Sarah Stewart Legal Group, PLLC

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Easing the Financial Strain of Caregiving

By: Sarah Stewart Legal Group

Caregiving can be a thankless job.  As the U.S. Baby Boomer populations ages, more and more people are becoming caregivers for their aging family members.  According to the AARP and the National Alliance for Caregiving, in 2015, about 13% of the population were caregivers for adults or children within the previous 12 months of the survey.

Caregivers often work full-time jobs and struggle to balance their own lives and families with the often additional full-time job of caring for their family member.  They usually receive little or no compensation for their time, and often pay out of their own pockets for their loved one’s needs.

If you are a caregiver, how can you ease the financial burdens that come with the territory of caring for your loved one?

An option for those who care for adults who receive some sort of benefits or income may be a caregiver agreement where a caregiver can be reimbursed for time and money spent caring for their family member. If these agreements are properly drafted, they can be used to “spend down” funds to qualify for Medicaid when the person receiving the care needs to.

If there is no agreement, any payments made to the caregiver may be seen as a “gift.”  In Oklahoma, the Medicaid “look-back period” is 5 years.  That means if any money or items were given to someone in that time period that are not subject to an exemption defined by the state, it could be counted against the individual trying to qualify for Medicaid or other benefits as a current asset.  That means the person seeking funding will have to wait until that money is “spent” down to the Medicaid qualification level to qualify.

Requirements for Caregiver Agreements

The agreement must be in writing and must be specific about the types of work the caregiver will do.  Will the caregiver be running errands? What kinds of errands?  Where is the loved one needing care living?  If with the caregiver, is the caregiver charging rent to the loved one?

What other, additional services will the caregiver provide?  Is the caregiver paying the bills for the family member?  Are they maintaining or repairing the house the loved one lives in?

Log Your Time and Expenses

Once you have the agreement in place, be sure to keep a detailed log of the time you spend providing the services.  If you pay for something out of pocket and want to be reimbursed, keep receipts. Keep records of the income you receive.  Payments to caregivers are generally counted as taxable income for tax purposes.

When caregivers assist their elderly family members, they are providing a benefit to the family member and the government by allowing that person to stay in their home for a longer period of time and decreasing the amount of care the government will have to pay for for the elderly loved one.

If you are in a situation where you can benefit from a caregiver agreement, reach out to a professional today!

These documents have strict requirements that must be met to ensure your loved one can qualify for government benefits when they need them. Do not try to do this on your own!

How to Protect Aging Loved Ones from Financial Scams and Abuse

By: Sarah Stewart Legal Group

The National Council on Aging reports that financial crimes against the elderly are “the crime of the 21st century.”  Financial crimes are becoming more common because law enforcement has difficulty finding the perpetrators and prosecuting them.  Criminals who financially abuse the elderly can be complete strangers or family members.

Some of the more popular scams in recent years include callers posing as the IRS, Medicare, and claiming a family member has been kidnapped when they haven’t.  These scammers try to force an unsuspecting caller to wire them money immediately and can even spoof a number to make the call look legitimate.

These scammers target people who have worked hard their entire lives to be able to retire in peace, people like our friend Ann. Ann and her husband were married for 40 years when he died.  They worked together to build a nice nest egg that allowed Ann to retire comfortably soon after his death.

Recently, Ann got a call.  On the other end of the line was a man who said he was from the IRS.  He claimed Ann owed the IRS $10,000 in back taxes.  If she did not pay immediately, the IRS would send someone to her home to arrest her.  Ann had never had problems with the IRS before and was, understandably, shaken.

She drove to her local bank branch while she was on the phone with the man, to try to wire the money to him as he requested.  Luckily, an observant bank teller noticed that Ann seemed distressed.  She was able to speak to Ann about the situation and assure her that the man on the phone was not with the IRS. Ann was able to keep her money that day. Many people are not that lucky.

