When a Will Isn’t Enough to Avoid Conflict: Remember Your Personal Property

“When the parents are gone, there’s all kinds of unforeseen stuff they leave us with, stuff they never intended.” – Ira Glass, in This American Life, Episode 763: “Left Behind”

If you grew up with siblings, you probably remember some sibling rivalry. That rivalry can continue well into adulthood, especially after the parents are gone. In many families, parents are like the glue that keeps the family together. Once their gone, old issues can resurface, especially when it comes to dividing the parents’ personal property.  That’s why it’s important to have a plan for how you want your personal, sentimental property distributed to the people that you love. If you don’t, that can make an already tough situation so much worse.

This American Life, a popular podcast, recently featured a family with such a story. Eleven adult siblings needed to divide their dead parents’ stuff. But they didn’t all get along. Although their parents (who were both attorneys) had wills, they didn’t list in their will which child would get which items. They left all that to the kids, saying simply, everyone should get an equal amount. So the siblings invented a remarkably elaborate cheat-proof system to divide up the remains of their childhood. In the end, it was a system that played off the siblings’ natural suspicions towards each other and did nothing to bring them closer together after losing their parents.

Here’s a quote from the narrator:

“What they have left to them is just these things, right? And this mandate– to get along well enough one last time to split it up amongst themselves. And they don’t want to screw it up. They want to honor their parents’ last request. But they know it’s going to be tough for them, given how they are sometimes with each other.”

This is an example of incomplete planning that can lead to conflict after you’re gone. If the parents in this story had left a personal property memorandum that referred back to their Wills, that could have reduced the strain on their children, especially the estate’s executor. It would have also saved a lot of time and conflict….and their relationships with each other.

You can listen to this story (16 minute run time) here.

Or you can read the transcript here. 

 

This article is a service of the Law Firm of Myrna Serrano Setty, P.A. We don’t just draft documents, we help you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Planning Session, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. Call our office today to schedule a Planning Session. Mention this article to learn how to get this $500 session at no charge. 

Call us at (813) 902-3189.

Check out another blog post about embracing the emotional side of estate planning. Here

Can An Adult Child Be Liable for a Parent’s Nursing Home Bill?

Although a nursing home cannot require a child to be personally liable for their parent’s nursing home bill, there are circumstances in which children can end up having to pay.

This is a major reason why it is important to read any admission agreements carefully before signing.

Federal regulations prevent a nursing home from requiring a third party to be personally liable as a condition of admission. However, children of nursing home residents often sign the nursing home admission agreement as the “responsible party.” This is a confusing term and it isn’t always clear from the contract what it means.

Typically, the responsible party is agreeing to do everything in his or her power to make sure that the resident pays the nursing home from the resident’s funds.

If the resident runs out of funds, the responsible party may be required to apply for Medicaid on the resident’s behalf. If the responsible party doesn’t follow through on applying for Medicaid or provide the state with all the information needed to determine Medicaid eligibility, the nursing home may sue the responsible party for breach of contract. In addition, if a responsible party misuses a resident’s funds instead of paying the resident’s bill, the nursing home may also sue the responsible party. In both these circumstances, the responsible party may end up having to pay the nursing home out of his or her own funds.

In a case in New York, a son signed an admission agreement for his mother as the responsible party. After the mother died, the nursing home sued the son for breach of contract, arguing that he failed to apply for Medicaid or use his mother’s money to pay the nursing home and that he fraudulently transferred her money to himself. The court ruled that the son could be liable for breach of contract even though the admission agreement did not require the son to use his own funds to pay the nursing home. (Jewish Home Lifecare v. Ast, N.Y. Sup. Ct., New York Cty., No. 161001/14, July 17,2015).

Although it is against the law to require a child to sign an admission agreement as the person who guarantees payment, it is important to read the contract carefully because some nursing homes still have language in their contracts that violates the regulations. If possible, consult with your attorney before signing an admission agreement.

Another way children may be liable for a nursing home bill is through filial responsibility laws.

These laws obligate adult children to provide necessities like food, clothing, housing, and medical attention for their indigent parents. Filial responsibility laws have been rarely enforced, but as it has become more difficult to qualify for Medicaid, states are more likely to use them. Pennsylvania is one state that has used filial responsibility laws aggressively.

We recommend that your Health Care Directives explicitly lay down a financial liability shield for your agents.

This one provision can save great grief and money.

This article is a service of the Law Firm of Myrna Serrano Setty, P.A. We don’t just draft documents, we help you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Planning Session, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. Call our office today to schedule a Planning Session. Mention this article to learn how to get this $500 session at no charge. 

Call us at (813) 902-3189.

