Comprehensive Planning. Lifelong Solutions.

When to Update Estate Planning Documents

By Emily Martin, Esq.

When you execute an estate plan, chances are you’re enthusiastic about how well your plan is going to work for you and relieved to have what is often an unpleasant task out of the way.  Once you get home, you may place the estate planning portfolio in your safe or a safe deposit box at the bank, so that the documents are accessible and won’t be inadvertently destroyed.  Unfortunately, that is often the last time that most people give serious thought to their estate plan.  While most people may not need to update their estate plan every year or even every two or three years, it is important that you review your plan on a regular basis to make sure that it does not need to be changed or updated.

There are many factors that can cause someone to need to update their estate planning documents.  For example, if you have children, you will need to change your will to appoint a guardian who would care for your child if you and your spouse were to pass away. If you go through a divorce or separation, you will obviously need to change your estate plan to protect your assets from your ex-spouse. If you are older and have grandchildren, you may want to update your plan to include your grandchildren (or even great-grandchildren).

Surprisingly, many of our older clients come to us with estate plans that they executed twenty or more years ago when their children were little.  When they come to us, often their children are not only grown, but have children of their own.  If these clients have a will appointing guardians for their children, their estate plan is not only out-of-date but includes unnecessary provisions.  This framework will no longer work to accomplish the goals and serve the needs of our clients.

Aside from inheritance issues, which can usually be fixed with a simple change to an already established estate plan, some estate plans may need to be reworked entirely.  If you made your estate plan when you were younger, chances are you were not concerned about qualifying for Medicaid or veterans’ benefits.  However, if you are retired or approaching the age of retirement, you may want to consider an irrevocable trust in order to protect your assets from a Medicaid spend-down.  This type of estate plan is much more complex than having a simple will, which is the most common type of estate plan, and requires a reworking of the way your assets are titled as well as a change to almost all of your estate planning documents. 

Additionally, if you signed your estate planning documents in the 1990s, you may have a trust that was drafted with the goal of allowing your estate to avoid estate tax. In the 1990s, the estate tax exemption was $600,000. That means that anyone with an estate worth $600,000 or more would have an estate subject to estate taxes. Many attorneys crafted unique estate plans and complex trusts to allow their clients’ estates to avoid having to pay estate taxes. However, in 2019, the estate tax exclusion is $11.4 million per individual and $22.8 million per married couple. This means that a great number of people currently do not have to plan for the avoidance of estate tax, because they do not have what is called a taxable estate. For people who had complex trusts drafted to avoid estate taxes, their estate plan is likely much too complicated for what they currently need. These documents should be updated to reflect the current law.

The final reason that an estate plan would need to be updated is if there is a major change in the law that would change the way certain documents operate.   For example, in 2010, Virginia passed the Uniform Power of Attorney Act. This act created a new format for durable powers of attorney that was designed to make these documents more readily acceptable by financial institutions.  If it has been a few years since you executed your estate plan, it is important to verify that there have been no changes in the law that would warrant a change to your estate plan.

While some changes, such as death and divorce, make it obvious that your estate plan needs to be updated, there are other issues, such as changes in the law, of which you might not be aware. Having an estate plan that is outdated or no longer accomplishes your goals can be almost as bad as not having an estate plan at all. For these reasons, it is important to contact your estate planning attorney on an annual basis to make sure that your plan is still working the way you wanted it to and that no changes need to be made.

Ask Kit Kat: Bahamas’ Heroine

Hook Law Center: Kit Kat, what can you tell us about the woman from the Bahamas who rescued 97 dogs during Hurricane Dorian?

Kit Kat: Well, this truly is a remarkable story. While it was not an unusually large house, she managed to cram 79 of them in her master bedroom. The rest were in other areas of her house. She had a few dog crates donated by neighbors for those who were really scared or sick and needed to be left alone. Her name is Chella Phillips. She had help from her brother. He slept only an hour during the worst of the storm, and Chella didn’t sleep at all.

During the initial parts of the storm while she still had electricity, she played music, had the TV on, as well as air conditioning. Eventually, she, too, lost power. Her house, which was already a refuge for stray dogs before the hurricane, started to flood. Attempting to keep the house and the dogs dry was quite an effort! While she still had power, she communicated with people through Facebook. Her concern was always for the dogs, “I pray for the other islands who have unimaginable damages and I don’t see how any dogs or any living being could have survived outside. My heart goes out to them.”

Ms. Phillips operates a shelter in Nassau, Bahamas called “The Voiceless Dogs of Nassau, Bahamas.” In August, long before there was any knowledge of Dorian, she had raised $63,000 for her shelter. This surpassed her original goal of $20,000. She has taken in close to 1,000 dogs since its opening. She is truly a heroine in every sense of the word! (Hannah Natanson, “This woman took 97 rescue dogs into her Bahamas home to protect them from Hurricane Dorian,” The Washington Post, Sep.3, 2019)

Posted on Wednesday, September 11th, 2019. Filed under Senior Law News.

Crisis of Care and Larger Crisis in the Workforce

By Letha Sgritta McDowell, CELA

Much has been written and contemplated about the care that an individual needs to age successfully, and even more has been written on how to pay for the care for chronic illness which is often needed as one ages. However, not much thought has been given about who will provide care. Our country is aging at a rapid rate. 10,000 baby boomers reach the age of 65 each day and, by the year 2035, it is projected that the number of individuals over the age of 65 will outnumber the number of individuals under the age of 18. In the year 2020, there will be 3.5 working adults for every person over the age of 65 but, by the year 2060, that number falls to 2.5 working adults for every person over the age of 65.

