Elder Law Articles and information in Rhode island
Phone: 401-841-5700
Fax: 401-367-0192
Phone: 401-841-5700
Fax: 401-367-0192
The following are articles written by Attorney Jeremy W. Howe or the attorneys of Counsel First. They focus on Elder Law, Pension Law, and Family Law topics. Please browse through using the below menu.
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If you read my “blurbs” at the beginning of our monthly elder-law newsletter you might wonder whether I am “beating a dead horse” when it comes to “powers of attorney”. “How much can you say that you haven’t said before?” you might ask. The answer is that in an elder-law and family practice, initial decisions regarding your future agents can make your estate plan work or your decisions can cause future problems for you, your spouse or your family.
Take for example the appointment of one person (eg. “my daughter, who is a nurse”) and another person (eg. “my other daughter, who is an accountant”) as your agents in the future. It might seem logical that the nurse might have the best background to make medical decisions and the accountant might be the best attorney-in-fact over business decisions. But the opposite might be true.
Your daughter the nurse may pay lip-service to your medical directives but in fact may try to act against your wishes due to her experiences as a nurse. Your daughter the accountant may pledge to act in your best interests but when the time comes may be more concerned about building an estate to pass to the next generation than to maintain the “nest-egg” for you and your spouse and to use your estate for your benefit. More importantly, your two agents may not agree. One decides that Mom needs assisted living. The other decides that the cost is prohibitive.
What to do in that case? Mediate? Open a Probate Court guardianship? Should one agent or “attorney-in-fact” be named to both positions? The job of the elder law attorney is to test the wishes of the client to ensure that “simple” questions such as these are fully explored before the plan is implemented.
We have clients who ask us to transfer real estate to a child or children during their life-time in order to avoid probate and for other family reasons. This can cause undesirable tax results (capital gains) when the property is sold by the child or children in the future. Further, a joint tenant can sever the joint tenancy without notifying the other joint tenants which converts the nature of the tenancy to a “tenancy-in-common.”
The most famous decision illustrating this result is a 1980 California decision where a wife conveyed her joint interest to herself as a tenant in common before her death. Upon her death, her husband expected to own the property outright but owned it with his wife’s devisees under her will! While Rhode Island uses a different form of joint holding by a husband and wife called a “Tenancy By the Entirety”, if another person is added as a joint owner, unexpected results can occur.
The moral: “CounselFirst”!
As a family planner, I try to stay on top of any and all resources which might assist my clients in meeting their goals. I recently met with a representative of the Rhode Island Foundation which is a non-profit foundation.
The stated objective of the foundation is “to sustain and strengthen the quality of life for all Rhode Islanders” which of course is a noble goal. When the representative called, my first reaction was: “My clients are not rich so what can this foundation do for my clients?” I thought that the primary purpose of the foundation was to provide annual grants to Rhode Island entities from the foundation’s endowment.
At our meeting I quickly learned that I knew little about the work of the foundation and that it could be useful for many of my clients. Here is a short summary of some benefits of involving the foundation in your planning:
Cost-free consultations, information and resources regarding charitable planning and giving. (Not legal or tax advice but assisting that advice by your attorney)
Accepting and managing endowments for any amount in excess of $10,000
Receiving gifts in any amount to add to one of their 800+ funds
Reasonable costs (compared to other managing entities)
Assisting donors in making very specific donations, gifts or bequests, following through with the donor’s desires and supporting the gift
Supporting a “donor-advised fund” where you take an active role in selecting grantees each year (which can also be controlled by your children in the future)
Providing income to you or to another for your lifetime through an annuity or a charitable trust
The donor can chose the charity and can be very specific regarding the use of funds by the designated charity. You can honor or memorialize someone forever. The foundation can help you find the right charity to meet your goals. For example, you could establish a scholarship fund in someone’s name. The charity can be in another state as well as in Rhode Island.
For local clients, The Newport County Fund is a permanent endowment of the Foundation and you can direct the use of your endowment to the needs of Newport County. The Maher Center could be designated as a beneficiary, for example.
LET US KNOW IF YOU HAVE ANY QUESTIONS ABOUT THE BENEFITS OF CHARITABLE GIVING. - Jeremy, Kristy & Hilary
In December I wondered in this newsletter whether our national legislators would pass legislation regarding Federal estate taxes. They did not. Where does this leave us?
For the moment we estate planners and elder-lawyers are in limbo. If a client has already died in 2010 or if they die soon, there is no current estate tax. There is talk of remedial legislation that will be retroactive to January 1st. Wait till the litigators “get ahold of” that one!
For your information, there is some precedent that Congress can pass retroactive legislation in matters such as this (that affect the federal pocketbook) but we’ll wait and see. There is also talk that the current administration would like to give a “year off” from paying federal estate (and gift) taxes but it is hard to see how that is wise given the current national financial crisis. It would help very wealthy families and hurt less wealthy families who will pay capital gains taxes on inherited assets over $1.3 million dollars.
After 2010 the estate tax exemption will be one million dollars again and the estate tax rate will increase to 55%.That will affect many more families. Standard language found in many estate plans could leave spouses with nothing. It is important to you check with an elder law or estate planning attorney to make sure your estate plan does what you want it to do. Call us with any estate planning questions.
Disclaimer
CASE RESULTS : EACH CASE IS FACT SPECIFIC AND WHAT MAY HAVE HAPPENED IN THESE CASES MAY NOT “FIT” YOUR PARTICULAR SITUATION OR BE IN YOUR BEST INTEREST.
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