The Tip Of A Lifetime

I recently came across an uplifting story that I want to share with you. It’s about a young woman named Melissa Manier, who was working as a waitress at a restaurant in Harrisburg, Pennsylvania to help pay her way through college. One day, she was waiting on an elderly gentleman who frequented the restaurant, a man by the name of Benjamin Olewine III. The two had never spoken to one another, but on this particular day, they did.

Photo Credit: en.wikipedia.org

Photo Credit: en.wikipedia.org

During their conversation, Benjamin learned that Melissa was working her way through nursing school and struggling to pay her student debt. According to Benjamin, he admired Melissa’s determination to succeed and her demeanor. So much so, that he offered to pay off her existing loans, and cover the cost of the rest of her education.

As you would expect, Melissa was skeptical. After all, she had no idea who this man was, other than another friendly regular customer.

It turns out that Benjamin Olewine III is a millionaire and one of Harrisburg’s most generous philanthropists. He had donated money to causes all over town, and he was serious about paying for Melissa’s education and helping her realize her dreams of becoming a nurse.

Fast-forward a few years, hundreds of hours of study, and $20,000 in tuition payments from Benjamin—Melissa is now a registered nurse. Fittingly, she works at PinnacleHealth in Harrisburg, where the spine, bone and joint institute is named after a major donor. That donor’s name is Benjamin Olewine III.

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Estate Planning Is No Game, Especially When You Own A Professional Sports Team

While virtually everyone can benefit from having an estate plan of his or her own, proper planning is particularly important for people of means—for example, owners of professional sports teams. Let’s take a look at what happened following the death of three such owners.

Joseph Robbie
Joseph Robbie was a highly successful businessman and attorney. He also owned one of the most successful teams in National Football League history, the Miami Dolphins. When Robbie passed away in 1990, his estate was valued at slightly less than $100 million, nearly 50 percent of which was lost to federal estate taxes. This, together with bitter infighting between family members, forced Robbie’s family to sell the team at a fraction of its value—a result that could have been avoided through proper planning.

George Steinbrenner

English: George Steinbrenner's life, work clip...

George Steinbrenner 1930-2010 (Photo credit: Wikipedia)

George Steinbrenner, the owner of the New York Yankees, a team worth approximately $1.6 billion according to Forbes, passed away in 2010. However, at the time of his death, the franchise was 95 percent leveraged due to debt from construction of the Yankee’s new stadium. While this sounds like a recipe for disaster, Steinbrenner had the “good fortune” to die in a year when there was no federal estate tax. In effect, he saved his heirs approximately $600 million by passing away in 2010. In the world of sports, pundits often say, “It’s better to be lucky than good.” In Mr. Steinbrenner’s case, it would appear that this cliché rang true.

Ralph Wilson
Ralph Wilson died earlier this year. He was the sole owner of the Buffalo Bills. He never made public his intentions for the franchise, so it is unknown if ownership will transfer to his family members, or the team will be put up for sale. The result may wind up revolving around the issue of estate taxes and whether Wilson put in place a plan to reduce or eliminate payment of these taxes upon his death.

If he did nothing, his family may have to pay hundreds of millions of dollars in state and federal estate taxes. However, if he left the team to his wife, his estate would pay nothing, thanks to the marital exemption. There are a number of other estate planning tools he could have used to protect the family’s assets, together with the Bill’s future in Buffalo. Given how little time has passed since Mr. Wilson’s death, it’s simply too early to tell what will happen to his estate and the franchise.

To learn more about the estate planning issues associated with these professional sports team owners, click on the links below.

A Tale of Two Families

How Steinbrenner Saved His Heirs a $600 Million Tax Bill

Estate taxes may hold key to Bills’ future after Wilson’s death

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Paper Makes A Comeback—Social Security Administration To Resume Mailing Benefits Statements

I always liked receiving those statements in the mail every year detailing my Social Security benefits. It reminded me that, yes, some of the money I paid in taxes that year would eventually come back to me when I retire. Sure, I could have registered to view my benefits online, but I just liked getting those statements. If you feel the same way, I have some good news for you—the Social Security Administration will resume mailing them out this September.

Modern Social Security card.

Modern Social Security card. (Photo credit: Wikipedia)

There is a catch, however. The statements will only be mailed to workers aged 25, 30, 35, 40, 45, 50, 55, 60, and older. And, if you registered to view your benefits online, you will not receive the mailed statement.