The result of this is that it is likely going to be difficult, if not impossible, to find enough elder care workers. Many who are tasked with finding appropriate care for loved ones find it difficult to find, and keep, good care providers. The job of aiding an older adult with their care needs can be both physically challenging as well as mentally exhausting. Care activities include tasks from shopping and meal preparation to medication monitoring to housekeeping to aiding with physical activities such as bathing. Not only can the job of caregiving be taxing, it is often low-paying.

Low-paying difficult jobs result in caregivers who begin the job and then leave to find other work, or caregivers who will leave agencies for small increases in pay or benefits. For individuals who choose to hire caregivers privately, the same issues apply without a backup. This means that, when a caregiver calls in sick, there isn’t an agency who can send a replacement for the day.

The challenges with locating and managing care providers can, in turn, become burdensome on family members and friends who have chosen to accept the responsibility to organize care. Much in the same way parents are often left in a lurch when a child is sick and cannot attend school or daycare, loved ones coordinating care cannot simply leave an aging person with chronic illness at home alone. However, unlike a small child with an illness, an older adult with a chronic illness is not portable and cannot easily be passed from one family or friend’s home to another. 

The challenges with caregiving and coordinating care exist today and result in lost work time, lost vacation time, lost contributions to retirement plans, and in some cases, lost promotions and lower pay. With the trend of reduction in the number of able bodied care providers as well as the increase in the number of individuals needing care, the effect on a working adult coordinating care of a loved one will be significantly greater.

In years (and generations) past, many individuals did not live into old age as we do now. Or, for those lucky enough to reach old age, they did not suffer the same chronic illnesses we live with today. In cases where care for chronic illness was needed, often a family member was not working and was able to be a care provider. Today, life expectancies are greater than ever. In addition, household demographics (and thus cost of living) have changed drastically. In 1960, less than 50% of households had both spouses working, yet in 2010, more than 65% of households had dual incomes. Therefore, the cost of living has increased along with household income. This means that the loss of income which may result from providing care could be disastrous financially.

How exactly the care crisis will play out in terms of finding available paid caregivers remains to be seen. Even more challenging will be determining how the potential inability to find paid caregivers will affect the economy and the workforce. What does seem clear is that finding caregivers for an aging population may be just as challenging as finding a method to pay.

Ask Kit Kat: Donkey on an Island

Hook Law Center: Kit Kat, what can you tell us about a donkey that was stranded on an island in California for 2 years before being rescued?

Kit Kat: Well, this is an interesting tale. The donkey’s name is Hillary, and she has a lovely grey coat. She is considered wild, and she got stuck on some high ground in Mariposa County, CA about 2 years ago. At that time, there was severe drought, and the lake bed was completely dry. Near the middle of the lake was some high ground. When heavy rains filled up the lake bed, Hillary was left stranded in the area which now appeared to be an island. Somehow others in her herd got to higher ground before this happened. She stayed there for 2 entire years! People in the area brought her hay and other food on a regular basis, but they were stumped on how to rescue her. Being wild, she was not exactly cooperative.

Finally, the Department of Fish and Wildlife decided to intervene. At first, they tried using a large cage with watermelon as an enticement. Hillary didn’t even go near the cage, and geese finished off the watermelon. They finally decided that she’d have to be tranquilized by darts in order to transport her. This was successful. She was not reunited with her herd, because they discovered that she had a leg injury. Because they feared her herd would reject her after such a long absence, she has been sent to a wildlife sanctuary. She is quarantined for now, as they begin to evaluate and treat her. Eventually, she will be introduced to a herd at the sanctuary who have special needs. It likely that she will stay there for the rest of her life.

Hillary is one lucky lady, and we wish her the best! (Hilary Hanson, “Hillary The Donkey Finally Rescued After 2 Years Stranded Alone On Island,” The Huffington Post, August 26, 2019)

Posted on Thursday, September 5th, 2019. Filed under Senior Law News.

How Your Tax Debt May Impact Your Passport

By Amanda L. Richter, CPA

Before you renew your passport and leave the Country, you will want to make sure that you are not seriously delinquent on your tax debt. IRC § 7345 authorizes the State Department to deny a passport application or renewal for any individual that is deemed to be seriously delinquent on their tax debt to the Internal Revenue Service.

Before denying your passport application, the State Department will hold your application for 90 days. This is to provide you with enough time to resolve any erroneous certification issues, pay the tax debt in full or make an arrangement to pay the IRS.

Under IRC 7345(b), the IRS defines seriously delinquent as an unpaid, legally enforceable Federal tax liability of an individual which has been assessed, is greater than $52,000 (for 2019 the threshold is $52,000 and is indexed for inflation) and a notice of federal tax lien has been filed and all administrative remedies under IRC § 6320 have lapsed or been exhausted or a levy has been issued for the debt.

There are some types of tax debts that are not included in determining seriously delinquent tax debt. Excluded categories of tax debt include:

  1. Debt that is determined to be currently not collectible due to hardship.
  2. Debt that resulted from identity theft.
  3. Taxpayers in a Disaster Zone.
  4. Debt of a taxpayer in bankruptcy
  5. Debt of a deceased taxpayer.
  6. Debt that is pending an Offer in Compromise.
  7. Debt that is included in a pending Installment Agreement
  8. Pending claims that will result in no balance due.

You will be notified in writing via Notice CP 508C once the IRS certifies the tax debt to the State Department. It is important to keep your address up-to-date with the IRS, because the notice will be sent by regular mail to your last known address. Reversal of the certification is not a quick process, so you will want to make sure you do not wait until the last minute to get ahead of your tax debt.  Once you have resolved your tax debt or made appropriate arrangements, you will receive Notice CP 508R within 30 days.

