Author Archives: Jonathan Swain

Beneficiary Designations

Tip – Remember to check your beneficiary designations on insurance policies, IRAs, 401Ks, and investments.

The daughter of one of my clients came to see me about her mother’s estate after her mother had passed away. She said that her mother had several investment accounts and that her mother’s investment advisor had told her to talk with me because she needed to file for probate. She began by explaining that her mother had named her children as the beneficiaries on her accounts. At this point, I stopped her to explain that if the children are named as beneficiaries, there was no need to probate. All that the daughter needed to do was contact the company, fill out their form, and provide them with a death certificate.

”Why then did he tell me I needed to file for probate,” she asked. Not knowing, I called the advisor and asked him. He explained that the mother had 5 different accounts and that 4 of them named the children as the beneficiaries, but unfortunately there was one annuity with no beneficiary designation. The funds in that account could only be released to the personal representative of the
mother’s estate. My client had no other reason to file for probate other than this one annuity. This is a situation that I occasionally encounter.

In some cases, people intentionally name their Estate as the beneficiary of their investment accounts. They name their estate to provide funds to the estate to pay final expenses and creditors. However, if there is no need to fund the estate, by naming the beneficiaries correctly, probate can be avoided.

In Idaho, probate is efficient, timely, and inexpensive when compared to some other states. Nevertheless, it still can take several months to go through the process. Whereas if you name your children as the beneficiaries on insurance policies and investment accounts, the money goes straight to them without much delay.

Because I have had this experience repeatedly, I encourage my clients to review all their investment accounts and check their beneficiary designations to make sure their assets are going to the persons or entities that they want them to go to. Even if you are sure that the designations are correct, checking each one is worth the effort.

View our “Senior’s Guide to a Well-Planned Future” on our website! Packer Elder Care Law – with you for life!

Tom Packer is an Elder Law Attorney serving all Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity. If you have a question about a Senior’s legal, financial or healthcare needs, please call us.

April 2022

Ethical Wills

Consider leaving more than your property to your family.

A friend, who had been recently diagnosed in the early stages of Alzheimer’s disease, came to me for advice on how to get his legal and financial affairs in order. I explained that he needed to name agents to make medical and financial decisions for him. We discussed what government programs and benefits were available to help pay for his care. Knowing that my friend loved his family, I then encouraged him to write letters to his wife and children to let them know how much he cared for them.

Like a letter written to loved ones, there is something called an Ethical Will that gives us the opportunity to express our thoughts, love, and values in writing for those we love. Why should we leave something in writing for our family? Eric Weiner, PhD, the author of “Ethical Wills: Words from the Jewish HEART” gives the following reasons for people to express their values to their family and future generations in an letter or Ethical Will:

“It hit me like a strong punch to the gut. During a keynote address, the speaker asked us if we knew the names of our grandparents. Most in attendance raised their hands. He then asked us if we knew the names and something about all eight of our great-grandparents. Less than half responded. I knew one grandparent. I never met any of my great-grandparents and knew very little about almost all of them. Will my fate be the same? Will I be remembered by some descendent 50 years from now who happens to be named after me?

Jews have long pondered this and developed a tool that promotes intergenerational connections. The ethical will allows us to tell our story for current and future generations. For Jews, it is not enough to only leave a traditional Will. We also have a spiritual duty to guide the next generation, to
help brighten their way through life.

Where a traditional Will emphasizes money, possessions, real estate, and valuables, an Ethical Will describes our values, life stories, and blessings. While not a legal document, it adds something meaningful to the static, dry documents that rely on tax and legal language. Ethical Wills use the language of hope and immortality.

Ethical Wills have a long and rich tradition in Jewish history. They were first described 3,000 years ago in the Hebrew Bible when Jacob addressed his 12 sons on his deathbed. He told them stories, predicted their futures, and imparted his life lessons. . .

The main ingredient for writing an Ethical Will is to speak from the heart. You are constrained only by the limits of your imagination; just keep it positive. For example, here is an excerpt from an Ethical Will:

‘‘Respect life – yours and others. I’m a believer in the Golden Rule—treat other people the way you want to be treated. I hope you find a vocation that adds value to the world . . . I feel lucky to have worked in hospice. Trying to relieve suffering has been a worthwhile pursuit for me.’