Why did the Social Security Administration decide to resume mailing benefits statements? A recent article I found online (I know, somewhat ironic, isn’t it?) discusses several reasons. One is that only about 11 million people signed up to access information about their benefits online. Given that Social Security is a primary component of a secure retirement, it is important that people understand the benefits that will be available to them when they retire.

The Social Security Administration also received pressure from advocacy groups for the elderly and the paper industry. The executive director of Consumers for Paper Options, John Runyan, pointed out that millions of Americans have no Internet access, and therefore no way to verify the accuracy and amount of their benefits.

Fortunately, now they will.

If you want to set up online access – click here.

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Got Arthritis? Get Milk.

It is estimated that more than a third of adults over the age of 65 have a degenerative joint disease known as osteoarthritis. And, according to the Centers for Disease Control and Prevention, arthritis of the knee is particularly severe and common in older women.

A glass of milk Français : Un verre de lait

(Photo credit: Wikipedia)

I recently came across an article in the AARP newsletter that discussed this issue and referenced an interesting study funded by the U.S. National Heart, Lung and Blood Institute. The study suggests that women who drink up to six glasses of fat-free or low-fat milk per week are able to delay the effects of arthritis in their knees.

Unfortunately, the study indicated that men did not experience a similar decline in the progression of knee osteoarthritis. Oddly enough, the study also showed that consuming other dairy products, such as yogurt or cheese, did not reduce joint deterioration at all. In fact, women who consumed more cheese displayed faster deterioration.

The researchers who took part in the study were unable to discern a cause-effect explanation for what they found. However, when the team’s leader, Bing Lu, M.D., was asked by the New York Times whether people with osteoarthritis should drink milk, his answer was simple: “Yes, low-fat or fat-free milk.”

Given some of the foods and beverages that are rumored to treat osteoarthritis, such as shark cartilage and snake venom, I’ll take a cold glass of milk every time.

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How Reverse Mortgages Can Lead To Problems For Your Children

According to a recent New York Times article, children of parents who took out reverse mortgages to cover the cost of long-term care are increasingly faced with a difficult choice—watching helplessly as the family home goes into foreclosure, or losing their inheritances to pay back the loan and protect the home.

Housing

(Photo credit: james.thompson)

While there is no specific data on the number of heirs facing foreclosure as a result of reverse mortgages, interviews with elder law advocates, housing counselors, and heirs suggest that the problem may already be impacting tens of thousands of people. And the problem could become worse. The combined debt of seniors between the ages of ages of 65 and 74 is rising faster than the debt of any other age group. Some will turn to reverse mortgages to pay their debts. Meanwhile, 13 percent of outstanding reverse mortgages are underwater, and create a financial crisis for the heirs forced to deal with the mortgages.

The problem for heirs of parents who have passed away with reverse mortgages seems to be twofold. The law requires that lenders offer heirs 30 days from when the loan is due to decide what they wish to do with the property. Furthermore, heirs are supposed to be given six months to arrange for financing if they want to keep the home. It would appear that many lenders are not informing the heirs of these options, and instead initiating foreclosure within a matter of weeks.

The other problem centers on what is known in the industry as the 95 percent rule. Heirs are permitted to pay 95 percent of the current fair market value of the property to buy out the reverse mortgage. But the housing crises from a few years ago has rendered today’s market value significantly below what the heirs’ parents paid for their reverse mortgage. The disparity between the current value of the home and the mortgage often forces heirs to opt for foreclosure rather than trying to keep the family home, or at least keep it long enough to sell it on their own.

If you are considering a reverse mortgage to pay for long-term care costs, I invite you to contact me for a consultation. I can show you other ways to pay for the care you need, and preserve your hard-earned assets for the enjoyment of your well spouse and your loved ones.

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Posted in Asset Protection, Inheritances, Long Term Care, Real Estate, Reverse Mortgages | Leave a comment

The Dangers Of Using Cookie-Cutter, Downloadable Legal Forms

When people learn that I am an estate planning and elder law attorney, some of them ask what I think about “do it yourself” wills, trusts, and other estate planning forms that can be found online. Of course, when I tell them that it is advisable to hire an attorney, it sounds rather self-serving.