Ask Kit Kat: Animal Crossing over the Freeway

Hook Law Center: Kit Kat, what can you tell us about the new bridge in California that will be finished by 2023 that allows many types of animals to cross over a busy road unbothered by cars or humans?

Kit Kat: Well, this sounds like a truly great solution to a problem that has vexed conservationists for some time. In the busy area of southern California around Los Angeles, wildlife was being trapped on one side of US 101 or the other. There was concern in particular for a certain mountain lion named P-22. He wears a tracking collar, so he has been observed many times. According to Beth Pratt of the National Wildlife Federation, “When the freeway went in, it cut off an ecosystem. We’re just now seeing impacts of that.” Mountain lions like P-22 are being confined to the west of the roadway in the Santa Monica Mountains, all the way up the coast to Los Angeles. Other mountain lions remain on the east side of the road, and it makes mating and rearing young difficult. This has led to inbreeding, and conservationists fear it could lead to eventual extinction within a span of 15 years, if something isn’t done to reverse the situation.

It’s not only mountain lions which are affected, though they, with symbolic leaders like P-22, have become the face of the crusade. Pratt even likened P-22 to being ‘the Brad Pitt of the cougar world.’ Nevertheless, coyotes, deer, lizards, and snakes will benefit also. The bridge, exclusively for animal use, will span 10 lanes of traffic 35 miles northwest of Los Angeles. It will be the second animal overpass in California, though tunnels for animal use are more common. 80% of the funding for the project will come from private sources, while 20% will come from state funds which were allocated for conservation purposes.

Great care is being taken in the design of the bridge. “Ideally the animals will never know they’re on a bridge. It’s landscape flowing over a freeway. It’s putting back a piece of the ecosystem that was lost,” says architect Clark Stevens. Berms and hollows will exist alongside of high walls which will help to minimize sound and light from the busy roadway below. The public support for the project is huge. Of 9,000 comments the planning agency received during the comment period, only 15 were negative. It’s a wonderful undertaking that can’t come soon enough! (Associated Press, “California Reportedly Plans to Build Bridge Over Major Freeway to Give Wildlife Room to Roam,” Huffington Post, August 20, 2019)

Posted on Thursday, August 29th, 2019. Filed under Senior Law News.

Changes Coming to TSP Withdrawal Options on Sept. 15, 2019

By Jennifer Rossettini, CFP®

The Thrift Savings Plan (“TSP”) is a 401(k)-style retirement savings plan for federal employees and military personnel.  When these employees no longer work for the government, they have the option of leaving their accounts in place, but many decide to transfer the money to an outside IRA, citing limited withdrawal options as a main reason for doing so.  Currently, participants have three basic withdrawal options: (1) lump-sum withdrawal or transfer to another account; (2) purchase an annuity; or (3) withdraw in equal monthly payments.  If participants do not take the lump-sum withdrawal, the other two options prevent the account’s balance from growing any further.  Further, once a monthly payment amount is chosen, participants cannot take intermittent lump sum withdrawals to pay for things like a new car, vacation or unexpected healthcare expenses. With the passage of the TSP Modernization Act, comes more options regarding withdrawals.  The following is a summary of some of the important changes taking effect on September 15, 2019:

Partial Withdrawals

Before the effective date of the Act, TSP participants are limited to one partial withdrawal from their account during their lifetime.  These partial withdrawals are either age-based, in-service withdrawals at 59 ½ or older, or post-separation withdrawals.  After the effective date of the act, (1) participants will be able to take up to four age-based, in-service withdrawals per calendar year; (2) there will be no limit to the number of partial withdrawals participants can take after separating from service; (3) participants will be able to take partial withdrawals while they are receiving post-separation installment payments; and (4) having taken age-based, in-service withdrawals will not prevent participants from taking post-separation partial withdrawals.

Withdrawing from Roth/Traditional Balances

As a reminder, the funds comprising the Roth balance of a participant’s TSP were contributed after taxes and are, therefore, generally income tax free when withdrawn.  On the other hand, the funds comprising the Traditional balance of a participant’s TSP were contributed before taxes and are therefore taxed as ordinary income when withdrawn.  Before the effective date of the Act, participants are required to take their withdrawals on a pro rata basis from both their Roth balances and their Traditional balances.  This means that if 75% of your account is traditional and 25% is Roth, any withdrawal will have to come 75% from traditional and 25% from Roth.  After the effective date of the Act, participants can choose which balance to withdraw from based on their personal financial needs and income tax situation.

Withdrawal Deadline

Prior to the effective date of the Act, participants are required to make a full withdrawal election once they turn 70 ½ and are separated from federal service, or else the governments begins an account “abandonment” process.  After the effective date of the Act, participants will no longer be required to make a full withdrawal election, and if a participant’s account has already been abandoned, they will be able to restore their balance without making a full withdrawal election.  The only withdrawal that a participant will be required to make going forward will be an amount equal to the Required Minimum Distribution under IRS rules.

Installment Payments

There are several things changing with regard to installment payments: (1) instead of having to receive installment payments on a monthly basis, participants can now receive payments quarterly or annually; (2) instead of being limited to the open season between October 1 and December 15 of each year to change the amount of the monthly payment, participants will now be able to change the amount and frequency of installment payments at any time during the year; (3) instead of being forced to take a final withdrawal if they want to stop their monthly payments, participants will now be able to start and stop payments at any time.

While these changes are positive, there are still some drawbacks to TSP’s, including the limited investment options available and the inability of a beneficiary of a TSP account to stretch payments over a longer time period than one year.  Fortunately, with the ability to take more withdrawals from the TSP, participants have more opportunities to move assets from the TSP toward more retirement-appropriate accounts with fewer limitations.  It also allows more opportunity to be able to pay for things outside of one’s monthly budget.

