Kansas & Missouri Estate Planning

Recordkeeping Key When Caring For Senior Parents In Overland Park, KS

Are you spending any time and money taking care of your parents in Overland Park or elsewhere? Do you intend to take any tax deductions for your assistance? If yes, then mind your recordkeeping or you may forego the deductions.

The case of Estate of Olivo v. Commissioner is most instructive.

Forbes examined the Olivo case in an article titled “Mother's Day? Son Claims $1.2M Tax Write-Off For Helping Mom.” From the title of the article, it is clear that the son may have been a bit generous in his claim. To make matters even more interesting, the son was a tax attorney.

Background: Anthony Olivo was the son/tax attorney. He took nearly ten years away from his law practice to care for his parents. Accordingly, Anthony lost his law practice income. However, he did collect fees from his parents for managing their estates. When Anthony’s mother died, he sought to deduct $44,200 in administrator’s fees, $55,000 in accountant’s and attorney’s fees, and a whopping $1,240,000 for a near-decade’s worth of lost wages (he did manage his own firm, after all).

The IRS raised an eyebrow, and then raised it further when they took a look at his documentation of all of these fees and amounts. Problem: there was no contract, no invoice, and no evidence. Not good.

Even when Anthony was handling the estate and filing the tax return he didn’t keep track of his time and just estimated. Also, not good.

In reality, not everything claimed may have been deductible. Nevertheless, the lack of recordkeeping killed any chance for success.

If you and you loved ones are entering a period of caregiving, then a little forethought and planning can go a long way. In the end, a little recordkeeping goes a long way in making your claim.

Remember: When making your financial, tax and estate plans, don't go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS, and to download free tools to help you organize your estate, visit my estate planning website.

Reference: Forbes (May 8, 2013) “Mother's Day? Son Claims $1.2M Tax Write-Off For Helping Mom”

When Having “The Talk,” Experts Advise Going To Mom First In Overland Park, KS

When I was a wee lad, I always knew my mother was an easier "touch" than my father. Such is the nature of mother-child relationships. Question: Have you had “the talk” with your senior parents? You know, the one about their finances? According to experts, ask Mom first (whether you live in Overland Park or elsewhere).

Fidelity Investments specifically suggests that moms are the best source of open dialogue, even when it comes to the “money talk.” In fact, MarketWatch recently considered this in an article titled “In family-money talks, start with mom.”

A summary of the numbers from that article:

In the survey of 975 parents and 152 adult children, 64% of mothers said it was “not at all difficult” to start a conversation with an adult child about their finances; only 54% of fathers felt the same way. In addition, 79% of women, versus 69% of men, reported having had “comprehensive discussions” with their adult children about estate planning or wills.  The same was true of 66% of women vs. 56% of men about health and elder-care topics and 70% of women vs. 55% of men about running out of money in retirement.

Although there are many reasons why moms might be the best to approach, most of them are mere conjecture. More important, however, is the reality that senior parents really do not enjoy talking about their finances. That is understandable.

All that noted, “the talk” needs to be had, sooner rather than later.

Remember: When making your financial, tax and estate plans, don't go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS, and to download free tools to help you organize your estate, visit my estate planning website.

Reference: MarketWatch (May 7, 2013) “In family-money talks, start with mom”

Power Of Attorney – Power To Steal In Overland Park, KS?

One of the tricky things about old age is the point at which you need legally delegate another to handle your financial matters. This legal "appointment" is one of the most important decisions you will make. Why? Because it can be a license to steal in the wrong hands.

A "power of attorney" is one of the most fundamental legal instruments you will ever create. In fact, everyone upon becoming a "legal adult" (i.e., age 18 in Kansas and Missouri, unless emancipated earlier), ought to appoint one or more "attorneys-in-fact" to handle financial matters in the event of incapacity. The alternative is an unpleasant (and expensive) adventure in the probate court.

But a power of attorney has an unfortunate downside, especially in the form of financial "elder abuse." It can become a license to steal.

