Wednesday, April 25, 2018

Power of Attorney to Curtail Dad’s Spending

We’ve all read disturbing stories about elder abuse, and it may be these stories that contribute to a reluctance by many seniors to create a Power of Attorney. The Agent you name as your Power of Attorney will be responsible for determining where and how you live out your life. It should be someone with integrity, someone you trust to make good decisions about your healthcare and finances. The following story an example of how one daughter’s getting Power of Attorney was absolutely in the best interests of her father.

Meet Christine and her father, Dick

Christine and her husband, Bill, weary of long, rainy Seattle winters, retired in sunny Florida. Within two years, Christine’s parents, in their early 80s, moved to a nearby community. A pragmatic RN, Christine knew that she had just become her parents’ caretaker. She also knew she would get no help from her only sibling, a sister who lived in Chicago and hated Florida.
Within five years of their move, Christine’s mother died. Her father, Dick, stayed in their home, but his health was declining. He wasn’t taking his medications or eating properly, and the house was more than he could manage. Christine helped him sell his home and move into a very nice retirement community where he had his own unit, was surrounded by friendly people with numerous activities to keep him busy. Dick, however, remained in his unit, didn’t socialize or participate in any events and became increasingly isolated.

He began buying new cars, including a sexy convertible

Dick became obsessed with buying cars. Once he drove the car home, he’d find a reason to sell it. It was too big, too small, too expensive, guzzled too much gas, etc. Within a single year, he would easily have three-four car transactions, always with a different dealer. The irony was that he drove to WalMart once/week; Dick had no need for a car. He also began investing heavily in coupon sweepstakes, convinced that Publisher’s Clearinghouse was going to make him a millionaire.

The problem: Her father was running out of money

Between the car and the coupon fetishes, Dick was depleting his resources. Christine wanted to get a Power of Attorney to control her father’s spending, but he refused. It took Dick’s totaling his latest car, a sexy convertible, and ending up in the hospital, for him to finally relent.

As her father’s Power of Attorney, Christine was able to manage her father’s life

  • Paid his bills, giving her father a weekly allowance and putting an end to his car purchases and restricting the number of sweepstakes he could enter.
  • Arranged for a healthcare aide to visit three times/week to monitor his health and make sure he was taking his medications.
  • Helped Dick update his Living Trust and Advanced Healthcare Directive while he was still mentally competent.

Power of Attorney makes decisions in the best interests of the Principal

The Agent under a Power of Attorney has a fiduciary obligation to make decisions that are in the best interests of the Principal. In most cases, the Agent is an adult child who has been named by a parent, but a Power of Attorney can be a trusted friend, financial adviser or a professional fiduciary. In this case, Christine was acting in the best interests of her father. Becoming legally empowered to manage his money meant that Dick would not have to move in with her and Bill. Call it enlightened self-interest, but Bill and Dick hated each other, so avoiding this situation was clearly in everyone’s best interest.

Powers of Attorney all terminate on death or incapacity

  • The Agent can engage in legal business on behalf of the Principal until that person dies or is mentally incompetent to act on his/her own behalf. Once either of those events happens, the power of attorney is no longer valid.
  • A Durable Power of Attorney can survive mental incapacity, but not death. A durable power of attorney allows the agent to continue to act on the Principal’s behalf even if the Principal is mentally incompetent.

Creating a Power of Attorney is part of our Living Trust package

We encourage everyone to think carefully about whom they appoint as their Agent. Being a Power of Attorney can become time-consuming, and it may require dealing with financial accounts, so your Power of Attorney should be comfortable managing financials and dealing with attorneys, accountants and government agencies such as social security. If you need to create or update your Trust, contact California Document Preparers at one of our three Bay Area offices today to schedule an appointment. Our dedicated team is helpful, compassionate and affordable.

Wednesday, April 18, 2018

Creating a Living Trust? Don’t Forget Your Pets

I don’t know what it’s like in your neighborhood, but where I live, everyone seems to have a dog. On my morning walk I routinely greet a wide variety of scruffy mutts of dubious lineage, sheepdogs, the biggest Great Dane I’ve ever seen, an obese Bulldog and a yellow Lab who has simply stolen my heart. For many people, especially the elderly, a pet is a loyal companion. It shouldn’t be surprising that people want to make provisions for their pets in their Living Trusts, just as they do for the rest of their families. In California, as in 39 states, there are Pet Trusts.

