HOLISTIC ESTATE PLANNING: (PART 2)

Jun 17, 2016

Imagine the Buck's, John and Jane, a married couple with three children: 

1)      a 25-year old son who is married, has a newborn daughter, has $50,000 in student loans, and is working at an engineering firm making roughly $60,000 annually;

2)      a 20-year old son who recently dropped out of college after being convicted of three minor in possession of alcohol charges and is now in Vail, CO working at a ski resort because CO recently legalized marijuana and he doesn’t want to work a "real job;"

3)      and, finally, a 15-year old daughter who is first in her high school class and suffers from a degenerative nerve disease that will confine her to a wheelchair within two years and eventually leave her unable to care for herself. 

John and Jane have done fairly well for themselves, with John being the managing partner in a local golf course and Jane teaching at a local middle-school.  They have a recently refinanced home in the suburbs, own a 1/3-share of Jane's family cottage in northern Michigan along with her two siblings, their retirement accounts—a mix of work-related plans and individual IRA's total nearly $250,000, they have tried to save a six-month emergency fund (but it's more like two), each has a modest life insurance plan provided by their employers, and they stand to inherit a rather substantial sum when John's mom, who is now in a nursing home, passes away.  Life is complicated for John and Jane, but not that out of the ordinary.

John and Jane could go to the internet and create their own wills and powers of attorney on the cheap or they could simply go to an attorney who will write them a will, or maybe even a simple trust, to ensure that, when both have passed away, the remaining assets will be distributed to the kids and name others (or each other) to act for them should they become disabled.  OR, they could engage in holistic estate planning, working closely with:

-           an insurance agent to put coverages in place to insure against loss of income due to disability, losses to the home (fire) or car, general liability (i.e. the papergirl slipped and fell in the driveway);

-          a financial planner to insure that their financial assets are maximized, protected, and situated to meet their future needs by employing an investment portfolio that matches their risk profile and utilizing life insurance and long-term care insurance appropriately;

-          a doctor to advise them on what they might expect in regard to the short- and long-term needs for their daughter;

-           an estate planning attorney to help them structure a plan that will serve them while they are still alive, in the event of disability, after one of them is gone, and, finally, when both have passed. A plan that will distribute the family legacy in a way that will protect the beneficiaries from creditors (student loans), predators (bad marriages), and themselves (see the ski bum). A plan that will address the future health care expenses and needs of their daughter (special needs planning).  All without placing undue burden on any of the children upon their deaths (see the eldest son) and minimizing tax consequences to them as well (tax basis planning and IRA stretching);

-          an accountant to insure that the plan is up to snuff with the IRS and all returns get filed accurately and completely; and,

-          in view of all that is going here there must be a plan in place to deal with the family share of the cottage, how the inheritance will be folded into the estate plan, and what steps must be taken to ensure that the daughter's ongoing medical expenses will be covered and that someone will be there to care for her.

Whoa! My apologies for the run-on sentence.  As you can see, what might appear to be a fairly normal family situation can necessitate a fairly complicated plan in response.  Had John and Jane simply run out and bought a will or a trust, they likely would have missed some planning opportunities and failed to ensure that their estate plan was in tune with the family’s finances (now and future), health status, and insurance coverages. 

Not only that, but most family circumstances are dynamic and change greatly in a short period of time, creating the need for periodic review to keep the plan consistent with and responsive to those changes.

Again, the primary objective should be to involve all of the potential moving parts to ensure that the plan operates as closely to the Buck's wishes (within the boundaries of the law, of course) while they are alive, if either or both become disabled, and upon death.  All the while, the plan should act to protect and maximize their assets while also building in a buffer for life's unexpected events.  Remember, We're in this together . . . your family and ours!

What (exactly) Is “holistic” Estate Planning?: (PART 1)

May 31, 2016
I am often asked, encouraged, or dared to define what “holistic” estate planning is? Why? I attribute it (in not-so-equal parts) to the advent of LegalZoom, public naivete’, and poor marketing by estate planners, to name a few.