By writing an Ethical Will, maybe 50 years from now, if asked, our descendants will know something about us – how we lived our lives, what we stood for and believed in.” (Ethical Wills: Words from the Jewish HEART)

As you consider taking the time to express your thoughts in writing, remember that this is a chance for you to leave something that will touch the hearts of your family and future generations.

View our “Senior’s Guide to a Well-Planned Future” on our website! Packer Elder Care Law – with you for life!

Tom Packer is an Elder Law Attorney serving all Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity. If you have a question about a Senior’s legal, financial or healthcare needs, please call us.

March 2022

Problems with Revocable Living Trusts

Tip: If you have a Revocable Living Trust, don’t forget to fund it.

A Revocable Living Trust is one way to transfer property at your death. To avoid probate is one of the primary reasons people set up a revocable living trust. Another good reason to set up a trust, is if you own property in multiple states. By having a trust, it is not necessary to probate in each state.

But  creating the trust is only the first step; the next step is to fund the trust. To fund the trust means you  must transfer your property into the trust. How you transfer property into the trust depends on what type of property it is. For example, if you want to transfer your home into the trust, you must sign and record a deed.

You don’t just fund the trust once, but every time you procure additional property or accounts—during your entire lifetime—you must take the steps to put them into your trust. Twenty years down the road, if you sell your house and buy a new one, you must deed the new house into the trust. Often, lives get busy, and people simply forget to put newly acquired property into the trust.

And therein lies the problem. Sometimes people will set up a trust, but for some reason, they never transfer their property, or they forget to transfer newly acquired property into the trust; so, at their death, their estates end up being probated anyway.

Most people who create a revocable living trust will also write a pour over will. These wills provide if the person failed to transfer property into the trust, the property is transferred into the trust by their will at their death.

I recently saw a case where a couple set up a revocable living trust, but never put their property into the trust and then passed away. This couple only had one son, and everything went to him. However, they had a pour over will that accompanied the trust, which said their property had to first be transferred into the trust, and then the trust said their property went to the son. This created an expensive, absurd result that was caused by not properly funding the trust.

In conclusion, managing a trust properly can be complicated. If you are going to
have a trust, seek competent legal advice, make sure to put your property into the trust, and then review it with your attorney periodically to make sure
everything is in order.

View our “Senior’s Guide to a Well-Planned Future” on our website! Packer Elder Care Law – with you for life!

Tom Packer is an Elder Law Attorney serving all Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity. If you have a question about a Senior’s legal, financial or healthcare needs, please call us.

February 2022

Gifting Real Property to Your Children

Tip: Gifting your home and other real property to your children can create several problems that you should be aware of.

I frequently have clients who want to gift their home, recreational property, farm ground or other real property to their children. I always try to understand why they want to gift their property and review with them if there is a better way to accomplish their objective. I then explain to them that gifting property can create several problems. Here is a list of things you would want to consider if you are contemplating gifting your home or other real property to you children:

  1. As of 2022 under IRS rules, if you gift property with a value of over $16,000, you are required to file a gift tax return.
  2. If you gift your home to you children, but you continue to live in your home, you will lose the homeowner’s exemption on your home and your property taxes will increase dramatically. You can, however, deed your home to your children and retain a life estate. By retaining a life estate, you will continue to receive the homeowner’s exemption, and you can stay in your home until you pass away, and then it goes to your children.
  3. If you gift property while you are alive that has appreciated since you bought it, your children will lose the step-up in basis that is available to them if you had waited and given the property to them at your death. This could result in your children paying capital gains tax on the proceeds if they sell the property.
  4. If you need to apply to Medicaid to help pay for your care, you will have a period of ineligibility for the Medicaid Program.
  5. And perhaps the most obvious reason to not gift your home to your children is that once you have deeded your home or property to them, it is no longer yours. Consider what would happen to your property if you have given it to a child and they take out bankruptcy, get a divorce, or die and the property is passed down to their children.

Persons who are gifting their home to their children to simplify their lives, often find out that they have complicated things instead. If you are contemplating gifting your property to your children, be careful and talk with an attorney who can help you understand all the ramifications of making a gift.

View our “Senior’s Guide to a Well-Planned Future” on our website! Packer Elder Care Law – with you for life!

Tom Packer is an Elder Law Attorney serving all Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity. If you have a question about a Senior’s legal, financial or healthcare needs, please call us.

January 2022

Aging With Grace and Dignity

Here are 7 keys to a long, healthy life.          

