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Jul 3 19

What Does a Healthcare Agent Do and How Do I Choose?

by Phil Levin, Esq.
Man asking questions

Today, I want to tackle two very important questions I receive often: “What is a Healthcare Agent?” and “How do I choose the right person for the job?”
Yet, before I answer these questions, let me start by saying that as an estate planning attorney, I work with families all the time who are literally barred from making medical decisions on their loved one’s behalf because they didn’t have the proper documentation in place when an accident or incapacity occurred.
It’s a devastating situation and, unfortunately, one we are seeing more and more of as strict privacy and HIPAA laws are put into place.
For that reason, I always advise every adult (including 18-year-olds who can no longer rely on mom or dad for help!) to educate themselves on this important subject and ultimately put a healthcare directive in place so someone always has legal permission to act on your behalf in an emergency.
What Does a Healthcare Agent Do?
If you’re not familiar with the role of a healthcare agent, this is essentially the person who will carry out your wishes regarding things like life-support, resuscitation, and feeding tubes if you are incapacitated and unable to speak for yourself. Your healthcare agent will also handle the day-to-day decision making regarding your medical care including (but not limited to):
Medication administration
Blood and blood products
Diagnostic tests
Dialysis
Surgery
Long-term care (e.g., nursing home assistance, home healthcare)
Hiring and firing medical personnel
Determining who can (and cannot) visit you during your hospital stay
Getting court authorization to obtain or withhold treatment if your wishes are not honored by a doctor or other healthcare professionals
How to Choose a Healthcare Agent
The choice of a healthcare agent requires very serious consideration. While it may initially seem like an easy choice, this is actually one of the most common areas people get stuck on when trying to complete their estate plan.
Remember, your healthcare agent could be called on to make some of the most difficult and heart-wrenching decisions they’ve ever faced in their life. The job could also be time-consuming, stressful, and emotionally draining depending on the nature of the emergency.
For these reasons, I would advise you to really take your time and thoroughly evaluate all possible candidates for the job. Here are the top three qualifications I ask my clients to consider when narrowing their search:
1. Location — In a true medical emergency, your healthcare agent may be called upon to make round-the-clock decisions until you are stable. If that occurs, you’ll want someone who lives close enough to meet with doctors and visit the hospital whenever necessary (which of course may also mean excluding people who travel a lot on business or have demanding jobs).
2. Medical Understanding — While your healthcare agent certainly doesn’t need a Ph.D. in science, you do want someone who is capable of understanding your medical condition and the choices presented to him or her by the doctors overseeing your care. That may also require you to weed out candidates who are overly squeamish or emotional about medical subjects to ensure the best decisions are made on your behalf.
3. Loyalty — The person you choose as healthcare agent should feel a sense of loyalty to you and your wishes to ensure your preferences are fully carried out in the face of emotional stress, personal disagreement, or pressure from other family members to make decisions contrary to those you have specified.
Of course, if after going through this brief checklist you still have questions about how to choose a healthcare agent, what an agent can do for you, or even how to limit the scope of your agent’s power during a medical emergency, I invite you to call our office to schedule a planning session. During this session, we can discuss your options and make sure you truly have the right documentation in place to protect your medical wishes if the unthinkable occurs.

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Jun 10 19

5 Estate Planning Mistakes to Avoid

by Phil Levin, Esq.
Estate Planning

Unfortunately, most Americans are indifferent to estate planning or completely ignore the importance of having an estate plan. However, when it comes to estate planning, there are some mistakes that you cannot afford to make.

Below are five (5) of the most critical estate planning mistakes:

1. Not Having any Estate Plan. This is the biggest mistake, especially among professionals and young parents who assume they do not need one. Passing away intestate – or without an estate plan – will assure local state laws determine receives all of your assets in the event of your passing. In addition, a Judge will decide who cares for all of your minor children.

2. Failing to make Proper Beneficiary Designations.This typically happens by not updating beneficiary designations on your life insurance, annuities, and retirement plan accounts. In fact, many clients are surprised to learn that beneficiary designations supersede or override instructions left in their Last Will and Testament or under the terms of a Trust Agreement.

3. Not Reviewing Legal Documents Regularly. An estate plan should be reviewed whenever there are significant personal, financial, for tax law changes, and especially upon marriage, divorce, death of a loved one, receipt of an inheritance, upon birth of a child, relocation to a new state. Such updates to your estate plan can ensure that you and your family are protected in the future because of changes in circumstances, which often change over time.

