Gifts To Grandchildren

Gifts given to grandchildren by grandparents can be a great blessing.  Kelly Greene wrote an article in the Wall Street Journal September 14, 2012, titled "Are You Coddling Your Grandkids?"  In her article, Ms. Greene indicates five ways to give to a grandchild something and at the same time not creating a sense of entitlement from a grandchild.
First, Ms. Greene says you must, "Pare your gifts to offset the pain."  In other words, don't give to the extent that you jeopardize your own financial care.
Second, Ms. Greene say you might consider making a gift a loan rather than an outright gift.  If the loan is handled properly, it might be a good way to help the grandchild and at the same time allowing them to make their own way in the world.
Third, Ms. Greene says a grandparent can create teaching moments.  Gifting stock or investments rather than cash can be a way of teaching grandchildren the value of money as an example.
Fourth, Ms. Greene says it is a good idea to delay a grandchild's gratification.  Gifting money at certain dates or events rather than on a regular basis can help grandchildren rely on their own resources first.
Fifth, Ms. Greene counsels to practice equality.  One of the most common reasons for litigation between family members if perceived favoritism. 
As you choose to gift assets, it is wise to take into account the feelings of family members and how said gifts will affect them in the long run.

New Year's Resolution

At the beginning of this new year, we at Hughes Estate Group wish all a happy and successful year.  We would encourage everyone to set a goal for this year to either get an estate plan in place (if a plan is not in place) or review and update any existing estate plan (if a plan does exist).  Death is something we will all experience.  Ensuring the smooth transition of one's estate to beloved beneficiaries is one of the best gifts a person can give his or her family.

Requirements of a Care Agreement

A care agreement is a formal agreement between two parties. One party is providing services. The other party is hiring said individual to provide said services. A care agreement
• must be a formal contract between parties;
• must name the parties involved in the care agreement.
• must outline service and duty terms.
• must outline payment terms.
• must outline breach of contract terms.
• must outline termination of contract terms.
• must outline length of time the contract is valid/active.
• must allow for mutual amendments or changes to contract.
• must be signed and dated by all parties (parent(s) and family member(s)).

Elements of Care in Care Agreements

Care agreements can be customized to each family’s particular situation. The following are basic elements of care that can be explained in a care agreement: 
• Personal Assistance
• Personal Hygiene
• Meals
• Laundry
• Housekeeping
• Transportation Services
• Yard Care
• Shopping
• Social Contacts
• Religious Needs
• Intellectual and Emotional Needs

Purposes of Family Care Agreements

There are many good reasons for families to enter into care agreements, particularly agreements in which a family member is paid for services rendered. 
First, a care agreement spells out for the parent, family, and third parties the details of care a family member will provide to an ailing parent. Caring for a parent even occasionally can be a physical, time-consuming, emotional, and financial burden for a family member. Acting as a parent’s full-time, primary caregiver can be deeply burdensome. A care agreement spells out details of care in a way that is illuminating and helpful for everyone involved.

Second, when a parent needs help, family members often rally around and provide service for their parents free of charge. But caring for a parent can be a significant financial burden, not to speak of the physical and emotional burdens (in taking time off work or in taking time away from their own family duties, for example). A wise parent will set forth in a care agreement details regarding compensation of family members for care services the family performs on the parent’s behalf.

Third, a memorialized care agreement prevents family resentments and disagreements regarding said payments. Misunderstandings and hurt feelings often occur in families during the time an aging parent is being cared for by family members. A carefully drafted care agreement protects in numerous ways a family member serving an aging parent.

Fourth, a care agreement has Medicaid advantages. Without a formal care agreement, the funds used to pay family members are treated as part of the ailing parent’s assets or income for Medicaid eligibility purposes. On the other hand, if an ailing parent is paying a family member (or anticipates paying a family member in the future) for services, a formal care agreement ensures that funds used to pay family members are not treated as the ailing parent’s assets or income for Medicaid eligibility requirements.

Family Care Agreements

A care agreement (also known as a family care agreement, personal care agreement, personal services agreement, care contract, etc.) is an agreement between a parent (or parents) and a family member (or members) in which the family member agrees to care for the parent and the parent agrees to pay the family member for the services performed on behalf of said parent.

Joke of the Week

An elderly couple is lying in bed one morning having just awakened from a good night's sleep. He takes her hand and she responds, "Don't touch me!"

"Why not," he says.

She answers back, "Because I'm dead."

The husband says to her, "What on earth are you talking about? We're both lying here in bed together and talking to one another."

The wife says, "Not so, I'm definitely dead."

Her husband insists, "You're not dead. What in the world makes you think you are dead?"

His wife answers, "I know I'm dead because I woke up this morning and nothing hurts."

