Estate Planning Bits

10 perils of joint tenancy

Joint tenancy is a form of co-ownership. Often, owning an asset such as a home or bank account under a joint tenancy relationship is advantageous. For example, when one of the co-owners dies, joint ownership typically provides the surviving co-owner instant access to the jointly held property, eliminating the need for probate. However, joint tenancy can have its perils.

1. Control Issues: By providing someone with co-ownership, you give them control of your asset. If you add another person as co-owner of your home, you cannot sell or mortgage the home unless that person agrees.


2. Creditor Issues: If creditors seek out your co-owner for outstanding debt owed, the creditors may be able to obtain part of your home or bank account that is held in joint tenancy.


3. Relationship Issues: If you and your co-owner experience a falling out, the co-owner may be able to take all of the money out of the bank account without your approval.


4. Substitute for Will Issues: Many times, parents of several children will place one child’s name on an account and assume that that child will divide assets equally among all siblings. However, this method provides no stipulations over control of the money. The surviving co-owner can do with it what he pleases, with no legal obligation.


5. Uncertainty Issues: Unplanned ownership of property often leads to unwanted results, especially for people unable to manage assets.


6. Tax Issues: Careful planning to eliminate or reduce estate taxes can be completely thwarted by an inadvertently created joint tenancy that passes property outright to a surviving joint owner.


7. Long-term Care Issues: Careful planning to reduce long-term care financing can also be thwarted by an inadvertently created joint tenancy that passes property outright to a surviving joint owner.


8. Marriage Issues: Individual property may become marital property once it is transferred into a joint tenancy.


9. Incompetency Issues: In the event that a co-owner becomes incompetent, part of the property may go into a conservatorship, making it burdensome if the other joint tenant wants to sell some or all of the jointly held property.


10. Distribution Issues: Joint tenancies deprive you of the flexibility of a will or trust in which you can stagger the distribution ages of the beneficiaries. In a joint tenancy arrangement, the joint tenant receives the asset all at once.

By: Todd C. Ratner, Esq.

Top ten issues regarding wills

1. Should I have a Will? Everyone already has a Will in every state whether or not they drafted it themselves. The Commonwealth of Massachusetts, and every state, establishes who your beneficiaries are.
2. What kind of Will should I have? The best type is one written by a qualified attorney. Many people have taken the do-it-yourself approach or prepared one online. Unfortunately, computer programs don’t cover many of the important issues and often don’t provide advice about who should be serving in various capacities. They also usually don’t address specific situations that may apply to you.
3. How does a Will work when I die? In most states, the Executor of the estate (the person named in the Will,) hires a lawyer to probate the Will, which is basically the administration of the estate through the Court. Creditors and taxes are paid first, and then after all expenses are paid, the balance of the funds are distributed to the beneficiaries pursuant to the terms of the Will. 
4. What if I have a Will but am not satisfied with it? A minor change can be made to the Will by a document called a Codocil. More frequently, it is easier and “cleaner” to adjust your Will by merely rewriting it, which revokes the prior one. 
5. Do both spouses need Wills? Yes, most couples have their property owned jointly and name each other as beneficiary. However, it is on the second death that all the assets will be probated if they are in the surviving spouse’s name alone. In second marriage situations, or in issues of blended families, it is very important that both Wills coordinate the distribution. 
6. Is it possible to set up a Trust under my Will? Yes, many people create a Trust under a Will called a Testamentary Trust. However, in some states, these Trusts need to be accounted for every year with the probate court. If there is a separate Trust created outside of your Will, then there will not be any court involvement or fees relative to the Trust administration. 
7. How can I include a charity in my Will? There are several ways that a charitable bequest can be made, by percentage, fixed dollar amount, specific item of personal property, etc. Each technique requires thoughtful planning before the gift is made. 
8. How can a charitable bequest benefit me? With a bequest, the gift is made after your demise, when you no longer need that asset. There are also ways to set this up so that the future security of your spouse and heirs is secured through a charitable bequest in which they may receive income or principal from the gift while the charity also receives a benefit. 
9. How much does a Will cost? Well, that depends upon the amount of work that needs to be expended by the attorney who is preparing the Will for you. Very often, the cost of the Will is relatively nominal, but the cost of the planning is more important. This may include the preparation of a Trust, Health Proxy, Power of Attorney and other related documents. 
10. How do I go about getting an attorney? You can ask your friends and family or a trusted advisor who is qualified to effectively plan your estate. If not, the local estate planning council, the local bar association, or perhaps a charity that is involved in your estate plan will be able to suggest a qualified lawyer for you. 

by: Hyman G. Darling, Esq

Cobra benefits update

If you work for a company that has 20 employees or more, then you have basic Federal rights that cover you if you lose your employment with them. Also, in some states, there are expansive programs that extend certain COBRA rights to workers even if the company has fewer than 20 employees.