LegalZoom offers the ability to create your own legal documents online, with the creation of a Will being one of the front-page offerings. The Wills and Trusts offering features bundles for Wills and associated documents and includes a 30-minute phone consultation with a LegalZoom-provided attorney starting at $149 and a similar bundle for Living Trusts starting at $299. Essentially, what you get is an attorney’s recommendation, based on information you’ve provided, as to which bundle you need (Will or Living Trust) and, based on the bundle you choose, an associated set of documents.

More often than not, during an initial contact with a potential client, I hear them say, “I need a Will” or “I need a Trust, can you help me and what will it cost? . . . because I don’t want to pay a lot. After all, I can get one on LegalZoom for $299!“ When I ask them why they need a Will or a Trust, a common response is, “my brother-in-law says he has a Trust and I need one too.” The truth is, you might need a Will, you might need Trust (which should come along with a Will with a pour-over provision), and you might not “need” either. And, everyone should have powers of attorney for financial and healthcare decisions (the “associated” documents). But, regardless of what mix of documentation is required, EVERYONE SHOULD HAVE A “PLAN.”

In some cases, that “plan” might be “no plan,” but, if you have minor children; special needs children; are facing a long-term care situation; have a home, life insurance, money in the bank, a retirement account, a pension, or any other assets to speak of; or, you simply have another loved one that must be cared for once you’re gone (or incapacitated); you should probably have a plan that includes, at a minimum, a will and powers of attorney, and, maybe, a trust. That plan should protect and maximize assets (including your health, relationships, property, and finances) and should not be created without the input of key advisors—including an estate planning attorney, a financial advisor, a Certified Public Accountant, and an insurance agent. And, in some cases, other professionals (i.e. business, divorce, or disability attorneys and, oftentimes, physicians) may be required contributors to effectively create a holistic approach—one that covers as many contingencies as possible while minimizing uncertainty and properly managing risks.

In Part 1, let’s look at a fairly common family scenario.

Sarah is a divorced mother of two young children, a 14-year old son, Adam, and a 12-year old daughter, Zoe. Sarah makes $55,000 annually as a registered nurse working at the local hospital and receives $850 per month in child support. After the divorce, she decided to stay in the family home to minimize disruption for the children.

Unfortunately, Adam has never been the same since the divorce. His grades have suffered, he has already had some run-ins with school administrators and, more recently, with police. He struggles with anger issues, has threatened suicide, and has a penchant for destroying property. Sarah suspects that he may already be sexually active and experimenting with alcohol and/or drugs. He is currently in counseling.

Zoe, on the other hand, has shown signs of being a gifted student and excels in both school and on the soccer field. She is the leading scorer on her local travel team. She dreams of one day going to Stanford to play soccer while pursuing her dream of becoming the researcher who solves many of the mysteries associated with adolescent suicide. Her coaches say she is a “good” soccer player at this stage, but probably not skilled enough to warrant a Division 1 scholarship offer. She might, however, be a good enough student to warrant at least a partial academic scholarship at a school like Stanford.

Sarah covers the children on her medical and dental plan at work, she has a $55,000 life insurance policy through work, a disability policy pays that 2/3 of her income in the event she is disabled, a 401(k) plan worth roughly $75,000, and has religiously put the $850 per month in a savings account at the bank for the kids’ college (current balance = $42,500). She has insurance on the home and the car, but has no personal liability insurance. And, if she lost her job, or went to part-time, she would lose her life and disability insurance and would have to contribute more to cover the cost of her medical and dental benefits.

Sarah is concerned about Adam’s behaviors, wonders if she should work less and spend more time with him, but wants to make sure she provides for at least a sizable portion of college costs for both kids. She is also worried that Adam might do something really bad and cause some serious damage to himself, another, or to some property. She is also concerned because, if something happened to her, the kids’ alcoholic dad is the last person she would want to care for them.

