Estate Planning & Elder Law

Giving Thanks

2011-11-23T11:22:00.000-08:00

This is the time of year when we reflect on turkey and mashed potatoes with gravy, pies and stuffing, football and basketball. It's begins a hectic march through to New Year's with everyone looking for more time and usually more money, there never seems to be enough of either. I talk to a lot of people throughout the year who say that they don't have enough time throughout the year let alone through the holiday season. There is always something left to do, place to go, meeting/game/event/dinner/practice/recital/ to attend. We don't have the time, we don't have the energy to think about estate planning.

Then we gather with family and friends at parties and events which brings us around to reflecting on family, those who are with us and those who aren't. We vow to do better next year, but we all know how that resolution goes. We go back to work, back to our lives, back to our everyday problems and, well you all know how it goes.

We partner with caring and committed families, individuals, their trusted advisors and their loved ones to discover, clarify, promote and protect their values and valuables through our unique Life Map Legacy Planning Process (TM). The Life Map Process consists of 5 components:
1. Listen to clients and their needs, goals and dreams;
2. Education of clients and their loved ones;
3. Customized counseling;
4. Work with client's other professional advisors; and,
5. Ongoing maintenance and updating system.

Working through the Life Map (TM) process ensures that an estate plan will work when needed and give peace of mind to clients and their loved ones. We are more than the dollars and cents that we collect over our lifetimes, we are also our values, our wisdom, our culture, our stories. An analogy I like to use is the family vacation. Each vacation has to be planned out in advance so that it is enjoyable and not a royal pain. Plans are made to select the destination, the transportation, things to do on the way, while there and on the way home. Countless hours are spent making sure that the vacation is planned along with contingencies for unknown problems that may crop up.

Analogize this with what most people allow to pass for estate planning. An appointment is made with an attorney, a personal information form is filled-out and a meeting is had with someone from the attorney's office. The attorney tells the client what they need and prepares a set of documents which are signed and on rare occasion the estate plan is funded (assets transferred to reflect correct title according to the estate planning documents). These documents are filed away somewhere to collect dust. How many of you would take a vacation with that kind of planning? If you wouldn't go on vacation like that, why would you plan for the rest of your lives and beyond like that.

So, once the turkey dinner has been digested, contact me to discuss an estate plan that will work for you and your family, today, tomorrow and after you are gone.

What is Going On?

2011-04-10T15:03:00.000-07:00

There seems to be a pattern emerging from the new Congress, which seems to be much the same as the last Congress, don't get along or work together until you absolutely have to and only to the extent you absolutely have to. Take the Estate Tax Issue signed December 17, just weeks before the existing law sunset. Then there is the recent near disaster of coming within one hour of forcing the entire Federal government to come to a halt. I think that we can look forward to more of the same in the future.

In Illinois, we don't know what to expect. Governors Gone Wild, Mayors not living here until it is of advantage to them, no money in the state coffers. Medicaid laws enacted in 2006 that have not been adopted here in Illinois to date. It seems that we might finally get around to adopting the Deficit Reduction Act of 2006 (DRA) by the end of the year, no promises though. Some people act as if we already adopted DRA some time ago, but no, not yet. In the State's defense, there was a suit challenging it's constitutionality basically because there was a spelling error/missing words problem.

The new rules basically change the penalty period should one have excess assets from beginning the date the asset was gifted, to, the penalty period beginning the date the Medicaid application is filed. There is a big difference between a 10 month penalty period starting two years ago and one going forward 10 months from this month. This is particularly difficult where there is no money to pay a nursing home going forward as money was already spent down before the Medicaid application was filed.

There are legal strategies that can pre-qualify individuals for Medicaid, while protecting assets so that they can be passed on to your family. As this economic situation continues to languish and interest rates continue to bottom out and we continue to live longer and longer and health care costs continue to rise, more and more families will need to at least be aware of asset protection strategies that qualify one spouse for Medicaid, without putting the other spouse in the poor house and still having some assets to pass on to your heirs when you die.

If you are interested in this topic feel free to contact me to schedule a free consultation at 630-613-7700, or e-mail me at bill@wjdennislaw.com.

Estate Tax Update - Part 4/ Other Exemptions

2011-03-05T05:38:00.000-08:00

The headline catcher is that the Federal Estate Tax is $5 million, but there are other exemptions that are notable. The lifetime gift tax exemption is now $5 million. The annual gift tax exclusion amount remains at $13,000 for 2011 and is indexed to inflation.

Just to explain, there are two gift taxes. The annual gift tax exclusion is the $13,000, which is the amount you can give, per year, per person. So, if husband and wife both want to give the same person a $13,000 gift, they may and that would total $26,000 per year. If the gift exceeds the $13,000 limit, every dollar over $13,000 is taxed and must be reported on a gift tax return (form 709).

The other gift tax is a lifetime exemption and is currently $5 million. So, that means you are allowed to give away $5 million over your lifetime. This is total, not per beneficiary. If you give $1 million to one of your kids, when you die you only have $4 million of exemption remaining. If you gift more than $5 million during your lifetime, every additional dollar will be taxed at 35%.