Last Will And Testament

Last Will And Testament (Photo credit: Ken_Mayer)

A recent article in the ABA Journal speaks to my concerns about the potential pitfalls and unwanted consequences of using downloadable forms. It discusses the case of a Florida woman, Ann Aldrich, who used an “E-Z Legal Form” to create her will in 2004. In the will, she left all of her assets to her sister, with the caveat that if Aldrich’s sister predeceased her, the assets would go to her brother.

Sounds simple enough, right? So why, then, did the Florida Supreme Court rule that Aldrich’s two nieces were entitled to part of her estate? Because the E-Z Legal Form failed to include what is known as a residuary clause providing for property not listed in the will. That is, assets acquired by Aldrich after 2004, when she made her will, were distributed according to the laws if intestacy. With regard to these assets, it was as if the will had never been created in the first place! Florida intestacy laws mandated that the nieces inherit these assets, not Aldrich’s brother.

One of the concurring justices in the case, Barbara Pariente, said: “While I appreciate that there are many individuals in this state who might have difficulty affording a lawyer, this case does remind me of the old adage ‘penny-wise and pound-foolish.’ I therefore take this opportunity to highlight a cautionary tale of the potential dangers of utilizing pre-printed forms and drafting a will without legal assistance. As this case illustrates, that decision can ultimately result in the frustration of the testator’s intent, in addition to the payment of extensive attorney’s fees—the precise results the testator sought to avoid in the first place.”

Thank you, Justice Pariente. I couldn’t have said it better myself.

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Senior Dating—Tips To Help You “Get Your Groove” Back

One of the most rewarding aspects of being an elder law and estate planning attorney is that I get to develop strong relationships with my clients. To create a sound plan, I need to know my clients well. Many clients often become close friends, and we talk about a wide range of personal matters. Some of these conversations even turn to the problem of re-entering the world of dating as a senior. Now, I’m not much of a matchmaker, but I did find an article in the New York Times that provides a wealth of information on the topic.

Romance isn't just for teenagers...

Romance isn’t just for teenagers… (Photo credit: Ed Yourdon)

First of all, if you are a senior looking for a date this Friday night, you are hardly alone. Approximately 45 percent of people age 65 and older are separated, divorced, or widowed, according to the AARP. And people over the age of 60 are the fastest growing online dating demographic. In fact, AARP Dating has teamed up with a website called HowAboutWe to provide suggestions for offline dates, and the site has nearly 60,000 followers.

While there is no shortage of dating websites out there (eHarmony, Match.com, and JDate to name a few), many seniors simply aren’t comfortable with looking for relationships online, or don’t use the Internet at all. Another option is professional matchmakers, of which there are some 3,000 in the United States. About 90 percent of them work with seniors, but not necessarily exclusively.

Clearly, there are plenty of resources out there to help seniors find that special someone. However, according to the article in the Times, many seniors who do find someone they enjoy spending time with are reluctant to remarry. Why? Some are worried that the other person might simply be “after their money.” Others are concerned about the implications remarriage can have for their children’s inheritance. These are valid concerns. If you are in a serious relationship and considering remarriage, I invite you to call me for a consultation. I can show you a number of ways to protect your assets, including a prenuptial agreement.

In the meantime, if you’re just looking for advice on senior dating, I strongly recommend that you click on the link below to read the full article in the Times. You’ll be surprised by how many people share your concerns about re-entering the dating world and what they are doing about it.

New York Times Article: Matchmakers For Those Over 60

10 Best Places for Single Boomers to Retire

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Income Tax Benefits Available To Families With Special Needs Children

As the cost to care for children with special needs continues to rise, parents need all the help they can get. Unfortunately, as many as 15% to 30% of parents with a special needs child are not taking full advantage of tax benefits available to them, according to a recent article in the Journal of Accountancy. Hundreds, perhaps thousands, of dollars in tax benefits and deductions are going unclaimed by some families. Let’s take a look at some of the benefits available.

Cropped version of Image:Child piggyback.jpg. ...

(Photo credit: Wikipedia)

The Dependency Exemption
This exemption can be taken for a “qualifying child” or “qualifying relative.” In 2013, the exemption amount was $3,900. In addition, if the loved one with special needs is permanently or totally disabled, the exemption may be available regardless of his or her age.