As loved ones age, their ability to recognize these kinds of scams can diminish.  If families are concerned that their elderly loved ones may fall victim to financial abuse and scams, they can help protect them by convincing them to put an estate plan in place.

Everyone has heard of Wills and Trusts and planning for your family after your death, but many of us may not be aware of the fact that estate planning does more.  For elderly family members, estate plans allow trusted loved ones to be aware of the financial health of the aging person and help protect them.

Estate plans usually include documents that allow people to choose others to act for them when they are unable to act on their own.  These documents can include specific provisions about managing bank accounts and other assets to ensure the aging person does not fall prey to predators.

After putting an estate plan into place, be sure to list all of the companies the person holds assets with- banks, retirement accounts, stocks, bonds, insurance accounts, etc.  Also, make a list of trusted advisors- attorneys, accountants, financial planners, etc.  These lists will make it easier for family to step in when an elderly loved one needs them to take over.

Talk to your elderly loved ones about their plans today.  If they have a plan, one that may be older, review the plan and make sure they don’t need to make any changes.

Have these conversations now and get these plans complete before it’s too late!

7 Reasons to Budget and Tips to Do It Right

By Sarah Stewart Legal Group, PLLC

Do you have a budget? If so, you are in the minority.  A study from the U.S. Bank in 2017 found that only 41% of people living in the U.S. had a budget.

Experts agree making and following a budget is the best way to manage your money and save for emergencies, vacations, and retirement. Budgeting also relieves a lot of stress by allowing people to plan for expenses and be sure they have enough money to live each month.

If you aren’t budgeting, we’ll tell you why you should and how to do it right.

Why Budget?

(1) You Have Control of Your Money

With a budget you know how much money comes in and where it goes.  You know what you can afford each month and can make a plan to lower debt and plan for other life and financial goals.

(2) Emergency Planning

When you have a budget and know where your money comes from and where it goes, you can plan to put some extra aside for emergencies.  Have you ever had your air conditioning go out in the heat of the Summer? Have you had a pipe break, flooding your house?  Wouldn’t it be nice to have the money set aside to cover those expenses without affecting your month?

(3) Determine and Focus on Money Goals

Knowing where your money goes gives you the power to change spending habits and decide what money goals you have.  Have you always wanted to take a trip to Italy?  What would it take to get there?  Planning for that trip will motivate you to skip the coffee drive through a few times a week.

(4) Share with Your Spouse and Family

Budgeting allows you to work as a team with your family and teaches your children how to use their money wisely.

(5) Foresee Problems

With a budget, you learn the ebbs and flows of your finances and can head off possible financial problems before they become problems.

(6) Decide About Debt

Budgeting helps you decide what, if any, debt you can afford. Do you want a new car?  Can you really afford it?

(7) Adjust Spending

When you budget, you can get rid of unnecessary expenses and add the savings up for retirement, college funds, vacations, or whatever you want.

Budgeting Tips

(1) If you’re married, be sure to budget together.  It won’t do any good if the two of you aren’t on the same page about important expenses.

(2) Be flexible.  Every month can be different.  You may need to buy school supplies, car maintenance expenses, or holidays.  Be sure to allow room for these expenses in your budget.

(3) Start with food, shelter, utilities, clothing, and transportation. Your necessities are the most important.  Fill everything else in around them.

(4) Pay off debt.  The less money you owe, the more you have for yourself!  Not to mention, credit cards and loans charge interest and penalties, taking more of your hard-earned money than you can imagine.

(5) If you’re struggling with certain expenses in your budget, such as entertainment, pull out cash for the month for that category.  Only use the cash.  Once it’s gone, you can’t spend any more on that category.

If you don’t have a budget yet, sit down with your family and set one up today!

Planning for Temporary Child Custody if You Die

By: Sarah Stewart Legal Group

If we don’t plan for our assets after our death while we’re alive, the Court will take over for your family and tell them who gets what. Because of this, estate planning tools are important for everyone.   But, families with young children have even more at stake if they don’t plan properly for their children.

