Green ribbonElder Law Update
North Carolina Edition
Vol 2  Issue Nine
 March 2009
In This Issue
Beneficiaries Under A Will
Picking The Right Trustee
Checklist For New Trustees
Exercise For Seniors
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Greetings!


Irish MugPicture to the left:  What do you think?  It's my new mug shot!

I am a Scot (well . . . a fair amount of other northern European stuff is mixed in there . . . but I claim most proudly the Scottish heritage). I am a sojourner of some 16+ years among the Irish, having married a Savannah Irish woman.  My half-Irish son reminds me of my "otherness" come this time every year as he looks gleefully to goodtimes with his relatives (my Irish inlaws). For non-Scottish people they are a decent lot and, I must admit, have led me to a love of all things Irish.

Actually, I am the only lawyer in the family, so I am sure the irony of having all the blarney come from the non-Irish guy is not lost on them.

We have a new face below.  Kristin Cerbone has been a friend for a few years, and I have known her husband Adam for many years.  Kristin is a rare Savannah commodity: An elder law attorney.  After a stint with an Atlanta law firm and with Georgia Legal Services (handling mostly elder law and Medicaid cases), Kristin devoted most of her time to Celia (her now 5 year old).  Now that Celia is off to academe (well . . . preschool), Kristi is coming back to the legal fold.  Many of you will be seeing much more of her in Savannah as she takes on more case responsibility and gives me a welcome hand.

Fiduciaries and Beneficiaries

We decided this would be a good issue in which to address some fairly straightforward estate planning questions we commonly receive about beneficiaries and trustees.  I certainly hope these pointers help.

Pumpin' Arn . . .

Or Pumping Iron, if you prefer.  Dr. Hodges, uh, weighs in on the importance of exercise for the older among us.  It is an interesting article that I hope you'll take a moment to read.  Because she and her husband/partner Cisco Hodges are my primary care doctors, her comment about the under age-65 crowd and "noncompliance" regarding exercise instructions hit hard.

Have a great March (which should go out meekly like a lamb after the leonine start we had) and a great St. Patrick's Day.  The North Carolinians will need to understand that the day is taken seriously in Savannah.  Very.


Bob Mason
Certified Elder Law Attorney

Certified by the National Elder Law Foundation, recognized by the American Bar Association as the certifying entity for specialization in  Elder Law.
DOES YOUR WILL NAME AN ALTERNATE BENEFICIARY?

- Kristin Cerbone
 
What wKristin Cerboneill happen to your estate if your primary beneficiary does not survive you? If your will does not name an alternate beneficiary, your estate will be divided according to state law. The way the state divides your estate may not agree with your wishes. Your money may go to someone you don't like or to someone who is unable to handle it.

For example, suppose your will divides your estate among your spouse and three children. If one child dies before you, do you want his or her portion of your estate to go to your grandchildren? To your other children? To your spouse? Or perhaps to a charitable organization or institution? Another issue to consider is whether the person who would inherit under the law is too young or has special needs. In that case, you may need a special needs trust to protect the assets.

Double check your will to make sure it names an alternate beneficiary. And if you don't already have a will, being able to name an alternate beneficiary is an important reason to create one.

Naming an alternate is a good idea for other provisions in your will as well. If you have young children, you should also consider naming an alternate guardian for your children in the event your first choice is unable to fulfill his or her obligation. In addition, you may want to appoint an alternate executor in case the first one cannot serve.

Our suggestion:  Pull out that old last will and testament today and have a look at it.

Savannah elder law attorney Kristin Cerbone is an affiliate of Mason Law, PC.  You may email her by clicking HERE.
Have the Right Trustee?
 - Bob Mason

What the heck is a "fiduciary" anyway? It actually comes from the Latin for "faith" Bowtie Bob(fide, as in Semper Fidelis). A fiduciary is a fancy legal term for the person who will take care of your property for you if you transfer it to a trust or if you are unable to do it yourself. Examples are the executor of an estate, the trustee of a trust, or an attorney-in-fact under a power of attorney. Your first instinct might be to name one of your children as a fiduciary, but if you want to avoid conflict among your children, this might not be the best option.

Some of the toughest planning issues we deal with at Mason Law involve helping clients name appropriate fiduciaries.

When naming a fiduciary, it is important to be able to trust the individual, which is why people often name family members as fiduciaries. However, problems can arise when a parent with two or more children names one child as a fiduciary. A child is often not the best fiduciary for several reasons:
  • It is hard for a child to be completely objective.
  • Children often disagree over many things, including how long the estate should take to complete, the selling of assets, and the division of personal property.
  • Children often don't communicate with each other well.
Often (not always, but often) when one child is named as fiduciary problems can arise.
An alternative might be to hire a professional fiduciary. A professional fiduciary can be a bank with trust powers, a certified public accountant, or a trust company. Often we can recommend a good one in the area. A professional fiduciary will charge a fee (it is not a hobby, after all), but the fee should be explained ahead of time. In addition, because a professional is experienced in managing money and property, your assets are more likely to increase under this person's or institution's guidance.

