The Planner - July 2009

As you can see on page 8 of this document, the beneficiaries of Michael Jackson's trust have been made public! You probably thought this sort of thing would be kept private, since the contents of trusts aren't public record the way wills are. Mostly this is true. However, there is a new and notable exception that affects Mr. Jackson's trust and could affect yours. A new rule in the Texas probate code makes beneficiaries of a trust public record if the trustee of the trust and the executor of the will are the same person and the will is probated. Note that most wills associated with living trusts do not have to be probated because the trust is fully funded and handles all estate assets.

Many of our clients select trust-based planning as a way to avoid making private matters public. Because trusts are not subject to probate proceedings, they have always been a good means to accomplish that end. However, the new rule described above could result in somewhat less privacy than was expected if your successor trustee applies for probate.

Keeping up with changes in the probate code is best accomplished through periodic attorney reviews. We suggest our clients come in for an estate plan review every three to five years or if any of the following occurs:

1. A change in the desired estate distribution;
2. A change in the person or persons you wish to have as successor trustee;
3. A change in marital status;
4. The death of a beneficiary or the death of a successor trustee;
5. A significant increase in net worth, receipt of retirement benefits, or sale of significant assets;
6. Moving to another state; or
7. A drastic change in health.

Changes in some of these areas do not necessarily mean an estate plan needs to be updated, but it's a good idea to consult with a qualified attorney just in case. The Greening Law Firm, P.C. offers complimentary consultations for estate planning, probate, Medicaid planning, estate administration and estate plan reviews.

We stand ready to serve you.

Merry Christmas in July (25),

Ronald G. Greening

The Greening Law Firm, P.C.

Listen In
Retiring Smart: The Cost of Aging

Lita Epstein, MBA, is a seasoned financial writer who develops books and courses on investing, finance and living in retirement. Her books include the "Complete Idiot's Guide to Social Security and Medicare" and the "Pocket Idiot's Guide to Investing in Mutual Funds."

Click here to hear it.

What Does Long-Term Care Cost? Who Pays?

Many people come into our offices thinking that the estate plan we help them create will be quick, easy, and above all, the end of the line. They hope that once this item is crossed off the to-do list they can breathe a sigh of relief and never think about it again. For some people this is exactly what happens, but others find that the creation of an estate plan serves as a jumping off point for other important planning strategies: Retirement planning, investment planning, Medicaid planning and long-term care planning are all important issues every family will have to eventually consider.

Most of these issues are at least somewhat familiar, but long-term care still presents a number of questions for many people: What exactly is it? Will I need it? Who will provide it? And how will I pay for it? In an effort to shine some light on the still murky issue, the AARP has published an article that helps answer these questions in a clear and concise manner. The article also addresses issues such as the difference between public and private services, and when you may need to utilize one or the other.

Answering the difficult questions, however, is only the first step. "Using a combination of support-family and friends, community services, private funds, and government assistance, if necessary-provides a balanced approach to getting the help you need in the setting of your choice." Once again, having a plan is essential to ensure that you retain control over your own finances and care far into the future.

Will Long-Term Care Get a Federal Makeover?

Texan seniors and families are watching closely as the Obama Administration gears up to retool the health care system. According to Howard Gleckman of the Urban Institute, the Administration is not paying sufficient attention to the needs of the ten million Americans who require custodial nursing care. With the stay at a long-term care facility averaging $75,000 a year, and home health care costs similarly astronomical, older Americans and their families desperately need help. Toward that end, Senator Edward Kennedy and Congressmen Frank Pallone and John Dingell have introduced the Community Living Assistance Services and Supports Act of 2009. The proposed legislation is designed to prevent family impoverishment when a loved one needs care, permit more frail elderly to remain at home, and reduce the growing burden on Medicaid. Read Gleckman's USA Today blog post on the subject.

Plunging Life Insurance Values May Threaten Your Estate Plan

For those with substantial assets, purchasing life insurance to pay the estate tax bill has long been a useful estate planning strategy. But a recent Wall Street Journal article points out that decreased interest rates are devaluing policies, which may no longer provide sufficient funds to cover taxes. If life insurance is part of your estate plan, have your policy reviewed by a financial professional. Read the Wall St. Journal article.