Another year has come and gone, but with it have come memories, and an appreciation for the opportunity to live, grow and spend time with loved ones.

Growing older can bring challenges. Often, we are not prepared for the natural progression of aging. Eric Shapira, DDS, in his book entitled A New Wrinkle, stated: “(Aging) is a subtle experience for some, but for others it can happen in an instant and is more of a shock. So how do we define aging? How do we adapt to it? How do we embrace this transition with love and acceptance to make the change with grace and dignity? How do we make this the most exciting and rewarding time in our lives?”

“Whether you’re ready for this next stage in life or not, there are ways to handle new challenges. Grace is the ability to accept things in a manner that is calm, considerate, loving, and reflective. Dignity is one’s ability to maintain a positive sense of self—taking pride in being able to do things for ourselves and others, to stand up for ourselves, and to be independent as well.” (A New Wrinkle)

So, with all this in mind, what can one do to make this the most rewarding time of their life? According to Eric Shapira, the 7 keys to living a long, healthy life are:

  1. stimulating the mind;
  2. staying social;
  3. eating right;
  4. getting enough rest;
  5. experiencing closeness with others;
  6. remaining ambulatory; and
  7. last but not least, getting out of yourself.

Following these keys, using your talents, sharing your expertise with others, will add longevity, happiness, and satisfaction to your life.

Senior Citizen Centers, located in your community, help us accomplish many of these keys. Recently, I have been participating in what we call “Chair Volleyball” at my senior center. To play, we have six people sitting on chairs on each side of a low net. We hit a beach ball back and forth over the net following the rules and scoring used when playing volleyball. If you rise off your chair, it’s a foul and you lose the point, but the court is quite a bit smaller than regular size, so it is easier to reach. We play once a week, and we look forward to the laughter that accompanies the different things that happen as we battle to get the ball to the other side. Some people are limited in their mobility, but they find great satisfaction in taking part in the team effort, and they enjoy sharing in the teasing and joking that arises from it. One participant stated, “It’s just fun to come and laugh!” Chair Volleyball is played every Wednesday at 9:00 a.m. at the Bingham County Senior Citizen’s Center in Blackfoot. Come join the fun!

Many other activities are offered at Senior Centers that might catch your interest—nutritional meals are served, exercise classes are provided, and service opportunities are available that gives us a place to get up and get out.

Seniors can take pride in their status as seasoned individuals with knowledge to share, and they can help others be successful by providing a little coaching from their perspective. One ‘seasoned’ individual noticed that her teenage grandson was not wanting to help the family by emptying the dishwasher. Instead of scolding or telling him he should help, she used her wisdom and simply said, “Do you know how much that little act of kindness can help your mom? It makes her job so much easier to be able to just load the dishes and not have to put them away first.” This helped her grandson see things differently and be more willing to help.

And that is another secret to a long and happy life—not just doing for ourselves but doing for others.

December 2021

Small Estate Affidavit

In some cases where the total value of an estate is less than $100,000, you may claim property with an Affidavit and not file for probate.          

Once in a while, a client will come to my office because their parent has passed away. My client explains that their parent had a checking and savings account and a car that was titled only in the parent’s name.

They tell me that they have gone to the bank and the bank won’t give them access to the bank accounts even though they presented them with a death certificate and sometimes with a Will nominating the child to be the personal representative. Then when they went to the assessor’s office, the clerk told them that they would have to probate before they could transfer the car title. My client complains that they do not want to probate the estate and asks if there is some alternative to access the money in the bank and get a new title to the car.

The good news is that there is an alternate way. Idaho Code § 15-3-1201 establishes a procedure whereby property can be collected by an Affidavit. A person claiming to be the successor of the decedent may present an Affidavit, containing the information listed below, to any person or financial institution owing the decedent money or having possession of tangible personal property belonging to the decedent. Once they have been presented with an Affidavit, the bank is required to turn over the money in the accounts and any person holding tangible personal property must deliver it to the successor.

An Affidavit is a sworn statement signed before a Notary. Idaho Code                § 15-3-1201 provides that the Affidavit must state the following:

  • The fair market value of the entire estate of the decedent, which is subject to probate, less encumbrances, does not exceed $100,000;
  • That thirty days have elapsed since the death of the decedent;
  • No application for the appointment of a personal representative is pending or has been granted in any jurisdiction; and
  • That the claiming successor is entitled to payment or delivery of the property.