A Tax Break to Help Working Caregivers Pay for Day Care

Paying for day care is one of the biggest expenses faced by working adults with young children, a dependent parent, or a child with a disability. But there is a tax credit available to help working caregivers defray the costs of day care (for seniors it’s called “adult day care”).

In order to qualify for the tax credit, you must have a dependent who cannot be left alone and who has lived with you for more than half the year.

Qualifying dependents may be the following:

  • A child who is under age 13 when the care is provided
  • A spouse who is physically or mentally incapable of self-care
  • An individual who is physically or mentally incapable of self-care and either is your dependent or could have been your dependent except that his or her income is too high ($4,150 or more) or he or she files a joint return.

Even though you can no longer receive a deduction for claiming a parent (or child) as a dependent, you can still receive this tax credit if your parent (or other relative) qualifies as a dependent.

This means you must provide more than half of their support for the year. Support includes amounts spent to provide food, lodging, clothing, education, medical and dental care, recreation, transportation, and similar necessities. Even if you do not pay more than half your parent’s total support for the year, you may still be able to claim your parent as a dependent if you pay more than 10 percent of your parent’s support for the year, and, with others, collectively contribute to more than half of your parent’s support.

The total expenses you can use to calculate the credit is $3,000 for one child or dependent or up to $6,000 for two or more children or dependents. So if you spent $10,000 on care, you can only use $3,000 of it toward the credit. Once you know your work-related day care expenses, to calculate the credit, you need to multiply the expenses by a percentage of between 20 and 35, depending on your income. (A chart giving the percentage rates is in IRS Publication 503.)

For example, if you earn $15,000 or less and have the maximum $3,000 eligible for the credit, to figure out your credit you multiply $3,000 by 35 percent. If you earn $43,000 or more, you multiply $3,000 by 20 percent. (A tax credit is directly subtracted from the tax you owe, in contrast to a tax deduction, which decreases your taxable income.)

The care can be provided in or out of the home, by an individual or by a licensed care center, but the care provider cannot be a spouse, dependent, or the child’s parent. The main purpose of the care must be the dependent’s well-being and protection, and expenses for care should not include amounts you pay for food, lodging, clothing, education, and entertainment.

To get the credit, you must report the name, address, and either the care provider’s Social Security number or employer identification number on the tax return. To find out if you are eligible to claim the credit, click here.
For more information about the credit from the IRS, click here and here.

Are you worried about taking care of a loved one who has long-term care or special needs? We can help you put plans in place so that your family isn’t left with a mess if you become incapacitated or die.

This article is a service of the Law Firm of Myrna Serrano Setty, P.A. We don’t just draft documents, we help you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Planning Session, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. Call our office today to schedule a Planning Session. Mention this article to learn how to get this $500 session at no charge. 

Call us at (813) 902-3189.

Report Ranks States on Nursing Home Quality and Shows Families’ Conflicted Views

A new report that combines nursing home quality data with a survey of family members ranks the best and worst states for care and paints a picture of how Americans view nursing homes.

The website Care.com analyzed Medicare’s nursing home ratings to identify the states with the best and worst overall nursing home quality ratings. Using Medicare’s five-star nursing home rating system, Care.com found that Hawaii nursing homes had the highest overall average ratings (3.93), followed by the District of Columbia (3.89), Florida (3.75), and New Jersey (3.75).  The state with the lowest average rating was Texas (2.68), followed by Oklahoma (2.76), Louisiana (2.80), and Kentucky (2.98).

Care.com also surveyed 978 people who have family members in a nursing home to determine their impressions about nursing homes. The surveyors found that the family members visited their loved ones in a nursing home an average six times a month, and more than half of those surveyed felt that they did not visit enough. Those who thought they visited enough visited an average of nine times a month. In addition, a little over half felt somewhat to extremely guilty about their loved one being in a nursing home, while slightly less than one-quarter (23 percent) did not feel guilty at all.

If the tables were turned, nearly half of the respondents said they would not want their families to send them to a nursing home.

While the survey indicates that the decision to admit a loved one to a nursing home was difficult, a majority (71.3 percent) of respondents felt satisfied with the care their loved ones were receiving. Only 18.1 percent said they were dissatisfied and about 10 percent were neutral. A little over half said that they would like to provide care at home if they could. The most common special request made on behalf of a loved one in a nursing home is for special food. Other common requests include extra attention and environmental accommodations (e.g., room temperature). Read the entire report here.

Are you worried about being able to afford quality long-term care? We can help you incorporate a variety of planning strategies to maximize your quality of life and help protect what you’ve worked so hard for.

This article is a service of the Law Firm of Myrna Serrano Setty, P.A. We don’t just draft documents, we help you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Planning Session, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. Call our office today to schedule a Planning Session. Mention this article to learn how to get this $500 session at no charge. 

Call us at (813) 902-3189.