Planning For a Loved One With Special Needs With Marc Wander

Posted on May 9, 2013 by Christopher J. Berry

Michigan estate planning attorney Marc Wander specializes in planning for children with special needs and makes himself available to any group or association to give his presentation on Planning for a Loved One with Special Needs. Contact Marc to arrange a presentation.

Marc is a partner of the Bloomfield Hills law firm of Witzke, Berry, Carter &Wander, PLLC. Marc has been licensed to practice law in Michigan since 1992. Marc’s practice is devoted to estate planning and business succession planning. Marc is a member of the Probate and Estate Planning Section of the State Bar of Michigan and is a prior Chairperson of the Oakland County Bar Association Tax Committee. He is a frequent continuing education speaker to insurance agents, financial advisors, CPA’s and financial industry organizations. He has also been heard on WJR Radio. Follow Marc on Twitter @MarcWander.

The Inheritance Conversation

Posted on May 2, 2013 by Christopher J. Berry

By Marc Wander

Telling heirs what they stand to inherit is a tricky issue all parents face.

Believe or not, some parents would rather talk to their children about sex than money. Go figure. For wealthy families, it’s arguably the most delicate of avenues to traverse down. With that said, there are a few keys to lighten the burden of talking about this particularly sensitive subject matter.

Filled with emotional time bombs, telling heirs how much they will inherit is filled with feelings of guilt, worry, and fear of entitlement or a stifling of work ethic. But waiting too long to discuss the issue, or worse, avoiding the topic all together, is not a solution. Financial advisers believe this causes confusion, distrust and can leave heirs unprepared to manage the family’s wealth appropriately.

So, how do you begin to face this ticking-time bomb of a conversation? Here are a few ideas from advisers:

Do It Gradually

Every family will posses unique dynamics, values, the amount of wealth to be distributed and the maturity level of heirs, so advisers don’t pretend to have cut and dry rules for parents when it comes to when and how much to tell heirs about an inheritance.

Generally, establishing full disclosure over time is far more effective than delivering the news too soon, or hiding wealth-transfer plans until a death has occured.

Developing a family mission state which clarifies the family’s values regarding money is one way to lay the backdrop for full disclosure. Sharing stories in regular family meetings about the origin of the family’s wealth is an effective way to instill a sense of diligence and appreciation in the younger generation, says Victor Preisser, founding director of the Institute for Preparing Heirs in Pasadena, Calif.

Are Your Kids Ready to Know?

Advisers contend that it is best for parents to assess where their children stand in terms of financial responsibility, resilience, and ability to think as an adult before they share too much information.

To help clients figure that out, Richard Del Monte, the founder of wealth-management firm Del Monte Group in Alamo, Calif., gives his clients’ heirs a blank check and tells them to imagine it’s a large amount of money, close to what they believe they will actually inherit. He asks them to describe how they would spend it if they received it today.

How they answer reveals their level of maturity and indicates what if any type of mentoring needs to take place in terms of wealth and related responsibilities. ”I can’t tell you how many times I hear answers like, ‘I would buy a Ferrari, or an airplane,’ ” he says.

If you need help having the inheritance conversation with your children, contact us to help you assess the readiness and financial maturity of your children.

Marc H. Wander is a partner of the Bloomfield Hills law firm of Witzke, Berry, Carter &Wander, PLLC. Marc has been licensed to practice law in Michigan since 1992. Marc’s practice is devoted to estate planning and business succession planning. Marc is a member of the Probate and Estate Planning Section of the State Bar of Michigan and is a prior Chairperson of the Oakland County Bar Association Tax Committee. He is a frequent continuing education speaker to insurance agents, financial advisors, CPA’s and financial industry organizations. He has also been heard on WJR Radio. Follow Marc on Twitter @MarcWander

Be Weary of Length Antibiotic Prescription in Elderly

Posted on April 29, 2013 by Christopher J. Berry

By Michael Witzke

New Canadian study reveals that elderly in nursing homes should monitor the length of their prescription courses.

