Comprehensive Planning. Lifelong Solutions.

Protecting Seniors From Isolation

By Hook Law Center

Although we frequently think of seniors as living among family members or in a senior community or other shared housing arrangement, the likelihood of living alone rises as one ages, according to the U.S. Census Bureau. Among women 65 to 74 years old, the probability of residing alone is 32 percent. This rate increases to 57 percent for those who are 85 or more years old. Among men, the rates are 13 percent and 29 percent respectively. And among those who are 100 years or older, approximately one-third reside alone at home.

Isolation of the elderly can lead to some upsetting health results, and can raise the risk of death. According to a review published in the Journal of Primary Prevention, social isolation has been shown to cause many harmful health problems in seniors, such as a heightened risk for all-cause mortality, dementia, re-hospitalization and more falls.

As stated in the UChicago News, social isolation can interrupt sleep, raise blood pressure, cause a morning surge in the stress hormone, cortisol, change gene expression in immune cells, escalate depression and reduce a sense of well-being.

There are several measures friends and family can take to combat such feelings of social isolation in seniors. You can make sure that they have a sufficient amount of incontinence supplies and that they are tested for hearing and vision on a regular basis. You can also ask neighbors to help by visiting them to see if they are feeling OK. In addition, you can call or email them frequently if you are unable to see them in person.

Another preventative measure is to arrange for food to be delivered to them so as to prevent them from suffering from malnutrition. An organization such as Meals on Wheels can provide this service along with some social interaction. You can help seniors become more socially active by encouraging an enabling them to use hearing aids or walkers. Give rides to senior relatives whenever possible or arrange rides for them.

Contact your local Area Agency on Aging to discover senior centers, transportation services and other programs to help the elderly.

Sources

  • http://www.aplaceformom.com/blog/2-25-14-preventing-senior-isolation-in-winter/
  • Posted on Tuesday, September 20th, 2016. Filed under Senior Law News.

    New Changes Coming for Family-Owned Businesses

    By Elizabeth Boehmcke

    The IRS has published proposed regulations concerning the valuation of family-owned businesses for estate and gift tax purposes that are potentially game changing. The sweep of these regulations is broad and encompasses both active family businesses and passive, investment-driven family enterprises that have primarily been created for wealth transfer planning purposes. Anyone with an interest in a family-controlled business of any kind needs to pay attention to these changes.

    For many years, families whose fortunes exceeded the applicable estate tax exemption amount (currently $5.45 million) have tried to reduce the value of their estates for estate and gift tax purposes by utilizing planning techniques that take advantage of discounts available in the valuation of assets held by entities such as LLCs, partnerships or corporations. For instance, clients have been advised to create family limited partnerships or family limited liability companies and to transfer a portion of their assets to these entities. Then, clients are encouraged to make gifts of sufficient interests in the business such that they are left with a minority interest in the company and their children each also own minority interests. The gifts of the minority interests to the children are subject to valuation discounts such as minority discounts and lack of marketability discounts that reduce the “cost” of the gift for gift tax purposes. And then, when the client passes away, similar discounts are available to lower the estate tax value of the interest retained by the client. In this way, it is possible to reduce the value of the property passing subject to estate and gift taxes by 30-40% or more. For clients with active businesses, the same discounting techniques are available and often advisable.

    The new proposed regulations may change the ability of family business owners, even of active businesses, to take discounts once the regulations become effective. Although there is some disagreement among commentators about the scope of the Section 2704 Proposed Regulations, there is some consensus that there is a significant risk that the discounts will simply disappear for family-controlled entities or, at the very least, become far less attractive as a planning tool.

    The proposed regulations add a new three-year rule which would treat certain transfers which occur within three years of the death of the original transferor, like the plan described above, as a deemed transfer of the lapsed voting or liquidation power at the transferor’s death. This results in the value being included in the gross estate of the transferor. As a result, it seems that the discounts that otherwise would have been available on the transfer of minority interests are recaptured, and no discount is available for the minority interest that is retained. Additionally, the proposed regulations would deny the ability for discounts based on the status of a transferee as a mere “assignee” instead of being a full member of the business.

    In addition to these roadblocks, the Service has proposed that certain restrictions be “disregarded” for valuation purposes. These would include the ability of a non-family member, such as a charity, to prevent the removal of the restrictions that would otherwise allow for discounts unless the non-family member meets certain criteria, including significant ownership interests for significant periods of time and the right to be bought out of the business for cash or property. The criteria are such that it is unlikely to be workable in practice. In addition, the proposed regulations state that restrictions that are not mandated by federal or state law are to be disregarded. This is particularly problematic, because most state statutes are not mandatory by nature. Rather, they provide default rules in many cases but allow the business entity to make choices for itself about liquidation rights, voting rights and many of the other important rights that affect the valuation of an ownership interest in a business entity.

