Category Archives: Senior Tips

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 It is no longer valid, and you cannot use it to have access to bank accounts.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!

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.

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.

July 2021

Be Prepared in Case of Incapacity

Consider getting your financial and healthcare powers of attorney in place.

Many people are proactive and execute durable powers of attorney well before incapacity becomes an issue. In most cases, having these documents in place will make it unnecessary for the court to appoint a guardian or conservator (a court-supervised person to administer an individual’s affairs).

Sometimes, a conservatorship or guardianship is necessary even when there are durable powers of attorney in place. For example, the agent appointed, or the attorney-in-fact, may be unable or unwilling to act or is disqualified from acting due to wrong-doing; the person who has become incapacitated may be a threat to himself or others; or the incapacitated person’s family may not be able to agree on who should be making decisions, or may not agree with the decisions that are being made. In situations such as these, the appointment of a conservator or guardian by the court may be appropriate. (A Guide to Elder Law Practice, 2007 Timothy L Takacs.)

If the court determines that a conservator is needed, Idaho Code § 15-5-410 for conservators list the persons entitled for consideration in the following order:

an individual nominated by the incapacitated person in a financial power of attorney;
the spouse of the incapacitated person;
an adult child of the incapacitated person;
a parent of the incapacitated person; or
any relative of the incapacitated person with whom he or she has resided six months prior to the filing of the petition.

The court may disregard this order of priority or designate any other person, if it determines it is in the best interest of the incapacitated person.

There are advantages and disadvantages to having a court-appointed conservator or guardian:

Advantage: Guardians and conservators are supervised by the court. Annual accountings must be turned into the court by the guardian and conservator.
Disadvantages: Guardianships and conservatorships are expensive—with court costs, visitor, and attorney’s fees.

In conclusion, planning allows you to have a say in the important decisions affecting your life. In our website listed below, you can view our booklet called; “A Senior’s Guide to a Well-Planned Future” or if you are interested, you could stop by our office and pick one up. This booklet details what you need to have in place to be prepared in case of incapacity.

June 2021

Small Estate Affidavit

If your estate is less than $100,000, it is unnecessary to probate it.

In Idaho, small estates that have a value of less than $100,000, do not need to be probated for the heirs to collect the property in the estate. Thirty days after a person has died, any heir of the decedent—on behalf of all the heirs—may present an affidavit to any individual holding property of the decedent to obtain the property.

Idaho Code § 15-3-1201 lays out the requirements for the affidavit, which must state the following:

The fair market value of the entire estate of the decedent is less than $100,000.
Thirty days have elapsed since the death of the decedent.
No application for the appointment of a personal representative in a probate proceeding is pending in any jurisdiction.
The person claiming the property is entitled to payment or delivery of the property.

The effect of the affidavit is that the individual who delivers the personal property to the heir is released from any liability. They are released to the same extent as if they had dealt with a personal representative in a probate proceeding.

A form entitled Idaho Small Estate Affidavit for Collection of Decedent’s Property, Possessions, & Accounts can be found online. However, if you need to transfer the title to a vehicle belonging to the decedent, you can find an Affidavit of Inheritance form on the Idaho Department of Transportation’s web site.

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

May 2021

Paying Attention to Beneficiaries

Make sure if certain changes occur, that you update your policies!

Many people set up their beneficiary designations on their life insurance policies or financial investments and don’t think about it again. However, if significant life changes occur, such as a death or divorce, it’s a good idea to review your beneficiary designations to see if they are still the ones you want.

For example, what happens when someone gets a divorce and fails to take the ex-spouse’s name off their insurance policy? When they pass away, their ex-wife or ex-husband could receive their death benefit, instead of their children.

I had this question come up recently. A father passed away, and the children contacted the insurance company to claim their death benefit—only to discover that the beneficiary on their Dad’s policy was his ex-wife. Even though they had been divorced over 20 years ago, he had never changed the beneficiary designation so that it would go to his children. The children called me to find out if there was anything that could be done.

Luckily for them, Idaho is one of about half of the states that has a revocation-upon-divorce statute that automatically revokes an ex-spouse’s designation as a life insurance beneficiary upon divorce. Idaho code § 15-2-508 revokes a pre-divorce life insurance policy as well as a gift to an ex-spouse in a Will or gifts in a Living Trust.

In conclusion, it’s wise to review your beneficiary designations on life insurance policies or other financial investments to make sure they are consistent with your intentions and there are no surprises in the future.

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

April 2021

Community Property with Right of Survivorship

Did you know that a home can’t pass to your spouse with an ‘or’ clause?

Many people are not aware that their interest in their home—unlike their bank account—does not automatically transfer to their spouse when they pass away. Similarly, most of us know that if you title your car in your name “or” in your spouse’s name, then either spouse may transfer the title to the vehicle to another person, even after one of them has passed away. However, for your home, to automatically transfer to a surviving spouse, there are specific requirements that must be met.