Special School Instruction
Certain expenses associated with attending a special school can be deducted as medical expenses. These include lodging, transportation, and meals. Costs incurred for treatment, care, supervision, training, and more can also be deducted if the special school provides them.

Capital Expenditures
Capital expenditures to a residence that are undertaken to provide for medical care or assistance with physical limitations (such as an entrance ramp, railings, custom bathing facilities, etc.) may be deductible as medical expenses.

Conferences and Seminars
Registration fees and travel expenses to attend conferences and seminars dedicated to issues essential to the care of a special needs child may be deductible.

Impairment-Related Work Expenditures
If a special needs child gets a job later in life, some expenses related to maintaining his or her employment may be deductible.

These are just some of the income tax benefits available to families with special needs children. It is important to note that the rules governing eligibility for these tax deductions are extremely complicated and change over time. You can learn about them by reading the entire Journal of Accountancy article at http://www.journalofaccountancy.com/Issues/2013/Jun/20137378.htm.

If you are caring for a child with special needs, you are not alone. I am always available to discuss special needs planning tools and strategies, including special needs trusts. Give me a call at your earliest convenience.

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Family Heirlooms—How Much Are They Worth?

When a loved one dies, he or she leaves behind much more than assets in a will or trust. There are treasured memories, of course. And what about all the “stuff” that Mom or Dad accumulated over the years? Many of these items have sentimental value at the very least, and others might have monetary value as well. Is the brooch that Mom’s mother gave her when she was a girl actually worth a lot of money?

Brooch in Red and Yellow

Brooch in Red and Yellow (Photo credit: merlinprincesse)

Forbes recently ran an article exploring this topic. It referenced the television show Antiques Roadshow and discussed how the show’s popularity has given birth to a cottage industry of low-cost or even free appraisal events throughout the United States, often hosted by non-profits, banks, auction houses, and others.

If you’ve ever watched Antiques Roadshow, you might be under the impression that practically every heirloom passed on to children by their parents is worth a considerable amount of money. No doubt this makes for a better show, but the Forbes article points out that the vast majority of items people bring in for appraisal have little if any dollar value. And even when they do, these appraisals are known in the industry as “verbal approximations of value.” To determine how much an heirloom is actually worth for the purposes of dividing assets equitably among surviving family members or purchasing insurance to protect the item, it is necessary to obtain a written, formal appraisal.

So is that painting your parents picked up on their trip to Paris, or that armoire passed down from one generation to the next, actually worth something? Absolutely! Even if an appraiser tells you that it has no monetary value, if the heirloom reminds you of your father or mother, it can be conservatively valued as “priceless.”

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Rules Governing Care Of Dementia Patients In Massachusetts Amended

Workers in nursing home dementia care units will now have to receive eight hours of initial training plus four hours of additional training every year, according to rules recently adopted by state regulators. The new regulations also require such facilities to have, at the very least, one therapeutic activities director. The therapeutic activities director is responsible for ensuring residents in the dementia unit are provided with appropriate and meaningful activities.

Dad at Diamond Ridge Healthcare Center (Novemb...

(Photo credit: cseeman)

These new regulations close a legal loophole that permitted nursing homes to advertise their dementia units without actually providing workers with specific training or residents with specialized activities. The regulations were finalized by the Public Health Council, an appointed body of health advocates and academics that sets public policy.

Another change that has been under discussion of late is the requirement for a 6-foot fence surrounding outdoor areas, with the goal of preventing residents from wandering away and becoming lost.

However, some nursing home operators objected to this change, arguing that facilities in urban areas might never be able to meet a requirement mandating that residents have access to outdoor space if 6-foot fences were required. Other operators said that fences this high could reduce residents’ enjoyment of the opportunity to be outside in the first place.

The Public Health Council came up with a compromise, requiring that nursing homes with dementia care units must have a “fence or barrier to prevent injury and elopement.”

It is important to note that the new regulations require that all licensed nursing homes, not simply those advertising dementia units, must provide dementia-specific training for every direct-care worker within 180 days.

As a dedicated Massachusetts elder law attorney, I applaud these new regulations and invite you to click on the link below to learn more about them.

http://www.bostonglobe.com/lifestyle/health-wellness/2014/02/13/dementia-care-rules-finalized-for-massachusetts-nursing-homes/ruU64q0mgJ4Db7dVegROyK/story.html

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