Comprehensive Planning. Lifelong Solutions.

What Do You Mean Electronic Will?

By Letha Sgritta McDowell, CELA

In a world of rapid change, the process of estate planning seems to have been relatively stagnant; at least until recently. The process has always been something like a client meeting with an attorney to discuss his or her wishes in the event of disability or death. The attorney then discusses documents like a will, trust and power of attorney and together the attorney and client determine the best plan for the client. Then, the attorney drafts the plan and the client returns to sign all the documents. Whether written by hand, on a typewriter, or with a word processor, the process has remained largely unchanged.

Technology has changed so much around us, including in the legal world. Potential clients now Google basic legal questions before coming to see an attorney, so they are more versed in legal documents before an attorney suggests them. Deeds can be electronically recorded and so an inked signature is never sent to the register of deeds. Legal Zoom and other electronic services have changed many transactional law practices, including estate planning. Some now bypass the attorney and use online services with which to draft their estate planning documents or business plans. Whether created using Legal Zoom or drafted by an attorney, all wills require the testator to sign it with an ink pen. So, despite the existence of such online services and the rapid evolution of technology, the manner in which wills are executed remained unchanged; at least until recently.

Last week Florida passed an electronic wills law. The Florida law allows individuals to electronically sign their own will, by-passing the need for a second trip to the attorney’s office or an ink pen. In order for the will to be considered valid, it must be electronically signed by the testator and signed in the presence of two witnesses, much in the manner in which wills are traditionally executed, but the witnesses do not have to be in the same room as the testator. Instead the witnessing of the will can be done virtually (by web camera), so long as the execution is videotaped. There are a number of other requirements that must be met in order for a will to be a valid electronic will; however, the revolution does not exist so much in the details, but rather in the fact that electronic signatures and thus purely electronic wills exist.

Currently, neither Virginia nor North Carolina are considering similar laws; however, Florida’s electronic wills statute will impact both states. Will Virginia and North Carolina accept Wills which were validly executed under Florida’s electronic wills statute as a means to pass title to a Florida resident’s real estate located here, even though the will wouldn’t be considered valid here? Should Virginia and North Carolina consider similar electronic wills statutes to make travelling to and from our states easier?

Many believe that allowing the electronic creation of wills will allow the more than half of Americans who don’t have wills, to create them at a reasonable cost. Others are concerned that allowing the electronic execution of wills will result in an increase in fraud, undue influence, and elder abuse. The actual impact of allowing electronic signatures and electronic wills remains to be seen. But one thing is for certain, technology continues to change the practice of law.

At Hook Law Center we understand that your time is limited and valuable. For that reason we offer virtual appointments (via web cam) and a limited number of evening appointments

Kit KatAsk Kit Kat – Prairie Dog ‘Talk’

Hook Law Center:  Kit Kat, what can you tell us about how prairie dogs communicate?

Kit Kat:  Well, if you’ve ever heard a prairie dog whistle, you’ve heard prairie dogs “talking.” What may sound to you like a cheerful whistle is actually how they communicate. The premier expert in the field is Con Slobodchikoff, emeritus professor of biology at Northern Arizona University. He’s been studying prairie dogs’ communication for more than 30 years!

According to Dr. Slobodchikoff, prairie dogs have such complex communication abilities, that he has labeled it as language. Not all his colleagues in the scientific community agree, but he still clings to his assertion. Dr. Slobodchikoff says that the prairie dog can not only telegraph what type of outsider there is, but also the outsider’s size, shape, color, and speed. He also says they can describe something they have never seen before. One way they do this is through the use of intonation. Much like in the Mandarin language in which one word (ma) can mean horse, mother, or to scold, the prairie dog combines 6-7 overtones (compared with a human’s 3-4 overtones) to compose different strings of words—“dog big yellow fast” or “human small blue slow.” Dr. Slobodchikoff is dedicated to this field and will continue his research into these fascinating creatures.

Sadly, his subjects are in decline right now. They are not a protected species, because some see them as pests who consume the grass that cattle depend on. Dr. Slobodchikoff says they are not really a threat, because it would take hundreds of prairie dogs to eat as much grass as one cow does. Before 1800, it is estimated that as many as 5 billion prairie dogs occupied the Great Plains. They live in colonies in underground burrows and rarely venture more than a few hundred feet from the home colony. As soon as a threat is detected, the one who realizes danger sounds the alert, and all run for cover. Now, it is estimated that only 10-20 million exist. Another problem for them is disease. Since 1900, they have been prone to contract plague, brought to North America by flea-bitten rats from Asia. Nevertheless, Dr. Slobodchikoff will continue his studies, even though it now requires him to travel further from Flagstaff where Northern Arizona University is located to find his subjects. (Ferris Jabr, “Can Prairie Dogs Talk?” The New York Times Magazine, May 12, 2017)

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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 Tuesday, May 30th, 2017. Filed under Newsletter.