As with any major financial decision, TSP participants should seek the advice of a financial advisor before taking advantage of these expanded withdrawal opportunities.

Ask Kit Kat: Goat Brush Cutters

Hook Law Center: Kit Kat, what can you tell us about how Portugal is using goats to manage underbrush, and thus help reduce fires in rural regions?

Kit Kat: Well, this story really caught my eye! Apparently, Portugal is more prone to fire in rural areas, because they are suffering from extreme drought—more than most areas in Europe. As rural areas have become less populated, there are no longer enough people to prune steep, hilly areas as there was in the past. The few people they do have are elderly, and they are no longer able to do the task. Using tractors isn’t feasible, because the land is too hilly. Thus, enter the goatherd and goats! Portugal is actually is paying a few hearty souls to pilot a program in which a goatherd manages the job machinery cannot. In the village of Vermelhos in southern Portugal, Leonel Martins Pereira, 49, manages a herd of 150 Algarve goats who are keeping the area free of brush, and thus safe from fire.

The Algarve is a breed native to the area which has dark spots on a white coat. So far, they are doing a super job! They really love to munch, and their favorite target is the strawberry tree, which is actually a bush. It has a sticky coating which can be set on fire very quickly. The pilot program has 40-50 goatherds across the country who tend to approximately 10,800 goats across an area of about 6,700 acres. According to Nuno Sequeira, a board member for the forestry department, the problem in this plan was not funding, but finding enough goatherds. “It just became very hard to find people willing to do this hard work and live in such areas.”

Some of these areas are significantly declining in population. Vermelhos, the town in which Mr. Pereira operates from, is down to 25 residents from a high of 100 in the 1980s. The  primary school is closed. In his youth, the town had about 10 shepherds. The pay for such work is meager. He earns about the equivalent of $3.35 per day, and it is a 7-day per week job. Mr. Pereira admits his work is a vocation, but that may not be enough to sustain him in the long term. The government’s position is that this is a pilot program, and that changes will eventually be made if overall they find it is worth the investment. Stay tuned to see how this program develops. (Raphael Minder, “Scorched Portugal Turns to the Goat as a Low-Cost Firefighter,” The New York Times (Europe), August 17, 2019)

Posted on Thursday, August 22nd, 2019. Filed under Senior Law News.

Parents May Use FMLA to Attend an IEP Meeting

By Shannon Laymon-Pecoraro, CELA

On August 8, 2019, the U.S. Department of Labor (DOL) issued opinion letter FMLA2019-2-A which set forth that employees may take leave under the Family and Medical Leave Act (FMLA) to attend a meeting to discuss the Individualized Education Program (IEP) for a child.

The Individuals with Disabilities Education Act (IDEA) required public schools to develop an IEP for students that receive especial education and related services. In developing the IEP, the school is to receive input from the child and the child’s parents, teachers, administrators, and related service personnel. Related Services, under IDEA, includes various services such as counseling services, medical services, physical therapy, and speech therapy.

In reaching its opinion that attendance at an IEP is “care for a family member…with a serious health condition” under FMLA, the DOL relied upon the following facts:

  • Child had qualifying serious health conditions.
  • The parent already received a certification from the child’s doctor to support intermittent leave to care for children, which was approved by the employer.
  • Child receives prescribed occupational, speech, and physical therapy provided by the school district.
  • Schools hold IEP meetings four times a year to review educational and medical needs, and that therapists, teachers, and administrators participate in the IEP meeting.
  • Meetings set forth student progress and areas of concern, review doctor recommendations and new test results, and that recommendations for additional therapies may be discussed.

Ask Kit Kat: Giant Parrots of the Past

Hook Law Center: Kit Kat, what can you tell us about giant parrots of the past which once roamed New Zealand?

Kit Kat: Well, this is another interesting story. Apparently, New Zealand, somewhat like its neighbor Australia, is home to some unique species. Today, New Zealand has some unusual parrots which are much larger than the varieties in the Americas. The Kakapo is so large that it cannot fly. Keas, who have extremely sharp beaks, are quite strong and can, if they have a mind to, attack sheep and pull rubber parts off cars. However, now scientists have discovered an even larger, prehistoric parrot, which they think may have been close to 3 feet tall and weighing close to 15.4 pounds. That’s as heavy as some bowling balls are! Researchers named the new species Heracles inexpectatus: Heracles to connote strength, and inexpectatus, because they were completely surprised by the discovery. It was found near St. Bathans on New Zealand’s South Island. They officially announced the find on August 6, 2019 through publication in Biology Letters.  This particular spot is rich in previously unknown species. A large burrowing bat had also been discovered in the vicinity.

Actually, the bird’s size misled the scientists initially. The bones were found in 2008. At first, it was thought it belonged to the eagle family. Then in early 2019, Ellen Mather, a graduate student at Flinders University in Adelaide, Australia realized the bones had been misidentified. On re-examination, Ms. Mather and Dr.Trevor Worthy, her mentor and professor, realized the two leg bones had characteristics found only in parrots. Because of the location of where the bones were discovered, they think the parrot dates to the early Miocene period, a period which ranged from 16-19 million years ago. Because the bones were quite “solid and heavy,” Dr. Worthy hypothesizes that the Heracles was flightless and had a diet of seeds and fruit. The research team plans to visit St. Bathans later this year to determine whether there are any more fossils related to this particular species of parrot. (Cara Giaimo, “These Giant Parrots Once Roamed New Zealand,” The New York Times (Trilobites) , August 6, 2019)

Posted on Monday, August 19th, 2019. Filed under Senior Law News.

