Estate Planning for Gen Z’s and College Students

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Going away to school is exciting.

But before taking Junior to college or to his first apartment, don’t forget legal matters. There are key financial and legal documents you need in place. These documents are a general durable power of attorney, health care proxy and living will for Junior. Once Junior attains the age of majority, his doctor, nurse, academic registrar, landlord or bank needs these documents to speak with you.

Having the documents in place can bring peace of mind. Busy Gen Z’s need time to learn how to “adult.” They feel overwhelmed by the financial side of “living their best life.”

If you insist that Junior sign his legal documents before leaving home, you have done him a favor.

With these documents, you can lead Junior by example in dealing responsibly with adult challenges. These could be “surprise medical bills,” health insurance reimbursements, credit card billing, income tax issues. Once you shown him how to manage such challenges, he will thrive. And you can relax and just be the proud parent!

Since Gen Z’s are the digital generation, make sure you have a well-crafted durable power of attorney with digital asset powers. If the unthinkable happens, you will want to be able to access Junior’s Instagram or other social media accounts in an emergency.

If Junior doesn’t execute a health care proxy, you will wish he did when he is in an urgent care facility located ten hours away!

Junior should also share a list of credit card and financial accounts with the customer service number for each account. That way, if he misplaces his credit card, it is easy to report. Also note his digital accounts numbers, usernames and passwords (i.e., student identification username and password, and the health insurance username and password).

For more practice tips on estate planning for your family, contact Jane. 

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Helping Someone With Dementia Sell the Home

Selling the home through guadrianship

Sometimes, a home must be sold, but the homeowner is no longer able to sign a listing or sale agreement due to cognitive impairment, confusion, advanced dementia or severe and persistent addiction issues (i.e., Wernicke-Korsakoff syndrome), or new onset dementia after recovering from COVID-19.  covid-19-pneumonia-increases-risk-of-dementia-study-says  Others may be temporarily incapacitated due to cardiac issues, surgery, or severe illness.  These conditions can prevent an adult from being temporarily or permanently able to make important financial, medical or legal decisions.  Adults who can no longer make decisions may be incapacitated.  And in real estate bubble with many residential properties reaching their peak value, it’s critical to act fast to accept the best home sale offer.

Unfortunately, incapacitated adults are unable to enter into a binding contract, such as an agreement to list or sell the home. When this happens, one option may be to use a general durable power of attorney or a real estate power of attorney to sell the home.  But that can only be successful where there is already a valid general durable power of attorney or real estate power of attorney in place.  If there is a power of attorney, and the homeowner is able to make decisions, the home cannot be sold through a power of attorney without the homeowner’s consent to the sale.  Giving a power of attorney to a trusted adult child or friend is like giving them an extra set of keys to the car. You can always take back the keys when you wish.

More to the point, a power of attorney is an important legal document by which the principal (i.e., the person signing the power of attorney) gives authority to an agent to carry out the affairs of the principal.  The catch-22 is that in order to make a power of attorney, the principal must have legal capacity.  Unfortunately, there are many incapacitated persons who never bothered to obtain a power of attorney before they lost capacity.   Another risk is that there may be a valid power of attorney, but the agent named may be deceased, very ill, or no longer available to serve.  Once again, there is no one with legal authority to sign the home sale agreement and the house cannot be sold even if there is a buyer.

The solution is to seek a court order for authority to sell the home.  This involves filing a lawsuit in the Superior Court for a judgment of incapacitation and award of guardianship.  The guardianship process is not a simple one. There are several different types of guardianships and the correct type must be selected.  Various court rules, required information and forms must be complied with.

The guardianship process requires doctor’s reports and an investigation into the finances and health of the alleged incapacitated person. As part of the process, the Superior Court judge appoints an independent attorney to investigate these matters and to write a report.  This attorney is referred to as the court-appointed attorney.  Often, that attorney’s report carries great weight with the court.  Testimony by the doctors may be waived, or if the guardianship is disputed, there may be an adversarial hearing.  If the evidence, any testimony and the court-appointed attorney’s report indicates that the alleged incapacitated person cannot make any significant decisions as to his person or property, then a plenary guardianship may be awarded.

But this is only the first step in obtaining court-authority to sell the home of the incapacitated person, who may urgently need the anticipated net home sale proceeds to pay for long-term care.  The next step is to file a motion with the court to sell the home through the guardianship.  The court can potentially award the requested order.  Only when such an order is in place, can the home be legally sold.

