Michigan Estate Planning & Elder Law

FDIC Calculator -- Are Your Bank Accounts Covered?

“EDIE the Estimator”.  EDIE is short for the Electronic Deposit Insurance Estimator, a calculator created by the FDIC to calculate your FDIC insurance coverage for each FDIC-insured bank where you have deposit accounts.  EDIE will let you print a report for each bank, letting you know whether your deposits are within or exceed coverage limits.  Click on the link below to check your accounts:

EDIE THE ESTIMATOR

Boring But Important . . . New Simplified FDIC Insurance Rules For Trusts

The FDIC is adopting an interim rule to simplify its deposit insurance rules for revocable trust accounts.  The FDIC's main goal in implementing these revisions is to make the rules easier to understand and apply, without decreasing coverage currently available for revocable trust account owners. 

Under the new rules, a trust account owner with up to five different beneficiaries named in all his or her revocable trust accounts at one FDIC-insured institution will be insured up to $100,000 per beneficiary.  Revocable trust account owners with more than $500,000 and more than five different beneficiaries named in the trust will be insured for the greater of $500,000 or the aggregate amount of all the beneficiaries’ interests in the trust, limited to $100,000 per beneficiary.

 

The effective date of the interim rule is September 26, 2008.  A full discussion of the new rules can be found at:

Link To Full Discussion Of New FDIC Rules

It's Back To School Time . . . Are Your Children Protected?

The “kids” are back in school.  Some are going away to college.  Lost among scheduling classes, building lofts and moving furniture, are some important questions many parents forgot to ask:   Has your son or daughter signed a Health Care Power of Attorney?  Has he or she signed a medical information release (sometimes called a HIPAA Authorization)?

You may still consider your son or daughter a “child”.  But under the law, once he or she turns 18, the medical community treats your child as an adult.  What happens when a medical emergency arises and your son or daughter can’t make his or her own decisions?  Without a valid Health Care Power of Attorney appointing you as the health care agent, you can’t make decisions for him or her without going to Probate Court and becoming your child’s “legal guardian”.  And under the HIPAA law, the hospital is prohibited from even discussing the care and treatment of your child with you or anyone else.  Even in a non-emergency situation, the release allows you to take care of routine matters, like checking on your son’s or daughter’s health insurance claims.

I’m not trying to make you panic – I want to encourage you to take the time to put these important documents in place for your children, grandchildren, or other loved ones in this situation.

And The Survey Says . . . Most Americans Don't Have An Estate Plan

According to a recent survey by FindLaw.com, nearly 60% of Americans don't have an estate plan, giving them little control over what will happen to their assets and minor children, and no control over issues relating to their incapacity.  The survey further broke down estate planning by age:  More than half of Americans over age 50 have an estate plan; but only about 25% of adults between the ages of 25 and 34 have one.

If you die without an estate plan, you have what is called an "intestate" estate.  That means the distribution of your assets through the probate court process will be controlled by a default statute.  Also, the court will determine who will raise your minor children, and decide who will make financial and medical decisions for you if you become incapacitated.

What does lack of planning mean?  Financial drain.  Emotional drain.  Family conflict. 

An old quote goes something like this:  "There is never enough time to do everything, but there is always enough time to do the most important thing." 

Ask yourself: Have I taken the time to do an important thing for me and my family?

Estate Planning For Second Marriages

I have had several clients in my office recently with a common issue -- problems stemming from estate planning (or lack of proper estate planning) in a second marriage.  I have met with surviving spouses, and I have met with children and step-children.  All of them tell me the same thing: "My (spouse) (father) (mother) wouldn't have wanted it this way".  Failure to properly plan in these cases can leave the surviving spouse "on the street", or mistakenly disinherit children.

Estate planning for second marriages is a difficult challenge.  You want to provide for your spouse (and certainly want your spouse to provide for you), but you also want to protect an inheritance for your children from a previous marriage. How your assets (especially your home) are held and distributed requires special consideration.

The extent to which this "balancing" creates issues depends on each spouse's net worth, and each spouse's desires relating to other beneficiaries.  You need to ask the tough questions:  "What happens if I die first?" (Is this what you want?) and "What happens if my spouse dies first?" (Is this what you want?)

Once you determine your goals, a plan can be implemented to meet those goals, along with the desired goals of probate avoidance and tax reduction.  Too many people "leave it to chance", which results in leaving your family in conflict.

I recently saw a simple definition of "legacy" as "something handed down".  You have the ability to "hand down" good, or to "hand down" bad.  If you don't properly plan for a second marriage, you are likely to "hand down" bad.  Don't let it happen, especially when it can be easily avoided with proper planning.