A recent Canadian study shows that elderly nursing home residents are often prescribed courses of antibiotics that last 10 days or more, bringing unnecessary risk of drug resistance and secondary infections.

According to researchers a week or less of antibiotic use will effectively kill most common infections, including pneumonia.

“If they’re receiving antibiotic treatment beyond cure, they’re being exposed to those harms without additional benefit,” said Dr. Nick Daneman, who worked on the new study at the Sunnybrook Health Sciences Center in Toronto.

Dr. Naneman and his colleagues analyzed records for nearly 67,000 nursing home residents treated at 630 facilities in Ontario, Canada in 2010. A shade over three-quarters of the elderly residents were prescribed at least one course of antibiotics that year, even though the study team couldn’t determine the reasons for treatment. Close to 45 percent of all prescriptions were for more than seven days – often 10 or 14.

Individual patient’s health was not the determining factor of the length of a given treatment course. Rather, the frequency of longer-term prescribing varied by doctor, according to the report in JAMA Internal Medicine.

“It appears to be more important who’s prescribing the medication than who’s receiving the medication,” Daneman said.

“I’m convinced there has to be something related to prescribers (to) explain all those treatments,” said Yuting Zhang, a pharmaceutical and health economics researcher at the University of Pittsburgh in Pennsylvania who had no involvement with the new study.

However, she told Reuters Health that it’s unclear what that might be. Doctors’ age or education, for example, didn’t predict who prescribed lengthier antibiotic courses.

Using antibiotics longer than needed creates the unnecessary risk that bacteria will become resistant to the drugs. And next time, when the patient develops an infection if could be much more difficult to treat. In addition, the overuse of antibiotics can make a person vulnerable to Clostridium difficile, a type of bacteria that’s known for spreading in hospital wards and nursing homes and causes severe stomach pain and diarrhea.

“You can almost think of C. difficile as an antibiotic side effect,” Daneman told Reuters Health, because almost every patient who gets it has been treated with antibiotics in the past few weeks.

Daneman said alerts as part of electronic lengths could help limit unnecessarily long treatments. Also, patients can ask their doctor why they are supposed to take certain drugs for as long as they were prescribed, according to Zhang.

“I think it’s almost always better for patients or caregivers to seek that information,” she said.

Mr. Witzke practices in the areas of estate and gift tax planning, financial planning, retirement planning, LGBT civil rights, charitable giving, elder law, and small business planning. He focuses on helping clients grow, protect, and transfer wealth efficiently. Mr. Witzke is a past president and board member of the Financial Planning Association of Michigan, a member of the board of directors for Leadership Oakland, and a member of the planned giving advisory committees of Wayne State University and the Community House in Birmingham. Follow Mr. Witzke on Twitter @gr8estatelawyer.

Poll Reveals Aging Americans in denial about reality of long-term care

Posted on April 24, 2013 by Christopher J. Berry

By Marc Wander

Americans actively underestimate their chance of needing long-term care in their elder-years. As a result they are ignoring the necessary steps to prepare themselves and their love ones for what’s likely to come.

A recent poll examined how people 40 and older are preparing for this strenuous and often expensive reality of aging, and found two-thirds claim they have done little to no planning. Worse, 3 in 10 prefer not to think about aging at all. Only a quarter predict it’s very likely that they will need help around or caring for themselves during their senior years, as reported in a poll by the AP-NORC Center for Public Affairs Research.

Even more troubling, the poll revealed that more than half of the 40-plus crowd already have been caregivers for an impaired relative or friend — witnessing the assistance they will likely need, firsthand.

“I didn’t think I was old. I still don’t think I’m old,” explained retired school teacher Malinda Bowman, 60, of Laura, Ohio.

Twice a caregiver, Bowman has aided both her grandmother and her mother, yet made little plans for herself.