Additionally, although the Federal Estate Tax exemption amount is $5 million, the Illinois legislature passed, and Governor Quinn enacted a state estate tax exemption amount of $2 million. So, although you can die with $5 million in assets and not owe any Federal Estate Tax, you will have to pay the Illinois Estate Tax on $3 million, which is taxed at

Estate Tax Update - Part 3/ Asset Protection

2011-03-05T05:05:00.000-08:00

Asset Protection is really risk management to discourage potential creditors from collecting from those protected assets. Asset Protection is not an exact science and the strategies used to protect assets are more like multiple layers of protection. There are several analogies that come to mind, the layers of an onion is one and a bit longer one is thinking of protected assets as placing a treasure in a metal box and placing a lock on the box. Now you put the box in a concrete room, with a steel door and a strong lock. This room could be located in a castle with a thick, high stone wall surrounding it. Around the wall is a moat and in the moat are crocodiles and, well I think you get the idea. Unless the creditor is very determined and able, they will rather go after easier treasure and leave the protected treasure alone.

The reason I bring the subject of asset protection up in this discussion of the new estate tax law is that some people will tell you that now that there is a $5 million estate tax exemption and portability of that exemption, that 99% of the public will no longer need to utilize trusts. I find two problems with this thinking.

First, is the fact that this legislation is temporary. The new tax laws have been passed for the next two years only and something will need to be done before December 31, 2012 or the law will sunset back to 2001 levels ($1 million estate tax) . There is a chance that the law will be ratified and continue on for the foreseeable future, however, there is just as great a chance that, the limits will be lowered even to the $1 million level.

Second, is the fact that there are other reasons aside from estate tax avoidance to utilize a credit shelter/family trust. Some of these reasons are:
1. Protect assets from lawsuit against the surviving spouse.
2. Protect the surviving spouse should he/she remarry and the new spouse needs to enter a nursing home.
3. Prevent the surviving spouse from unintentionally disinheriting children of the decedent.
4. Protect the growth in value of the deceased spouse's property during the life of the surviving spouse from future estate tax.
5. Allow flexibility for the surviving spouse to manipulate his/her income taxes after the first spouse's death.
6. If the law sunsets in 2012, we go back to 2001 rules.

Estate Tax Planning Update - Part 2/ Exemption and Portability

2011-03-05T04:47:00.000-08:00

The new tax law signed by President Obama allows a person to pass $5 million at his/her death without any estate tax. This means a married couple can pass $10 million. Additionally, one can pass the first $5 million directly to the surviving spouse. This is referred to as portability. Previously, a married couple had to utilize a credit shelter trust or family trust to shelter the exemption amount from estate tax. This trust also protects assets from creditors, predators and remarriage issues.

Under the new law, even when the exemption amount ($5 million) is passed directly to the spouse, they still get to use the $5 million exemption from the first death. As with most good things in life there is a "but" involved. So, $5 million can be passed from one spouse to another directly and still qualify for the $5 million exemption, BUT, the surviving spouse must file an estate tax return (form 706) at the first death. This tax form can be daunting as it can be complicated and require appraisals and proof of values. Because virtually all 706 forms are personally reviewed by and IRS agent, the audit risk is very high.

There are other rules dealing with remarriage that will be the subject of another post, but for now just know that a surviving spouse is not allowed to stack exemption amounts should they remarry.

Estate Planning Tax Update - Part 1/Change

2011-03-04T12:24:00.000-08:00

I want to address some of the Tax Law changes and how they will affect Estate Planning. I was hoping this could be something we all could count on into the future, but, that is not to be. It looks like we will have to get used to the word change, at least for the foreseeable future. This is intended to be a series of short to semi-short writings on different aspects of the new tax law.

Part One - Change

On December 17, 2010, President Obama signed a new tax law that affects every estate plan in some way or another. However, there is no clarity as to how long this new tax law will continue to be in effect. It just happens to sunset, December 31, 2012, which just happens to be a presidential election year. I am too cynical to think that was done by accident.

If President Obama is re-elected, he will likely carry several more Democratic Congressmen and Senators into office with him. In that event, the Federal Estate Tax exemption will likely go down. $2 - 3.5 million seem to be the numbers bandied around. If there is a Republican in the White House in 2012, the federal estate tax exemption will likely remain the same or increase. If nothing is done, the new law sunsets and the exemption reverts to the 2001 level - $1 million.
On top of that, the Illinois Estate Tax Exemption is currently $2 million. Should the Federal Estate Tax find itself somewhere between $3.5 and above in 2012, the Illinois tax will likely remain at $2 m. If the Federal Estate Tax is allowed to sunset, returning to $1 million, the Illinois Estate Tax will likely re-couple with the Federal Estate Tax. That means that Illinois will take a share of the Federal tax amount, instead of maintaining a separate exemption amount.

Either way, it seems that both sides are content to allow this issue to be tossed around like a political football. Will 2012 bring us certainty? Clarity? Or, just more of the same wait and see attitude that has given us the band aid we are living with today?

With all this uncertainty, many people ask, "Why plan?" "Why not wait for some certainty and clarity and then plan?" The problem with that thinking is that even if the Estate Tax issue is settled, other issues will continue to change. The Stock Market, the Economic Recovery, unemployment, marriage, divorce, death, all these things and many more will bring change to everyone's lives.

That is why my practice model advocates updating and maintenance as part every estate plan. Plan for certainty, not destiny.

Estate Tax Exemption Update

2010-10-12T16:21:00.000-07:00

This will be a very short post. I would like to say that I have confidence that the legislature will take care of business by the end of the year and we will have a freeze on the previous estate tax exemption, that being $3.5 million per person, with all the same taxes and regulations as were in force in 2009. I would like to say that the legislature has a long-range plan to address the ambiguity and uncertainty they left us with when they failed to pass any substantive law relating to estate taxes.