Communication is Key When Planning for the Future

How often do you and your spouse talk about the financial aspect of your retirement? For that matter, how often do you talk about finances in general? New Research by Fidelity has found that an alarmingly high number of couples barely communicate about their finances at all. In fact, "only 15 percent of couples feel confident that both of them could assume responsibility for their joint finances if necessary."

Retirement planning is one of the leading areas in which spouses have a failure to communicate, according to the research. After the recent market turmoil, people have new and greater concerns about their ability to retire comfortably, but they aren't talking about it.And lack of communication means a lack of planning: "Although couples agree about their top financial concerns in retirement, they have not developed better planning habits. In fact, nearly 10 percent fewer couples report they had completed critical plans - be that a retirement plan, an estate plan, or a will - as compared to 2007."

Although the temptation to bury your head in the sand may be strong, talking with your spouse-and then with a trusted professional-to create quality retirement and estate plans is essential, and will bring incredible comfort and security to you and the rest of your family.If talking about finances is not something that comes naturally to you and your spouse, a good way to get started is to make an appointment with a professional who can lead you through the process together.

Talking about money doesn't have to be scary. Learning together and making plans for the future will not only strengthen your financial situation, it can also strengthen your relationship.

Wrongful Resuscitation

Recent studies show a real "lack of regard" for patient's preferences in life-sustaining treatment decisions by doctors and hospital staff (National Quality Forum: Safe Practices for Better Healthcare 2009 Update).

Another 2008 published study (Pieracci) reviewed life-sustaining treatment decisions that occurred between hospital medical staff and their patients and/or their health care agents under advance directives. The conclusion of the study is frightening. "Despite patients' wishes, the indiscriminate use of technology and the lack of communication between patients and health care providers have been shown to result in unnecessary pain and suffering for patients." In addition, the study notes that the medical costs of prolonging a dying patient's life via artificial ventilation and intensive care often range between $11,000 and $36,000. Another study entitled Support demonstrated that 46% of dying patients received mechanical ventilation in the last three days of their lives. Many of those individuals never wanted to be on a ventilator-yet they were forced by their physician's decisions to live on in a state of hopeless suffering.

What can you do to prevent "wrongful resuscitation" from happening to you or someone that you love?

Create a written advance directive such as a Health Care Power of Attorney, Living Will, and/or a Do Not Resuscitate Order (DNR) in appropriate circumstances;
Insist that your advance directives are placed in all of your medical records and that your physician is well aware of the existence of such documents;
Have "the talk" with your family and doctor to make sure that everyone is very aware of your feelings regarding life-sustaining treatment in the event there is no hope of recovery. This will allow you to get all of your family members "on the same page"; and
Choose an "advocate" as your Health Care Power of Attorney and/or surrogate decision maker. That advocate is someone who can look a medical professional in the eye and insist that your wishes be carried out. I recommend that you look through your family and friends and choose someone who can insist that your desire regarding life-prolonging treatment be respected by the medical profession.

It's important to know that there is substantial legal authority for health care directives to be followed. In fact, it is now considered to be a "sentinel incident" when a hospital performs a wrongful resuscitation. The Center for Medicare and Medicaid Services (CMS) has emphasized that patients have the right to make decisions regarding their long-term health care, and that those decisions should be respected by physicians and hospitals.

Practice Limited to Estate Planning, Estate Administration, Probate, and Elder Law

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1601 Williams Drive Georgetown, Texas 78628, 931.0888

The hiring of an attorney is an important decision. The items discussed in this newsletter are of a general nature and not intended to provide legal advice. Please consult with a qualified estate planning/elder law attorney to determine the best options for your personal circumstances.

In accordance with IRS Circular 230, the content of this newsletter is not to be relied upon for the preparation of a tax return or to avoid tax penalties imposed by the Internal Revenue Code. If you desire a formal opinion on a particular tax matter for the purpose of filing a return or avoiding the imposition of any penalties, please contact us to discuss the further Treasury requirements that must be met and whether it is possible to meet those requirements under the circumstances, as well as the anticipated time and fees involved.

To comply with the U.S. Treasury regulations, we must inform you that (i) any U.S. federal tax advice contained in this newsletter was not intended or written to be used, and cannot be used, by any person for the purpose of avoiding U.S. federal tax penalties that may be imposed on such person and (ii) each taxpayer should seek advice from their tax advisor based on the taxpayer's particular circumstances.