The problem of abuse by way of a power of attorney is nothing new. In fact, a recent article in MarketWatch took up the matter. The article, titled "Power of attorney: It’s easily abused," noted that 34% of all elder abuse doesn't originate with credit card fraud, bogus lotteries, or emails from captive African princes. No, it is due to family members who have access and maybe even the power of attorney to dispose of accounts as they see fit.

The importance of your selection of attorneys-in-fact cannot be stressed enough. This is one of those decisions when the entire family ought to be apprised and alerted to who is going to do what and why.

Do not go it alone. Engage competent legal counsel to help you navigate these potentially treacherous waters.

For more information about estate planning in Overland Park, KS, and to download free tools to help you organize your estate, visit my estate planning website.

Reference: MarketWatch (March 19, 2013) "Power of attorney: It’s easily abused"

Alzheimer’s And Dementia – Silent Killers In Overland Park, KS

One in three seniors dies with Alzheimer’s or other dementia. That is a rather sobering statistic. Given these numbers, it only makes sense to make your health care and legal plans now while there is still time.

This new statistic – hardly alone in a field of such startling statistics – comes from a new report by the Alzheimer's Association. This was discussed in a recent article in The Washington Post titled "Beyond memory loss, report finds 1 in 3 seniors dies with dementia that can impede other care." Beyond these statistics in the realization these conditions have a likelihood to impede other care and render a loved one vulnerable to further conditions. For example, pneumonia can be caused by poor motor skills (difficulty swallowing), complications to medication, and even the inability to understand and communicate regarding one’s health care matters.

All told, Alzheimer's is the sixth leading cause of death, given that it is listed as the underlying condition on death certificates.

So, what should you do now? Realize that Alzheimer's and dementia are very real and insidious threats to the health and well-being of yourself or your senior loved ones. Get your ducks in a row now, especially when it comes to advance health directives and estate plans.

This is not a do-in-yourself program either. Make sure you engage competent legal counsel to help you navigate the applicable laws.

For more information about estate planning in Overland Park, KS, and to download free tools to help you organize your estate, visit my estate planning website.

Reference: The Washington Post (March 18, 2013) "Beyond memory loss, report finds 1 in 3 seniors dies with dementia that can impede other care"

Have You Discussed Your End-Of-Life Wishes In Overland Park, KS?

A rather unfortunate story hit the news a little while ago. It's the story of Lorraine Bayless and the Glenwood Gardens nursing home.

Spoiler alert: Lorraine fell into cardiac arrest and the facility was utterly unable to administer CPR, despite the pleading 911 operator. Why? "Company policy."

Don't rush to judgment, however. There's more to the story than meets the eyes ... or the headlines.

This matter has been taken up by Forbes in two recent articles, by two different authors. The first, by Howard Gleckman, is titled "The CPR Death At Glenwood Gardens: What Really Happened And Five Lessons You Should Learn." The second Forbes article is penned by Carolyn Rosenblatt and is titled "Nurse Refuses To Give CPR, Senior Dies: Ethical Problem Or Legal Issue?"

Here are four key facts regarding this story. First, Lorraine was having a stroke and CPR was not likely to help her. Second, the "nursing facility" was actually an independent living facility without skilled nurses. Third, Lorraine herself had not wanted a long drawn out passing; and fourth, Lorraine and her family already had arranged for a Do Not Resuscitate (DNR) order.

Against this backdrop, each of us needs to know two fundamental wishes when it comes to our loved ones:

1)      What does your loved one want and need in a facility? Since the facility in question was not an actual nursing home and the "nurse" was not actually a skilled nurse, the staff was not allowed to perform CPR, both by "company policy" and by law. There are many types of facilities with varying degrees of medical or personal care. Truly, to be in the "wrong" facility may mean not limiting the care your loved one may want.

2)      Likewise, what does your loved one want (or not want) when it comes to end-of-life measures? What decisions has your loved one made regarding emergency care, resuscitation, breathing or other life-sustaining apparatuses? Lorraine purposefully had a DNR, had made her decision, and her family clearly knew her wishes. Nevertheless, there are many additional considerations when it comes to making and communicating your wishes.