    The details of the proposed regulations are too extensive and complicated to cover completely in this newsletter. The proposed regulations will not be effective until 30 days after the regulations are finalized. There is a hearing scheduled in Washington, D.C. on December 1, 2016 to discuss the proposed regulations, and we expect that the regulations will not be finalized until sometime in 2017. We, therefore, have some time to take advantage of planning opportunities for discounts that may not be available next year. Of course, we do not know the scope of the three-year rule and exactly how it will be changed when the regulations are finalized. There is some risk that transfers made before the regulations are finalized may become subject to the regulations that will include the discounts taken into the estate of the transferor if the transferor dies within three years of the transfer.

    The attorneys at the Hook Law Center are ready to meet with you to discuss your options, to review your operating agreements and to assist you in planning to meet the challenges posed by the proposed regulations. Furthermore, if transfers have already taken place, it may be important to discuss a plan for the payment of estate taxes on any amount added back to the gross estate. For all our clients engaged in active family businesses, business succession planning is always challenging; however, the proposed regulations do provide some safe harbor relief that must be investigated on an individual basis to determine what may work for your situation.

    Kit KatAsk Kit Kat – Reindeer Struck by Lightning

    Hook Law Center:  Kit Kat, what can you tell us about the reindeer in Norway that were killed on August 26, 2016 by a terrible lightning strike?

    Kit Kat:  Well, this is a very sad tale, indeed! 323 reindeer were struck by lightning in a hunting area of the Hardangervidda mountain plateau of central southern Norway on Friday, August 26. At those altitudes, the mountains are treeless, and the reindeer took the brunt of the lightning strikes. From a picture in the article which appeared in The Washington Post, it looked like something out of a science-fiction or horror movie. Deer were stopped in their tracks, and fell dead right where they stood. In some cases, this meant falling right on top of one another. Reindeer when grazing, cluster in herds, and this was quite a large herd. This is especially true during bad weather. A gamekeeper discovered them. He notified NTB, a Norwegian news outlet. In turn, experts were called in to take samples of the carcasses which were later sent to a state veterinary institute to officially determine the cause of death.

    Unfortunately, animals being struck by lightning is not unheard of. Before this latest incident, the largest group of animals known to be killed by lightning was a group of 68 Jersey cows in Australia in 2005. And just this past March (2016), 21 cows in South Dakota were killed when they became electrocuted from their metal feeder, which was struck by lightning. Yet, some animals get lucky! A male bison in Iowa, who lives at Neal Smith Wildlife Refuge, was struck by lightning in the shoulder in 2013. He lives to this day, though he has a large, hairless patch where he was hit. His caretakers have fittingly named him “Sparky!” (Karin Brulliard, “A lighning strike killed 323 reindeer, and this is the ghastly aftermath,” The Washington Post, Animalia section, August 29, 2016)

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    Distribution of This Newsletter

    Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

    Posted on Monday, September 12th, 2016. Filed under Senior Law News.

    How to transfer property to a living trust

    By Hook Law Center

    A living trust is a legal entity that is used to hold title to your assets while you are alive. Upon your death, the assets are then transferred to the beneficiaries named in the trust. You can transfer such assets as bank accounts, stocks, bonds and certificates to the trust. You may also wish to change the beneficiary on your life insurance policy and retirement accounts, and establish a pour-over will that distributes any assets obtained after the creation of the living trust (but prior to your death) to the trust upon your death.

    You can also transfer tangible personal property to a living trust. This type of property includes jewelry, furniture, books, artwork, clothing, automobiles and other such items. Personal property does not include real property and intangible property, including money, stocks or bonds.

    The transfer of an automobile or other vehicle to a living trust is very similar to transferring it to a third party. You sign the title over to the trustee, who then registers the vehicle. Registration of a vehicle held in trust has the same requirements as does registration of a vehicle held in your own name. You are also required to have an insurance card that shows that the insurance on the vehicle is in the name of the trustee. And if you are behind in the payment of any property taxes, you will be required pay the delinquent tax prior completing registration.

    Moreover, most states will require you to have either a duplicate of the trust instrument or a letter from the attorney confirming the name of the trust and the trustee. The letter must also corroborate that the trust is in effect. There are some states that will levy a sales tax on the transfer of a vehicle to a revocable living trust on the basis of the sale price paid by the trustee or the vehicle’s book value, whichever is greater. However, a sales tax is inapplicable when the transferor is the same as the transferee. If your state is insistent, contact your state tax department, and speak with one of its lawyers.

