Wednesday, January 25, 2017

Joint Ownership May Not Turn Out Like "Going Halfsies"

Nice idea, this “going halfsies” for married couples, with each spouse putting money into a jointly held savings or investment account which either spouse may access. However, as an estate planning attorney in Indiana, I sometimes need to break the news to clients that those very convenient jointly held accounts may end up creating problems for them when it comes to collecting eldercare benefits from the government.

Many people believe that joint accounts are a good way to avoid probate while transferring money to loved ones, and that’s true. Of course, joint accounts held with children as co-owners can make those accounts vulnerable to a child’s creditors.  When it comes to elder law, there’s another even more important issue with jointly held accounts:
According to Indiana rules, when any type of account held in a financial institution is jointly owned, it is presumed that all of the funds belong to each owner. When a person applies for Medicaid to cover nursing home costs, the state looks as the applicant’s assets to see if he or she qualifies for assistance.  This includes joint accounts, even if only spouse needs care and he or she did not contribute to the funds in that account.

When the state determines your financial eligibility for Medicaid, some assets are counted, while others are excluded, explains Assets usually counted include:
  • checking and savings accounts
  • stocks and bonds
  • CDs
  • real estate other than primary residence
  • motor vehicles (if you have more than one)
Assets usually not counted for eligibility include:
  • primary residence (there are equity interest limits)
  • personal property and household belongings
  • retirement plans of the spouse not in need of care
  •  term life insurance
  • up to $10,000 in burial funds
  • assets held in certain trusts

At Geyer Law, we are acutely conscious of the fact that individuals and families facing the prospect of an extended nursing home stay deal with more than emotional difficulties; they must grapple with paying for nursing home care.  Few can afford to privately pay for nursing home care for any extended period of time and Medicaid will not pay unless assets are depleted.

The more – and the sooner -  Medicaid planning is undertaken, the more assets can be preserved for the family.  “Going halfsies” is hardly enough to solve the problem!
- by Ronnie of the Rebecca W. Geyer blog team

Wednesday, January 18, 2017

Don't Forget Social Security When Planning Your Estate

 When clients turn to Geyer Law for help in creating an estate plan, it’s very typical for Social Security benefits to be the last thing on their minds. Surprise! Social Security is interwoven in just about every decision seniors make when it comes to their own retirement and how they wish to benefit those they may someday leave behind.

 Social Security Spousal benefits:
“A key question for you and your spouse to discuss is how long either of you expect to live,” cautions Fidelity Vice President and CFP® professional Ann Dowd. When one spouse dies, the surviving spouse can claim the benefits of the spouse with the higher Social Security benefit  for the rest of his or her life. Because of this, for any couple with at least one member who expects to live into his or her late 80s or 90s, deferring the higher earner’s benefit at the outset of retirement might may sense.  On the other hand, if both spouses have health issues, claiming their benefits early may make the most sense.

Social Security benefits for survivors:
Many people think of Social Security only as a retirement program, but some of the Social Security taxes you pay go towards survivors benefits for workers and their family.  In fact, these benefits include:
  • widows and widowers
  • divorced widows and widowers
  • children
  • dependent parents
Important things to know about these survivor benefits:
  • A widow or widower can get Social Security benefits at any age if they take care of a child younger than age 16 or disabled.
  • Unmarried children younger than age 18 (up to age 19 if they’re attending elementary or secondary school full time) can get benefits.
  • Under certain circumstances, benefits can be paid to stepchildren, grandchildren, stepgrandchildren, and adopted children.
Two startling statistics:
  1. For many Americans, these survivor benefits exceed the amounts of  life insurance coverage they have purchased!
  2. 50% of women collecting Social Security today are receiving part or all of their benefits based on their husband’s earning history and the decisions made around it.
Medicare considerations:
While you are thinking about your Social Security, and your timing in terms of beginning benefits, don’t forget to consider Medicare.  You can sign up for Medicare at age 65 regardless of when you choose to begin receiving Social Security benefits.  In fact, Medicare recommends you sign up three months before age 65.  If you don’t enroll when first eligible, that could affect your benefits, warn California tax advisors Gumbiner and Savett.