4. Not Funding Your Living Trust. A properly designed Living Trust has no operative effect if the Trust is not funded during your life. These type of Trusts must be funded to operate correctly. If you pass away and leave an unfunded Trust, there may be significant costs, delays, and publicity which occur due to the need to raise a probate proceeding with the Court – which is what you were trying to avoid by creating a Living Trust in the first place. As a result, your estate would need to go through the probate process and any Trust you desired to establish for specific beneficiaries would need to be funded after your death.

5. Giving All of Your Property Outright to Beneficiaries Too Soon. As much as 75% of inheritances are squandered away within 12 – 18 months after being received. Therefore, in order to protect and preserve your assets for your family, you may wish to establish a Trust so that your beneficiaries receive their inheritance over a period of time, or over the course of the beneficiary’s lifetime, to reduce the risk of their inheritance being exposed to the potential claims of creditors, predators, tax liens, and bankruptcy.

You can prevent making these five (5) estate planning mistakes by working together with a competent and experienced estate planning attorney to establish a comprehensive estate plan.

We can work together with you to design and implement a well-crafted estate plan in order to protect you during your life, and ensure that you leave your family a lasting legacy.

May 8 19

How Much Will You Receive From Social Security?

by Phil Levin, Esq.
socialsecuritycards

It can be difficult to predict how much you will receive from Social Security, especially if you are more than a few years away from retirement. But familiarizing yourself with how your benefit will be calculated can help you budget for retirement and even boost your future Social Security payments.

Here’s how to estimate how much you will get from Social Security in retirement.

Consider the averages. The average Social Security benefit was $1,413.37 per month in June 2018. The maximum possible Social Security benefit for someone who retires at full retirement age is $2,788 in 2018. However, a worker would need to earn the maximum taxable amount, currently $128,400 for 2018, over a 35-year career to get this Social Security payment.

Familiarize yourself with the calculation. Social Security payments are calculated using the 35 highest earning years of your career, and are adjusted for inflation. If you work for more than 35 years, your lowest earning years are dropped from the calculation, which results in a higher payment. Those who don’t work for 35 years have zeros averaged into the Social Security calculation and get smaller payments.

Factor in your retirement age. Your age when you start Social Security plays a big role in your payment amount. Your monthly Social Security benefit is reduced if you claim payments before your full retirement age, which is typically age 66 or 67, depending on your birth year. You can boost your monthly payments for each month you delay claiming between your full retirement age and age 70.

Subtract Medicare premiums. Many retirees have their Medicare Part B premiums deducted from their Social Security checks. The standard Medicare Part B premium is $134 per month in 2018, although some retirees pay a different amount. Medicare Part B payments are prohibited by law from decreasing Social Security payments for existing beneficiaries, so a Medicare Part B premium hike can’t be more than your annual Social Security cost-of-living adjustment.

Factor in income tax withholding. Many retirees have to pay income tax on their Social Security payments, especially if they have other sources of retirement income.

Create a My Social Security account. You can get a personalized estimate of your future Social Security benefits at various claiming ages by creating a my Social Security account. These estimates are based on your actual earning history and tend to be most accurate for those approaching retirement age. Your estimates might change from year to year, especially if you have a significant salary change or gaps in your earnings history.

 At The Levin Law Firm, we do not just draft documents; we ensure that you make informed and empowered decisions for yourself and the people you love.It can be difficult to predict how much you will receive from Social Security, especially if you are more than a few years away from retirement. But familiarizing yourself with how your benefit will be calculated can help you budget for retirement and even boost your future Social Security payments.

Here’s how to estimate how much you will get from Social Security in retirement.

Consider the averages. The average Social Security benefit was $1,413.37 per month in June 2018. The maximum possible Social Security benefit for someone who retires at full retirement age is $2,788 in 2018. However, a worker would need to earn the maximum taxable amount, currently $128,400 for 2018, over a 35-year career to get this Social Security payment.

Familiarize yourself with the calculation. Social Security payments are calculated using the 35 highest earning years of your career, and are adjusted for inflation. If you work for more than 35 years, your lowest earning years are dropped from the calculation, which results in a higher payment. Those who don’t work for 35 years have zeros averaged into the Social Security calculation and get smaller payments.

Factor in your retirement age. Your age when you start Social Security plays a big role in your payment amount. Your monthly Social Security benefit is reduced if you claim payments before your full retirement age, which is typically age 66 or 67, depending on your birth year. You can boost your monthly payments for each month you delay claiming between your full retirement age and age 70.

