Comprehensive Planning. Lifelong Solutions.

Selecting an Elder Law Attorney

By Shannon Laymon-Pecoraro, CELA

As with any form of professional service, selecting the right professional matters. A recent study by Hinge marketing indicated that 68% of buyers of professional services valued “expertise and specialized skill” when selecting a professional. While attorneys are trained in a wide variety of areas, the study revealed that clients want to know that their attorney is committed to the particular service they are seeking, and that the attorney is not just a “jack-of-all-trades and master of none”.  In an era where an increasing number of attorneys advertise elder law services, it can be a complicated process for clients to locate the elder law attorneys who are committed or experienced in the field. My clients over the years have asked what they should look for when interviewing elder law attorneys, and I have compiled the following information to help understand more about the field and its practitioners.  

  1. Elder Law is not just estate planning. Elder Law is a specialized legal area that focuses on planning for chronic illness. This practice area involves, among other things, legal aspects of health and long-term care planning, surrogate-decision making authority, disposition of estates, and the tax impact of it all. While estate planning is one component of the practice area, what really makes an attorney an elder law attorney stand out from estate planning attorneys will be their intricate understanding of public benefits, which will include the Social Security, Medicare, Medicaid and Veteran benefit systems. 
  • There is a Certified Elder Law Attorney (CELA) designation.  The National Elder Law Foundation (NELF) certifies elder and special needs law practitioners. The CELA designation ensures that the practitioner not only has significant experience and substantial involvement in the field of elder law, but has taken the time to submit to a comprehensive exam, that has a pass rate below 50%, and peer evaluation. The designation allows the community to identify which attorneys have more than just a basic understanding of elder law cases.  
  • Committed practitioners participate in elder law and special needs planning organizations. You should ask your attorney what organizations they are not just members of, but actively participate in. Important organizations in the field will include the National Academy of Elder Law Attorneys (NAELA) and its local chapters (in Virginia it would be the Virginia Academy of Elder Law Attorneys (VAELA)), Special Needs Alliance (SNA), and the Academy of Special Needs Planners (ASNAP). Many practitioners may also be Fellows of the American College of Trust and Estate Counsel (ACTEC), a national organization of lawyers who have demonstrated their expertise in the trust and estate practice.
  • Dedication to the practice of elder law. A tell-tale sign of a true elder law practitioner will be that the primary focus of their practice will be dedicated to elder law. You should assess whether your attorney’s practice has a particular emphasis on elder law, and what percentage of the particular attorney’s cases are related to elder law and special needs planning.

There is a saying that if you think hiring a professional is expensive, you should hire an amateur. We understand that the true cost of a long-term care planning engagement is not only the legal fees for representation, but also the out-of-pocket medical expenses. As a result, Hook Law Center, P.C.’s experience and dedication to the field of elder law enables us to efficiently manage a client’s engagement so as to minimize the cost to the client. Our firm truly focuses on elder law – you will not find our attorneys representing clients in criminal proceedings, real estate closings, divorce or custody matters, or bankruptcy cases and we have three CELAs – which means that we are committed to not being a face in the crowd or a “jack-of-all-trades,” but being the “masters” of elder law.

Ask Kit Kat: Horse Toes

Hook Law Center: Kit Kat, what can you tell us about how a horse’s hoof forms in utero?

Kit Kat: Well, this is really fascinating. Everyone knows that a horse’s hooves appear to be a single unit with a hard outer covering consisting of some of the same material as the human nail. However, scientists have recently realized that “a horse’s hoof is literally a giant middle finger. It seems to be the remnant of a foot that once had five full toes, with only three remaining visible—two vestigial digits are still on either side of the large, hardened middle digit, but there is no trace of the others,” writes Veronique Greenwood in a recent New York Times article. Ms. Greenwood’s observations are the result of reviewing the work of Dr. Kathryn Kavanagh, a biologist at the University of Massachusetts, Dartmouth. Dr. Kavanagh and her colleagues happened to be examining some preserved horse embryos, and they saw some things which no one had ever noticed. In the early stages of gestation, in the hoof area, there were clearly clusters of cells in groups of five, not three. The stage does not last long—perhaps as short as 2 days. They know with precision the length of the stage, because the cell samples were taken from horses artificially inseminated on known dates. Dr. Kavanagh comments, “We think it wasn’t recognized before because the appearance was so brief. It only last a couple of days, and we got really lucky.”