One woman loses her best friend and a dog

Clare Jackson’s eyes fill up when she thinks about the death of her best friend, Sylvia. Not only did Clare lose her friend of 40 years, but she also lost Sylvia’s beloved Labrador, Dolly. Sylvia had a stroke and died, and her caregiver immediately euthanized Dolly. “There was nothing I could do–Sylvia had revised her Will, and there was no mention of Dolly.”
This experience was a bitter lesson for Clare, who also loved Dolly and would have gladly provided a loving home for her. (Note that Clare and her husband have made provisions in their Trust for their own dog, Oliver.)

Animals who outlive their owners face uncertain futures

People who die before their pets leave stranded animals. In a best-case scenario, a neighbor, family member or friend cares for the pet for the rest of its life. The alternatives? The Humane Society estimates that six to eight million dogs and cats enter shelters annually. An estimated half are adopted, and the rest are euthanized. In some sad cases, after the death of its owner a pet is simply let out the front door to get lost, run over or any of the other horrible fates that befall abused animals.

Thinking of leaving a chunk of change to Spot or Fluffy?

So what are your options for your pets? A Will is a transfer of assets. An animal can’t own property–someone has to be in charge.

The solution: A Pet Trust

This legal document outlines the continued care and maintenance of domestic animals; it also names new caregivers or directs Trustees to find new homes for pets. A Trustee has a legal duty to carry out your wishes.
While owners may simply include their pets as provisions in their Wills, Michael Markarian of the Humane Society believes a Trust is a better option in case of disability. “Wills may take weeks to be executed and could be contested, but a Living Trustcan be written to take effect immediately.”

Creating a Pet Trust: Think about the economics of caring for your pet

When naming a Trustee, think about the expense of caring for a pet. Food and visits to the vet can add up. Some owners make outright gifts of cash for their animals’ care.
  • One woman set aside $5,000 to offset costs for the person who ends up with her dogs.
  • Another pet owner reveals that she has a list of ten people who are potential Trustees care for her cat, Sadie. What the new caregiver won’t know at first is that the estate is instructed to award the person $10,000 if the feline is still with him/her after six months. “I want someone to care for Sadie out of love and kindness and be rewarded if they keep her and fall in love with her like I did.”
  • Others leave money to be distributed over time—monthly, annually, or as reimbursement for expenses.
  • For even more security for a beloved pet, name someone other than the caregiver as Trustee. This person will dole out the cash on some kind of predetermined schedule, reducing the risk of someone’s taking the money and getting rid of the pet.
  • One man created a Living Trust for his three Rottweilers. If his ex-wife couldn’t take care of the dogs, two Trustees were given explicit instructions to use their best judgment to find good homes for his pets. There were dependencies: The dogs should be kept together, and the new caregiver would receive $150 per month, plus money for veterinary bills and other expenses.

Choose your Pet Trustee carefully, just as you would choose a guardian for your child

Talk to potential caregivers for your pets until you find someone you trust. In the same way that you would be choosing someone to take care of your children, what you really want is a person who will love your pet as you have.

We encourage everyone to create a Living Trust

A Living Trust is an important part of life planning and is one of the most thoughtful things you can do for your family. Our dedicated Living Trust team is helpful, compassionate and affordable, available by phone and email throughout the process. Contact California Document Preparers at one of our three Bay Area offices today to schedule an appointment.

Wednesday, April 11, 2018

Assisted Living Centers: A Largely Unregulated, Booming Industry

Living Trusts are an important service for California Document Preparers, and many of our clients are retired or thinking about it. As a result, discussions frequently surface about a range of life-planning topics such as social security, financial planning and hospice. A recent New York Times article about assisted-living facilities got our attention.
Federal investigators have discovered significant gaps in the way that assisted-living facilities are being regulated, potentially jeopardizing the care of the growing number of people who rely on these services from a booming, poorly regulated industry.

Assisted Living: Little accountability or regulation

According to the Government Accounting Office (GAO), the federal government lacks even basic information about the quality of assisted living services provided to low-income people on Medicaid. Billions of dollars in government spending are flowing to the industry, yet it has only vague standards and limited supervision. States reported spending more than $10 billion/year in federal and state funds for assisted living services for more than 330,000 Medicaid beneficiaries. That’s an average of more than $30,000 a person, with very little accountability.
Individual states are supposed to keep track of cases involving the abuse, neglect, exploitation or unexplained death of Medicaid beneficiaries in assisted living facilities.
  • More than half of the states were unable to provide data about the details of those cases.
  • Out of 50 states, only 22 were able to provide data on “critical incidents—those cases of potential or actual harm.” These states reported more than 22,900 incidents, including physical, emotional or sexual abuse of residents.
  • Many of the people involved in these “incidents” are older, with physical or intellectual disabilities. More than a third of residents have Alzheimer’s or other forms of dementia.
The National Center for Assisted Living, a trade group for providers, said states already had “a robust oversight system” to ensure proper care for residents. According to this group, California, Oregon, Rhode Island and Virginia have adopted laws to enhance licensing requirements and penalties for poor performance of facilities.