“I guess I was focused on caring for my grandmother and mom and dad, so I didn’t really think about myself,” she said. “Everything we had was devoted to taking care of them.”

The poll revealed that most people presume that family will step up if they require long-term care even though 6 in 10 have never discussed the possibility with loved one.

While it is a grand presumption, what happens if more advanced care is needed like giving injections or cleaning open wounds. If your loved ones aren’t able to perform those tasks, can they afford to hire help?

“The expectation that your family is going to be there when you need them often doesn’t mean they understand the full extent of what the job of caregiving will be,” Susan Reinhard, a nurse who directs AARP’s Public Policy Institute, said. “Your survey is pointing out a problem for not just people approaching the need for long-term care, but for family members who will be expected to take on the huge responsibility of providing care.”

Government figures show nearly 7 in 10 Americans will need long-term care at some point after the reach 65. Despite the “it won’t happen to me” ignorance plea, the AP-NORC Center poll found half of those surveyed think just about everyone will need some assistance at some point. There are major misperceptions about how much care costs and who will pay for it. Nearly 60 percent of those surveyed underestimated the cost of a nursing home, which averages more than $6,700 a month.

Medicare doesn’t cover the most common types of long-term care. Yet 37 percent of those surveyed mistakenly believe it will pay for a nursing home and worse, expect it to cover a home health aide when that’s only approved in certain conditions.

The older they get, the more preparations people take. Just 8 percent of 40- to 54-year-olds have done much planning for long-term care, compared with 30 percent of those 65 or older, the poll found.

The AP-NORC Center for Public Affairs Research survey was conducted Feb. 21 through March 27, with funding from the SCAN Foundation. The SCAN Foundation is an independent, nonprofit organization that supports research and other initiatives on aging and health care. The nationally representative poll involved landline and cellphone interviews with 1,019 Americans age 40 or older. It has a margin of sampling error of plus or minus 4.1 percentage points.

How to Live in Assisted Living

Posted on April 23, 2013 by Christopher J. Berry

By Marc Wander

Many consider Martin Bayne the nation’s foremost advocate for people in assisted living.

“Marty communicates the truth about living and aging and dying in America,” said Joy Loverde, a caregiving expert and author of “The Complete Eldercare Planner.”

Geriatrician and nursing home reformer Dr. William Thomas, wrote in an e-mail, “He has been able to do what very few others have done — he has told the story of life on the inside of long-term care.”

Bayne ran won of the largest long-term care insurance brokerages in the United States, along with along with a well-known website, mrltc.com, before encountering early-stage Parkinson’s 18 years ago. He moved to an assisted living center in upstate New York in 2002 after becoming seriously disabled. Three years ago, he was relocated to a facility in northeastern Pennsylvania, where he has a single room and receives several hours of daily assistance from aides.

Mr. Bayne blogs about assisted living at thevoiceofagingboomers.com in addition to writing for other publications. His mission, he said, is to “speak on behalf of those who can’t speak on their own, and who have come to feel they have no voice.”

Follow the link below to an interview where you can read about his emotional experiences of older adults in assisted living and the changes he would like to see made in this type of long-term care.

Ladies, It’s Time to Talk About Estate Planning

Posted on April 10, 2013 by Christopher J. Berry

By Marc Wander

Currently, women serve as CEOs of 14 Fortune 500 companies, according to Catalyst. Including: Indra K. Nooyi atPepsiCo; Irene B. Rosenfeld fromKraft Foods; Patricia A. Woertz ofArcher Daniels Midland, and Ursula M. Burns of Xerox.

But, for all of their achievements they’re not as savvy about estate planning as they should be, says Deborah Jacobs of Forbes. A recent survey by EZLaw suggests that women are more concerned with losing weight than about protecting their financial assets.