Every now and then, an "expert" or "political analyst" will prognosticate on the future of the Federal Estate Tax, but there is no confidence in their writing. These prognosticators are always sure to include this caveat, or that disclaimer, because while they might think they have some insight, they really might as well be throwing darts at a donkey's hind-end.

The sad fact is that we will likely watch the legislature do nothing substantive with estate tax reform and EGTRRA will be left to sunset to the preordained 2011 rates and ceilings. I would list those rates and ceilings, but I have no confidence in the legislature whatsoever and might find myself waking-up tomorrow with something totally new and different.

Stay Tuned.............

Don't Pass it by, Pick It Up

2010-08-23T13:09:00.000-07:00

I have a dog and I try to walk her every day, or she tries to walk me. We have issues, but somehow or other we seem to get outside together each morning and sometimes each evening. Maybe it is just me, or maybe I am becoming more sensitive to this, but, I seem to notice a lot of litter, garbage and debris both on the roads, in parks and on private property.

I, like most people I see walking along, with, or without four-legged friend attached, walk right around, through or by litter all the time. After walking with my dog around the same pond everyday for several weeks, I decided to try to pick-up a couple pieces of litter each day to see if it would make any difference in the appearance of that park.

Now, I do not always walk the same route and there are times, this year in particular, where the path around this pond were not passable, but, I have to admit that by picking trash up every day, I have noticed a marked difference. In fact, this has become a bit of an obsession for me and I have unofficially adopted that park as my litter-free zone.

Now, I am not writing this for a pat on the back or for some kind of kudos, what I do want to impress upon anyone reading this is that if I can do this, so can just about anyone else. Besides being able to enjoy a cleaner park and a safer environment for other critters who share that space, you also receive a feeling of accomplishment and pride in your neighborhood.

I have been trying to think of ways to expand this concept to not only my neighborhood, but to my town and beyond to other suburbs in my area. I also ride a bicycle as that is one form of exercise that I can do on regular basis, at least while the weather stays relatively nice and have been dismayed to see how much trash can accumulate on the sides of nature trails over time. Instead of continuing to ride past all this trash, I plan to dedicate a portion of each ride to parking my bike and walking along for 10-15 minutes to pick-up trash along certain stretches of the trail.

I think this is doable as I don't think that I will be challenging Lance anytime soon and the walking and bending over won't hurt my waistline either. My purpose for this blog is to challenge others to do the same. It doesn't take much to carry an extra plastic bag with you and to pick-up a little bit of trash/litter each time you walk your dog, or go out for some exercise. Yes, you will be let down sometimes that the next time you walk that way, there may be more litter replacing what you picked-up, but, if done over time, people get the message and actually start taking care to look for and find the nearest trash can.

I know battling litter is nothing new. I know that there are people out there more eco-conscious than myself. I also know that there will be litter no matter what I do, but, I find myself taking a stand, here, now. Just think about it the next time you are out walking, it might just give your day a lift.

2010-06-04T08:03:00.000-07:00

It has been a while since I have posted to my blog. I thought I would wait until Congress acted on the Estate Tax issues, thinking they would take care of their previous oversight at the first available opportunity. While there are talks in committee regarding the Estate Tax and avoiding the Sunset provision of EGTRAA we will be facing in 2011 should they (Congress) not address the issues involved, there is really nothing substantive to report at this time.

I feel no more comfortable today than I did two months ago in predicting what the status of the Federal and State Estate tax will be in 2011, or for the remainder of 2010 for that matter. The uncertainty of the whole situation has left many thinking that they should wait until this is all cleared-up before initiating an estate plan. If your choice is to wait until the Federal Government finalizes all these issues, you will not have any planning in place in your lifetime.

There is a solution. It is quite simple really. It is a 3 part process that will ensure your estate plan will work for both you and your family.

1. Develop the Best Plan You Can Now.
Take the time to look at where you are now and where you want to be 10, 20, or 30 years from now and seek out an attorney who will work with you to create a plan that will work for you and your family now and into the future.

2. Continue to Update and Maintain Your Plan.
If you can count on anything beyond death and taxes, it is that things will continue to change. The laws will continue to change, your financial and personal situations will continue to change and I will continue to learn more about both over time. Staying on top of your estate plan over time can save substantial amounts of money that might otherwise be lost to taxes and/or lost opportunities.

3. Transfer Your Wealth in and Efficient and Effective Manner.
By being consistent and purposeful about your planning, when something does happen, you either become disabled, or die, your assets and documents are where they are supposed to be and transferring those assets is much simpler and more effective.

At the Law Office of William J. Dennis, we utilize a 3 step process and work with you, your family and other professional advisers to ensure that you and your family have an estate plan that will work as intended when it is needed.

1. You Tell Us About Your Family, We Will Tell You About the Law and Together We Will Create an Estate Plan that Works.
You are the expert when it comes to you and your family. We start with a conversation about you and your family and the goals you have for your estate plan. I will give you an overview of my practice and review basic estate planning concepts with you. Based on your situation and goals, we will give you several possible options to consider. Once you have chosen an option, we will work together to design the plan you want. We will then make sure that assets and beneficiary designations are properly in place.

2. Formal Updating and Maintenance Program.
As discussed above, things change. It is necessary that we work to keep your estate plan current so that it is as effective, 5, 10, 20 years from now as it is today. We meet with clients each year to go over plans and advise clients of changes in the law that might affect their Estate Plans and opportunities that arise due to some of those changes.