The report, “Improved Federal Oversight of Beneficiary Health and Welfare Is Needed,” grew out of a two-year study requested by a bipartisan group of senators.

  • The report concludes that the Centers for Medicare and Medicaid Services have provided “unclear guidance” and have done little to monitor the use of federal money that is being directed toward assisted living facilities.
  • Without a clear process for evaluating and monitoring facilities, the committee has no way of knowing if states are meeting their commitments to protect the health and welfare of Medicaid beneficiaries in assisted-care facilities.

Standards for nursing homes

In 1987, Congress established standards for nursing home residents’ rights, imposed dozens of new requirements on homes, specifying the services they must provide. Yet assisted-living facilities have largely escaped scrutiny, even while the GAO says the demand is likely to increase with the aging baby-boomer population and increased life expectancy. Not surprising, the potential to make money off a needy population has attracted investors to an unregulated industry.

The report was commissioned by a bipartisan group of senators

Democrats and Republicans commissioned this report, and the Trump administration is recommending that federal officials should clarify the requirement for states to report on the abuse or neglect of people in assisted living facilities. The administration said it was studying whether additional reporting requirements might be needed.
Assisted living was not part of the original Medicaid program, but many states now cover it under waivers intended to encourage “home and community-based services” as an alternative to nursing homes and other institutions. The report said that assisted living could potentially save money for Medicaid because it generally costs less than nursing-home care.
Nothing in the report disputes the fact that there are many assisted living facilities that are doing an excellent job of providing high-quality, compassionate care for their residents.

The mission of assisted living facilities

Assisted-living communities can be a wonderful bridge between living at home and living in a nursing home. Residents live in apartments or houses; they have a high degree of independence but require help managing their medications and performing daily activities like bathing, dressing and eating.

Personal experience with assisted living

My own folks moved to a retirement community when their home became too much for them to manage. As their friends died, they also were becoming increasingly isolated. They  loved this busy new environment, the activities and the warm, friendly people. They lived happily in their own little unit for seven years.
When my stepfather had a stroke, my mother was too weak to care for him. As part of their contract with the community, they were able to move to assisted care when and if it became necessary. The stroke was the catalyst, and we moved both of my parents into assisted care. Before long, my stepfather moved into nursing care. Both of my parents died within six months. During this time, they were extremely well cared for by kind, generous caretakers to whom we were all very grateful.

We encourage everyone to create a Living Trust

But for those whose parents have been diagnosed with some form of dementia, the timing becomes much more critical. Our dedicated team is helpful, compassionate and affordable. Contact California Document Preparers at one of our three Bay Area offices today to schedule an appointment.

Tuesday, April 3, 2018

Few topics are as polarizing as guns and the controversy that inevitably surfaces over the second-amendment right to bear arms. Guns have dominated the headlines the past few weeks after yet another school massacre—this time in Florida. Angry kids, moms and others are increasingly vocal about the need to enact stricter gun control legislation, yet there remains opposition by gun owners, politicians and the NRA.

California: Stringent laws for passing guns from one generation to the next

As the nation struggles with gun-control issues, you may be surprised that California has some of the strictest laws in the country, including those that regulate the passing of firearms from one generation to the next. So restrictive are California’s regulations that some people have moved out of state to avoid them. Regulations vary not only by what weapon is to be inherited, but by who is in line to receive them. Assault weapons are for all practical purposes nontransferable, and if the relative to whom you’d like to bequeath a gun is a drug addict or ex-felon, be aware that the transfer is illegal.
Yet millions of Americans have sizeable, sometimes valuable collections of guns for hunting or target shooting and may have antique guns that are prized family heirlooms. And now they’re preparing their Living Trusts, deciding how they will allocate their gun collections to their heirs. There are some important things to keep in mind.

Categories of severely restricted firearms 

“Severely restricted” describes that category of weapons which is heavily regulated, such as assault weapons, including the Florida shooter’s AR-15, an AK-47 or an Uzi. California is intent on eliminating severely restricted weapons by making their transfer nearly impossible.