Joke of the Week

"My grandfather plays the piano by ear."

"Well, if we must boast--my grandfather fiddles with his beard."

The Basic Stages of Life

There are three basic stages of life when contemplating estate planning.

1. Individual is alive and mentally competent



2. Individual is alive and mentally incapacitated



3. Individual has died

Each of these stages is handled differently.

Individual is alive and mentally competent
When an individual is alive and mentally competent, estate planning documents can be in place, but most likely the documents are sleeping (or not being used) during this stage of life.

Individual is alive and mentally incapacitated
When an individual is alive but mentally incapacitated, there are certain estate documents that if prepared ahead of time allow family members to step in and begin acting on behalf of the incapacitated individual. The kind of documents that might be prepared for this stage of life are:

• health care power of attorney



• medical directive (pull-the-plug)



• health care directive



• financial power of attorney



• do not resuscitate (In Utah, an individual can only obtain a DNR by contacting a physician and filling out the DNR with the physician.)

If these documents are not in place before an individual becomes incapacitated, family members will go to court to obtain conservatorship or guardianship appointment in order to act for an incapacitated person.

Individual has died
When an individual has died, any powers of attorney used during incapacity becomes void and family members must turn to any will or trust that has been established to deal with this stage. If an individual has prepared a trust and/or will, family members can begin the process of accessing assets, paying bills, and distributing assets to the beneficiaries of the deceased person. If the person dies without estate documents in place, most likely the family members will need to go through probate to obtain authority to access and distribute any property of the deceased person.

In contemplating estate planning, it is important to be aware of the three stages of life and prepare for each stage.

Joke of the Week

Jacob, age 85, and Rebecca, age 79, are all excited about their decision to get married. They go for a stroll to discuss the wedding and as they walk go past a drugstore. Jacob suggests that they go in. He addresses the man behind the counter: "Are you the owner?" The pharmacist answers, "Yes."
Jacob: "Do you sell heart medication?"
Pharmacist: "Of course we do."
Jacob: "How about medicine for circulation?"
Pharmacist: "All kinds."
Jacob: "Medicine for rheumatism?"
Pharmacist: "Definitely."
Jacob: "Medicine for memory?"
Pharmacist: "Yes, a large variety."
Jacob: "What about vitamins and sleeping pills?"
Pharmacist: "Absolutely."
Jacob: "Perfect! We'd like to register here for our wedding gifts."

Book Review: "The Parent Care Conversation"

Dan Taylor experienced an emotional five years caring for his father who had developed Alzheimer's. After Mr. Taylor's father's death, Mr. Taylor developed a plan with ways to talk to parents about their financial and health care concerns before the parents actually need help. His book, The Parent Care Conversation: 6 strategies for dealing with the emotional and financial challenges of aging parents is a good book to read before sitting down with loved ones and discussing financial and health care concerns.

Mr. Taylor's plan presents six conversations that need to be made between children and parents. The six conversations are:

• The Big Picture Conversation




• The Money Conversation




• The Property Conversation




• The House Conversation




• The Professional Care Conversation




• The Legacy Conversation

It is not always easy to talk about the future especially when discussing parents financial and health care needs. But it is really crucial for the peace of mind of both the children and parents to be prepared for the inevitable. Therefore, we recommend reading Mr. Taylor's book.

Comparing a Power of Attorney to Dynamite

In Wilson Rawl's Where the Red Fern Grows, Billy says of his small hunting dog Little Ann, "Dynamite comes in little packages." In my opinion, financial powers of attorney are as dangerous as dynamite in terms of their potential consequences for ill. Inadequate financial powers of attorney are at the heart of numerous expensive and painful probate cases. I think financial powers of attorney are as important as revocable trusts and deserve as much attention.
In an article written by Linda S. Whitton, titled "Durable Powers as an Alternative to Guardianship: Lessons We Have Learned" (37 Stetson L.Rev. 2007), Ms. Whitton states there are three things to understand about durable powers of attorney as used as an alternative to guardianship.

1. A Power of Attorney is Only as Effective as the Willingness of Third Parties to Accept It.



2. A Power of Attorney is Only as Protective as the Agent is Trustworthy.



3. A Power of Attorney will Not Prevent Family Power Struggles over the Principal's Assets.

In this blog, I will address the first point made by Ms. Whitton.

The first point is spot on. If a third party refuses to accept a financial power of attorney, then the power of attorney is not very effective.

A word about this first lesson in terms of Utah law. As of the date of this entry, there is no Utah statute or Utah judicial decision that requires a third parto to accept a financial power of attorney or that offers any statutory redress against a third party for unreasonably refusing to accept a financial power of attorney. Utah statutory law governing financial powers of attorney is quite basic, essentially recognizing and authorizing the use of financial powers of attorney, but not much more. (U.C.A. 75-5-501 to 504.)