“While self-sufficiency is certainly an important part of our culture, decisions regarding retirement and estate planning are some that really should be informed by a knowledgeable professional,” is the message from one Pennsylvania law firm.

At Geyer Law, we couldn’t agree more.  Our attorneys take a lifetime planning approach to take the mystery out of the estate planning process. Social Security is definitely part of that estate planning process.
- by Rebecca W. Geyer

Wednesday, January 11, 2017

There's No Place Like Domicile

Domicile in Indiana is defined as ‘the place where a person has his true, fixed, permanent home and principal establishment, and to which place he has, whenever he is absent, the intention of returning,” an information bulletin from the State of Indiana explains. “Domicile is not determined by the location of the person's body,” the bulletin adds, and “once established, a person's domicile is presumed to continue until the person's actions provide adequate evidence that, along with moving to another jurisdiction, the person intends to establish a domicile in the new residence.”

Each state has its own estate planning and eldercare laws, and each state has its own system of taxation. Indiana, for example, repealed its inheritance tax effective January 1, 2013. However, if you inherit assets from someone who lived in a state that does have an inheritance tax, you could be facing a tax bill from that state.

Probate in Indiana
Marion County has its own probate court, while other Indiana counties handle probate matters at the local county district or superior court.

What kinds of assets avoid probate and go directly to the co-owner or designated beneficiary?
  1. Bank or credit union accounts set up as POD (Payable on Death)
  2. Assets owned as joint tenants with right of survivorship
  3. Life insurance policies with designated beneficiaries
  4. Retirement plan accounts with named beneficiaries
  5. Property in revocable trusts

What kinds of assets DO have to go through probate in Indiana?
  1. Bank, credit union, and investment accounts held in the single name of the person who died
  2. Tangible assets such as clothes, jewelry, furniture and vehicles registered in single name of the person who has died
It’s become more and more common for people to cross state lines because of their work or family situations, and it’s quite common for people to own property in more than one state. Your domicile, however, is the state where you maintain your permanent residence and where you intend to return for prolonged periods.

When it comes to estate planning in Indiana, there’s no place like domicile!

- by Ronnie of Rebecca W. Geyer & Associates

Wednesday, January 4, 2017

What's a Waiver, and What's a Waiver For?

A waiver, according to, is an intentional relinquishment of a right or interest. A mom, for example, might sign a waiver saying the school is not responsible if her child is hurt while on the school trip.  When it comes to estate planning, there are several important uses of waiver.

HIPAA waivers
Every doctor and hospital has you sign a notice ensuring that health care providers will keep information about your treatment and your health history private. But what happens if you’ve given healthcare power of attorney to a family member or friend in case an accident or illness prevents you from making decisions? What if your estate includes a living will, perhaps including a “Do Not Resuscitate” order? The HIPAA waiver can ensure that health care providers will be allowed to “violate” your privacy and talk about your condition with those specific people you’ve named as your representatives.

Waivers of inheritance
Estate law allows heirs named in a will to disclaim their inheritance by notifying the executor of the estate and filing a written waiver with the court. Why would anyone choose to do that?
  • To avoid taxes
  • To avoid having to look after property
  • To help someone else who needs the money more
  • To protect the property from seizure by creditors (if the person is involved in a lawsuit or has filed bankruptcy)
Prenuptial agreements
With more people getting married for the second or third time and wanting to preserve assets for children from prior marriages, prenuptial agreements typically have one spouse waiving his or her claim to the other’s estate (usually in return for other considerations).

401(k) beneficiary waivers
According to the law, the automatic beneficiary of 401(k) plan assets in the owner’s spouse’s . However, the spouse can sign a waiver allowing the employee to name a different beneficiary.

What’s a waiver, we’re asked at Geyer Law? Answer: The opposite of cookie-cutter estate planning. What’s a waiver for? To allow us as estate planning attorneys to tailor your estate plan to fit your own needs and individual situation.
- by Rebecca W. Geyer