There are several issues that “holistic” estate planning can address for Sarah. Generally, an initial consultation with Sarah will help her to identify her goals-- providing for the kids’ welfare in the event she passes away (or is disabled for that matter) while also providing for their education—evaluate her current family and financial situation and what options are currently available, based on that information, to help her meet her goals. From there, a team of professionals can be assembled to work with Sarah toward her goals.

First, a financial planner and an attorney provide guidance to Sarah in maximizing the money she has set aside for the children’s education. A savings account is probably not the best option. Next, they might be able to give some guidance and counsel as to how she might lessen her workload to spend more time with Adam by petitioning for more child support and structuring her finances a bit differently. The financial planner might also suggest purchasing some non-term life insurance with a long-term care rider that will provide for the children in the event of her death or disability.

Second, a savvy property and casualty insurance agent might suggest that Sarah review her home, auto, and personal liability needs to make sure she has the appropriate coverage; particularly, in regard to liability, as parents can be held financially liable for the deeds of their children.

Third, the attorney should discuss the amount of control Sarah would like to have over any funds that pass to her children after her death. If she is concerned about who might have access to the funds and when, she might consider employing a revocable living trust. The attorney should also look at passing some assets, maybe the home or the 401(k), outside of the trust while still avoiding probate to take advantage of some benefits that might be available by doing so. And, as part of her estate plan, Sarah can nominate a guardian and a conservator (or trustee) to look after the welfare of the children until they reach the age of majority (and maybe beyond).

Fourth, consultation with Adam’s health care providers might shed some light on what his current issues are and the types of resources, including more time spent with his mother, will be needed to help address them.

Finally, a Certified Public Accountant should be consulted to identify any potential tax issues and to prepare any needed tax returns should the plan necessitate them.

The primary objective should be to involve all of the potential moving parts to ensure that the plan operates as closely to Sarah’s wishes (within the boundaries of the law, of course) while Sarah is alive, if she becomes disabled, and upon her death. All the while, the plan should act to protect and maximize her assets while also building in a buffer for life’s unexpected events.

Remember, We’re in this together . . . your family and ours!

Same-Sex Couples Can Adopt In All 50 States

May 28, 2016




On March 31, 2016, in Campaign for Southern Equality, et al. v Mississippi Department of Human Services, et. al. US District Judge Daniel Jordan III issued an injunction blocking Mississippi from enforcing its 16-year-old anti-gay adoption law. Mississippi was the last state that had such law; meaning that SAME-SEX COUPLES CAN NOW ADOPT IN ALL 50 STATES.

This ruling is celebrated among family law practitioners as we have long desired to have all families legally recognized; however; it doesn’t retroactively give legal rights to the parents who were denied the right to adopt in the past. In light of the recent change in laws, we are seeing a rise in clients seeking to have their family recognized for purposes of parental rights, health insurance, taxes, and estate planning.

If the children were adopted prior to the marriage of a same-sex couple, then the couple can together file a Petition for a Step-Parent Adoption, meaning the child(ren) would be adopted by the other partner. Thus, the partner would now have the same legal rights to parent the child(ren) as their partner.

If the parties were married prior to one partner’s adoption of a child, then the other partner may have a case for parental rights through the Doctrine of Equitable Parent. The doctrine, in short, allows a parent to petition the court to be considered a natural parent of the child: (1) if the child was born or conceived through marriage; (2) the parent and child mutually acknowledge a relationship as parent and child or the other parent has cooperated in the development of such a relationship over a period of time prior to the filing of the Complaint for Divorce; (3) the partner desires to have the rights afforded to a parent; and (4) the partner is willing to take on the responsibility and pay child support. Stankevich v Milliron, Michigan Court of Appeals, No.310710, November 19, 2015.

The Michigan Vital Records Office allows a second parent to add their name to any birth certificate if the child was born after the date of a legal marriage to two women. While this is a step, I caution clients not to rely on this alone to establish parental rights for the second (non-legal parent) as birth certificates do not alone give parental rights.

We’re in this together, your family and ours. Please contact us for a no-cost, no-obligation consultation.

SHOULD WE EXPECT THE UNEXPECTED . . . And (really) Plan For It?