Virginia’s New Access to Digital Assets Act

By Jessica A. Hayes

Effective July 1, 2017, Virginia will be repealing its current law relating to digital assets, the Privacy Expectation Afterlife and Choices Act, and will adopt the Uniform Fiduciary Access to Digital Assets Act, which will be codified as Virginia Code §§ 64.2-116 through 64.2-132 (the “Digital Assets Act”).

Under the Digital Assets Act, a “digital asset” is broadly defined as “an electronic record in which the individual has a right or interest.”  The Digital Assets Act will permit a fiduciary – the executor or administrator of an estate, the trustee of a trust, the guardian and conservator of an incapacitated person, and the agent under a power of attorney – to manage the principal’s digital assets such as computer files, web domains, and virtual currency.  However, it will restrict a fiduciary’s access to electronic communications such as email and text messages (the “content of an electronic communication”) and social media accounts, unless the original user specifically consented to such access in a will, trust, power of attorney, or other record. Whereas the previous law concerning digital assets applied only to executors and administrators of estates, the new law will apply to also to guardians, conservators, and agents under powers of attorney, broadening the scope of the law, and will provide more specific guidance to the “custodians” of digital assets (those who carry, maintain, process, receive, or store digital assets) which closely mirrors the laws of other states that have enacted the Uniform Fiduciary Access to Digital Assets Act. What does this mean for you?  If you wish for your executor, trustee, or agent to be able to access the content of your electronic communications, as opposed to merely a log of the parties to and date of the communications, you should include wording in your will, trust, and power of attorney to specifically permit it, in accordance with the terms of the new Digital Assets Act.

Kit KatAsk Kit Kat – Cats and Boxes

Hook Law Center:  Kit Kat, what can you tell us about cats and why they love boxes so much?

Kit Kat:  Well, we cats have our own special idiosyncrasies. One of them is that we love small, defined spaces. They make us feel protected and secure. It’s not just me saying this, or what you might have observed yourself about cats. Dr. Nicholas Dodman of Tufts University’s Cummings School of Veterinary Medicine says, “When young, they used to snuggle with their mom and litter mates, feeling the warmth and soothing contact. Think of it as a kind of swaddling behavior. The close contact with the box’s exterior, we believe, releases endorphins—nature’s own morphinelike substances—causing pleasure and reducing stress.” Pigs have a similar liking, he says about research he conducted with Temple Grandin of Colorado State University. However, for them, ‘lateral side pressure’ is all it takes to have a soothing effect.

More validation for cats’ preference of small spaces like boxes comes from Dutch scientists. Their research showed how shelter cats that were provided with boxes as retreats adapted much faster to their new environment when compared with those who were not provided boxes as a safe haven.

To take this a step further, it even appears that cats, with no available boxes at hand, will choose to sit in a taped representation on the floor or carpet of a box. It certainly is not a perfect substitute for the real thing, but it does represent to them, a smaller space which corresponds to their diminished stature.

And there you have it! To make your cat happy, all you have to do is provide a box or basket for them to snuggle in. My mom lines them with towels which can be regularly washed, so that the area is always fresh and clean! (Nicholas Dodman, “Your cat loves hopping into boxes. Here’s why.”

The Washington Post, Health and Science section, April 22, 2017; Originally published on theconversation.com.)

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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 Tuesday, May 23rd, 2017. Filed under Newsletter.

The Role of an Elder Law Attorney in Personal Injury Actions

By Shannon Laymon-Pecoraro, Esq.

People are often surprised when they hear that elder law attorneys assist personal injury attorneys with public benefits issues associated with their case. Our working knowledge of the intricately woven issues associated with medical insurance, means-tested benefits, capacity and asset protection often make us vital members of a settlement planning team. Some of the recurring issues we assist personal injury attorneys include the following:

Guardianships: When an individual lacks the requisite capacity to make the complex decisions associated required in bringing litigation, we are often called upon to bring a guardianship. In most cases, such causes of action are necessary to ensure that there is a proper fiduciary is empowered to bring the cause of action because the individual does not have an effective estate plan. In other cases; however, the personal injury may want the judicial determination of incapacity to streamline the decision making process.