Estate Planning for Unmarried Couples

By Emily Martin, Esq.

In recent years, the percentage of couples getting married has declined, and those who do get married, are getting married later. In fact, according to the Current Population Survey from the Pew Research Center in 2017, the median age at first marriage reached its highest point on record at 30 years for men and 28 years for women. Additionally, it has become more and more common for couples to live together before getting married – or to live together without getting married at all. In 2016, 18 million adults were living with an unmarried partner – a 29 percent increase from 2007. With the marriage rate declining, it has become more important for unmarried couples to plan for the future. Who will receive your assets after you pass away? And perhaps even more importantly, who will have the right to make decisions for you if you cannot make them on your own? All unmarried couples in a long-term relationship should address these difficult issues.

The first issue to consider is how your assets will pass after you pass away, and who will have the responsibility of managing your affairs after your death. If you do not have a will, then the laws of intestate succession for your state will determine who receives your assets upon your death. In Virginia, if you are unmarried, the default law states that children receive your assets first. If you do not have any children or grandchildren, then your parents (if they are living) will inherit everything, followed down the line by siblings, nieces and nephews.

If you are in a long-term relationship, chances are you would like for your partner to receive some or all of your assets upon your death. A will or a trust is one way to ensure that your assets pass the way you want them to. In these documents, you can designate that your partner receive a portion of your assets (or all of them, if you prefer). You can also name your partner as your executor or trustee, which gives them the authority to pay your debts, collect your assets, and manage your affairs after you die.

Another way to make sure that the right people receive your assets after your death is through beneficiary designations and “transfer on death” designations. If you have retirement accounts, annuities, or life insurance policies, it is important to keep the beneficiary designations on these accounts updated. These types of accounts typically allow you to name one or more primary beneficiaries as well as contingent beneficiaries who would only receive the assets if the primary beneficiaries were deceased. Because assets with beneficiary designations typically pass outside of probate, adding these designations to your accounts is one important way to avoid your estate having to go through the probate process after your death. Additionally, you can add “payable on death” or “transfer on death” designations to your bank accounts. Some states, including Virginia, even allow you to complete a “transfer on death” deed for your real property. This deed, which takes effect only after you die, allows you to designate one or more people who will receive your real property upon your death.

While many people are focused on what will happen after they die, they often forget to focus on what will happen if they don’t die, but instead become incapacitated and cannot manage their own affairs. A well-rounded, comprehensive estate plan answers both questions. It is important to make sure that your wishes regarding what will happen if you become incapacitated are well-documented. If you do not complete a financial or healthcare power of attorney, your partner could be forced to file for guardianship and conservatorship to be granted the authority to manage your affairs. This is a costly court process that often involves conflict between family members and other loved ones. If you wish for your partner to be able to make financial and medical decisions for you upon your incapacity, you need to sign a financial power of attorney as well as a healthcare power of attorney. Having these documents in place can help save a great deal of heartache and money if you become unable to manage your own affairs.

Although it is not a pleasant topic, estate planning is a very important one. It is a good idea to review your plan frequently (every three to five years, or more often if you have had a change in circumstances) and adjust it accordingly. If you and your partner part ways, if you have children, or if you find yourself in a new relationship, your documents may need to be updated to reflect that change. As always, having an open and honest dialogue with your partner about your wishes and letting them know that you have named them in your estate planning documents is crucial.

Although unmarried couples can face unique struggles when it comes to planning for incapacity and death, a little advance planning can allow you to make your wishes known while giving your partner the authority they need to handle your affairs if you are unable to do so.

Ask Kit Kat: Dog-Cat Stories

Hook Law Center: Kit Kat, do you have some feel-good animal stories for us?

Kit Kat: Yes, I do! One is about a dog, and one is about a cat. First, let me tell you about Kylie, the German shepherd, who is a trained cadaver dog. Kylie works with the District of Columbia’s fire department, and she is one of 4 such dogs which work with that fire department. She was severely injured in July when she stepped on a hidden fence along the Arlington-Alexandria (Virginia) border. She actually became impaled on the fence, causing her to bleed profusely. She was then taken by medevac helicopter to an animal hospital in Northwest Washington for treatment. She needed several surgeries in order to recover. But recover she did. The bones she helped uncover that day (July 19) are still under investigation. The five-year old shepherd is a marvel and essential member of that cadaver team!

Now let’s switch to our cat story. Tissy, is a Maine Coon cat, orange in color. Their hair is longer than the typical domestic shorthair cat. Maine Coon cats are also quite large and can weigh between 8-11 lbs. for a female and 13-18 lbs for a male. Tissy is unusual, though not really unique, because she loves water. She was adopted by a family in western Pennsylvania, who found her as a kitten, in a parking lot near the county fair. When Tissy was about a year old, her family discovered she loves to swim. So Tissy now wears a floatie around her middle, which lengthens the time she can stay in the water. The family also reports she loves bubble baths, so her swimming is not limited to summertime only. Who would have ever thought a cat would actually enjoy swimming? Wonders never cease. (Dana Hedgpeth & Associated Press, “D.C. cadaver dog impaled on the job returns to work; Pennsylvania cat dives in summer with love of swimming,” The Virginian-Pilot, August 3, 2019, p. 11)

Posted on Thursday, August 8th, 2019. Filed under Senior Law News.

Is Diet the Fountain of Youth?

By Letha Sgritta McDowell, CELA

Did you know that diet may be the best way to fight aging? The benefits of diet and exercise have long been touted as beneficial, and we hear about obesity leading to chronic conditions such as heart disease and diabetes which ultimately leads to an early death. However, beyond simply improving looks and living longer, studies are now showing that a healthy diet may be the secret to anti-aging.