This discovery seems to affirm other findings by other scientists in 2018 who noticed that horses have many more blood vessels and nerves in their legs than would be necessary for an animal with a large single toe. Dr. Kavanagh and her colleagues wonder if other animals like camels and emus would follow the same pattern. This discovery may lead to further study—why does an animal with only one toe still maintain the evolutionary stages of development of an ancestor who may have needed or functioned with a very different kind of hoof? There are implications for the understanding of all evolutionary processes. Why do some processes evolve and others don’t? Stay tuned for further developments. (Veronique Greenwood, “A Horse Has 5 Toes, and Then It Doesn’t,” The New York Times, Feb. 8, 2020)

Posted on Friday, February 21st, 2020. Filed under Senior Law News.

What to Do When Your Parent is in the “Gray Zone”

By Emily Martin, Esq.

For those of us who have aging parents, it can be difficult to tell if there is a problem, or if your parent is developing dementia. One day, Mom may be fine, but the next day, you find her keys in the freezer. Is she really losing it, or is it natural forgetfulness?

The “grey zone” is the difficult place between being able to make decisions and being unable to manage your own affairs. Many times, when seniors start to experience cognitive decline, it is often a gradual decline. Someone who is diagnosed with dementia, especially Alzheimer’s disease, may not immediately lose the capacity to make financial and legal decisions. However, it is often hard to tell when the time has come for someone else to take over these decisions for them.

With an Alzheimer’s disease diagnosis, the judgment needed to make good financial decisions can be impaired even at the beginning of the disease. Even if your parent looks and feels fine and acts normally, the truth is that those who suffer from dementia are less able to tell when something is not quite right about a financial offer or business proposal. This can create a multitude of issues, including arguments among family members and from the senior himself. Some family members may argue that Dad has always been in charge of the bills and has always made the investment decisions. They may be afraid of stepping on Dad’s toes when Dad is still able to understand that his decision-making capabilities are being taken away. On the other hand, Dad himself might object to no longer being able to handle his finances. He may become paranoid and begin to accuse family members of trying to “take his money.” 

Another potential issue is that those with cognitive impairment are vulnerable to financial abuse – whether it be from family members, scam artists, or caregivers. When people are in the early stages of dementia, it can be easy to overlook this type of problem, especially if the impairment is not immediately obvious from speaking with the person. The fact is that dementia can cause the brain to undergo changes without any outward physical signs of a problem.

So what is the solution for these problems? Even in the early stages of dementia, it is vitally important that your parent appoint someone else to take over the handling of financial matters through a financial power of attorney. If you wait until your parent has completely lost the ability to make financial decisions, you may have to pursue a conservatorship instead – a months-long process that can cost thousands of dollars in attorneys’ fees and filing fees.

Another useful solution is for the family to have a neutral third party determine that your parent is unable to make decisions. Have a qualified neuropsychologist conduct testing that will determine what Mom’s condition is and how it will impact her decision-making ability in the future. This way, if Mom argues that nothing is wrong with her, the information about her illness will be coming from someone other than her children or family members.

Finally, another suggestion is holding regular family meetings with a neutral person such as a mediator to help prevent arguments among family members from interfering with what is the best decision for your parent. This can be especially helpful, if one child does not think it is necessary for someone to take over the parent’s finances, or if the parent is arguing that he/she is not incapacitated.

In order to make sure that you and your loved ones are protected before there is an issue with the ability to handle financial and legal decisions, it is important that you meet with an experienced elder law attorney who can advise you on the best plan for your unique situation.

Ask Kit Kat: Wolf Pups at Play

Hook Law Center: Kit Kat, what can you tell us about what scientists have learned about wolf pups that play fetch, just like regular dogs?