Therefore, in Utah, if a client is incapacitated and if third parties will not accept a durable financial power of attorney signed by the client, then the named agent has only two options: the agent can sue the third party to force acceptance of the power of attorney or seek a conservatorship.

So the question is, what can be done in Utah to encourage third parties to accept financial powers of attorney?

I have asked the legal departments of Zions Bank, Wells Fargo, U.S. Bank, Key Bank, and Mountain America Credit Union what they are looking for in financial powers of attorney that encourage them to acknowledge the agent's authority to access the principal's accounts. The responses are summed up as follows:

1. First, are the formalities honored? Is the document signed and notarized? (A few of the legal departments said they would be impressed if the principal's signature was witnessed, even though there is no statute requiring witness attestation.)



2. What is the liability of the third party in accepting or rejecting the power of attorney? The less liable these third parties are, the more likely they said they would be in accepting the agent's authority under the power of attorney.



3. How recent and well-organized is the document? The more "fresh" and readable the power of attorney is, the more likely these third parties will accept it.

With these ideas in mind, I suggest that financial powers of attorney include language at the very beginning of the document that releases third parties from liability for accepting the agent's representatives regarding the validity of the power of attorney (and places liability for abusing the principal or the power of attorney squarely on the agent). I suggest this language include clear language as to what third parties are and are not obligated to do in accepting a financial power of attorney.

Check out our website to learn more about financial powers of attorney.

Craig E. Hughes

Book Review: "Last Laughs"

A fun cartoon book to look at regarding aging, retirement and death is "Last Laughs" edited by Mort Gerberg. For example, there is a cartoon depicting a grocery story with an old man pushing a shopping cart. Two old women discussing the old man say, "A great catch. He's a widower, still frisky, and has fully paid-up-long-term-care insurance." Take a look here.

How Can I Regain My Identity Once It Has Been Stolen?

The most important thing you can do if you find unexplained charges on credit cards, bills on your credit report, an unexplained notice you are being sued, or even an arrest warrant, is to take action quickly. Below are the starting steps of reclaiming your name:

• File a report with the police.


• Place a fraud alert on your credit reports.


• Close any accounts that you know or even think might have been tampered with or opened by someone else.


• File a complaint with the Federal Trade Commission.


• Put a Freeze on Your Credit.

How Can I Prevent Identity Theft?

There are many things you can do to reduce the risk of identity theft. The following is a quick guide to simple, but important ways to protect yourself and those you care about.

• Guard your personal information.


• Take your social security number off your driver's license and checks.


• Never carry documents containing personal information with you.


• Secure your mail and trash.


• Ask for a credit report at least twice a year.


• Consider removing your name from phone directories.


• Update computer protection regularly.

Credit reports can be obtained from one of the three major credit bureaus.
Equifax
Experian
TransUnion

Joke of the Week

An older couple was watching TV. The man stretches and says, "Honey, I think I'll go to the kitchen and get some ice cream. Would you like some?"

"Believe I would thanks."

"Would you like some chocolate sauce on it?"

"Yes, I would . . . but now be sure and write that down so you won't forget."

Her husband glares, shakes his head, and marches off to the kitchen. Twenty minutes pass as the husband rustles about. Finally, he reappears, carrying a plateful of scrambled eggs.

"Why," exclaims the wife, "I told you to write it down. Here you've come back and forgotten my bacon!"

Joke of the Week

I've got to the age when I need my false teeth and my hearing aid before I can ask where I've left my glasses.

Talking to Your Parents About Their Finances

I read an article in the Wall Street Journal's weekend edition. The article discusses ways for family members to approach talking to aging parents about their financial needs or concerns. The full article can be found here.

Search our website here for our family approach to estate planning.

A Connection Between Alzeimer's and Doing Estate Planning

In today's Wall Street Journal, one of the articles discusses the progress science is making towards detecting Alzeimer's disease earlier and earlier in patients, hence the likelihood of preventing the disease more and more often. In the same way it is wise to have medical checkups on a regular basis in order to detect early signs of Alzeimer's disease and thus take steps to prevent said disease, it is wise not to delay doing estate planning. The sooner you do your estate planning, maintain said plan, and review and update said plan on a regular basis, the more apt potential emergencies or problems with assets, estate taxes, incapacity, Medicaid, family conflicts, etc. will be eliminated or significantly reduced when life's inevitable moments arrive.

Check out our site here regarding the importance of doing your estate planning now.

Joke of the Week

Friend: "Was your grandmother's mind vigorous and sane up to the very last?"
Heir: "I don't know--the will won't be read until tomorrow."

Check out our website here for additional information regarding estate planning.