3. Efficient and Effective Transfer of Wealth.
If the first two steps have been administered properly, the third step is made much simpler. Working together over time, we can ensure that assets are structured correctly, titled correctly and/or designated such that your Estate Planning Goals and Objectives are met and that your assets are transferred to your loved ones in an efficient and effective manner.

If you would like to learn more about this subject, please feel free to call me to schedule an initial consultation at 630-613-7700. Initial consultations are always free, or you can visit my website at www.wjdennislaw.com.

2010 Estate Tax Overview

2010-03-08T08:30:00.000-08:00

2010 Estate Tax Overview

Last year the Federal Estate Tax Exemption amount was $3,500,000.00 and the Illinois State Estate Tax Exemption amount was $2,000,000.00.

This year the Federal Estate Tax was repealed because Congress could not agree upon legislation to amend the existing law, so, we are left with the following set of facts:

There is no present Federal Estate Tax;

There is no present Generation Skipping Tax;

The Illinois Estate Tax Exemption remains at $2,000,000.00;

The Gift Tax Exemption amount remains at $1,000,000.00;

There is a "sunset" provision written into the existing law that will revive the Federal Estate Tax Exemption in 2011 with an exemption amount of $1,000,000.00. Should that happen, the Illinois State Estate Tax will "re-couple" with the Federal Estate Tax. (that means that rather than collect their tax separately, the State of Illinois will take a percentage of the Federal tax assessed). The tax rate will be between 45-55%.

Now, back to 2010. The legislature has promised to pass legislation establishing a Federal Estate Tax Exemption amount. This legislation when passed will be retroactive, meaning that even if Congress does not get this law passed until December, the tax will be applied retroactively back to January 1, 2010. So, even if you should happen to die this year when there is no estate tax in effect, your estate could still be taxed at whatever level and rate the legislature decides upon.

Let's make this even more confusing by adding there is a legal argument that taxing retroactively is unconstitutional. This could go the route of the recent Medicaid revisions, not for the same reason, but bringing about the same effect of being tied-up in the Court system, while leaving people up in the air not knowing which way to turn.

Back again to 2010. The current rules allowing a "step-up" in the income tax basis of a decedent's assets is eliminated for 2010. Generally, the income tax basis of the decedent's assets will "carry over" to the recipient of the asset, likely increasing the capital gains tax paid when the asset is sold. This could mean those with large appreciated assets in their estates will either be paying increased capital gains tax, or the heirs who inherit these assets will be paying an increased capital gains tax, depending upon when the asset is sold.

I don't know of anyone who thought we would find ourselves with no Federal Estate Tax, even if it is only for one year. This also leaves doubts as to whether any meaningful legislation can be passed to amend the existing 2011 "sunset" provision. That will be the subject of another blog.

Being Thankful

2010-02-06T18:54:00.000-08:00

I saw that a colleague of mine named Peggy Hoyt has written a book on thankfulness titled "Thank Everyone for Everything" and it reminded me that I have been taught that my whole life. That the concept is so simple so as to escape us when we really need it. I know there are so many people who are hurting right now, feeling helpless and alone and not knowing where to turn. I am not going to make a religious bend out of this post as I don't feel that being thankful need be a religious endeavor, though thankfulness certainly is a big part of mine.

Being thankful need only involve looking outside of yourself and realizing that everything is not about you. We get wrapped-up in the 'me' of everything and forget that we are not alone. Not alone in problems, not alone in despair, not alone in misery, or pain. Just like we are not alone in celebration, not alone in laughter, not alone in love, compassion, healing, belonging, I think you get the picture, the list is as endless as it is diverse.

Now, I have not read Peggy's book yet, and it may have nothing to do with what I have written, but Thank You Peggy, for reminding me to be Thankful and thank you all who have read this.

2010-02-01T23:58:00.000-08:00

Unmarried couples, What Happens If?

My wife and I were talking to an acquaintance about a business related issue when out slipped the fact that the person she had been living with for the past 9 years had just recently died. She was plainly devastated. Both had grown children and had been in previous long-term relationships that either did not work, or, had ended when their previous spouse had died. "The worst part", our friend went on to say, "Is that once he died everything changed." She went on to say that she had no say in his treatment while he was alive, she had no say in any of his burial arrangements, she had to get her things out of his house within one week of him dying and that his kids have not spoken to her since the funeral. This all has happened within the last few months and it will be a long time before she gets over this, if she ever does.

It would have been insensitive of me to offer my opinion at that time, after the fact. It would have just been the sort of 'I told you so' that she did not need at that time. Instead we both hugged her and let her know that if she needs someone to talk to, we will listen. We will also keep her in our prayers and visit her more often to see if we can offer any help to her.

The partnership, whether opposite sex, or same sex is not really as important as what it means to the partners. If there is a commitment to another that is important to preserve in some way, then it is important that it be in writing. The state of Illinois does not recognize unmarried couples in many ways. What happens when one partner becomes incapacitated? Who makes decisions regarding financial management? Who makes the health care decisions?

In the scenario above, since the couple was not married, the doctors/hospital looked to the family (adult kids) who made at the very least, choices inconsistent with what their father wanted. His expectation was that his live-in life partner would take care of him, make the health care decisions for him, but since he could no longer speak for himself, the system took over and that did not happen. Our friend, was shut out and made a spectator of a series of events that has led her to what what she is left with today, a gaping hole in her life with limited means of healing the wound and finding some sort of closure.