If you need to transfer the title of a vehicle, an Affidavit form for vehicles can be found on the Idaho Department of Transportation’s website.

The successor—any person to whom payment has been made or to whom property has been transferred—is accountable to any creditor of the decedent and to any other persons with a right to the money or property.

This section of the Idaho Code provides an easy method for the collection of property for small estates without having to file for probate with the court. However, in some cases going through probate may be less troublesome than trying to collect property with a small estate Affidavit. For example, sometimes financial institutions are reluctant to give money to a person solely on an Affidavit and prefer to give it to a Personal Representative appointed by the probate court.

If you have questions about when it would be appropriate to use an Affidavit, we would be happy to answer them.

View our “Senior’s Guide to a Well-Planned Future” on our website! Packer Elder Care Law – with you for life!

Tom Packer is an Elder Law Attorney serving all Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity. If you have a question about a Senior’s legal, financial or healthcare needs, please call us.

November 2021

Common Estate Planning Misperceptions

Not understanding how the law works can lead to confusion and frustration.         

Often people have misconceptions about how the law and estate planning documents work. Here are some common misconceptions I run into:

  • Fiction: I have a financial power of attorney for my father. After he passes away, the bank will let me access his account to settle his affairs.

Fact: If you have a financial power of attorney for someone, when they die, the POA is terminated. It is no longer valid, and you cannot use it to have access to bank accounts.

  • Fiction: I am nominated in my mother’s Will to be her Personal Representative, so when she passes, I can settle her affairs.

Fact: When someone nominates another person to serve as their Personal Representative in their Will, that’s all that it is—a nomination. They are not authorized to act in that capacity until they file an application with the court and are appointed by the court to be the Personal Representative.

  • Fiction: I have a Will, so my kids won’t need to probate my estate.

Fact: The probate process is to determine if the Will is valid. To probate the estate and be appointed the personal representative, you must file an application with the court along with the original Will. The court reviews the application and Will and determines if they are in order. It then approves the application and issues Letters Testamentary. With the Letters, you can take whatever actions are needed to administer the estate of the deceased person.

  • Fiction: Here is one from Medicaid Law: If I am eligible for Medicaid, Medicaid will pay all the costs of my care.

Fact: When you qualify for Medicaid, Medicaid requires that all your monthly income—social security, pension, etc.—is paid to the facility for your care except for $109 for personal needs. Medicaid will make up the difference between what the facility charges for your care and what you must pay. If you are married, some of your income can be diverted to your spouse who remains at home to meet his or her needs.

  • Fiction:I need to put my property in a Trust to avoid paying inheritance tax.

Fact: An estate tax at the federal level is charged to all decedent’s estates when their assets pass on to their beneficiaries, whether they have a will or a trust. However, most estates won’t encounter the federal estate tax since it only applies to estates worth more than $11.7 million for 2021. Therefore, doing any kind of planning to avoid estate taxes for most people is unnecessary.

  • Fiction: When I pass away, my house automatically transfers to my spouse.

Fact: In many cases, your car and bank account automatically transfer to your spouse after you pass away, but your house is a different story. To have your house transfer to your spouse after you pass away you need a Deed that includes these 5 words: “with the right of survivorship.”

Understanding how the law and legal documents work can help you make better decisions—with less angst.

View our “Senior’s Guide to a Well-Planned Future” on our website! Packer Elder Care Law – with you for life!

Tom Packer is an Elder Law Attorney serving all Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity. If you have a question about a Senior’s legal, financial or healthcare needs, please call us.

October 2021

New Laws – IRA Beneficiaries

There now is a maximum 10-year post death payout for most retirement funds.

Let me start with a Happy Children’s Fairytale: “Once upon a time, estate planners had a wonderful surprise gift for their clients. When the client showed up with a large IRA asset, an “ugly duckling” that came laden with indebtedness for unpaid income taxes, the planner could turn the ugly duckling into a swan called the “Stretch IRA”— deferring those taxes for decades after the client’s demise, with a life expectancy payout to the client’s children or grandchildren.”

And the client, the family, and the estate planner lived happily ever after!

Disappointingly, the rest of this Tip contains the story of how the happy ending was taken away by the SECURE (Secure Every Community Up for Retirement) Act. When this law passed in December 2019, it radically changed the estate planning client’s ability to effectively use his or her retirement benefits for their posterity long term. Except for a few types of beneficiaries, (listed below) the life expectancy payout is “gone with the wind,” replaced by a maximum 10-year post death payout period. (This information comes from Estate Planning for Retirement Benefits in a Post-SECURE Act World, by Natalie B. Choate. Esq.)