May 19, 2016

Early Sunday morning, as I drove to my wife's favored latte' purveyor, I was stunned by the contrast of large snowflakes cascading to the verdant May turf.  It really was a beautiful combination of green and white (or maybe I'm just partial to those colors)!  What struck me though, as I entered the café, was the buzz among the customers about how crazy it was that it was snowing on May 15th.  C'mon folks, it's Michigan!  Is snow in mid-May really that unexpected?

I spent all of last week at two conferences dedicated to the enlightenment of estate planning professionals and heard so many horror stories along the way about families who failed to plan for what might seem to most as unexpected events.  We heard about families who, through the provisions in their Will and beneficiary designations, entrusted the distribution of all of their assets to their son in hopes that he would then pass them on to his siblings.  Well, not long after the second parent passed away, the son's wife filed for divorce and he soon defaulted on the mortgage to his home.  All of this resulted in both his now ex-wife and the bank gaining access to the family inheritance.

Next, we heard about the mom who left her home to all of the kids equally.  The problem was, she had one child who had substance abuse problems, nowhere to live, and no money, another who was very sentimental, but unable to contribute to the ongoing expenses and upkeep of the home, and another who was rather successful and very responsible.  When mom died, the problem child moved in to the house, but paid no rent; the daughter wouldn't agree to selling the home, but didn't contribute to paying the taxes, insurance, and upkeep on the property; and, the responsible one ended up either paying all of these expenses or risk foreclosure.  Certainly not what mom had in mind when she did her estate planning!

The list goes on and on. Obviously, Prince didn't expect to die at 58.  I didn't expect my mom to contract Alzheimer's disease.  We don't expect to break both legs in car accident.  Worse yet, we don't expect ourselves, or one of our loved ones, to be permanently incapacitated in a car accident.  We don't expect our well-raised children to blow their inheritance overnight because they have a gambling problem.  We don't expect our sister-in-law, who we left a large sum of money to take care of our children, to have her paper boy slip and fall in her driveway and, because she was negligent (and underinsured), is sued for all she has.  But these things are happening around us all of the time!  Just like snow in May! 

Scenarios such as these, and others, presenting situations and circumstances that occur frequently enough to be "expected," are often considered "unexpected." However, these are all contingencies that an experienced estate planning attorney can help you to anticipate and prepare for.  By bringing the family together to answer some oftentimes "hard" questions to discern who they desire to act (and what actions they will authorize that person to make) in times of incapacity, how they want to distribute hard-earned assets upon their death, what potential risks exist based on the answers to those questions, and designing a "holistic plan," employing insurance and tax professionals, financial planners, and others is what sets an estate planning attorney apart.  Building a holistic estate plan takes much of the guesswork out of life's "what ifs" and creates peace of mind when, as expected, the unexpected happens to you.

And, what about when the "expected" happens?!  Did you know that between 60-70% of Americans don't have a will!  And, I've got news for you folks . . . last I checked, most of us are going to die someday!

PLANNING FOR LONG-TERM CARE

May 6, 2016

An Old, (Very) Wise Man . . . ?  (the surprising truth about nursing home costs in Michigan!

My dad is someone whom I consider, and the facts would seem to bear this out, a very wise and shrewd business man.  Particularly, in regard to the health insurance business.  He’s spent nearly 40 years working in the industry, grew his employee benefits business to over 225 employees, and is a nationally acclaimed speaker on various health insurance issues.  I personally had the privilege of working side-by-side with him for more than 20 years. 

The reason I mention this is that, a couple weeks back, when my dad was visiting us for Sunday dinner, he mentioned, very proudly I might add, that the long-term care insurance policy that he had (so wisely) purchased on behalf of my oldest niece “will pay a monthly nursing home benefit of $8,000 when she turns 60, in 2050!”  He then sat back, looking very satisfied with himself, and said, “not too many people will have a plan that pays like that, Jack, do they?!”  As I said before, my dad is, in my opinion, one of the wisest business men I know.  But, at the risk of bursting his balloon, I felt compelled to inform him a very striking reality.  So I asked him, “Dad, do you think that will get the job done in 2050?  In fact, do you think that will get the job done today?”  He indicated that, although it might not cover the entire cost in 2050, it should be close.  And, certainly it would cover the cost today!