What could have been done so that his wishes would have been followed and she would not have had to go through the added pain of not being included? A Power of Attorney for either, or both, finances and health care would be a start. Separate Revocable Living Trusts spelling-out the terms and conditions relating to 'who makes what decisions' and 'who gets what' would have helped address the longer term issues. The re-titling of assets can be an effective tool as well.

I think the single most important factor is to consult with an Estate Planning attorney who will listen. Listen to what each partner brings to the relationship and to what extent each partner wants the other partner involved should one of them become incapacitated, or die. A well documented estate plan consisting of Separate Revocable Living Trusts, Health care Power of Attorney, Durable Power of Attorney for Property and Living Wills could have spelled-out the wishes and goals of each partner for the other.

Additionally, keeping the Estate Plan current and updated is extremely important, because changes in the couples circumstances must be documented correctly or the couple risks losing the effectiveness of the plan.

If you have questions, or, if you want to talk more about this type of planning, please contact me to schedule an appointment. Initial consultations are free.

Why You Should be Concerned About Medicaid

2010-01-18T19:07:00.000-08:00

Medicaid is the government paid medical assistance for the low income elderly, right? Yes, it is. But your client has a sizeable nestegg. So, your question should be how much money is enough? What is the threshhold amount below which Medicaid planning is advisable?

The answer is, "It depends", but let's look at some of het factors, or variables, that influence the answer. First, the fact is we are living longer, or as I have heard it put, "We aren't dying the way we are supposed to anymore." Thirty years ago the average life expectancy was somewhere in the late 60's, early 70's. Twenty years ago the average life expectancy was around the mid to late 70's, ten years ago the late 70's to early 80's. Today, living into your 90's is fairly common. I have heard numerous reports that opine that children born within the last 5 years have a better than equal chance of living well past 120. No, that is not a typo, 120.

Second, since we are living longer, the chances of developing some type of mental disability, such as Alzheimer Disease or Dymentia are on the rise.

Third, the rise in mental disability increases the average length in nursing homes because while the mind no longer works properly, the body continues to run just fine.

Additionally medical and nursing home costs are increasing every year. I won't go into exact costs in this area as it varies so wildly from individual to individual, but, you don't have to be old and reside in a nursing home to feel the bite of medical expenses. In the Chicago area the average monthly nursing home cost if between $6 - 7,000.00 per month, which equates to between $72 - 84,000.00 per year. This number does not include incidentals like hospital deductibles, drug deductibles, physical therapy, etc.

Even though we are retiring later, the average retirement age remains somewhere between 65 - 72. Retirement you no longer produce new income and are now living off your savings, pension and social security.

Now that we know some of the facts, let's apply these factors to some real life situations. Let's say Mr. and Mrs. Smith have $500,000 of assets, both are 70 and are just recently retired. They live in a house that is paid-off and are getting an unheard of rate of 5% on their investments. Between social security, a pension and interest income, they live comfortably on $30,000 per year gross without eating into any of their savings.

Ten years down the road, it is necessary for Mr. Smith to enter a nursing home because he has developed Alzheimer disease. The average cost per month has probably risen to over $7,000 per month. Mr. Smith enters the nursing home and begins self-paying for care and continues like this for the first three years. Three years at $7,000 per month equals $252,000, which does not include anything but the basic nursing home costs.

That leaves Mrs. Smith with approximately $300,000 to live on. Mrs. Smith lives fairly comfortably on social security, pension and interest income until at age 90 she enters a nursing home with dementia. By that time nursing home costs have increased to $7,500 per month and $90,000 per year, which still does not include other expenses she has to incur.

Mrs. Smithh lives for 5 years in the nursing home. Unless family helps with the bills, Mrs Smith will be forced into the Medicaid arena to help pay a portion of her continuing care. Additionally, Mr. and Mrs. Smith were unable to leave anyting for their kids. Now, the government will tell you that savings are for retirement and not to make the next generations wealthy, but I think if you talked to Mr and Mrs Smith, they would disagree to some extent. The fact is that most parents want to be able to leave something to their children, grandchildren and/or charity.

There are many strategies for protecting asssets and qualifying for medicaid and the most effective strategies involve pre-planning and maintenance. The worst outcomes stem from waiting too long and going through what is called "crisis" planning. A crisis plan is one where mom and dad are being forced to spend down their assets to become eligible for Medicaid. They find themselves having to attempt to effect changes in their portfolio now, without the benefit of pre-planning strategies.

Don't let this happen to you or ones you love. Schedule an appointment to meet with me and let me tell you what can be done to get you eligible for Medicaid and save some of your assets to give to your loved ones without incurring any fines, penalties or pay-backs.

Happy New Year

2010-01-01T22:14:00.000-08:00

It is now officially 2010 and as I look back over the last year I find myself wondering where it went. The first part of the year seemed to drag, but the last 6 months just flew by. I know there is a list a mile long of things that I meant to get done but didn't for one reason or another. We all make resolutions and some we keep, some we don't.

I have resolved to get a handle on my health, lose weight and get in shape this year. Some may see this a several resolutions, but, I see them as so inter-connected as to be one resolution. I have been over-weight for several years now and it seems that I add a few pounds and get just a little bit more out of shape each year. I am a big guy and people have always said that when you're tall you can hide alot of weight and still look, O.K. While that may be true, it is also true that when you are over-weight your body will be more inclined to succumb to ailments and disease. You get to a certain age and you can no longer allow the body to just take care of itself. It needs help and not just occasionally. I am laying out a plan to eat right, exercise and follow-up with my doctor to make sure everything is under control.