Subtract Medicare premiums. Many retirees have their Medicare Part B premiums deducted from their Social Security checks. The standard Medicare Part B premium is $134 per month in 2018, although some retirees pay a different amount. Medicare Part B payments are prohibited by law from decreasing Social Security payments for existing beneficiaries, so a Medicare Part B premium hike can’t be more than your annual Social Security cost-of-living adjustment.

Factor in income tax withholding. Many retirees have to pay income tax on their Social Security payments, especially if they have other sources of retirement income.

Create a My Social Security account. You can get a personalized estimate of your future Social Security benefits at various claiming ages by creating a my Social Security account. These estimates are based on your actual earning history and tend to be most accurate for those approaching retirement age. Your estimates might change from year to year, especially if you have a significant salary change or gaps in your earnings history.

 At The Levin Law Firm, we do not just draft documents; we ensure that you make informed and empowered decisions for yourself and the people you love.It can be difficult to predict how much you will receive from Social Security, especially if you are more than a few years away from retirement. But familiarizing yourself with how your benefit will be calculated can help you budget for retirement and even boost your future Social Security payments.

Here’s how to estimate how much you will get from Social Security in retirement.

Consider the averages. The average Social Security benefit was $1,413.37 per month in June 2018. The maximum possible Social Security benefit for someone who retires at full retirement age is $2,788 in 2018. However, a worker would need to earn the maximum taxable amount, currently $128,400 for 2018, over a 35-year career to get this Social Security payment.

Familiarize yourself with the calculation. Social Security payments are calculated using the 35 highest earning years of your career, and are adjusted for inflation. If you work for more than 35 years, your lowest earning years are dropped from the calculation, which results in a higher payment. Those who don’t work for 35 years have zeros averaged into the Social Security calculation and get smaller payments.

Factor in your retirement age. Your age when you start Social Security plays a big role in your payment amount. Your monthly Social Security benefit is reduced if you claim payments before your full retirement age, which is typically age 66 or 67, depending on your birth year. You can boost your monthly payments for each month you delay claiming between your full retirement age and age 70.

Subtract Medicare premiums. Many retirees have their Medicare Part B premiums deducted from their Social Security checks. The standard Medicare Part B premium is $134 per month in 2018, although some retirees pay a different amount. Medicare Part B payments are prohibited by law from decreasing Social Security payments for existing beneficiaries, so a Medicare Part B premium hike can’t be more than your annual Social Security cost-of-living adjustment.

Factor in income tax withholding. Many retirees have to pay income tax on their Social Security payments, especially if they have other sources of retirement income.

Create a My Social Security account. You can get a personalized estimate of your future Social Security benefits at various claiming ages by creating a my Social Security account. These estimates are based on your actual earning history and tend to be most accurate for those approaching retirement age. Your estimates might change from year to year, especially if you have a significant salary change or gaps in your earnings history.

 At The Levin Law Firm, we do not just draft documents; we ensure that you make informed and empowered decisions for yourself and the people you love.

Apr 5 19

Trusts For Privacy

by Phil Levin, Esq.
unnamed (19)

There are many excellent reasons to utilize trusts for estate planning purposes:
Trusts can be designed to completely avoid the costs and delays resulting from probate, which is a public process to change title of assets from a deceased person to the new recipient.
Trusts can also be designed to reduce both inheritance and income taxes.
In the Elder Law arena, our clients often use irrevocable trusts in order to qualify for Medical Assistence.
Trusts are very valuable to manage assets if you suffer an illness, injury, or incapacity, which would completely avoid a “Guardianship” or “life probate.”
Trusts can be designed to be very flexible and continue after death for your beneficiaries to provide a multitude of benefits, including:
Asset Protection. Assets distributed in trust can provide loved ones with asset protection benefits, as long as distributions are in the trustee’s discretion for the health, education, maintenance, and support of your beneficiaries.
Asset Management. A trust can be useful to provide investment advisory services for beneficiaries who are unable or unwilling to manage inherited assets for themselves, such as minor or immature children, and for a spendthrift person.
Divorce Protection. By leaving specific assets in a trust, inherited property will not become comingled with your beneficiary and his or her spouse’s assets. As a result, trusts provide excellent protection in the event that your in-laws become the out-laws, resulting from one or more of your children going through a divorce.
Special Needs Protection. Assets for a beneficiary who has a mental and/or physical disability, and who is currently receiving, [or expected to require public benefits in the future], can be placed into a Special Needs Trust. As a result, property you desire to be earmarked for the benefit of a special needs person will not jeopardize having their public benefits reduced or completely terminated, which often occurs when a person with special needs receives an outright inheritence of property from a parent or another relative.
In addition to each of the above wonderful reasons why clients often establish both Lifetime and Testamentary Trusts, unlike a Will, or dying intestate, without an estate plan, [both of which would fully expose individually owned assets to the probate system], a trust completely avoids the costs, delays, and publicity of a formal probate proceeding with the local Orphans’ Court.
In fact, the privacy which a trust affords is one of the key reasons trusts are used by many people who guard their privacy zealously, including celebrities. For example, when comedian Garry Shandling died in 2016, he left a probate estate with a net value of less than $669,000. However, it is strongly suspected that Shandling left a trust which held the majority of his other assets. Here are links to stories about Shandling’s death and estate. Of course, we will never know how much Shandling left through trusts, because of the privacy that trusts provide, and since trusts are never exposed to the probate process.
If you do not want your friends, neighbors, and all of your family relations to know about the nature and extent of your assets in the event of your passing, along with exactly how much and who will receive your property, a trust may be just the right estate planning strategy to protect your personal privacy, and also make certain that your assets are distributed in the proper manner to your loved ones.