Kit Kat: Well, as usual, science does tell us some interesting things that may have crossover applicability to other species. Although it was a very small sample of only 13 wolf pups, Christina Hansen Wheat and Hans Temrin, biologists at Stockholm University made the following observation—three eight-week old wolf puppies retrieved a ball thrown by a stranger, without any training. The significance of this, according to Hansen Wheat and Temrin, is that this indicates that sociability in wolves has been present for a very long time. Dogs evolved from wolves, but the scientists theorize, that dogs’ ability to engage with humans evolved not through domestication, but was present early on through the genetic material they inherited from wolves. Elinor Karlsson at the Broad Institute in Cambridge, who also studies the genetics of dogs, concurs when she says, “I think we too often assume that things we observe in dogs are special and unique, without ever really ever proving that.” Though only 3 of the 13 wolf pups fetched, which may seem like a small number, the scientists still think it is significant. They further observe that not all dogs fetch. I personally can attest to that. My mother had a collie growing up named Prince. He was a wonderful dog, great with children, but he never would fetch a stick or ball.

The scientists also point out that the evolution of different breeds of dogs like the short legs of Corgis and dachshunds—resulted from human interference. Another dog characteristic—the ability to digest starch better than wolves—came about from the increase in the number of copies of a specific gene. This occurred through evolution, rather than domestication. Scientists like these will continue to investigate the differences between wolves and dogs, and how genes and human intervention play a role in each species’ development. (James Gorman, “What Wolf Pups That Play Fetch Reveal About Your Dog,” The New York Times, Jan. 16, 2020)

Posted on Monday, February 17th, 2020. Filed under Senior Law News.

Can a Lengthy Probate be Avoided

By Rachel Snead, Esq.

What have you heard about the probate process? That it’s a long, expensive process that should be avoided at all costs? That it wasn’t so bad after all? The reality is that both scenarios can be true. It simply depends on how complicated and extensive an estate is.

Some estates are so small they don’t even require probate. Others are quite large, requiring deliberate and careful legal planning to avoid a probate disaster. In either case, you might want to arrange your estate to avoid probate for a variety of reasons ranging from a lack of available cash flow for your heirs to a lack of privacy regarding your personal affairs. Whatever your reason, probating a small estate is a much simpler and faster process in Virginia than a lengthy full probate with all of its statutory requirements. What if you could structure an estate plan to avoid probate and have assets move directly to your heirs? You can!

Under Virginia Code Section 64.2-601, when the total estate does not exceed $50,000, a successor in interest, typically an heir-at-law or a beneficiary of the Will, can collect and distribute the assets without having to go through the full probate process. If there is a Will, it must be admitted to probate, but an executor or personal representative does not need to be appointed. This is known as “putting the Will to record” or recording the Will.

To claim the assets without being appointed executor or personal representative, the person collecting the assets must provide an affidavit (an Affidavit of Collection) signed by all the lawful successors in interest stating that:

  1. The total estate does not exceed $50,000;
  2. At least 60 days have passed since the decedent’s death;
  3. No application for the appointment of an executor or personal representative is pending or has been granted in any jurisdiction;
  4. The Will, if there is one, has been admitted to probate;
  5. The claimant is entitled to collect the assets and the basis of entitlement;
  6. The names and addresses of all other successors in interest;
  7. The name and addresses of the successors designated to receive the assets on behalf of all the successors;
  8. An acknowledgment that the claiming successor has a fiduciary duty to safeguard and promptly pay the assets to the law successors in accordance with Virginia law.

While an executor or personal representative is not required to be qualified on a small estate, many attorneys advise potential personal representatives or executors to do so. Doing this gives the executor or personal representative the Letter of Qualification he or she will need to collect the assets and take any other action for which a Letter of Qualification may be necessary, such as accessing a safe deposit box or liquidating stocks, bonds or other assets titled in the decedent’s name.

This process for a small estate is much simpler than that of a full probate proceeding. Probate of an estate that exceeds $50,000 requires an executor or administrator, depending on whether there was a Will or not, be qualified to administer the estate of the decedent thereby accepting personal liability. The executor or personal representative is then responsible for filing an inventory after four months from their qualification date as well as a final accounting to the relevant commissioner of accounts after 16 months from qualification. But this can be avoided as long as the decedent’s estate is under $50,000. If the estate is under $25,000 an affidavit of collection isn’t even required.

This does not mean gifting away everything you have worked hard for or that your estate is of little value. It simply means that your assets, whatever they are, are titled in such a way that they can pass directly to the intended beneficiaries on your death, thereby never becoming a part of your estate. This can easily be accomplished with planning and foresight. 