Parkinson Foundation Walk-A-Thon

Last year, my father died of complications from Parkinson's disease, so the Parkinson Foundation's cause is close to my heart.  For those who are interested, the Michigan Parkinson Foundation is hosting a Walk-A-Thon on June 7, 2008 (St. Clair Shores) and June 8, 2008 (Northville). 

Parkinson's disease can strike people of all ages.  Over 35,000 Michigan residents are afflicted.  For 25 years, the Michigan Parkinson Foundation has provided education and support to patients, their families, and health care providers. 

I will be at the Northville Walk-A-Thon on June 8 with my family.  Come join us to support a great cause, and to share some memories.  Here is the link to the Foundation's website for more details:

http://www.parkinsonsmi.org/walkreg.aspx

Caring For Parents - Online Broadcast

On April 2, 2008, PBS aired the broadcast “Caring for Parents”.  Unfortunately, the network will not be airing the broadcast again locally in the near future.  However, PBS has made this broadcast available to watch online.  I highly recommend that you take the opportunity to watch this informative broadcast which provides a very helpful insight and suggestions for people with aging parents in need of assistance.

The first 90-minutes of Caring for Your Parents underscores today’s struggle to keep parents at home, tensions between siblings, and the complexity of shifting caregiver roles through an intimate look at five American families.

To watch the PBS Special Online, go to:

http://www.pbs.org/wgbh/caringforyourparents/

New Federal Study Identifies Growing Problems With Memory, Decision-Making

A new federal study found that more than 5 million elderly Americans have a hard time remembering things and making daily decisions.  This is in addition to the 3.4 million Americans who have alzheimer's or other types of dementia.  The article appearing in The Week stated:  "It now appears that more than one-third of the nation's elderly have some diminished mental function."

Why is this important to you and your family?  First, this number is higher than experts originally believed.  Second, the numbers will increase even more as baby boomers age. 

Incapacity can be both emotionally and financially taxing if you don't properly plan for it.  For example, if you don't have a comprehensive estate plan, you may be required to open and maintain a Guardianship and Conservatorship at the Probate Court to manage the incapacitated person's personal and financial matters.  We call this a "living probate", which can be as time-consuming and expensive as the "death probate" which most people know about and try to avoid.

So, make sure that you and your loved ones have a comprehensive estate plan that deals with both death and incapacity:  This includes a Durable Power of Attorney, Health Care Power of Attorney, HIPAA Authorization and Living Trust, among other documents needed to tie the main documents together.

Project Helps Seniors Drive Longer, Maintain Independence

Driving is a major area of security and independence for seniors.  I watched my father struggle with no longer driving a car – and losing his independence – due to Parkinson's disease.  And my grandfather just turned 97 years old, and only stopped driving a few years back.  Losing that control, that independence, can be devastating. 

A recent Detroit Free Press article featured retired GM engineer, John Bieda, who works as a volunteer instructor for the AARP Driver Safety Program.  The goal of the AARP Program is to help seniors recognize “natural declines” in eyesight, reaction time and other characteristics that make it harder to drive safely.

Bieda's class focuses on real-life worries and ways drivers can help offset the challenges of aging.  He suggests:

• Limiting nighttime driving.

• Leaving extra driving distance between vehicles.

• Exercising and stretching daily to maintain muscle strength and flexibility.

• Adjusting mirrors to better see blind spots.

• Not making left turns, even if it means going out of the way to get somewhere by

The number of people taking the courses is growing – more than 3,400 people took part in 2007, up from about 2,600 in 2006.  There is a minimal $10 cost for the course, which generally consists of 8 hours of instruction over 2 days.   For more about senior driving classes, go to www.aarp.org/drive or call 888-227-7669. Community senior centers also may have information.

Estate Tax Update

Current law provides for one year of estate tax repeal (in 2010) and then in 2011 returns estate tax rules to a 55% top rate and a $1 million exemption.  On March 13, 2008, the Senate overwhelmingly approved an amendment to its version of a Congressional budget that would authorize tax legislation to permanently reform the estate tax at a $3.5 million per individual exemption ($7 million for a married couple), and a 45% top rate. The vote was 99 to 1.  Senators rejected two other estate tax amendments – each crafted slightly differently, but both with $5 million per individual exemptions ($10 million married), and a 35 percent top rate.

 

The budget is not binding and it is not law.  Inclusion in the budget establishes a sense of what the Senate thinks it would approve (particularly in light of the 99 to 1 vote by which it passed). But it does not guarantee it will be enacted into law. Of course, time will tell. The only votes that will really count in connection with reforming the estate tax are the ones on the actual bill that goes to the Senate floor (if there is one), probably this fall or perhaps even not until next year.