Traditional estate planning tools like Wills and Trusts allow parents to name a Guardian for their children if the parents die while the children are under the age of 18.  At the very least, parents should think through who you trust to care for and raise your children if you’re not there.

Though these documents are important for every young family to have,  there are other plans parents of young children may not be aware of that are just as crucial.

Sometimes when both parents have died, children can be taken into state custody, at least for a brief period.  If you want to minimize the chance of this happening to your children, you will need to make plans and arrangements with family members or friends if something happens to you.

Let’s say you go out on a date night and leave the kids with a sitter, but you get in a car accident and don’t make it home.  Who would the babysitter call? Who would care for the children until the Guardian can go to court and establish Guardianship? Getting a guardianship is a process that can take weeks.

What about young families who do not live close to their parents, siblings, or other family members?  What if closest relatives are more than 5 hours away? Where would your children go?

If you have a trusted friend you would like them to stay with until family arrives, you will need documentation granting the friend authority to keep the children temporarily.  Otherwise, child protective services will likely take them into custody.

If you are a parent or Guardian of young children, you should consider drafting a plan for your family.  You can give a copy of the plan to your proposed caretaker and keep a copy somewhere in your home that is easily accessible and that the sitter knows about.

Your children will have enough stress and trauma from dealing with your loss if you die suddenly.  Do you want to make that process even more difficult by having the state take them into custody and hand them over to strangers?

If not, get to work on your temporary custody plans for your children today!

Estate Planning: Planning for Life, Not Just Death

By Sarah Stewart Legal Group

When people think of estate planning- wills, trusts, durable powers of attorney, advance directives for healthcare, and other documents- it can often bring to mind thoughts of death. Though planning for our assets after death is an important part of estate planning, estate planning is also used to plan for you and your family’s best life.

To draft a thorough and appropriate estate plan, professionals will walk you through your plan, asking what will happen if an heir divorces, if someone dies, if someone has a child, or other important life changes happen.  They will also help you plan for illness and disability.

If you are an adult, over the age of 18, an important planning tool you will want to consider is a Durable Power of Attorney. A Power of Attorney will allow someone else to take care of your financial, and possibly medical, responsibilities if you are unable to do so yourself.  You get to create this document any way that works for you and meets your goals and needs.

Another important planning tool for any adult is an Advance Directive for Healthcare.  In Oklahoma, this is the only document that allows you to name someone to withhold life-sustaining treatment when you are unable to make decisions for yourself and other important criteria are met.  These documents walk you through 3 situations and allow you to choose the life-sustaining treatment you want, or don’t want.

Under Oklahoma law, there is no automatic authority for a spouse, child, or parent to access a family member’s information and handle their affairs.  Unless accounts are owned jointly, only a Durable Power of Attorney, or Trust where the person is named a Co-Trustee, will give companies the authority to deal with a spouse or family member on your behalf.

If you do not have a Power of Attorney and have not named an agent, your family will have to go to court to gain access to your accounts and information through a guardianship.  This is a lengthy, costly procedure that invites the Court into your life indefinitely and requires the Court to approve decisions that you may not want them involved in.

If it is important to you to maintain privacy and/or name a specific individual to help care for your health and assets, or to reduce stress and costs for your family, a Durable Power of Attorney and Advance Directive for Healthcare are a great place to start to make a plan for emergencies in your life.

If you do not have a plan in place for your life emergencies, reach out to a professional to help you get started now!

6 Costly Myths About Retirement Planning

By Sarah Stewart Legal Group PLLC

U.S. Citizens are well-known for their lack of retirement planning. According to a 2016 Retirement Confidence Survey, 26% of those surveyed said they had saved less than $1,000 for retirement.  More than 50% saved less than $25,000 for retirement.  Moreover, a Fidelity Investments study in 2017 found that more than 1/5 of workers aren’t contributing enough to their 401(k)s to receive the full benefit of employer-matching.

Whether you’re a Baby Boomer, a Gen X-er, or a Millennial, if you want to retire someday, you need to be aware of some common retirement myths that can stop you from saving the most you can for your best retirement.