Mar 1 19

Why Beneficiary Designations are not a Substitute for Trusts

by Phil Levin, Esq.
Beneficiary Designations are not a substitute for trusts

TOD (Transfer on Death) designations, POD (Pay on Death) designations, and beneficiary designations for life insurance and annuity contracts are useful in the right circumstances. Each of these tools allows for an automatic transfer or distribution to the named beneficiary at the death of the owner. But these type of designations can have a few shortfalls. First, if the named beneficiary predeceases the owner, thjs type of designation will not be effective to transfer the asset. However, in most cases, the account owner can designate a contingent beneficiary, to ensure that the asset distributed in accordance with the client’s wishes.

But, if there is no contingent beneficiary, or if the contingent beneficiary also predecease the account owner, the asset may end up in the probate estate if the decedent passed away with a valid Last Will and Testament, which in many cases is what the owner was trying to avoid. And if the client died without a valid Will, then the asset would distribute to individuals under the intestate laws of the state where the client was domiciled at the time of their passing. In some cases, the account agreement with the financial institution might specify an alternate disposition, like to the spouse or next of kin rather than the probate estate of the owner, which is often the case when employer provided retirement plan accounts distribute in the absence of a designated beneficiary who survives the account owner.

Other Drawbacks

Joint tenancy of property between a decedent and a surviving beneficiary may also has similar drawbacks. Upon the death of the last surviving joint tenant, the property is included in that owner’s estate. Joint tenancy has an additional hazard during lifetime which can be illustrated by the following example: Mary has only one child, John. Mary wants to transfer all her assets to John at her death. She hears that an easy way to avoid probate is to add John as a joint tenant, so she does that. John gets sued. Unfortunately, Mary’s property held in joint tenancy with John is an asset that can be subject to John’s creditors, including his spouse in the event that John should go through a divorce. As a result, the “easy” estate planning method of transferring property at death became quite costly for John, since the outright receipt of jointly owned property, or distribution by a simple beneficiary designation, provides absolutely no protection for the beneficiary from their current or future creditors.

Another drawback of TOD and POD beneficiary designations, and ownership of property by joint tenancy, is that these types of property ownership do not plan for the incapacity of the account owner. In other words, if the owner becomes incapacitated, the existence of that form of ownership does not provide management of the asset during the owner’s life.

A Better Solution

A Revocable Living Trust is typically a much better solution for clients, and avoids all of the drawbacks detailed above, including management of assets in the event that the client suffers an illness, injury, or incapacity during their life.

More specifically, the disposition of property at death can be much more flexible, which Trust can include multiple contingent beneficiaries upon the lassing of a client. In addition, the Trust can include specific provisions to ensure that specific assets distribute in the right manner, and at the appropriate time, to designated beneficiaries. In addition, by including appropriate provisions in the Trust, assets which fund the Trust are not exposed to the beneficiary’s potential creditors, whichbos not th case with joint tenancy of property between a decedent and individual beneficary.

Finally, through inclusion of Successor Trustee provisions, a Trust can easily provide management of assets during an owner’s illness, injury, or incapacity. While a Durable Financial Power of Attorney could also accomplish asset management objectives, POAs are often not as readily accepted due to the reluctance by financial institutions’ to rely solely on these documents due to many incidents of fraud. Our experience reveals that a Revocable Living Trust is much more readily accepted by a wide variety of banks, brokersge firms, and other financial institutions.

As detailed above, while joint tenancy, TOD, POD, and beneficiary designations are simple, and can work in some circumstances, these type of beneficiary designations often have their drawbacks.