Well folks, I’ve got news for you. Although I can’t truly predict what the costs for a nursing home stay in 2050 will be, I’m quite sure they will be substantially higher than they are today.  I then took my dad to the Michigan Department of Health and Human Services website to show him the 2016 “divestment divisor” is  $8,282 (which is the average monthly cost of nursing home care in Michigan according to DHHS. This number changes every January).  When my dad saw this number, you could almost hear the sound of his jaw crashing against the dinner table! 

The sad reality is that very few people are aware of the costs associated with nursing home care.  To make matters worse, according to the Centers for Medicare & Medicaid Services, at least 70% of people over 65 will need long-term care services and support at some point in their lives.
(Source: 2015 Medicare & You).  And, according to the Centers for Disease Control and Prevention, the average length of stay in nursing homes is 835—or roughly 2.3 years (Source: Nursing Home Care FastStats, last updated May 2014).  Startling numbers, aren’t they? 

Do the math!  $8,282/mo. X 12 months X 2.3 years = $228,588.20.  And, it appears that more than half of us will require some type of long-term care services or support during our lives.  Plus, Medicare generally doesn’t pay for long-term care, long-term care insurance is expensive (and often the benefit you purchase won’t do the job when you need it to—see my niece’s predicament above), and governmental benefit programs typically requires that a person have minimal assets in order to qualify.

However, there is hope!  With some planning, you can protect your assets and position yourself (and your family members) to withstand the brutal costs associated with long-term care.  My very wise father is reconsidering his plans for himself and family members as I write this. 

To do so, contact an elder law attorney to start the process now—before it’s too late.  And, if you have a loved one facing the panacea of long-term care now and haven’t planned, all the more reason to contact an attorney now.  There might still be a way to protect a large portion of your hard earned nest-egg.

REMEMBER:  We’re in this together . . . your family and ours!

More on this subject to come.

WHY FAMILY AND ELDER LAW OF MID-MICHIGAN, P.C.?

Apr 15, 2016
Hello, and welcome to our new firm, new website, and, hopefully, your new family lawyers!  On January 1, 2016, 3 local attorneys, John W. Bissell and Emily M. Klavenski (both formerly of the Law Office of John W. Bissell, P.C.) and Howard "Jack" Weyers, Jr., came together to form Family and Elder Law of Mid-Michigan, P.C. Now, you’re probably asking yourself, why Family and Elder Law of Mid-Michigan, P.C.? Seems like a pretty long name, doesn’t it? To make a long story (and potentially long name) short, our 3 attorneys came together with the idea for a new firm founded on the idea of providing a broad continuum of high-quality, yet affordably priced, family legal services. Our lawyers wanted to buck tradition a bit by not naming the firm Bissell, Klavenski, and Weyers, but rather wanted to express who we are to the public through our name. Well, the idea of trying to fit the name: Divorce, Custody, Stepchild Adoption, Pre- and Post-Nuptial Agreement, Child Support, Spousal Support, Criminal, Wills, Trusts, Guardianship, Conservatorship, Probate Administration, Elder Advocacy, Medicaid and Long-Term Care Planning, and Domestic and Civil Mediation Law, P.C. onto letterhead seemed pretty much impossible. But, we did want to convey the message that we are a full-service, family-oriented law firm that specializes in family law, estate planning, and elder law and offers a full spectrum of services related thereto (had to throw in a little legalese there—we do that too!—but only upon request).

Furthermore, we are strategically partnered with other attorneys, healthcare providers, and financial industry professionals to provide a holistic approach to meeting all of your family's needs. So, when the need arises, please give us a call. We are at your service. AND, REMEMBER—WE'RE IN THIS TOGETHER, YOUR FAMILY AND OURS!