This is analogous to estate planning. I know alot of you out there either have no estate plan, or, have an inadequate or outdated estate plan. You mean to do something about it, but, ______________, you fill-in the blank with your exuse(s).

Here are some examples:
-You had a will and some other papers done and are all set. (even though those documents were drafted over 10 years ago)
-You assigned beneficiaries to all your assets so that everything will avoid probate. (including puting your children as joint owners on your house)
-I don't have time to do it right now, I just need to get through ___________________, (again fill in the blank)
-There is always tomorrow.

Those are just a few excuses I hear and there are as many more as there are people without adequate estate planning. I understand excuses, I have used excuses to explain why I haven't taken better care of myself. I'm too busy, I'm too tired, it's too cold out, it's too hot, I'll do it later, I'll do twice as much tomorrow, it's just one cookie, chocolate, extra portion., etc.

Life has a way of sneaking up on you and time slips away until we look at ourselves one morning and wonder what happened? How did I get like this? It all happens so slowly you hardly notice it a first, but then it snowballs until, BAAM, who is that fat guy in the mirror and what did he do with the real me?

With my health, I can move forward, change my lifestyle, eat a better diet, exercise and take better control of any lingering ailments with a doctor's care. With estate planning, you can do much the same. You can move forward and resolve to plan for your future and the future of your loved ones.

You can start by realizing that by not planning, or by having an inadequate plan, you leave yourself open to results that will likely not meet your expectations and/or goals.

You need to resolve to contemplate just what you do and don't want, what your goals for your estate plan are. More simply put, you need to decide how you want to be treated when you become disabled, and, where you want your stuff to go when you die.

Consult with an estate planning attorney to find out what needs to be done so that your goals and expectations can be met.

Resolve to maintain and update your plan on an ongoing basis, and that means regularly, not once, or every 5 years so that you will be taken care of when you become disabled and your stuff goes to who you want, when you want and the way you want when you die.

Let's not make any more excuses. I resolve to get in better shape this year. You resolve to take care of your estate planning this year.

How We Can Help You

2009-06-26T11:34:00.000-07:00

Here at the Law Office of William J. Dennis, we ask our clients what their most important concerns are. Most often, we receive a variety of different answers, yet there is always one common concern: How do I remain independent in my home without being a burden on my loved ones or having to get assistance?

For reasons ranging from acute illness to long-term health conditions, more than 7.6 million Americans receive in-home care, according to the U.S. Census Bureau. But that number is far greater if you include care given by family members. Informal care is given to an adult family member in 1 in 5 American households, according to the 2004 survey Caregiving in the U.S. The typical caregiver is a 46-year-old woman, who spends about 20 hours a week taking care of her mother, according to the survey, which was paid for by the National Alliance for Caregiving and AARP.

Failing to Plan

Long-term care is not high on the list for most people. It is difficult to imagine you or a loved one aging to the point where intervention is required. In fact, many people do not give it consideration until it happens.

But…I have a Will

Ironically, a will is not enough protection. Long-term planning is referred to as estate planning and it will not only protect you and your loved ones, but it will guide the process for situations that you may not want, or expect.

While in our profession it is difficult to understand why more people do not take the time to learn about estate planning and the benefits of it, is saddens us to see the crisis situations that could be avoided.

I do not want to ever be put in one of those “homes”

Today in the United States there are over 16,000 nursing homes. Nursing homes, also known as skilled nursing facilities, are for seniors who require constant medical care and need significant assistance with the activities of daily living. The goal of care in a nursing home is to help individuals meet their daily physical, medical, social, and psychological needs. Nursing homes are generally stand alone facilities, but some are operated within a hospital or an assisted living community.

Residents of nursing homes generally have high care needs and complex medical conditions that require routine skilled nursing services. Due to the constant care needs of its residents, nursing homes are required by federal law to have a licensed nurse on duty 24 hours a day. Residents typically share a room and are served meals in a central dining area. Residents should have the opportunity to be involved in activities that provide mental, physical, and social stimulation. Be sure to ask about activities offered when you tour the facility.

The average cost of care for nursing home care ranges between $4000 and $8000 per month. Cost is determined by the level of care needed, the setting where the care is provided, and the geographic location. Due to the high cost of care, many residents use supplemental funding from the government in the form of Medicare and/or Medicaid.

Our office can help you understand the benefits available today, the types of assistance to consider and what type of funding support you may qualify for.

When Does Someone Need To Move From Assisted Living To Nursing Home Care?

2009-06-19T11:17:00.000-07:00

"My 86-year-old mother has been in an assisted living community close to my home for the past two years. She has been declining slightly, almost imperceptibly, over the years. Most recently she fell while in her room and was unable to get up or reach out for the call cord. It was not until later that day, when mom did not come to dinner, that a staff member finally found her on the floor. She had been there for hours.

Fortunately, she was only weak and did not suffer any serious injury but it was of major concern for both myself as well as the centers administrator.

When I was called about the incident, I spoke in length with the administrator. She told me that it was “time” for mom to move to skilled care, that it was best for her own safety.

I was disheartened for mom. She never wanted to go into “one of those places”. She loves her apartment, her friends and was still mentally strong and even physically strong. I took the time to research nursing homes and spoke with her doctor. He said that with her age and the fact that she fell and was unable to find the strength to get up, that it was an indication that her health was declining. I was sick to stomach. I argued with him that she does not seem forgetful and that this environment was so good for her mental and emotional state. Of course, I want her to be safe but how is she going to feel having to go into a nursing home? How in the world would I tell her? How could we afford 24/hour skilled care? Can this facility force her to move?" - Frank S.