Women’s longer life expectancy, combined with their tendency to marry older men and their lower lifetime earnings means there is a greater probability their living standards are compromised in retirement if proper estate planning isn’t done. And because women are most frequently widowed, the final word about which of a couple’s assets go where (family, charity, or the taxman), is typically theirs.

Women who don’t participate in estate planning may end up surrendering to strategies that put them at financial disadvantage. Even worse, is how a lack of planning can affect families of young children. Without a will, a court will appoint a guardian for your children if they are minors and you were a single or surviving parent.

But how do you start the conversation about this difficult topic? It’s often best to have a series of talks, rather than attempting everything at once.

With your spouse or partner. Every couple has their own unique way of talking. When you figure out yours, emphasize your own mortality (“In case something happens to me”). Make it a subject of mutual concern (“We’re not getting any younger”), or focus on the children (“Now that we’re parents).

Sometimes it is easier to use friends as an example, or current events. If a friend or family member has talked to you about their own plan, use it as a transition.

If you encounter resistance from a spouse or partner have a unique card to play: “We owe this much to each other” or “Please do this for my sake.”

After you have found away to talk your spouse or partner, the next step is to talk to an experienced estate planning attorney.

When Should You Redo Your Will?

Posted on April 8, 2013 by Christopher J. Berry

By Michael Witzke

Almost 2.5 million Americans died each year, many of which haven’t signed the basic documents required to protect loved ones. So let’s take a look at this important step. How often should you revisit your estate plan?

Many financial advisors have a difficult time convincing clients they need to update a will or living trust. Both documents can be used to transfer assets, and each has unique uses and features. These documents, along with the rest of your estate plan, should be revisited a minimum of every five years– more frequently if there is a change in the law, your finances or personal circumstances. Consider the following life developments after which you’ll want to consider reviewing your estate plan.

Changes in the law. As it stands, you can transfer up to $5.12 million tax-free during life or at death. If you haven’t revised wills and trusts during the past 5 to 10 years, they may no longer convey your intent about how much money is destined for trusts benefiting children and grandchildren, rather than a spouse.

Impending good fortune. Perhaps you have made an investment with great promise, or own a business and are expecting major success (from a sale or initial public offering or a revolutionary new product), you may want to consider shifting some of the potential earnings to family. After the appreciation occurs, making transfers will consume more of your $5.12 million lifetime gift tax exemption or require you to pay gift tax (35% currently) on a larger amount. Appreciation will be sheltered from both gift tax and estate tax if you can afford to transfer some holdings prior to their increase in value.

Financial setbacks. A number of extraordinary estate-planning opportunities have arisen from the financial whirlpool that began in 2008. Low asset values combined with the decline in interest rates used in structuring various wealth-transfer tools significantly reduced the tax cost of making lifetime transfers, through both gifts or intra-family transaction.

With that said, the same economic conditions also made people anxious about their own financial security and less likely to reduce their net worth with lifetime transfers. However, strategies like the grantor retained annuity trust, or GRAT and installment sales to family members or to trusts for their benefit create an income stream for the person making the transfer. If you are not worried that reducing your net worth to save estate taxes will later leave you short for money, this is an appealing feature.

Change in committed relationships. You should not put off changing your plan if you get married, divorced or spit up. Not only does this apply to your living trust, but also to assets that pass outside of these documents, like retirement assets, life insurance and savings bonds, in addition to jointly titled bank account, brokerage accounts and real estate.

Depending on the state, the law may provide recourse if you forget to change the paperwork — say for your life insurance or IRA — once you are wed. But regardless of this fallback, your spouse could wind up with less than he would have received if you had changed the forms to make him the beneficiary. Divorce poses additional complications.

Becoming a parent. For a lot of people, this is the first occasion that prompts the formation of an estate plan. Most importantly, name a guardian for your children and provide for them financially in the event something happens to you.