Trusts: We most often called upon to draft settlement trusts to protect the hard-earned settlements or awards received by a client. In some cases, we draft these trusts prior to a trial in preparation for the final disposition, and in other cases, we are called upon on the back-end to resolve lingering issues. With few exceptions, trusts should be the preferred vehicles for settlement funds for children or individuals with disabilities because of greater flexibility and protections for the individual beneficiaries. Important protections offered with a settlement trust include:

  • Protection of means-tested public benefits such as Supplemental Security Income (SSI), Medicaid, Section 8, and Food Stamps
  • Resolving Medicare issues such as liens and set-asides
  • Professional management of assets and spendthrift protections

Medicare Issues: The Medicare manual is complex, and the intricacies involved with Medicare’s status, as a “secondary payer” can be difficult to navigate. If you take into account the steep penalties associated for failing to address Medicare’s right to recover conditional payments or a future interest, having a second set of eyes becomes even more important. We are often asked to opine as to whether Medicare has a valid lien against settlement proceeds or if a set-aside is required.

Medicaid Issues: We are sometimes called upon to prevent the impoverishment of a family due to skilled-nursing required by an individual that has fallen victim to a catastrophic injury. We are most often called, however, to protect benefits that are already in place. While a minor may have Medicaid as a basic health insurance policy that can easily be substituted by purchasing private insurance, Medicaid benefits for the elderly or disabled will likely need much more protection due to more intensive care needs. This is especially true when an individual is receiving one of Virginia coveted ID/DD waivers, for which the waiting list is years long.

 

Bringing an elder law attorney in early becomes a critical component of settlement or trial preparation and often prevents delays associated with back-end tackling of issues. By being involved, an elder law attorney can assist with lining up allocations for Medicare and Medicaid, preparing Medicare Set-Asides, and drafting settlement trusts, settlement agreements, releases and orders to protect benefits and limit liabilities.

Hook Law Center, P.C. has been actively assisting clients and personal injury attorneys in resolving various elder law issues associated with settlements and awards. Our goal is to be an integral member of a settlement team and maximize the funds received, while protecting the clients and attorneys involved.

Kit KatAsk Kit Kat – Moose on Isle Royale

Hook Law Center:  Kit Kat, what can you tell us about moose on Isle Royale, Michigan?

Kit Kat:  Well, this is an interesting story. Isle Royale is a national park belonging to Michigan which is located in Lake Superior, close to the Canadian border. It is a large island, 45 miles in length. Hundreds of smaller islands surrounding it are included in the national park. Right now, there is an imbalance in the moose-wolf population. Moose are increasing, while the wolf population is in significant decline. Inbreeding of the wolves have contributed to their decline, with only 2 left—a male and female who are too old to reproduce. Moose, on the other hand, who feed on Balsam fir trees, are thriving. This may sound fine, but it’s really not. If the moose population gets too large (it’s estimated to be around 1,600 currently), they will continue to denude the island of its fir trees. Already, many once forested areas have been turned into grassy plains. A good balance between wolves and moose is what scientists call a predator-prey balance. In the past, when the moose population got too large as it did in the 1990s and reached a number close to 2,500, many moose died of starvation during a severe winter in 1996. There are no easy solutions.

The National Park Service is looking into 4 alternatives to address the problem, one of which is to let the wolves die out. Their preference, however, is to relocate 20-30 wolves to the park over a 3-5 year period. They will make a decision this fall (2017). Mother Nature sometimes gets out of balance. It will be interesting to see how the park service decides to intervene, if at all.

(Associated Press, “As wolves die out, moose numbers boom on Michigan’s Isle Royale,” The Washington Post (Kids Post), April 19, 2017)

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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, May 15th, 2017. Filed under Newsletter.

The New Elective Share Law Adds a Layer of Complexity for Planning for Long-Term Care

By Elizabeth Boehmcke

As of January 1, 2017, the Virginia Legislature amended our state’s formula for determining the surviving spouse’s elective share rights in the augmented estate. Under prior law, a surviving spouse was entitled to one-third of the decedent’s estate, augmented by certain transfers delineated by statute, such as life insurance, retirement accounts and gifts to others. Under the new law, the amount of the elective share is based on a sliding scale related to the length of the marriage and takes into consideration the assets of both the decedent and the surviving spouse. In theory, for long-term marriages (defined as those of 15 years or more), the idea is that the spouses operate like a partnership and that each spouse contributes equally to the marriage in one fashion or another and so both are entitled to share equally in the assets. Although the new law is worthy of extensive discussion on various points, I want to focus primarily on how it affects our clients who are planning for incapacitated or potentially incapacitated spouses and also planning for the possibility of needing public long-term care benefits, like Medicaid.