At the Law Office of William J. Dennis, these concerns are complex and unfortunately common. In fact, these questions are exactly the same that you may have, when faced with a situation such as this.

You are asking all the right questions and several more are in order:

What kind of contractual agreement does your loved one have with the retirement community? Many assisted living facilities have month to month agreements. Often, when the facility needs more care, they can ask the resident to leave.

If it is a continuing care retirement community (CCRC), it is often stipulated in the contractual agreement that a nurse’s assessment will determine the location and level of care. It is more difficult for staff to provide services all over a large community and easier if all the people needing care such as medication and continence management are in the same building or on the same floor.

One other consideration is to think about how your loved one's quality of life may be when in a different setting? This can be difficult to assess and often depends on both the individual and the setting. Consider the levels of attention they may receive in a nursing home: less privacy and perhaps more restrictions with less activity and social schedules. Also, the cognitive levels of the other residents may be less than theirs, therefore they may not be able to establish as many friendships.

There are some other options, should the assisted living facility and their doctor agree:

Some possible interventions might postpone or preclude a move to nursing home care:

The option of physical therapy and exercise. Can your loved one's strength be regained with the appropriate guidance and strength training?
Outside assistance. Can you afford and will the facility allow an in-home care agency to provide assistance in their room?
Are you or other family/friends able to intervene more and see them on a more frequent basis?

Give all of the above serious consideration. Unfortunately, because we live in a litigious society, the facility may have liability concerns. If you are confident that it is best for your loved one to stay where they are, you may want to inquire if the facility has a negotiated risk agreement or a “hold harmless” contract, where your family would basically promise not to sue if there is an adverse event.

This is an important decision and one that needs to be made carefully. Seeking the advice of an elder law attorney can help you review the emotional, financial and long term plans for your loved one, while protecting them, you and the future.

Ten Good Reasons To Have An Estate Plan

2009-06-19T11:07:00.000-07:00

1. No matter your net worth, it's important to have a basic estate plan in place.

An estate plan ensures that your family and financial goals are met after you die. It is a process. It involves people—your family, other individuals and, in some cases, charitable organizations of your choice. It also involves your assets (your property) and the various forms of ownership and title that those assets may take. Overall, it addresses your future needs in case you ever become unable to care for yourself. It is not only for the elderly – even young people are faced with unfortunate circumstances: health related, automobile accidents and so forth.

2. An estate plan has several elements and considerations. It can include:

A Will.
How and by whom your assets will be managed for your benefit during your lifetime if you ever become unable to manage them yourself.
The assignment of a Power of Attorney (POA)
When and under what circumstances it makes sense to distribute your assets during your lifetime.
How and to whom your assets will be distributed after your death.
A living will or health care proxy. How and by whom your personal care will be managed and how health care decisions will be made during your lifetime if you become unable to care for yourself.
For some, the establishment of a trust, may also be suitable.

3.What is involved in estate planning? Taking inventory of your assets is a good place to start.

Your assets include your investments, retirement savings, insurance policies, and real estate or business interests. A good place to start is to ask yourself the following questions:

What are my assets and what is their approximate value?
Whom do I want to receive those assets—and when?
Who should manage those assets if I cannot—either during my lifetime or after my death?
Who should be responsible for taking care of my minor children if I become unable to care for them myself?
Who should make decisions on my behalf concerning my care and welfare if I become unable to care for myself?
What do I want done with my remains after I die and where would I want them buried, scattered or otherwise laid to rest?

Once you have some answers to these questions, our office can help you create an estate plan, and advise you on such issues as taxes, title to assets and the management of your estate.

4. Everybody needs a Will.

A Will tells the world exactly where you want your assets distributed when you die. It's also the best place to name guardians for your children. Dying without a Will - also known as dying "intestate" - can be costly to your heirs and leaves you no say over who gets your assets. Even if you have a trust, you still need a will to take care of any holdings outside of that trust when you die.

5. Trusts are NOT only for wealthy people.

Trusts are legal mechanisms that let you put conditions on how and when your assets will be distributed upon your death. They also allow you to reduce your estate and gift taxes and to distribute assets to your heirs without the cost, delay and publicity of probate court, which administers wills. Some also offer greater protection of your assets from creditors and lawsuits.

6. Don’t I only have to discuss my estate plans with my family (heirs ) to prevent disputes or confusion?

That would be nice, but upon death emotions rise and there are often hard feelings among those you loved. Inheritance can be a loaded issue and at times full of mixed emotions and even greed. By being clear about your intentions with your loved ones, you may help dispel potential conflicts after you're gone, however, there may be issues you do not wish to speak of. Discussing your true wishes in confidence with your attorney can help provide you with peace of mind.

7. The federal estate tax exemption - the amount you may leave to heirs free of federal tax - has hit $3.5 million in 2009.

The estate tax is scheduled to phase out completely by 2010, but only for a year. Unless Congress passes new laws between now and then, the tax will be reinstated in 2011 and you will only be allowed to leave your heirs $1 million tax-free at that time.

8. You may leave an unlimited amount of money to your spouse tax-free, but this isn't always the best tactic.

By leaving all your assets to your spouse, you don't use your estate tax exemption and instead increase your surviving spouse's taxable estate. That means your children are likely to pay more in estate taxes if your spouse leaves them the money when he or she dies. Plus, it defers the tough decisions about the distribution of your assets until your spouse's death.