Mr. Witzke practices in the areas of estate and gift tax planning, financial planning, retirement planning, LGBT civil rights, charitable giving, elder law, and small business planning. He focuses on helping clients grow, protect, and transfer wealth efficiently. Mr. Witzke is a past president and board member of the Financial Planning Association of Michigan, a member of the board of directors for Leadership Oakland, and a member of the planned giving advisory committees of Wayne State University and the Community House in Birmingham. Follow Mr. Witzke on Twitter @gr8estatelawyer.

Writing Your First Estate Plan

Posted on April 4, 2013 by Christopher J. Berry

By Michael Witzke

Discover the basics for Writing Your First Estate Plan.

Are you recently married? Become a parent? Received an inheritance?

A number of people put together a first estate plan because of these life-events, while others are inspired to sign their first, overdue will following the death of a friend.

No matter your motivations, if you don’t have an estate plan, you need one. And if you have a really old one, you probably need a new one. It is important to prioritize your affairs and protect your family. There’s a surprising number of wealthy people who wait until thy are in their 50s or 60s before they do anything more than a simple will.

But even a will, is the just basics to an estate plan. While you may have pieces of your estate plan collected over the years — a living will signed hen you had elective surgery or a beneficiary form filled out for a 401(k) when you got your first first job — you must make sure the pieces fit together.

A couple had been married for years, yet the husband still had an old girlfriend listed as his primary beneficiary on his individual retirement account. After reviewing the form, he changed the beneficiary to his wife. Yes, the beneficiary forms you fill out for retirement accounts and life insurance determine who gets those assets — not your will. Yet a will, with provisions for the care of minor children, is still the cornerstone of a plan.

There a number of difficult issues to resolve in your will if you have kids. First, you must select a guardian to care for your children should both parents died. Also, you must name a trustee to manage any money that is set aside in a trust for the child’s care. The same person (or a different one) should also be named as the successor custodian for any custodial bank accounts (UGMA and UTMA accounts they’re known as) you have in the kids’ names. If you’ve got Section 529 college savings accounts for your kids, you may have filled out a form naming a successor owner for the trust, which can include the child himself. Just make sure the successor owner fits in with the plans you’ve made in the will.

Business owners have their own needs when it comes to estate planning. Consider what would happen to your business — would your heirs pay the bills and shut it down, or hire a business broker to try to sell it or possibly sell to key employees? If you have a partner, you ought to consider setting up a buy-sell agreement that lays out what happens to the business if one or the other owner dies or gets sick.

After you put together all the documents, sign them (and get them notarized if required in your state). And ensure your executor has the latest copies and knows where you’ve stashed the originals for safekeeping.

Gift Taxes: What Your CPA Doesn’t Know

Posted on March 27, 2013 by Christopher J. Berry

Taxpayers who gifted substantial assets to family members last year could be in for bitter surprise this tax season: potential errors on federal gift-tax returns that may cost donors taxes on gifts that they thought were tax-free.

Many taxpayers rushed to give during the last months of 2012, afraid that Congress would scale back the $5.12 million gift-tax exemption to $1 million at year-end — and raise the tax rate on gifts exceeding that limit to 55% from 35%. But in the end, lawmakers decided to leave the exemption intact, and raised the rate only five percentage points, to 40%.

Adding to the problem, Form 709, the gift-tax return, is a potential trap for accountants, particularly when the taxpayer gave something other than securities or put the gift into a trust, common in 2012. Form 709 applies to gifts exceeding $13,000 in 2012. Filing incorrectly can result in a weighty tax bill for an individual who expected to pay no tax on a gift at all. Also, an error can saddle heirs with a surprise bill even decades after someone made them the gift.

Unfortunately few accountants have experience with more complicated reporting on a gift-tax return. Most only know how to report smaller, annual gifts. But gifts of real estate or business interests — which were common last year — or anything besides stocks and bonds, are another story.