What happens to severely restricted firearms when their owner dies? The weapons must be:

  • Removed from California
  • Sold to a federally licensed firearms dealer
  • Destroyed
  • Turned over to law enforcement
The safest and simplest way to transfer a firearm from one person to another, even in distribution of an estate, is through a Federal Firearms Licensee (FFL) who also has the necessary California licenses to deal in firearms. Not only do such dealers know firearms, but they can carry out required background checks on intended recipients.

What about antique firearms–those manufactured before 1899

  • Curios, antiques or relics are those firearms of “special interest to collectors” by reason of some quality other than is associated with firearms intended for sporting use. These weapons must be at least 50 years old and derive monetary value for their owners.
  • Antiques, curios and relics can legally be transferred without going through an FFL, but a qualified FFL should verify a firearm’s classification before transfer.
  • Since January of 2014, transfer of antiques, curios and relics can’t be made unless the recipient has both a California Certificate of Eligibility and a Federal Curio or Relics license. The firearm must be registered with the California Department of Justice.

Here’s where it begins to get complicated . . .

Let’s say you want to leave your vintage Winchester rifle to your cousin Alfred, who served time for robbery in 2000. You also want your sister, Britt, to receive your Beretta. Everyone loves Britt; she’s got a big heart but also a bit of a substance-abuse problem and can’t seem to stay clean and sober or out of rehab for long. You’d also like to leave some of your gun collection to your nephew Brian—he’s just 13, but very responsible; he’s been hunting since he was five and understands gun safety rules.
You can’t transfer or bequeath shotguns or rifles to minors, and a minor who possesses such weapons cannot be prosecuted, but anyone who gives, sells, bequeaths or transfers a gun to someone under 18–including the executor of a Will–can be criminally liable for doing so. In California, minors can’t own handguns, and they themselves can be prosecuted in juvenile court for possession. There are certain exceptions, such as having the written consent of parents or legal guardians if weapons are for target shooting or hunting.

Who ends up on the no-gun list?

For Executors or Trustees, those prohibited by federal or California law from possessing rifles, pistols or shotguns include:
  • Convicted felons. If someone has been convicted of a crime and served time, that person cannot legally own a gun.
  • Anyone convicted of domestic violence or is under a restraining order from an intimate partner and is found to present a threat to that person or to that person’s children’s safety is ineligible to own a gun.
  • Those who unlawfully use or are addicted to narcotics. Narcotics use does not include spirits or tobacco, so chronic alcoholics, unless they are mentally ill, are not prohibited from owning firearms.
  • Anyone found by the courts to be mentally defective or who has been committed to a mental institution. This includes those deemed by a court to be a danger to others, mentally disordered sex offenders, and those found not guilty of a crime by reason of insanity or found mentally incompetent to stand trial. It also includes those in custody because they present a danger to themselves or others, individuals undergoing intensive treatment for mental illness, and those placed in a conservatorship because of a grave disability caused by a mental disorder or chronic alcoholism.
  • Anyone who has violated probation, restraining orders or injunctions by possessing firearms is in violation of California law.
California also has a longer list of misdemeanors–those involving violent or aggressive behavior–that generally result in a ten-year ban on firearm possession.

Conditions for families transferring firearms

Guns may be transferred from parent to child, child to parent, grandparent to grandchild, or grandchild to grandparent as long as all live in California and all children and grandchildren are 18 or older, 21 for handguns. Note that no more than five such family transfers can be made each year.
  • Recipients must first obtain a firearm safety certificate, issued by a licensed dealer after a written test is passed.
  • Those receiving anyfirearm (including rifles and shotguns) must have general firearm safety certificates.
  • Transfers between spouses or domestic partners must go through dealers, and the receiving spouse or partner must have a safety certificate.
  • A firearm may only have one registered owner who must pass a background check.
Becoming Executor of an estate that involves the transfer of firearms requires becoming familiar with laws relating to their storage, transportation and transfer. If there are questions, an FFL will be able to help you legally manage a firearm transfer.

We encourage everyone to create a Living Trust

This issue of transferring firearms provides a window into some of the responsibilities that an Executor may encounter. We encourage our clients to think carefully about the people they choose for this role, which is an important part of the Living Trust process. If you need to create or update your Trust, contact California Document Preparers at one of our three Bay Area offices today to schedule an appointment. Our dedicated team is helpful, compassionate and affordable.