Not surprisingly, this process requires additional legal work and documentation.  The guardian must show that the proposed sale is fair and reasonable and in the “best interests” of the incapacitated person. In deciding whether this standard is satisfied, the judge may consider whether the incapacitated person will ever be able to return to the home to live there independently or with the assistance of paid caregivers, provided there are sufficient funds.  The fair market value and the tax-assessed value of the home will also be considered, as will the outcome of any prior attempts to sell the property, the cost of continued homeownership, and whether the anticipated net house sale proceeds are needed to pay for long-term care. In many cases, the home must be sold as a condition of Medicaid eligibility for the former homeowner in a nursing home.

This process takes time.   In limited cases where the safety of the alleged incapacitated person is endangered, or a very good purchase offer may be lost without swift court approval, the guardianship process can be expedited in New Jersey.

The bottom line, is that when capacity is in issue, selling the home a general durable power of attorney or a real estate power of attorney is much more efficient than through a guardianship. However, selling the home through a guardianship can be done in the difficult cases where there is no legal authority in place to sell the home.

Questions, or if you need help clearing title to sell a home through a guardianship? Let Jane know.

Seniors, Mental Health and Firearms: A safety plan.

As of July 16, 2022, the suicide prevention and crisis hotline can be reached by dialing 988 in New Jersey (and nationwide.) There is also a chat feature. The 1-800-273-8255 hotline will continue in effect.   You can find additional details online at Department of Human Services | 988 Suicide & Crisis Lifeline (nj.gov).

Sadly, suicide affects people of all ages. It is a leading cause of death among white males over the age of 65.  Approximately 15 individuals pass away from this daily. The use of firearms is a leading contributing factor.  See James H. Price, Jagdish Khubchandani, Firearm Suicides in the Elderly:  A Narrative Review and Call to Action, Journal of Community Health 46:1050-1058 (February 5, 2021).  The full study is available online at Firearm Suicides in the Elderly: A Narrative Review and Call for Action | SpringerLink. Letters Against Isolation | Write letters to Self-isolating seniors.

This is not a political statement. Many seniors have firearms for protection and sport. When not in use, guns should be locked away, preferably in a gun case. You may want to reconsider keeping a firearm in the home of a senior with a serious vision impairment (i.e., blindness or macular degeneration), a condition which will impair coordination (i.e., multiple sclerosis, Parkinson’s Disease, cerebral palsy, stroke with paralysis, traumatic brain injury, and brain tumors) or a diagnosis or signs of dementia, confusion and/or cognitive impairment (i.e., Alzheimers and/or vascular dementia). Article for Gun Ownership & Safety Tips for Seniors

What are the societal factors driving these grim statistics? The elderly are confronted with physical and mental illness, isolation, loss of independence in the home, family and friendships, and must navigate life without any sense of meaning or productivity usually provided by gainful employment. They must face their struggles with limited income, limited financial resources and limited social support.  They are often invisible in our media.  Unlike younger adults, older individuals facing overwhelming challenges may be less likely to hang in there, until the situation improves for them. 

What You Can Do To Help.

These problems are a wake-up call.  What can we do to better the situation?   A good place to start is with little things. If you are so inclined, you could make a donation to non-profits that fight hunger, such as Feeding America and Meals on Wheels. Some churches have casserole programs, where you can prepare an extra meal, freeze in a foil container, and donate it to your local church or soup kitchen. Fostering a sense of connection is another way to help. It doesn’t take much to make a telephone or Facetime call, send a short note or card, share a meal, or to express your thanks to a loved one who helped shape you into who you are today. If your parents and grandparents are no longer with us, I am sorry for loss, but you are not off the hook! If you want to help and are inclined to write, consider volunteering with a cause like Letters Against Isolation, which fights senior loneliness with letters to bring joy. For more information, visit https://www.lettersagainstisolation.com/.

New Elder Justice Resources

black man covering face with hands
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Elder financial abuse involves the misuse of an elderly persons’s money, credit or property. Unfortunately, this is a growing and often unreported problem.

Fortunately, there are resources available to fight elder abuse. One is the statewide criminal referral hotline, found on the elder justice website of the New Jersey courts. Additional information and resources are available online at https://www.njcourts.gov/public/elder-justice.html.