Idaho is a community property state. Under the law, each spouse has a 50% ownership interest in their home. When a spouse dies, his or her interest in their home passes to their estate—not to the other spouse. However, in 2008, the Idaho Legislature passed Idaho Code Section § 15-6-401 (Community Property with Right of Survivorship in Real Property). To create a right of survivorship in real property, you must have a deed prepared that states that the transfer creates an estate in “community property with right of survivorship.” If a husband and wife already own real property, they may deed the property to themselves, to be an estate in community property with right of survivorship.

Real property is your home, farm, or land. When real property is held by a husband and wife as community property with right of survivorship, it will automatically transfer and belong to the surviving spouse, upon the death of one spouse.

The practical effect of doing this is that when the first spouse passes away, rather than having to go through probate to transfer the deceased spouse’s interest in the home to the surviving spouse, all that has to be done is to record a Death Certificate at the courthouse to transfer the interest to the surviving spouse.

It’s a good idea if a husband and wife own a home, to prepare a Community Spouse Deed, which deeds the property back to themselves as an estate in community property with right of survivorship.

Getting a Community Spouse Deed in place can be part of a well-planned future that will make your life simpler in the long run.

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

March 2021

It’s Our 100th Senior Tip! Let’s celebrate our connection with you.

Our motto: “Even the oldest tree some fruit may bear.” Longfellow

We have been connecting with you for 9 years, by sending you monthly, Senior Tips—and this is our 100^th! We are an Elder Law Firm that specializes in helping Seniors with their legal, financial, and healthcare needs. To keep you informed on these key issues, we write tips in each of these three areas.

Our Elder Law practice is different by design. For example, if you need help finding long-term care, we can help with placement and can ensure that you get the quality care you deserve; if you need assistance paying for care, we help you apply for Medicaid; if you need to get your legal affairs in order, we make sure you have the right, legal documents in place.

We encourage all Seniors to have a well-planned future. As you grow older, you enter a new stage of life with new challenges. You are the one who knows best what you want your future to be. Because your loved ones may not know your desires, it’s important that you communicate with them and put written documents in place to give them the authority to act on your behalf if needed. Too often people put this off—sometimes until incapacity sets in—and then it may be too late. This can lead to the Courts stepping in and appointing a guardian or conservator. Planning prevents someone else from deciding for you! By having the best plan in place for your individual needs, life goes more smoothly, giving you more time to focus on what brings you joy.

There is still much that Seniors can do during this time in their lives. This is illustrated in a poem by Henry Wadsworth Longfellow:

“What then? Shall we sit idly down and say

The night hath come; it is no longer day?

The night hath not yet come; we are not quite

Cut off from labor by failing light;

Something remains for us to do or dare;

Even the oldest tree some fruit may bear;

For age is opportunity no less

Than youth itself, though another dress,

And as the evening twilight fades away

The sky is filled with stars, invisible by day.”

Our challenge to you in our 100^th Senior Tip is for you to realize you still have much to offer. Make your life the best it can be—you only have one life to live. Enjoy it!

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

February 2021

Nursing Home Resident’s Rights

You have rights and protections as a nursing home resident.

As a nursing home resident, you have certain rights and protections under Federal and state law that ensure you get the care and services you need. In a nutshell, you have the right to be informed, make your own decisions, and have your personal information kept private.

Federal law specifies you have the following rights:

Be treated with respect. You have the right to make your own schedule for when you rise until when you go to bed and to choose the activities you want to participate in.
Be free from discrimination. Facilities must comply with Civil Rights laws.
Be free from abuse and neglect. You have the right to be free from verbal, physical and mental abuse.
Be free from restraints. This includes side rails and chemical restraints.
Make complaints. You can make a complaint without fear of punishment.
Get proper medical care. You have the right to be involved in your choice of a doctor and be fully informed of your health status.
Have your legal representative or family member notified. If you have an accident or your health status changes your family member is notified.
Get information on services and fees. You have a right to receive information on Medicare and Medicaid benefits.
Managing money. You must be allowed access to your bank accounts, cash, etc.
Get proper privacy. You have a right to phone calls, private visits and mail. You may also share a room with your spouse if he or she is in the nursing home.
Spend time with visitors. You may have visitors at any time, if it doesn’t interfere with other residents or the provision of care.
Social services. You have a right to counseling, to contact legal and financial professionals, and to get help solving problems with other residents.
Leaving the nursing home. You may leave to visit family or friends overnight. You may also choose to move out of the nursing home.
Protection against unfair transfer or discharge. You can’t be sent to another nursing home or discharged unless it is necessary for your welfare, health and safety.
Resident groups. You have a right to participate in ‘resident councils’ to air grievances.
Have family and friends involved. Family, friends, and your legal representative can help make sure you get good quality care.

The goal of nursing homes is to help the residents feel comfortable and well taken care of and to make sure that their rights are protected. Your desires and decisions matter. If you have any nursing home concerns, our office is available to help and to work with facilities to ensure you receive quality care.

Tom Packer is an Elder Law Attorney serving all of 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 2021