For example, Transfer on Death deeds (TODs) can be prepared for real property, so that on an individual’s death it automatically passes to the person named in the deed. Payable on Death (POD) beneficiaries can be named on bank accounts, stocks, bonds, life insurance policies, etc., so that the asset becomes payable to a beneficiary on the death of the owner. Real property and accounts can be titled “joint with the right of survivorship” (most married couples who own a home or bank account have joint title with right of survivorship). On the spouse’s death, that property automatically becomes the property of the other. You could even set up a Trust and have your assets titled to the Trust itself, so that upon your death the assets aren’t subject to probate.

All of these options are a means to bypassing probate, meaning a simpler and quicker process for your loved ones during a difficult and emotional time. This type of estate planning is easier to accomplish than you would think. If you are interested in creating a structured estate plan to avoid probate be sure to talk to an attorney who can advise you on your state’s laws as the requirements vary from state to state.

Ask Kit Kat: Sharks in Winter

Hook Law Center: Kit Kat, are there really sharks off the Outer Banks in North Carolina in the winter?

Kit Kat: Well, not usually. Most sharks winter in warmer waters like Florida. However, a small number don’t migrate at all. Also, some females only migrate south every other year, due to exhaustion from birthing shark pups, according to Tyler Bowling, program manager of the International Shark Attack File at the University of Florida. So, a shark biting a surfer on the foot in Rodanthe, NC in mid-January was extremely unusual. It was the only the 2nd attack in winter off NC ever, the first in January, and there had been a gap of 20 years between the two.

The bite in January was by a small blacktip shark. Gavin Naylor, program director of the Int. Shark File, suspects it was due to unusually warm temperatures in January off the NC coast. Most of this species depart for Florida at this time of year. According to the Int. Shark File, the United States in 2019 had the most shark attacks worldwide—21 in Florida, 9 in Hawaii, 3 in both NC and California. Australia came in second with 11 bites. Naylor comments, sharks don’t hunt out humans. They’re usually just looking for food. He says, “If one does bite a person, it’s often young and still trying to figure out its prey. When they target a fish, they chomp and swallow. When they bite a human, they typically let go.”

For those who vacation in North Carolina, beware of the summer months. Over the past 20 years, there have 56 bites in all, according to the Int. Shark File.  July led with 23, and June and August divided the remaining 33. Mostly, though, the sharks stay a bit off the coast. They are mostly likely to be where people do deep-sea fishing. Sometimes, there are dramatic stories of sharks jumping at large fish caught from charter boats, cutting the fish in half. Staying alert to your surroundings is key. We must share the beautiful ocean with all of the world’s creatures. (Jeff Hampton, “Outer Banks shark bites are rare in the winter; last week’s is only 2nd on record,” The Virginian-Pilot, January 23, 2020)

Posted on Friday, February 7th, 2020. Filed under Senior Law News.

A New Look at Charitable Giving in the Age of SECURE

By Letha Sgritta McDowell, CELA CAP

On December 19, 2019 Congress passed the SECURE Act which drastically changed the tax scheme for beneficiaries of qualified retirement plans. Before SECURE, the beneficiary of a qualified retirement plan could take advantage of continued tax deferral. This was often known as the “Stretch IRA.” Post SECURE, with a few notable exceptions such as a surviving spouse or a person with a disability, qualified plans must be withdrawn within 10 years of the death of the beneficiary. This requirement to withdraw qualified funds early will drastically increase the income tax paid by beneficiaries due to accelerated withdrawal – placing many beneficiaries in higher income tax brackets. These changes are causing many with some chartable intent to take a new look at an old planning technique, Charitable Remainder Trusts (“CRTs”).

Charitable Remainder Trusts have been popular in high net worth tax planning for some time. They allow a taxpayer to transfer assets to an irrevocable trust that will provide a benefit to themselves or other beneficiaries for either a specified term of years or for the life of the beneficiaries. At the remainder of the period, any remaining assets transfer to the charity specified. The creator of the trust would receive an immediate charitable deduction for income tax purposes based on the present value of the remainder that the charity is expected to receive. It is an excellent planning technique for individuals who are charitably-minded to remove highly appreciated property from their estates. In light of the SECURE Act, this technique may be beneficial to individuals of moderate wealth to diffuse some of the tax consequences by stretching the payments of qualified funds over a longer periods and ultimately benefitting a charity.