As we age our bodies change. Not simply in looks but in function as well. For example, thirst sensation decreases with age which means a person feels less thirsty. The result may be a failure to drink enough water. It also takes longer to digest a meal as a person ages and the ability to taste can be reduced which may lead to being disinterested in eating. Because our bodies change as we age, our diet needs to adapt as well. The diet we had in our 20s and 30s may simply not work anymore.

One key to a healthy diet (at any age) is water, but it becomes more important as an individual ages and in improving the aging process. As mentioned above, the sensation of being thirsty reduces as a person ages so older adults are more likely to be dehydrated. Not only does that affect organ function but our looks as well. Being dehydrated can exacerbate the appearance of fine lines and wrinkles.

Blueberries are extremely high in anti-oxidants, not to mention low in calories. Anti-oxidants are important, because they neutralize free radicals which exist in our bodies. Free radicals are unstable molecules that can attack cells, and they have been linked to diseases such as cancer. Recently, research has shown that an appropriate diet can help slow cognitive impairment that comes with dementia, and it is believed that blueberries and other foods high in anti-oxidants play a significant part in that.

Walnuts are high in phytochemicals such as polyunsaturated fatty acids which reduce pressure on the brain. Studies are also showing that consuming walnuts helps increase brain activity and slows cognitive decline, making walnuts a true brain food.

Believe it or not, watercress is an excellent food to add to a diet to reduce the signs of aging. Watercress contains potassium, calcium, manganese, phosphorus and a host of vitamins. Included in these are anti-oxidants which are discussed above, as well as compounds which increase circulation, improve the delivery of minerals to cells, and reduce basal DNA damage. Therefore, watercress may help prevent cancer and helps reduce the appearance of fine lines and wrinkles.

Papaya has a number of important vitamins and eating papaya has been shown to improve skin elasticity. It also contains an enzyme called papain which is a known anti-inflammatory and exfoliant. So, eating papaya can help shed dead cells and leave you with glowing skin.

This is a short list of foods which are beneficial to our bodies at any age but which can provide even more pronounced benefits as we age. There are many other foods which could be listed that can reduce cell damage, prevent heart disease, slow memory loss, and help us look younger. Many of us are unaware of how our bodies change as we age and that modifications to our diet can aid us in looking and feeling great well into old age.

Ask Kit Kat: NC Animal Shelters Well-Prepared

Hook Law Center: Kit Kat, what can you tell us about how the animal shelters in North Carolina are some of the best prepared in the country for emergencies like flooding or hurricanes?

Kit Kat: Well, yes, North Carolina does seem to have developed a great system for the organization and storage of supplies to keep pets and humans together during storms which result in large evacuations or sheltering. In fact, according to Wendy Pulley, interim human services branch manager of the NC Division of Emergency Management, “North Carolina has become the gold standard for pet shelters.” What is unique to North Carolina is that people and pets can stay together in the same shelters in the majority of cases. North Carolina, in essence, has pre-prepared trailers of pet supplies which can be unpacked should the situation require it. In the trailers are animal crates in folded condition, large rolls of plastic sheeting which can wrap an entire room or hallway to maintain sanitary conditions, leashes, food, etc. Very quickly a shelter can be established, and cleanup is a snap.

North Carolina, after Hurricane Katrina, took seriously the law enacted by Congress, that all states have evacuation plans for animals. In North Carolina, that meant mandating that every county have a plan for the evacuation of animals. About half of North Carolina’s 100 counties have purchased the trailers with animal supplies. Trailers with equipment-only cost $16,000. Those with air conditioning and which are self-contained units cost $35,000.  In some cases, other systems were already in place which met the law’s requirements. For example, counties on the coast like Dare and Currituck, have vehicles to move the animals inland to areas/shelters not so vulnerable to flooding. Pets are checked in by trained volunteers, and each pets gets an ID attached to its collar or crate. The goal is to eliminate the need for people to make a choice between evacuating and leaving their pets behind to fend for themselves. North Carolina has done a wonderful job in helping both people and their pets. (Jeff Hampton, “N.C. Shelters come with everything needed to save animals during storms,” The Virginian-Pilot, July 27, 2019, p. 3)

Posted on Monday, August 5th, 2019. Filed under Senior Law News.

Still Waiting On Your Tax Refund?

By Amanda L. Richter, CPA

Here are a few reasons you might have received a tax notice instead of your refund…

After completing the dreaded task of filing your tax return, you may be pleasantly surprised to see that you are due a refund but received less than what you expected. Or even worse, you might have received a tax notice from the Internal Revenue Service (“IRS”) instead of your actual refund.

The Department of Treasury’s Bureau of the Fiscal Service issues Federal tax refunds and operates the Treasury Offset Program. Through this program, your refund might be offset due to the following debts you and your spouse owe:

  • Federal or State taxes for a prior year
  • Past due child support
  • Federal agency non-tax debts
  • Certain unemployment compensation debts owed to
    a state

If you and your spouse do not owe any of the debts listed above, here are several common reasons for the change or delay in your refund:

  • The IRS needs additional information to verify a credit or deduction that was claimed on your return
  • The IRS adjusted your return and believes you made an error
  • The IRS is looking into another one of your returns
  • You or your spouse were a victim of identity theft

If your refund was reduced due to an outstanding debt, you can contact the agency with which you have the debt to determine if your refund was used to offset the amount owed, or you can also contact the Treasury Offset Program at 800-304-3107. If your refund was used to offset the debt, then you will receive a notice explaining the decrease in your refund. You do not need to contact the IRS unless your refund shown on the offset notice differs from the refund reported on your tax return.