As you might imagine, it's best for your senior loved ones to commit their wishes and decisions to writing. The most common form is known by many different names, but is simply a written record of their healthcare directives made in advance. As with financial matters, your senior loved ones also will want to sign a durable power of attorney for medical matters and appoint the "agents" they know and trust to carry out their wishes. Another document to evaluate is the Physician’s Orders for Life Sustaining Treatment (POLST), often also called Medical Orders for Life Sustaining Treatment (MOLST).

Regardless, the object of these kinds of documents is to empower your senior loved ones to inform their loved ones, doctors and medical facilities about their wishes now so those wishes can (and will) be carried out later. Note: Once executed, copies of the health care directives should be liberally distributed among agents, non-agent family members, doctors and medical facilities. As these end-of-life wishes also are emotional decisions, it is best if everyone concerned is informed rather than surprised.

This end-of-life planning isn't just for senior loved ones. Have you made your wishes known through proper legal planning? The best way to encourage personal responsibility in others is to lead by example.

For more information about estate planning in Overland Park, KS, and to download free tools to help you organize your estate, visit my estate planning website.

Reference: Forbes (March 8, 2013) "Nurse Refuses To Give CPR, Senior Dies: Ethical Problem Or Legal Issue?"

                 Forbes (March 6, 2013) "The CPR Death At Glenwood Gardens: What Really Happened And Five Lessons You Should Learn"

Elderly Loved Ones – Memory Issues & Money

It is not always obvious, especially at first. Is your elderly loved one having "memory" problems? If yes, what should you do, especially when it comes to financial matters?

A recent article in Forbes considered these question and others. The article, titled "Is Your Aging Loved One "Losing It"? Five Strategies to Help You Prepare For Managing the Money," also provides some practical pointers, to include:

1. Learn about the assets and financial responsibilities you and your loved one have.
2. Take time to get to know your loved one’s financial advisor, accountant, broker and banker.
3. Do not accept financial illiteracy.
4. Accept the potential responsibility you may have one day, as a way of protecting yourself against fraud and financial abuse.
5. Check your legal documents and be sure that you have what is needed to take over financial management if that time comes.

Each of these points is important. However, I will add my own to the mix – don't ignore the issue.This is no time to put your head in the sand.

While it can be hard admitting that a loved one is "losing it" cognitively, matters are only made worse when their financial matters crash and burn, too. If you already are at that point, then it may be wise to have a family meeting to coordinate your plan of action together.

Even closer to home, take a good look in the mirror. Do you have your own estate planning in place, so your loved ones could take care of your financial matters?

Reference: Forbes (February 14, 013) "Is Your Aging Loved One "Losing It"? Five Strategies to Help You Prepare For Managing the Money"

Elderly Parents – Blended Family Challenges

Let's face it – the modern family structure can get complicated. While "family" may make good material for divorce courts and sitcoms alike, it's also becoming clear that there is a new family crisis brewing in elder care within blended families.

This topic was taken up in a recent article in the New Old Age Blog titled "In Blended Families, Responsibility Blurs."

When it's just parents and just the kids born from those parents caring for elderly parents can be difficult enough. Generally, most families assume that the adult children can work things out to take care of their elderly parents. In a blended family, however, and especially in one where the parents of those adult children have remarried late in life, the boundaries can get blurry. There, moral decisions once clear become blurry.

With elderly parents in such situations, there oftentimes are changes in relationships for the worse that can lead to even petty angers which further add to complications. Remember, every family requires ongoing communication and shared understandings to make a family run smoothly. Easier said than done. Nevertheless, you owe it to yourself and to your loved ones to come to that point.

The original article has so much more to say on this topic, with a first-hand account that is all too familiar to many. Here is an important takeaway: the coming generations of elderly persons are more likely to be in a blended family, so be prepared now for the challenges that may bring to you and those you love.

Reference: The New York Times – The New Old Age Blog (February 5, 2013) "In Blended Families, Responsibility Blurs"

Tax Breaks When Supporting Elderly Parents

It's officially tax time, and if you have been caring for an elderly parent you may find that Uncle Sam can help with some of those costs through favorable tax treatment.