Traditionally, we have encouraged clients who see a realistic probability of needing to plan for not only the incapacity of a spouse who may survive them but also for the possibility that such spouse would be using public benefits at the time to consider the creation of a supplemental needs trust (“SNT”) in the Will of the first to die. However, because the surviving spouse has the right to receive an elective share outright, there has always been the concern that the failure to exercise that right created a transfer which would be attract a penalty for Medicaid purposes or, at the very least, would result in a Medicaid payback at the death of the surviving spouse. The new statute has created some alternatives.

The new statute provides that, if the surviving spouse is incapacitated at the death of the first spouse or within the time required for making the election for the elective share, then a conservator or an agent under a durable power of attorney may make the election for the survivor. In that case, the court is required to put the amount of the elective share in a trust for the benefit of the survivor. The trust as described in the statute both protects the survivor’s eligibility for public benefits and allows the assets remaining at the survivor’s death to pass to the beneficiaries chosen by the deceased spouse (typically children). Because the elective share amount is required to be placed in trust by the court, the surviving spouse cannot be considered to have made a transfer to which Medicaid could lay claim.

The statute further provides that if the surviving spouse is not incapacitated within the time required for making the election for the elective share, then assets placed in a trust with certain provisions will qualify for the elective share amount. Again, in this situation, because the elective share amount cannot be deemed to have been transferred by the survivor, Medicaid can make no claim on the assets held in the trust. However, in order to meet the requirements, the surviving spouse must be entitled to all the income of the trust for life and to principal in the discretion of a non-adverse trustee. This means that the income generated by the trust may be used to help pay for the survivor’s care. Careful financial planning can limit the amount of income available to be used for care and to ensure that public benefits remain available to the survivor.

By carefully thinking through the contingencies that could arise on the death of the first spouse, depending on the capacity of the surviving spouse, we can create multiple trusts that maximize the protection of assets for the survivor and his or her access to public benefits. This may result in the creation of multiple trusts on the death of the first spouse to die – one to hold the augmented estate share and one to hold the balance of the assets, probably in an SNT. In addition, if the surviving spouse is incapacitated at or near the death of the first to die, the survivor’s agent under a durable power of attorney will need to file certain papers with the court in a timely manner. However, the added complexity is worth it when you consider the additional protection available for both the surviving spouse and the remainder beneficiaries.

The changes in the elective share statute will affect almost all of our married clients. Your current documents may contain trusts created to accommodate the old rules or you may not yet have considered whether you need to worry about long-term care public benefits for the survivor of you. In either event, changing laws highlight the need for regularly checking in with your estate planning attorneys at the Hook Law Center to determine whether your plan should be updated. Please give us a call to arrange an appointment for one of our knowledgeable attorneys to review your plan and discuss how the changes in the law may affect you.

Kit KatAsk Kit Kat – Dogs’ Duty

Hook Law Center:  Kit Kat, what can you tell us about our faithful friends, dogs, and how they help science?

Kit Kat:  Well, dogs have always been helpful to mankind in a myriad of ways. They serve on police forces, help the military, guard residences, and are beloved family pets. However, in New York City, they are helping in a different way. Scientists there are studying their fecal waste, or in common parlance, their poop! What could that possibly tell us, you might ask? Well, it turns out a lot! An animal feces study, funded by the Alfred P. Sloan Foundation, is trying to examine the microbial life of New York City’s pets and pests. Not only is dogs’ waste being collected, but they are also collecting fecal samples from cats, rats, mice, pigeons, and cockroaches. The specimens must be fresh (no more than a day old), so the scientists and their assistants wander through the city’s five boroughs collecting. In the case of dogs, if they find the owner nearby, they get the owner to sign a form with certain information, along with the fecal sample. They are expending a lot of effort—rats and mice are trapped, and the posteriors of live pigeons are swabbed. Cat waste comes from shelters, feral cats, and pet felines. In early May, they will extract DNA from the samples, and determine if any patterns emerge.

The study is a collaborative effort with scientists from New York University and Fordham University participating. Dr. Jane Carlton, director of NYU’s Center for Genomics and Systems Biology and lead scientist in the study, says, ‘Characterizing the world around us is very important, especially the microbial world we can’t see.’ They will be comparing information they obtain from different parts of the city, and across species. Are there geographical differences, differences among the species, or does diet and age play a role? Stay tuned for the results of this fascinating undertaking! (Andy Newman, “Dogs Do Their Duty for Science,” The New York Times, (NY Region, Pet City section), April 7, 2017)

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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, May 8th, 2017. Filed under Newsletter.