To ensure that you or your family has some input, you can include a provision that allows one or more family members (or in some cases, even you) to discharge the fiduciary if they feel the professional is not doing a good job. This will allow your family to make sure the fiduciary is performing properly without having the burden of acting as fiduciary.

You can also name a family member or friend to act as a "co-fiduciary" with special powers to direct when and to who trust distributions should be made.
A Quick Checklist For New Trustees

- Bob Mason

 You have been asked to be a trustee of a trust. What responsibilities have been thrust upon you? How can you successfully carry them out?

Here are eight do's and two do not's to get you started:
  • Do read the trust document. It sets out the rules under which you will operate, so you need to understand it completely.
  • Do create a checking account for the trust. All income and expenses should go through this account. While you can and should invest the money, a checking account will enable you to make distributions and payments and keep track of them.
  • Do keep the best interests of the beneficiaries in mind at all times. You have what's called a "fiduciary" duty to them, which is an extremely high standard.
  • Do provide the beneficiaries and anyone else indicated in the trust with regular information regarding trust activity. The trust document should direct you as to how often to provide the information. This can be a copy of the checking and investment account statements or a more formal trust account prepared by an accountant or attorney.
  • Do invest the trust funds prudently and productively. This, too, is part of your "fiduciary" duties. You cannot simply leave all of the trust funds in a savings account. And you can't put them all into a promising new company. You need to diversify the trust portfolio among stocks and fixed income securities. It is wise to get professional investment advice.
  • Do keep in regular contact with the beneficiaries to understand their needs.
  • Do be aware of any public benefits the beneficiaries may be receiving and make sure you do not jeopardize the beneficiaries' eligibility. You will almost certainly need expert help in that regard.
  • Do file annual income tax returns for the trust.
  • Don't have any personal financial dealings with the trust, unless the trust document carefully spells out to what extent you may do so. For instance, you cannot borrow money from the trust or lend the trust money to anyone unless the trust document spells that out.
  • Don't fly solo. Get professional advice to make sure you are correctly fulfilling your role.
As you can see, the rules are complex. They can also easily get you into trouble. That is why suggestion number 10 may be the best advice.
Exercise and the Elderly

Beth G. Hodges, MD

Beth Hodges, MDAs a physician, I spend a lot of time recommending exercise to my patients.  Those under 65 know I am talking to them, though they may not comply.  Those over 65 rarely consider that exercise should be something they endorse, yet it is just as important, perhaps even more so. 

Maybe it is the mental images the word exercise conjures up.  Our elderly just cannot see themselves biking down the greenway or climbing the rock wall at the fitness club.  What they don't understand is that there are many other ways to exercise.  Walking out to the mailbox a few times a day can make a big difference for someone with heart or lung disease.  Bones benefit from weight bearing exercise, such as walking or lifting light weights (even 1-2 pounds.)  Arthritic joints loosen up with regular activity.  Sleep improves.  Energy increases and depression decreases.  Blood pressure and cholesterol decrease.

The biggest excuse I hear from my elderly as to why they will not exercise is that they can't afford it.  Yes, health clubs are expensive to those on fixed incomes, but there are inexpensive water aerobics classes at the YMCA, as well as many other activities available there.  Walking is also an inexpensive way to increase activity level.  If the weather is not conducive, they can walk at the mall.  If transportation issues prevent that, I have recommended walking a loop inside the house.  Treadmills are fine, if gait and balance are sufficient to be safe, but an elliptical machine or stationary bike is often safer for the elderly.  A family can chip in for Grandma and get a used stationary bike (I recommend a recumbent one) pretty cheaply.  Some elderly may be good candidates for a supervised pulmonary or cardiac rehabilitation program at their local hospital.

How much exercise is needed?  For someone very sedentary or in poor condition, ten minutes twice daily can make a difference.  I always recommend starting small and working up to a goal.  The CDC recommends 30 minutes daily, or a total of 2 ½-3 hours weekly. 

I was out in Arizona recently and while hiking up a mountain, ran across a group of women hiking down, not one of them under 75!  They were laughing, vibrant, happy.  The thought immediately crossed my poor oxygen deprived brain, these women look the way they do because of WHAT they do.  We should all try to be more like them. 
 
 
Beth Hodges, MD, is a principal in Hodges Family Practice with offices in Asheboro and Ramseur, North Carolina.
The Usual Disclaimer: This newsletter is for general information only. Please do not rely on anything you read in this email as definitive legal advice applicable to you. All situations are different, including yours. Nothing you read in this newsletter is a suitable substitute for professional advice you may receive from your attorney, your accountant, or your tax advisor.
All contents copyrighted 2009 by Mason Law, PC. Contents may be republished with written permission of Mason Law, PC (which permission will usually be given!).