Notices from the IRS can be stressful and confusing, so it is important to review it carefully to see why your full refund was not issued. If you have questions or concerns regarding the information reported on the notice, it is always recommended to speak with a tax professional to help you understand the notice and guide you through the next steps. You can also contact the IRS at the number listed on the notice you received to receive additional information regarding your reduced refund.

Ask Kit Kat: Bald Eagles Rebound

Hook Law Center: Kit Kat, what can you tell us about bald eagles around the Chesapeake Bay?

Kit Kat: Well, there is very good news indeed about bald eagles in the Chesapeake Bay along the Atlantic Ocean Coast! The 1970s were a terrible time for them. Their numbers were significantly reduced then largely due to pesticides. Contrast that to today when 302 eagle nests were counted in this year’s survey of the James River, a major tributary of the bay. In 1980, on the other hand, only 1 nest was found. According to Bryan Watts, co-founder and director of the Center for Conservation Biology at the College of William and Mary, “We’re sort of in the golden age of fish-eating waterbirds for the bay.” Other birds, too, have rebounded—osprey and blue heron, for example. In fact, Watts believes the bay may have more water fowl now than was present in the days of Capt. John Smith and the Jamestown Settlement.

What is responsible for such a dramatic change? First of all, they are protected, so they’re not being hunted. According to Watts, “We don’t consider them competitors for muskrats or for fish, and so we’re not killing them.” Protection came about through the Endangered Species Act of 1973. The other reason is that the use of pesticides was stopped. DDT was a major culprit, and also the insecticide Kepone, which was dumped illegally in the James River. From 1975-1979, no breeding pairs of eagles were found near the James River. Then, in 1980, one pair was discovered. Use of pesticides had ceased in the early to mid-70s. It took several years for them to recover, but recover they have! In 1990, there were 18 nests; in 2000, there were 57. By 2018, the number had risen to 289, and in 2019, it had risen further to 302!

Bald eagles are monitored twice yearly. It is a mandate of the US Fish and Wildlife Service since 1977 which established the Chesapeake Bay Bald Eagle Recovery Team. They used to survey Virginia’s entire eastern coast, but since 2016, they only monitor the James River. Recovery is now obvious, so they gather information on the James as a spot check. The first check is done in late February or early March before leaves hide the nests, and then in late April to decipher the number of eggs/chicks. Scientists are not sure whether the number of bald eagles has peaked. Maryland stopped surveying in 2004 when their count revealed 400 breeding pairs. In any case, it is evident bald eagles have rebounded along the Chesapeake Bay, and that is terrific news!  (Tamara Dietrich, “Bald eagles are back, tallied in unprecedented numbers around the Chesapeake Bay,” The Virginian-Pilot, July 11, 2019, p. 1 &4)

Posted on Monday, July 29th, 2019. Filed under Senior Law News.

Using Accountable Plans to Replace Lost Miscellaneous Itemized Deductions

By Jennifer Rossettini, CFP®

Did you used to itemize your deductions before 2018?  Do you miss being able to deduct unreimbursed work-related expenses like mileage, professional dues, and education from your income?  Did your tax bill increase as a result of no longer being able to deduct these expenses? If so, there may be a solution, if your employer is willing to go along with it.

Consider a taxpayer who is in the 30% tax bracket.  In 2017, she was able to deduct $12,000 in unreimbursed employment expenses for a total tax savings of $3,000.  She couldn’t claim these deductions at all in 2018.  If the taxpayer’s employer is on board, she can reduce her taxable compensation by the amount of the unreimbursed expenses by treating them as a working condition fringe benefit.

“A ‘working condition fringe benefit’ is any property or service provided to an employee to the extent that, if the employee paid for the property or service, the amount paid would be allowable as a trade or business expense.”[1]  Working condition fringe benefits would be excluded from the employee’s gross income for income tax purposes, not subject to employment taxes, and deductible by the employer.[2]

For a cash reimbursement of work-related expenses to qualify for a working condition fringe benefit, the arrangement must be structured as an “accountable plan,” which is a plan that follows certain IRS regulations.  To comply with these regulations the plan must require: (1) a business connection; (2) adequate substantiation; and (3) the return of excess advances.

To satisfy the business connection requirement, the amounts paid or incurred by the employee must be in connection with performing services for the employer.  The employer must make sure that the reimbursements or allowances are clearly identified as such, either in a separate check from the employee’s pay check or by delineating the reimbursement or allowance on the employee’s pay stub.

To satisfy the adequate substantiation requirement, the employee must be required to submit documentation, such as an expense report, diary, log or detailed receipt, within a reasonable time period, that shows the amount and business purpose of the expense, the time and place of any travel, the date and description of any business gifts, and the business relationship to the employer of each person receiving a gift.  For travel expenses, an accountable plan is permitted to use federal per diem rates for the basis of determining reimbursement amounts.

The plan must also require employees to return any advance that exceeds substantiated business expenses.  Any unreturned excess amount is treated as additional income subject to income taxes and federal employment taxes.  However, if the employer pays a per diem travel allowance that doesn’t exceed the federal per diem rate, employees can retain the excess of the per diem over actual expenses.  This will not disqualify the accountable plan or require the excess to be treated as taxable income.

If you are an employee who regularly incurs unreimbursed business expenses and you are hoping to minimize income taxes to the greatest extent possible, talk to your employer about whether they offer working condition fringe benefits.  If you are an employer looking to improve your cash flow and/or boost morale among your employees, consider establishing an accountable plan for this purpose.