Depending upon your circumstances, you may be able to claim your parent as a dependent, take a dependency care tax credit, deduct a portion of their medical expenses or get some combination of these tax breaks.

Forbes offers guidance on whether you might qualify in a recent article "How To Claim Tax Breaks For Supporting Your Parents." If you think you may qualify, consult an accountant or tax professional to maximize your tax savings.

Sadly, caregiving frequently also means managing end-of-life care ... and the attendant expenses. While it may be difficult to focus on financial matters during these stressful times, tax breaks can help extend available resources. Of course, the first step is to determine which expenses qualify and to what extent.

Expenses that frequently apply to people with advanced illness include health insurance premiums not paid through work, deductibles, co-pays, medication, alternative care, medical supplies such as bandages, dental care, Medicare B premiums, lodging while traveling for care, and transportation costs.

The IRS has a very detailed list of what is and isn't deductible in Publication 502. You can refer to this publication for details, as well as to another excellent Forbes article, "Save Money On Taxes At The End Of Life -- How And Why It Matters."

Again, be sure to consult your accountant or tax professional if you think you may have qualifying expenses. The tax savings could be significant, and could help ease an otherwise difficult burden.

References: Forbes (January 29, 2013) "How To Claim Tax Breaks For Supporting Your Parents"

Forbes (February 4, 2013) "Save Money On Taxes At The End Of Life -- How And Why It Matters"

DSM5 – Changing The Playing Field For Cognitive Diagnoses

Not all of the truly important medical developments come out of the laboratory, and in fact, many of the most noticeable shifts felt by doctors and patients alike spring from committee. For those of us with elderly loved ones, the committee with which you should become most familiar is the American Psychiatric Association and their upcoming best-seller, the DSM5.

This book may usher in new ways of approaching elders and depression, and that may not be a good thing according to some.

The concern over the DSM5 has come to a slow boil. The conversation about DSM5 has begun seeping out from the the academic literature and into the public square with articles like a recent piece in the The New York Times titled "Time to Recognize Mild Cognitive Disorder?"

The DSM5 will be the sequel to the Diagnostic and Statistical Manual of Mental Disorder IV (DSM IV), the utterly necessary reference book and dust-gatherer of psychologists, doctors, insurance companies, bureaucrats, and lawyers alike. DSM IV chronicles known and diagnosable psychological disorders.

For seniors, the new disorder making the rounds is "mild cognitive disorder." This diagnosis is an attempt to bring to psychiatry the same awareness to levels of cognitive senility that medical doctors know all too well and yet still understand too little. If the DSM5 is published as is, and becomes the go-to reference, then we’re likely to see many more elderly diagnosed into categories that have only just now been created.

For families taking care of elderly loved ones, and those getting on in years themselves, it's useful to understand the basis for any diagnosis made by their doctors. Regardless, the takeaway would be to get your legal ducks-in-a-row before a future diagnosis diminishes the legal capacity to make proper estate planning decisions.

Reference: The New York Times – The New Old Age Blog (January 25, 2013) "Time to Recognize Mild Cognitive Disorder?"

Health Care Costs = Location, Location, Location

A cup of coffee will cost you just a bit more or a bit less depending on where you get it. Interesting, however, the cost isn't necessarily dependent on how good the coffee tastes.

No, when it comes to geography and what you pay for something, remember the three things you can't afford to overlook: location, location and location. And the effect of location on medical care and old-age expenses can be significant.

Planning for your old-age, or for the needs of an elderly loved one, is partly a test of geography in the healthcare economy. In fact, it's more important to understand this fact of life now more than ever.

For some fresh analysis of topic, you might want to take a look at a recent Morningstar article titled "Health-Care Costs: Why Your Location Really Matters." The article speaks to the "numbers" and to international comparisons. Regardless, the key for you to note is not the economics or even the politics behind this issue, but rather the very real circumstances you and your loved ones may be facing now or in the future.

So, how will you plan for the geography of medical expenses?

Reference: Morningstar (January 11, 2013) "Health-Care Costs: Why Your Location Really Matters"