(1) You Should Only Invest in 401(k)s and IRAs

Traditional retirement accounts have penalties for withdrawing money before you are 59 1/2 years old. When you consider your retirement plan, if you have any idea you may want to retire early, you will want to invest at least a portion of your money in non-retirement, taxable accounts so that you can fund any years of retirement before age 59 1/2.

(2) You Don’t Have to Invest After Retirement

People are living longer and longer every year.  It is estimated that there are currently more than 72,000 people over the age of 100 in the U.S.  Assuming you want to retire at the average retirement age of 62, you can have up to 38 years of retirement.  Mind blowing- right?

Because we are all living longer, we have to stretch our retirement dollars further. Make a plan that can cover you if you live until 100.  It’s better to plan too much, than not enough.  You don’t want to end up standing on your child’s/grandchild’s doorstep at 80 because your retirement ran out.

(3) You Can Always Invest the Same Amount

As you get older, your income, and lifestyle expenses, increase.  Be sure you invest more in your retirement account to accommodate these lifestyle changes.  You don’t want to eat caviar when your 40 and be forced to eat Ramen noodles every night when you’re 70.

(4) You Don’t Need to Plan Distributions

Our goal is to make sure we don’t run out of money in retirement.  We want to plan distributions so we can be sure we are using our assets for stable income throughout our retirement.

(5) You Only Need to Save 10-15% of Your Income

If you started saving for your retirement in your 20s, saving 10 – 15% of your income each year works because interest compounds.  If you started saving later, you need to increase your savings to catch up.

With that being said, put aside whatever you can whenever you can.  Set up a monthly bank draft of a set amount so that you can be sure you are saving.  Everything will add up, and because of compounding interest, the sooner you start, the better.

(6) Financial Advisors Always Work in Your Best Interests

Not all financial planners are created equal.  Though many people believe financial advisors have to work in your best interests, it simply isn’t true.  Only financial planners who are fiduciaries are required by law to act in your best interests. Ask your financial advisor if he/she is a fiduciary and look for someone who says “yes.”

If you have not started a retirement or estate plan, reach out to professionals today!

 

5 Mistakes to Avoid When Making Your Estate Plan

By Sarah Stewart Legal Group

Estate planning is a topic a lot of people try to avoid, despite all the sage advice otherwise.  Though statistics vary, the consensus is only about 50% of people have actually planned for their family’s inheritance after their deaths.

Adults with children younger than 18 years of age, arguably the people who need to plan the most, have the lowest rate of planning- 36%.

Estate plans help families decide what assets go to whom, when, where, and can possibly save thousands of dollars in attorney and court costs. Planning is important for everyone, and it must be done correctly to meet your goals.

Here are 5 common mistakes you should avoid when estate planning.

(1) Not Planning

The difficulty of talking about death and working through a plan make people put off estate planning.  While you’re waiting for the right time, life, and death, can happen. If you die without an estate plan, the state decides who gets what, while your family is out thousands of dollars in court fees and attorney costs to get the state to divide your assets.

If you’re married, and you don’t have an estate plan, your spouse will not receive everything you left behind.  If you have children from a previous relationship that are not 18, and your previous partner survives you, your previous partner will receive your assets to manage for your children.  Are you comfortable with that?  If not, you need to make a plan.  Now.

(2) Forgetting Health Care Directives

Advance Directives for Health care are the only documents in the state of Oklahoma that gives someone the authority to withhold life-sustaining treatment on your behalf.  If you have certain situations where you would not want to be on life support, you need an Advance Directive in place.

Another important health care document is the Durable Power of Attorney for Health care.  If you are in a situation where you cannot make decisions for yourself, the Durable Power of Attorney will name someone you trust to make those decisions for you.

(3) Not Choosing a Guardian for Your Kids

If you don’t have an estate plan, and you have young children, you have not named a guardian for your children if something happens to you.  Your family will have to go to court, and possibly argue with other family members, to get guardianship of your child. And, the guardian may wind up being someone you wouldn’t want.