[1] Gardner, Randy, J.D., LL.M, CPA, RLP®, CFP®, and Welch, Julie A., CPA, PFS, CFP®. “Use Accountable Plans to Retain Benefits of Lost Miscellaneous Itemized Deductions.” Journal of Financial Planning. July 2019: 30. Print.

[2] Gardner & Welch at 31.

Ask Kit Kat: ASPCA/NYPD Partnership

Hook Law Center: Kit Kat, what can you tell us about the ASPCA/NYPD partnership which is now in its 5th year?

Kit Kat: Well, this is a huge success story, if there ever was one! ASPCA and the NYPD (New York Police Department) have been working together since 2013, actually. Back then, it was experimental and only involved one of NYC’s boroughs—the Bronx. When the cooperation proved to be a success, it became a city-wide effort in January 2014. This would mean a lot to abused animals since NYC with its 5 boroughs covers a lot of territory, millions of people, and 77 police precincts. That would mean a lot more attention would be given by people with the power to intervene when abuse/neglect was spotted.

ASPCA and NYPD worked hand-in-hand to make the lives of neglected animals better. Some of the things they did were: 1) establish a special center called the Animal Recovery Center (ARC) to care for the abused animals which were seized. 2) set-up a hotline on the NYPD Crime Stoppers Program to receive anonymous tips concerning animals abuse, and 3) passing laws which require the owners of abused animals with pending court cases to pay the cost of care for the animal while the case is being settled. This encourages a faster resolution of cases, and animals can be placed for adoption much more quickly than in the past.

Some of the cruelty where intervention occurred is unbelievable. One of the earliest cases involved a pit bull named Fraggle. He was found zipped inside a suitcase,  severely malnourished, and abandoned. After rehabilitation by the ASPCA, he was able to be adopted. Another of the  positive outcomes of the collaboration between the 2 departments is that people are also helped. NYPD Police Commissioner James P. O’Neill, says, “Animal cruelty is often linked to other serious crimes against people, including domestic violence. And so, by assisting animals in our neighborhoods, together we’re making our nation’s safest large city even safer.” (“A New Day for Animal Victims of Cruelty,” ASPCA Action, Issue 1, 2019, p.11-15)

Posted on Monday, July 22nd, 2019. Filed under Senior Law News.

Parents May Now Delegate Care Authority of a Child

By Shannon Laymon-Pecoraro, CELA

Many parents travel for work or otherwise send children to stay with a relative for temporary points in time, entrusting others with the care of their children. The concern has always been whether there is any authority to delegate parental decisions to such persons temporarily caring for the child. Until recently, there was no statutory authority that would permit another to step into the shoes of a parent for important care decisions.

Last week, a law permitting parents, or legal custodians, of a child to temporarily delegate care authority to another person became effective. Such delegation must be made in the form of a properly executed power of attorney, signed by both parents if they exercise joint custody, and may not exceed a period of 180 days. Service members on active duty have been exempted from the 180 day limit, but shall not be permitted to extend such time in excess of 30 days beyond the term of active duty service. The agent shall exercise parental or legal authority on a continuous basis for no less than 24 hours and without compensation for the intended duration of the power of attorney. The delegation may be revoked by any person who signed the power of attorney at any time.

The law specifically allows for the delegation of powers regarding the custody, care, and property of the child, but excludes the power to consent to marriage or adoption of the child, the performance or inducement of an abortion on or for the child, or the termination of parental rights to the child. Further, such delegation of does not modify the legal rights, obligations, or authority of a parent or legal custodian.

Another important exception to the law was implemented to prevent parents from delegating authority for the primary purpose of enrolling a child in a school outside of the child’s jurisdiction. The law specifically states that a power of attorney shall be invalid “if executed for the primary purpose of enrolling the child in a school for the sole purpose of participating in the academic or interscholastic athletics programs provided by that school or for any other unlawful purpose.” A violation of this section is punishable under the law.

As Kit Kat: Arctic Fox’s Journey

Hook Law Center: Kit Kat, was there really an Arctic fox who journeyed from Norway to Canada?

Kit Kat: Yes, amazingly, it did. The female fox was a coastal or blue fox. She had a tracking collar on, and that is how the journey was recorded. This represents a trip of more than 2,175 miles in only 76 days. She began on the Svalbard Archipelago of Norway in 2018, and was tracked to a remote island in northern Nunavut, Canada. This event was reported in Polar Research, and published by the Norwegian Polar Institute during the last week of June 2019.

How was such a trip possible? Well, this particular breed of fox is very hearty, but it is still an amazing story. It was only possible during winter, when the Arctic ice freezes over and the 2 continents are connected. At first, researchers were skeptical. How could this be? Eva Fuglei, of the Norwegian Polar Institute, said, “We didn’t think it was true. Could the fox have been found dead, the collar taken off and now aboard a boat?” That possibility was ruled out when they realized it would not be possible for a boat to travel through the ice that far north at that time of year. When tracking data was downloaded from the collar, it appears the fox left the Svalbard Archipelago on March 26, 2018 and reached Ellesmere Island in Nunavut, Canada 2.5 months later. In one day, she logged in about 96 miles! Ms. Fuglei  commented, “This is, to our knowledge, the fastest movement rate ever recorded for this species.”

Why would the fox have set out on such a journey? Researchers suspect it was motivated by lack of food in her original habitat or some threat that existed there. The fox’s migration also points to the importance of sea ice for some species. With global warming, the way of life for some species may be significantly altered. (Megan Specia, “An Arctic Fox’s Epic Journey: Norway to Canada in 76 days,” The New York Times, July 2, 2019)

Posted on Monday, July 15th, 2019. Filed under Senior Law News.
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