Normally, you are covered when there is a “triggering” or qualifying event. This could be if you are voluntarily or involuntarily laid off or terminated, unless you are terminated for gross misconduct. If your hours are reduced below the plan eligibility requirements, you may also have certain rights. In the event that you should pass away, or by age or disability qualify for Medicare, you may also have rights which continue. Other situations are if your dependent is no longer eligible because of age or non-student status or if your spouse is no longer eligible because of a divorce or legal separation.

Each plan should be reviewed individually upon a separation or a triggering event to determine what rights you have, as very often an election has to be made within certain time limitations, and it could be lost if not elected timely. Even if an election is made upon termination to continue the coverage, you should review the cost of coverage, as it will usually be significantly more than when you were employed.

Similarly, benefits such as life insurance should be reviewed because they normally become quite expensive upon termination, but if life expectancy is an issue, you should  consider the cost versus potential death benefit.

The cost of COBRA “non-compliance” is quite high, and therefore, employees should be certain that they verify the rules when notified properly by their employers.

by: Hyman G. Darling, Esq.

Organ donations decrease, highlighting urgent need.

The number of deceased organ donors in the United States actually decreased in 2008. So did the number of live organ donors. According to published reports, this is the first time that donations are down since organ donor tracking began approximately twenty years ago.

Therefore, the number of transplants in the United States also decreased in 2008. At the same time, the number of people waiting for transplants increased as did the number of people on waiting lists for transplants. It was reported that the transplant waiting list reached 100,000 in 2008, and approximately 50,000 people will be expected to be added to the list in 2009.

However, there is some good news in that the reported deaths on the transplant waiting list decreased after reaching a high of almost 7,000 in 2004. The data reported 6,229 deaths in 2008.

With fewer donors, few transplants, and more people waiting for the transplants, can it really be that fewer people are dying? As it turns out, the answer is no. The statistic only measures people who were removed from the waiting list because they died. There is another important category: people who were removed from the waiting list before they died. The people were removed because while they were waiting, they became too sick to undergo transplant surgery. This number has been going up, but it appears that the numbers to be reported for all categories may be skewed since it is difficult to track this important statistic.

If you wish to become an organ donor, you should be sure to include that specific language within your Health Proxy, Living Will or Advanced Medical Directive. Most states also have passed the Uniform Anatomical Gift Act, which allows a person to have their preference of being an organ donor placed on their driver’s license.

Information courtesy of Dave Undis, LifeSharers, May, 2009

Shared by: Hyman G. Darling, Esq.

New and improved veterans benefits

The benefit of aid and attendance is often misunderstood and under-utilized. Many individuals feel that in order to obtain this benefit, they must actually have been in combat. The veterans benefit requires only that the military person served at least one day of ninety days of active duty during a period of war. There is no specific requirement that the person had to have been in direct combat.

However, a person who is in the National Guard, military reservist, or was in active duty training for active military may not qualify for this benefit.

A person who is obtaining military retirement pay may not receive compensation as well. Retirement pay is reduced by the amount of compensation that person may be receiving. A veteran or the qualifying spouse, who may be residing in a nursing facility, may not receive a full payment of the pension if the person is eligible for Medicaid.

In those situations, the benefit is reduced to ninety dollars a month. But in many states, this amount may be retained by the Medicaid recipient in addition to the allowance for a personal needs allowance for that particular state. In order to obtain this benefit, if the veteran is younger than sixty-five years old, he or she must be totally disabled, and the burden to prove disability lies with the applicant. If the person is receiving Social Security Disability, that is evidence of disability for Veterans Administration purposes. Please note that a single surviving spouse does not need to be disabled, regardless of age.

There are many issues regarding aid and attendance that need to be reviewed, including the income test, the asset test, and ratings; and in some cases, the non-veteran spouse of a healthy veteran may be entitled to benefits.

Very often, it is more appropriate to have the person at home obtain these benefits so that they may stay at home, and together with other income, such as some form of long-term care insurance, or their own assets, which may include funds received from a reverse mortgage, they will be able to stay at home rather than becoming institutionalized.

By: Hyman G. Darling, Esq.