    One advantage of a living trust is the avoidance of probate, which can be costly and time-consuming. Another benefit is that a living trust ensures the privacy of your distributions whereas a will is public record. In addition, if you become ill or lose capacity, your trustee can make decisions on your behalf. But if you have a will without a durable power of attorney, the court will designate an individual to manage your financial matters. If you create a durable power of attorney, including one for health care decisions, the court will not select a conservator to handle your affairs.

    Sources

    • https://www.legalzoom.com/articles/top-three-benefits-of-a-living-trust
    • https://www.livingtrustnetwork.com/estate-planning-center/revocable-living-trust/how-to-fund-a-living-trust/transferring-tangible-personal-property-to-a-living-trust.html
    Posted on Tuesday, September 6th, 2016. Filed under Estate Planning.

    Protect Yourself from Identity Theft & Credit Card Fraud

    By Bobby Buhr

    With identity theft and credit card fraud becoming a growing problem, there are things that each of us can do to minimize the risk.

    Shred sensitive documents: Regularly shred outdated bank statements, credit card applications, bills, tax returns, and anything with your personal information before tossing it into the trash or recycling. Join us at our Virginia Beach office on September 17th for our annual shred day, “Shred with a Purpose”, from 9AM to Noon.

    Guard your information online:  Clear your logins and passwords.  Change logins and passwords frequently.  Pay for online purchases with a credit card which provides better guarantees under federal law than your online payment services or your debit card.  Be alert for phishing, a trick that mimics legitimate businesses to obtain your personal information. Use a wipe utility before disposing of hard drives and mobile devices.  Encrypt your data to keep online transactions secure.  Use strong passwords and keep passwords private.

    Monitor your bank and credit card statements:  Check your accounts regularly for fraudulent charges.

    Monitor your credit report:  By law, you are entitled to a free report every year from each three credit bureaus: Equifax, Experian, and TransUnion.  You can order through each agency or www.annualcreditreport.com.

    Credit and debit cards: Pay attention at the checkout line.  If a cashier, wait staff, or salesperson takes your card and either turns away from you or takes too long to conduct what is usually a normal transaction, they could be scanning your card into a skimming terminal or even taking a picture of your card front and back with a cell phone. Do not sign the back of your credit and debit cards; instead, write “Photo ID Required.”

    Checks: If you want to put a telephone number on your checks, use your work telephone number instead of your home number. If you have a post office box, use that address on your checks instead of your home address. Never have your Social Security number printed on your checks.

    Wallet: Limit what you carry. When you go out, take only the identification, credit, and debit cards you need. Keep photocopies of the contents of your wallet and all credit and debit cards. Copy both sides of each item, including your driver’s license, other identification cards, and credit/debit cards. This will permit you to know what you had, including account numbers, so you know which entities to contact if your wallet is lost or stolen. Keep the photocopy in a safe place. Also, when traveling, bring a copy of your passport and store it in an alternate location, like a locked suitcase or hotel safe, in case your passport is lost or stolen.

    Kit KatAsk Kit Kat – Louisiana Pets In Norfolk

    Hook Law Center:  Kit Kat, what can you tell us about the Louisiana pets caught in the flood being brought to Norfolk?

    Kit Kat:  Well, it was a terrible shame about the flood in the Baton Rouge area of Louisiana a couple of weeks ago! Not only were thousands of people displaced and their property destroyed, but pets were victims, too. Crash, the cockatiel, almost drowned in his cage before he was rescued. His owner had to give him up, because his owner lost everything in the flood. So nearly 60 animals, including rabbits, cats, dogs, and 2 cockatiels (Hula and Crash) came to Norfolk via vans. Their first stop was PETA headquarters on Front Street in Norfolk. From that starting point, they were met by staff from various local pet sanctuaries, including Norfolk Animal Care and Adoption Center, Chesapeake Animal Services, Chesapeake Humane Society, Danville Area Humane Society, and the Chowan-Gates shelter in North Carolina. Some of the pets already have homes waiting for them, but others will be available for adoption once they have been checked for any health issues. If you are interested in adopting one of these lovely creatures, email PETA at adopt@peta.org.

    Why did the pets have to come all the way to Norfolk? Well, the shelters in Baton Rouge and other towns in Louisiana were so overwhelmed with processing the pets who lost their homes during the flooding, there was no room for the pets that were already there. PETA stepped in and offered to help, says Daphna Nachminovitch, senior Vice President of PETA. The shelters in Louisiana will focus on reuniting pets caught in the flooding with their owners who are interested in reuniting with them. (Cindy Clayton, “In Louisiana, it kept on raining. Now it’s raining cats and dogs here.” The Virginian-Pilot, August 23, 2016, p. 3)

    Upcoming Seminars

    Distribution of This Newsletter

    Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

    Posted on Friday, September 2nd, 2016. Filed under Senior Law News.
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