Graduate accounting programs used to train accountants to report more-complicated gift transactions, but some no longer do. Many professionals falter on Form 709, which requires an advanced knowledge of rules for two separate taxes: the gift tax and the “generation-skipping tax,” which imposes levies that wouldn’t otherwise be incurred when families leave assets to heirs who are a generation younger or more. Estate planners consider the generation-skipping tax to be exceptionally complicated.

Many experts recommend that taxpayers have a lawyer review, if not prepare, the gift-tax return. The 709 is unique and many CPAs seem happy to have someone else do it.

Mr. Witzke practices in the areas of estate and gift tax planning, financial planning, retirement planning, LGBT civil rights, charitable giving, elder law, and small business planning. He focuses on helping clients grow, protect, and transfer wealth efficiently. Mr. Witzke is a past president and board member of the Financial Planning Association of Michigan, a member of the board of directors for Leadership Oakland, and a member of the planned giving advisory committees of Wayne State University and the Community House in Birmingham. Follow Mr. Witzke on Twitter @gr8estatelawyer.

Brooklyn Court Dumps Marriage Contract In Unprecedented Action

Posted on March 27, 2013 by Christopher J. Berry

An unprecedented action has a Brooklyn court warning you how you get your future spouse to sign a prenuptial agreement. The Brooklyn Appellate Court panel unanimously ruled to throw out a prenuptial agreement between a multimillionaire and his wife on the grounds that the agreement was fraudulently induced. Even the most seasoned Brooklyn matrimonial lawyers were shocked by the move.

Prenuptial agreements are cynically described as “weapons” that a spouse may utilize in a contested divorce proceeding. A prenuptial agreement is a written contract created prior to marriage. It generally outlines all of the property each person owns and specifies what each person’s property rights will be in the event the marriage dissolves.

The 1998 marriage between Elizabeth and Peter Petrakis had all the ingredients of a fairytale Peter earned his money in smoke shops and real estate to the tune of $20 million.

After a few years of marriage, the couple called it quits. There was an obstacle in the contested divorce: Elizabeth signed a prenup that enabled Peter to keep everything that is in his name in the event of a divorce.

For years, Elizabeth claimed that she was coerced into signing the prenup arguing that her soon-t0-be husband threatened to call off the wedding if she did not sign.

“He told me he would rip it up as soon as we had kids,” Elizabeth told the New York Post. Three children later, the prenup was still intact.

Siding with Elizabeth’s contention that she was coerced into signing the prenup, the court found Peter “credibility to be suspect,” and thus invalidated the prenup.

“I’m utterly surprised. I’m actually quite shocked,” Brooklyn attorney Peter C. Lomtevas said of the ruling. For many matrimonial attorneys, it is rare that they face an invalidated prenup.

“Prenups aren’t vacated all that often,” said attorney Louis Sternberg. “This is a very new approach. Prenups are supposed to be hard to overturn.”

Not all attorneys are convinced that the ruling was that surprising.

“There are very fact specific reasons why a prenuptial agreement would be overturned,” advised attorney Steven D. Cohn. “One factor being if the agreement was signed as a result of force or duress.”

Divorce attorney Jennifer Garcia agreed. “What [Ms. Petrakis] argued is that there was some kind of undue influence,” Garcia elucidated. “She signed the prenup four days before the wedding. That is too close to the date of the marriage, and that is why the prenup was thrown out.”

As a result, attorneys will be modifying their strategy when advising couples pre-marriage.

“If we see this sort of thing continuing then attorneys will certainly start putting extra precautions into prenuptial agreements,” said Alexander Yakov Tsiring, Esq.

Lomtevas offered a word of caution to attorneys and their clients: “If a prenup no longer protects you, what do you do with your money?”

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Telling heirs what they stand to inherit is a tricky issue all parents face.

Are Your Kids Ready to Know?

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New Canadian study reveals that elderly in nursing homes should monitor the length of their prescription courses.

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Discover the basics for Writing Your First Estate Plan.

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