Are the New Proposed Tax Cuts Something You Should Be Concerned About?

By Stephan A. Lipskis

The Trump Administration recently announced proposed tax cuts, which received many headlines for reducing corporate tax rates and generally being unclear on how the cuts would be absorbed in the national budget. What do the proposed income tax changes mean for estate planning and elder law? For the wealthy, the plan appears to offer significant benefits, but the proposed cuts would likely have harsh effects on low and middle income individuals with significant health care expenses.

Given the basic nature of the administration’s proposals, there is a lack of clarity with regard to what changes will be made to available income tax deductions and credits. A major piece of the proposal is simplifying the tax brackets to three rates of 10%, 25%, and 35%; unfortunately, it is unclear where those rates would fall. The proposal only specifically saves the charitable and mortgage interest deductions, which are two of the most widely claimed. Losing other deductions would not concern most low and middle income taxpayers, because the standard deduction would be more than doubled.

As an elder attorney, I am seriously concerned for the potential loss of the medical expense deduction. Loss of the medical expense deduction would increase the significant financial burden for those in long-term care or chronic illness, which impacts people of all income levels. Such expenses are only increasing, and the tax credit offers much-needed relief to taxpayers in the middle and lower income categories. When over half of U.S. bankruptcies arise from medical bills, eliminating this deduction would seem unwarranted.

The proposal seeks to eliminate the so-called “Death Taxes” which only impacts those passing with wealth exceeding $5.5 Million (single individuals) or $11 Million if a married couple maximizes their credit. If the implemented measures add elimination of gift taxes to the proposal, it would truly be a rare opportunity for wealth transfers with minimal taxes. This is primarily because an estate tax has been around for over a century now and, while it may go away temporarily, there is a decent chance it would return. Accordingly, only those who pass while the estate tax is gone would reap a benefit. On the other hand, individuals can easily plan to take advantage of changes in the gift tax during their life.

All told, the U.S. tax system is notoriously complex and riddled with deductions, credits, and other various measures that both add to the complexity of the system and offer advantages to certain individuals and businesses. The proposal put forth by the administration illustrates a desire to significantly reduce the complexity of the tax code, but risks oversimplification. The proposed points are certainly not set in stone and would need much refining in order to become coherent policy. However, the prospect of a losing deductions for health-related expenses creates legitimate concern. When combined with rising health care costs and the potential for increased uncertainty if the Affordable Care Act is repealed, the economic outlook for the low or middle-income elderly could become dire. If you have not planned ahead for significant medical costs or unexpected incapacity, these proposed changes offer yet another reason to consult an estate planning attorney specializing in elder law.

Kit KatAsk Kit Kat – Komodo Dragon Babies

Hook Law Center:  Kit Kat, what can you tell us about two Komodo dragon babies at the Virginia Aquarium & Marine Science Center in Virginia Beach?

Kit Kat:  Well, this story has several interesting twists and turns. The babies were hatched from eggs this past August (2016); however, their gender was revealed only recently. They have to be old enough to undergo a blood test for that to happen, and the blood test only occurred on April 13, 2017. The test revealed they are both males, and the museum went about announcing this in a fun way. They had the dad dragon, Teman, kick over some giant, blue plastic eggs in his exhibit using some incentives. The mother, Jude, unfortunately, did not live to see her babies hatch. She underwent surgery last summer to correct a condition known as egg-yolk coelomitis. There were complications, and she had to be euthanized last July. She was almost 9 years old at the time.

Now for the interesting part—staff at the museum were not even aware she had left behind some eggs until they were cleaning the exhibit area, and they discovered 18 eggs buried about two feet beneath the surface. Two of the eggs hatched, and now 8 months later, they are about 3 feet long! Eventually, they will end up being 7-8 feet long. The parents, Teman and Jude, were on loan from zoos in Denver and San Antonio. One of the babies will stay in Virginia Beach, and one will eventually go to San Antonio.

The as-of-yet unnamed babies live separately at this point in an area kept to a toasty 90 degrees, but a new exhibit area is being prepared for them which should be ready by late this summer. The museum is welcoming input to pick their names, so if you’d like to make a suggestion, go to their Facebook page. They are unique. In North America, there are only 123 Komodo dragons spread across 60 facilities. Virginia Beach is fortunate to have 4—Teman, the 2 babies, and another male named Sanchez! (Robyn Sidersky, “Two Komodo Dragon Babies,” The Virginian-Pilot, April 14, 2017, 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 Monday, May 1st, 2017. Filed under Newsletter.
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