Elder Law: A time to plan

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OK, here we go again with our preaching. Amid all of the holiday festivities and visiting with family and friends, invariably we make promises to exercise, stop smoking, drink less and eat healthier. Here are a few additional resolutions that just might be easier to keep.

Many of the clients and families we serve are in crisis due to an event that was both unforeseen and unplanned. We'll review some areas where these crises commonly occur and some steps that can be taken so that the effects can be avoided, or at least minimized.

The Good Olde Family Gathering -- While the holidays are a time to spread some cheer and to see people we may not often see, it's also one of the few times throughout the year when entire families are in the same place at the same time (and, hopefully, without fighting).

Parents especially should consider an open discussion with their children about their plans as they, the parents, age and how they -- not the kids -- want things to happen. Everything ranging from, "Where is the key to the safe deposit box?" to "What funeral home will handle our funeral?" should become fair game for discussion.

Is there someone in the family with "special needs"? How should those needs best be met, particularly if the parent is the caregiver of that person? If there appears to be an imminent need of long term care for the parent, which facilities are of interest and do the kids know where these facilities are?

While not all subjects may be comfortable to discuss, it's better to discuss them in advance rather than have to act during a crisis and possibly make a decision inconsistent with the intended, but unspoken and unknown plans and wishes of the parent.

The Estate Plan -- It's analogous to a tetanus shot ... if you can't remember the last time you had one, it's probably time to review the plan (or to create one).

The last time you prepared your will, the kids may have been minors or your now-estranged brother with the nosy spouse may have been named as a person in your power of attorney who may have control over your affairs at some point. Do the kids know where your "stuff" (a technical legal term) is and how to get to it in the event of your disability or death?

Medical Care -- If your last recollection of preparing a Living Will/Health Care Directive was when you were being prepped for surgery and you signed a form that the hospital handed to you, it's probably time to actually read the latest information about medical care decisions in Pennsylvania.

If you want a trusted family member to act on your behalf someday if you are unable to do so, you want to be sure that person is actually able (and willing) to help you and is not hampered by the various privacy hurdles that are standard now.

Taxes -- There are numerous state and federal taxes that affect the way we plan estates. This is even truer right now as we approach the "fiscal cliff." You owe it to yourself and to your family to keep up-to-date on the ramifications of whatever tax changes come out of this Congress. Remember, these changes can have the most impact on a person's wealth if not addressed and dealt with periodically as tax laws change.

IRAs -- Baby boomers are retiring in increasing numbers and more of the individual wealth in this country continues to shift to "pre-tax" individual retirement accounts, which require special planning.

For the "Greatest Generation," IRAs were a small portion of a person's overall wealth and many people used a simple will to distribute that wealth. However, IRAs do not normally pass through a will and are transferred by beneficiary designation. In addition, owners can now use different types of protective trusts to transfer IRAs for the benefit of their heirs.

So, at the very least, a review of your IRA beneficiary designations on a periodic basis is in order as well as considering using a trust to hold an IRA, and to consider the proper way to prepare that type of trust to comply with the IRS rules while still accomplishing the goals of the IRA owner.

Insurance -- Many clients own various types of insurance. We'll focus on life insurance because it is the most common.

Was the insurance company purchased by another company? Did the company "demutualize" and issue stock to its policy owners? If so, ask the insurance company if you own stock and how many shares? Are premiums still being paid on the policy? If so, why? Will the policy lapse during your lifetime?

Many of these questions can be answered by simply requesting an "In Force Illustration" of your policy from the insurance company or your agent.

While good planning helps you address all of the above issues, adding any one of these to your list of 2013 resolutions is a step in the right direction (and a lot easier than giving up doughnuts!). Have a happy, healthy and well-resolved New Year!

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Julian Gray and Frank Petrich are certified elder law attorneys with over 55 years of combined elder law experience who practice in the Pittsburgh area at Gray Elder Law. Send questions for consideration in this column to elderlawguys@grayelderlaw.com and visit their website at www.grayelderlaw.com.


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