Virginia done with respect to digital assets?  Virginia has not adopted the Uniform Fiduciary Access to Digital Assets Act (“UFADAA”) or any version of it.  Instead, in 2015 Virginia adopted a version of the Privacy Expectation Afterlife and Choices Act (“PEAC”).  Under this statute, a personal representative or executor may petition a court for access to certain information within a deceased individual’s digital records for the 18 month period prior to death.  However, the petition will not permit the personal representative to gain access to the content within the digital records unless it can be shown that the deceased individual consented, in some fashion, to have that information released.  If the deceased individual did not consent or deleted the information, the information will not be released.  Furthermore, the holders of the digital content have the ability to show an undue burden if they release the information, and therefore, can argue against disclosure.  The overall impact of Virginia’s statute is still being tested, and therefore, whether it is now simpler for a personal representative to gain access to digital assets is questionable.  Furthermore, the statute does not appear to apply to trustees, guardians or agents under a power of attorney or address access to such digital assets during any period of incapacity. 

So, what can you do to protect your digital assets but also ensure that your fiduciaries have authority to act on your behalf with respect to your digital assets?  You can make sure your last will and testament, revocable living trust and/or general durable power of attorney are updated to include authority and power regarding digital assets.  Moreover, you need to organize your digital assets by making sure the location of hard files and back-up files (i.e., in the cloud, on a USB drive, etc.) are known to your fiduciaries.  Your fiduciaries will need to be able to provide user names, passwords, answers to security questions and any other authentication methods associated with the accounts. 

Finally, your fiduciaries also need to know what digital assets are out there, so be sure to list the following information: e-mail accounts, domain names, online storage accounts (e.g., Dropbox), financial software, bank accounts, securities or brokerage accounts, types of devices, taxes, retirement accounts, credit cards, insurance (e.g., health, homeowners’, car, disability, etc.), debts (e.g. mortgage or car loans), utilities, social media, digital media (e.g., Netflix, Kindle, iTunes), membership or loyalty programs (e.g., frequent flyer accounts) as well as any other account that requires an online presence (e.g., Skype, Amazon or professional affiliations). 

When you really think about it, your digital footprint might be quite extensive and your fiduciaries need the information to be better able to provide for your care and handle your estate.  #estateplanning #incapacityplanning #estateadministration #digitalassets @bgnthebgn

Maryland Enacts Fiduciary Access to Digital Assets Act

July 7, 2016

On October 1, 2016, Maryland’s Fiduciary Access to Digital Assets Act will come into effect, thereby giving a fiduciary (i.e., personal representative, guardian, agent or trustee) or a designated recipient (i.e., a person named using an online tool) the ability to request access to a person’s digital assets in certain circumstances.  Digital Assets is defined as “an electronic record in which an individual has a right or interest.”  The Act allows an individual to direct whether their digital content is disclosed, to whom and to what extent.  This authority can be granted through an online tool provided by the custodian (e.g., Google has Inactive Account Manager or Facebook has Legacy Contact) or through an individual’s will, trust or power of attorney.  Access may still be subject to the terms of service agreement and gives the custodian of such information (e.g., Google) some discretion as to the breadth of the disclosure and the ability to charge an administrative fee.  If a request is made, the Act requires that a custodian comply no later than 60 days from the receipt of the request, including receipt of all the ancillary documentation associated with the request as detailed under the statute.

So, next steps for you?  When creating accounts be sure to look for whether the website requires you to complete an online tool.  You may want to opt out of using the online tool so that you can better control your wishes through your estate planning documents.  Furthermore, if you reside in Maryland, you should review and update your estate planning documents to ensure that access to digital assets has been addressed in accordance with your wishes.  Finally, you should create and store in a secure location a list of all your digital assets, including your credentials, so that your nominated fiduciaries know what assets to access during any period of incapacity and upon death. #estateplanning #estateadministration #digitalassets #MFADAA @bgnthebgn