There are five categories of eligible designated beneficiaries who are exempt from the 10-year SECURE ACT rule:

  • A surviving spouse
  • A minor child until he is 18
  • A disabled person
  • A chronically ill person
  • A person who is not more than 10 years younger than the plan participant

The options for leaving benefits to the persons listed above vary, but there still may be the ability to do lifetime payouts for some of these beneficiaries. It is incumbent, then, when designating beneficiaries for IRAs, to understand the different payout rules for the different categories.

So what can you do? If you have an IRA, all pre-2020 plans need to be reviewed in light of the SECURE Act’s changes. Many of those plans will not work as intended.

In addition, it is recommended that you check your beneficiaries from your financial institutions annually, or if any significant life changes occur.

View our “Senior’s Guide to a Well-Planned Future” on our website! Packer Elder Care Law – with you for life!

Tom Packer is an Elder Law Attorney serving all Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity. If you have a question about a Senior’s legal, financial or healthcare needs, please call us.

September 2021

Financial Power of Attorney Frustrations

Signing a financial institution’s power of attorney can resolve problems.

A power of attorney is the delegation of decision-making authority over an individual’s property to another. The person delegating the authority is called the Principal, and the person receiving the authority is called the Agent. Delegating authority can be for incapacity planning or for convenience. The agent acts in financial matters for the principal’s benefit. For example, the agent can deposit or withdraw money from bank accounts, buy or sell securities, operate or terminate an ownership interest in a business, purchase insurance, pay bills, lease or sell property, apply for government benefits, pay taxes, etc.

For the most part, powers of attorney work well and accomplish their intended purpose. Sometimes, however, problems arise when you present a power of attorney to the IRS, banks, or other financial institutions, who may hesitate to accept the power of attorney. The law states that institutions can be held liable for refusing to accept an acknowledged power of attorney. Nevertheless, institutions frequently cite their internal policies as the reason for their refusal.

One way to solve this problem is to ask the bank, the IRS, or other financial institutions for their power of attorney form, which you can sign in addition to your general power of attorney. IRS Form 2848 authorizes another person to represent an individual before the IRS. You can name an accountant, attorney, or a family member as your representative. This form allows your agent to transact matters for you with the IRS.

By signing IRS Form 2848 or a financial institution’s power of attorney form, you will have less problems with them rejecting your power of attorney and you will be able to transact business with them more smoothly.

Tom Packer is an Elder Law Attorney serving all Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity. If you have a question about a Senior’s legal, financial or healthcare needs, please call us.

August 2021

Deeding a House and Retaining a Life Estate

There are advantages and disadvantages to deeding your house and retaining a life estate.

If you have a small estate, to avoid probate you may consider quitclaiming your house to a child or someone else (the “Grantee”) and retaining a life estate. This allows you to live in your house for the rest of your life, and when you die, the house transfers to the Grantee. During your lifetime, you continue to maintain the property, pay any mortgage payments, and pay the annual property taxes and assessments.

There are advantages and disadvantages to preparing a quitclaim deed to your house and retaining a life estate. You can decide, according to your circumstances, if the advantages outweigh the disadvantages.

The main advantage in doing this is you can avoid probate, and the house goes directly to the Grantee after you pass away. The Grantee records a death certificate in the recorder’s office at the courthouse, which establishes him or her as the new owner.

The disadvantages are that even though you can live in the house or rent it for the rest of your life, there are restrictions on what you can do with your house. For example, because you no longer “own” your house, you cannot sell it, take out a house equity loan, or mortgage it without the Grantee’s consent. To be able to sell or encumber your property, the Grantee must either quitclaim the property back to you or sign with you on any transfer document. Deeding your house and retaining a life estate can also interfere with Medicaid eligibility.

In conclusion, I have had clients that have quitclaimed their house to a child and retained a life estate. When they passed, the house went to the child without going through probate. However, I have had other clients, who deeded their house to a child, but their circumstances changed, and they needed to sell or refinance their house. They were unable to do it because the child refused to cooperate. Whether you should consider doing this truly depends on your own individual circumstances.

Tom Packer is an Elder Law Attorney serving all Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity. If you have a question about a Senior’s legal, financial or healthcare needs, please call us.

July 2021