CRTs take two separate forms, one provides an annuity amount, known as a Charitable Remainder Annuity Trust (“CRAT”); the other provides a unitrust amount, a Charitable Remainder Unitrust (“CRUT). A unitrust amount is a percentage of all of the assets in the trust, regardless of whether it is considered income or principal.  With qualified retirement funds (IRA, 401(k), SEP, SIMPLE, etc) the owner would name the CRT as the beneficiary of the qualified plan. The CRT would then provide for either the annuity or unitrust amount to pay to the desired beneficiary. The CRT itself pays no income tax, and the beneficiary pays tax on the amount paid to him or her in the year.

For example, an individual could leave a $350,000 IRA to a Charitable Remainder Unitrust which provides for an annual payout of 12% of the trust for the benefit of their 55-year old child for her life. With annual growth and income of just 3%, the beneficiary will receive payouts of $539,311 over her life expectancy, and the charity will receive a gift of $70,068 at the death of the beneficiary. In addition, the beneficiary’s life expectancy is 25 years; therefore, the distributions are taken over a 25-year period rather than a 10-year period, ultimately allowing some continued tax deferral.

There are other options available to allow flexibility in the payout of CRTs which can make them even more attractive options; however, which options are relevant will depend on the age of the beneficiary, their income tax bracket, and the value of the IRA.

In addition, due to the somewhat complex nature of CRTs, many charitable organizations will act as Trustee of the CRT which eliminates the burden of administering the trust by the beneficiary. But, in the case of a sophisticated beneficiary, he/she may be named as the trustee of the trust, allowing him/her control over the investment structure of the assets in the trust. Ultimately, a CRT is a good option for an individual who has charitable intent. With no charitable intent, there is no foreseen benefit for a person to create a CRT. However, for those who have even a small desire to provide for charity and some qualified retirement funds, CRTs may provide excellent ways to provide a tax efficient benefit for those they care about while still benefitting  a charity.  

Ask Kit Kat: Dogs Saving Citrus

Hook Law Center: Kit Kat, how are dogs in Florida helping to save oranges and grapefruit from citrus disease?

Kit Kat: Well, once again an interesting tale about how animals have more talents than meet the eye at first glance! The citrus industry in Florida since 2005 has been dealing with various insect scourges that have significantly reduced the volume and strength of the industry. Currently, a particular threat is HLB (Huanglongbing), which prevents fruit from ripening. HLB lands on the citrus tree through a flying insect known as the psyllid. According to Tim R. Gottwald, a plant epidemiologist with the U.S. Dept. of Agriculture, “That psyllid is really a little flying hypodermic needle.”

In Perry, FL which is north of Jacksonville, one grower named Andy Jackson is taking a new approach to fighting HLB. He is utilizing specially-trained canines to sniff out HLB in its early stages, so the affected tree can be removed, and not infect large swaths of the grove. F1 K9 is a Florida company that trains dogs to detect explosives, drugs, and agricultural disease. Deploying trained dogs has an accuracy rate of 99%. Other methods like visual inspection and lab examination are much less effective and take longer to get results. The canines, fortunately, work incredibly fast. In 2-3 seconds, they can assess an individual tree. If they sit down, it indicates that the disease has been detected. A ribbon is tied to the tree, and within a few days, it will be removed.

The dogs at Jackson’s farm, on this particular day which the article was written about, are a springer spaniel, a German shepherd, A Belgian Malinois and a shepherd-Malinois mix. With one handler per dog, each dog walks a specific row in the grove. When they sniff the culprit, they sit and are rewarded with a chew toy or tennis ball. In about 3 hours, the 4 dogs have sniffed out the 25-acre grove. 25 diseased trees were discovered. Andy Jackson will definitely hire the quartet of dogs next year. (Duncan Strauss, “Dogs are helping save Florida’s citrus groves from a devastating disease,” The Washington Post, Jan.14, 2020)

Posted on Monday, February 3rd, 2020. Filed under Senior Law News.
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