Financial professionals, in particular, should remain alert for behavioral red flags of elder financial abuse. These can include:

  • new contact information for a financial account (address, email, or telephone)
  • unusual purchases or withdrawals on the account of someone who is cognitively impaired
  • an elderly person who seems withdrawn, anxious or afraid
  • an elderly person who cannot answer simple questions about her account activity
  • someone new taking great interest in the finances of an elderly person
  • repeated unsuccessful attempts to contact an elderly account holder
  • someone without proper identification trying to help an elderly person with bank or brokerage transactions

More information is contained in a government report to financial institutions found online at Advisory on Elder Financial Exploitation

What to Do if You Suspect Elder Abuse.

Your legal recourse may include criminal or civil prosecution, revoking a power of attorney, executing a new power of attorney and/or a guardianship or conservatorship. For strategies and solutions for your unique situation, contact Archer Brogan, LLP at https://archerbrogan.com

A Path to Financial Freedom

What if there was a simple way to finance your future long-term care?

How can you age in place at home without spending a fortune? Does that sound too good to be true? It’s not. If you are still insurable, advance planning with long-term care insurance can keep your options open.

Most of us will need a skilled nursing level of care, some for months or years. Medicare, Medigap and other health insurance plans do not pay for custodial care. These policies will only pay for limited sub-acute and skilled care for limited periods. Disability insurance is intended to replace your earned income from work if you become disabled.

What if you have a medical crisis and need 24/7 care? At a cost of over $5,000 per month at the private pay rate, even staying at home with paid care can be very expensive. https://www.genworth.com/aging-and-you/finances/cost-of-care.html.

The benefits of long-term care insurance. Long-term care insurance can help protect your family’s financial and emotional freedom and can facilitate asset protection planning.

How to you get and pay for long-term care insurance? Policies are typically purchased while the insured has attained the age of forty and before approximately age 66. With age, the risk of uninsurability increases.

Some federal and state government employers offer long-term care insurance. It may also be available through some private employers. Long-term care insurance can also be purchased through an insurance agent. Private banks also can help high net worth individuals obtain specially priced policies. Some individuals use their qualified retirement assets to pay for long-term care insurance premiums. Many policies are tax-qualified, meaning that the benefits paid under the policy may not be subject to income taxes. Some policies have special Medicaid protections. These are called “partnership policies.”

It is very important to understand what the policy will cover and how the elimination period will work. Make sure any long-term care insurance you purchase is a policy you can still afford if the premiums increase. Talk to your elder care attorney if you think you may want to lower the benefit amount or increase the waiting period before benefits are payable under the policy.

Individuals who want to plan for themselves can benefit from long-term care insurance. Dick and Jane are married and in their mid-sixties. Dick is a government employee with a long-term care insurance policy through his work. The policy pays four years of benefits after a 90-day elimination period. Dick has a serious fall and fractures requiring surgery. He goes into the hospital for surgery and contracts COVID-19 in the hospital. By the time he is ready for discharge from the hospital, he is generally deconditioned and just wants to go home.

Jane is a petite woman. She tells the hospital discharge planner that she is afraid she might hurt herself if she tries to lift Dick himself. Dick needs constant hands-on assistance to perform activities like walking, dressing, bathing, toileting, and transferring from a bed to a chair. At first, the social worker was recommending placement in a nursing home or rehabilitation for Dick, due to concern that Jane can’t care for Dick safely in the home. But after learning that there is a long-term care insurance policy, the hospital discharges Dick to the home. Once Dick satisfies the policy’s 90-day elimination period, the benefits are triggered and the benefit payments can pay for Dick’s care, relieving the financial burden on Jane. Dick and Jane do not need to spend down their assets to qualify for Medicaid, due to the long-term care insurance benefit. If they have substantial additional assets and Dick and Jane wish to do so, they can work with an elder care attorney to protect additional assets that may be at risk after the policy term is exhausted.

 Adult children who want to plan for their parent or parents can benefit from long-term care insurance. Sarah was a single mother in her early 60’s who raised four very successful adult children while working two jobs and living frugally. She is active and healthy and still working at Dunkin Donuts every day. When she retires, based on current projections, her income will limited to Social Security of about $1,500 per month, which is not enough to pay for a nice assisted living facility, if she should need some care. Her now very successful adult children purchase a policy insuring their mother, so that she can now enjoy her golden years in a comfortable community setting if she should need assisted living care. With her income and several years of long-term care insurance, if Sarah were to need a skilled level of care, she could potentially age in place in assisted living, in a very comfortable setting, and then transition to Medicaid after the facility’s private pay period is satisfied.

More information about long-term care insurance in New Jersey is available online click here .