9. There are two easy ways to give gifts tax-free and reduce your estate.

You may give up to $13,000 a year to an individual (or $26,000 if you're married and giving the gift with your spouse). You may also pay an unlimited amount of medical and education bills for someone if you pay the expenses directly to the institutions where they were incurred.

10. There are ways to give charitable gifts that keep on giving.

If you donate to a charitable gift fund or community foundation, your investment grows tax-free and you can select the charities to which contributions are given both before and after you die.

I have a Will, so why do I need an Estate Plan?

2009-06-12T10:42:00.000-07:00

Many people mistakenly think that estate planning only involves the writing of a Will. Estate planning, however, can also involve financial, tax, medical and business planning. A Will is part of the planning process, but you will need other documents as well to fully address your estate planning needs.

Who needs estate planning?

You do—whether your estate is large or small. Either way, you should designate someone to manage your assets and make health care and personal care decisions for you if you ever become unable to do so for yourself.

If your estate is small, you may simply focus on who will receive your assets after your death, and who should manage your estate, pay your last debts and handle the distribution of your assets.

If your estate is large, your attorney will also discuss various ways of preserving your assets for your beneficiaries and of reducing or postponing the amount of estate tax which otherwise might be payable after your death.

If you fail to plan ahead, a judge will simply appoint someone to handle your assets and personal care. Your assets then, will be distributed to your heirs according to a set of rules known as intestate succession.

Contrary to popular myth, everything does not automatically go to the state if you die without a Will. Your relatives, no matter how remote, and, in some cases, the relatives of your spouse will have priority in inheritance ahead of the state.

Still, they may not be your choice of heirs; an estate plan gives you much greater control over who will inherit your assets after your death.

What is included in my estate?

All of your assets. This could include assets held in your name alone or jointly with others, assets such as bank accounts, real estate, stocks and bonds, and furniture, cars and jewelry.

Your assets may also include life insurance proceeds, retirement accounts and payments that are due to you (such as a tax refund, outstanding loan or inheritance).

The value of your estate is equal to the “fair market value” of all of your various types of property—after you have deducted your debts (your car loan, for example, and any mortgage on your home.)

The value of your estate is important in determining whether your estate will be subject to estate taxes after your death and whether your beneficiaries could later be subject to capital gains taxes. Ensuring that there will be sufficient resources to pay such taxes is another important part of the estate planning process.

It’s All About Timing

2009-06-05T08:00:00.000-07:00

Elder Law is a highly specialized field of law, addressing the specific quality-of-life needs of those over the age of 65. Excellent Elder Law practice provides the elderly with caring counsel and effective legal and financial guidance. While encompassing literally all legal services for seniors. Elder Law primarily seeks to protect the assets and rights of seniors, and to enhance the quality of their lives.

Good news , bad news . The good news is that Americans are living longer than ever. The bad news is that we eventually wear out physically, mentally or both. It is a classic Catch-22.

Are you a seasoned citizen (i.e., over age 65), do you care about someone who is, or do you anticipate becoming a seasoned citizen yourself one day? According to the U.S. Census Bureau statistics, today, there are nearly 35 million and by 2010 there will be some 40 million seasoned citizens. Thereafter, due to the graying of the Baby-Boom generation, we will see that figure jump to 53 million in 2020 and to 70 million in 2030! As this seasoned population grows, so will the need for Elder Law services.

The longer you wait to plan ahead, the fewer opportunities you’ll have to maximize your savings,
and the more you’ll spend to protect your assets from long term care costs. Effective Elder Law
planning truly is “all about the time.”

WHAT CAN ELDER LAW DO FOR YOU?

Asset protection for the family of a person in need of nursing home care.
Asset planning to minimize taxes and the high cost of probate.
Protect dignity, comfort and self-sufficiency.
Preserve legal interest through guardianship appointments.
Protect nursing home residents from abuse and neglect.
Health and personal care planning for medical directives such as living wills.
Administer estates effectively by representing executors.
Employment and retirement advice including pensions, IRA and other retirement benefits.
Income, estate and gift tax advice.
Plan for family business continuation or sale.
Special Needs Trust to preserve accident settlements for victims and to help disabled children.

Long -Term Scare
Did you know that after age 65, there is a 48 percent chance that you will need care in a skilled nursing facility? After age 80 the odds that you will need skilled nursing care jump to 9 in 10, or 90 percent. If you are age 65 and married, the odds are 70 percent that you or your spouse will need skilled nursing care. The average nursing home stay, by the way, is 2.5 years. And the cost of long-term care is high. The national average cost for a year in a nursing home is estimated at $57,000. Is it any wonder that 50 percent of all elderly couples become impoverished within a year after either spouse enters a nursing home? The number jumps to 70 percent for widowed or single people. By the way, forget about Medicare paying for your chronic long-term care needs. Medicare only pays for acute nursing home care for up to 100 days, and even then your eligibility and the payments are subject to strict requirements. Remember, too, that Medigap (i.e., Medicare Supplement) policies typically exclude coverage for chronic long-term care.

What about giving away your assets to your loved ones to qualify for Medicaid? Any transfer of assets for less than fair market value may render you ineligible for Medicaid assistance for 60 months or more under the complex and confusing web of Medicaid Regulations.

Contact the Law Office of Bill Dennis today at 630.613.7700 or bill@wjdennislaw.com and get the experience you need.

Note: Nothing in this publication is intended or written to be used, and cannot be used by any person for the transactions or matters addressed herein. You should always seek advice from independent tax advisors regarding the same. [See IRS Circular 230.]