Remember when picking your guardian, that though your parents may be your first choice, if your children are older and your parents have health issues in the future, they may not realistically be able to care for them.  Consider naming a back-up guardian or co-guardian who is younger.

(4) Forgetting to Update Documents

When big life changes occur- divorce, birth, death, marriage, kids growing up- you should re-evaluate your plan.  Is everything the way you want it?  Has anything changed?  Documents are easy to amend if your plans change, but you have to stay on top of things.

(5) Incorrectly Titling Assets

Some people take the time and money to set up a trust, but forget to put their assets into the trust.  A trust is only as good as what you put in it.  Be sure to talk to your banks, financial planners, employers, and other asset holders to get your assets put into your trust.

If you don’t have an estate plan in place, or need to update yours, reach out to a professional today!

 

4 Benefits to Talking to Your Teen About Prenups

By: Sarah Stewart Legal Group

It is common knowledge that the divorce rate in the U.S. hovers around 50%.  Parents, especially those who have been through divorce themselves, are aware of the complications divorce can cause, particularly for young couples.

Though having a contract in place before marriage may not sound sexy, prenups are a great idea for young people looking to start their families.  Parents can make their children’s lives easier by bringing up the topic of prenups when their children first start dating, usually in their teens.

There are 4 benefits to talking to your teens about prenups before they find the person they want to be with forever.

(1) Prenups Are Good For You

We all hear the horrible stories about divorce battles fought in court.  Some of us may have even lived them.  Prenups make those battles much easier because you have a template to follow when you’re going though the process.  You planned out what would happen before you even got married, so the court, given no unforeseen circumstances, will generally honor the contract.

A divorce that could have taken years to complete, can be done in a matter of weeks.  That can save you, or your kids, a lot of stress and time!

(2) Teach Your Kids About Prenups So They Know What They Are

For many of us, the concept of a prenup never came up before we were engaged and thinking about marriage.  Then, for some of us, thinking about the end of the marriage to the person we love before the marriage has even started, seemed in poor taste.

Educate your kids now so that they know what these documents are and what they mean.  Then, they and their future fiance will know what is available to them and the benefits of having a prenup in place.

(3) Protect Family Wealth and Inheritance

The reality is, if you are wealthy and your children stand to inherit a significant amount of wealth, a prenup will be even more beneficial to them than the regular Joe.  Prenups protect those inherited assets from the future spouse.

Moreover, for couples who marry later in life, they often bring in their own significant assets- real estate, retirement accounts, businesses, etc.  For couples marrying later, a prenup allowing them to keep their assets separate is extremely beneficial if you end up in a divorce later in life.

(4) You’re Not Attacking Anyone

People can become defensive when they are confronted with advice about prenups after a proposal.  They can think breaching the topic means you don’t like their current partner.  If you can bring the subject up years before your child has found a significant relationship, you can take a lot of the emotion out of the subject and focus on the benefits your child can receive.

You may find bringing up the topic of prenups with your teen difficult.  Celebrity divorce and death are all over the news.  One way to start the conversation may be commenting on the current situation of a celebrity. You may also consider bringing your kids in for your estate planning discussions with your advisors and asking that advisor to discuss prenups.

However you choose to do it, talking about prenups with your kids is a great way to prepare them and protect them in the future!

Buzz Aldrin and Stan Lee’s Legal Battles Highlight the Need for Elder Care Planning

photo by Christina Korp

Photo by Frazer Harrison/Getty Images

By Sarah Stewart Legal Group

In the last month, 2 iconic American heroes have faced legal trouble due to aging that highlight the need for proper elder care planning, Stan Lee and Buzz Aldrin.

Stan Lee is the 95 year old godfather of the Marvel comic universe and usually appears in cameos in Marvel movies. Buzz Aldrin is one of the first men to walk on the moon during the U.S. moon landing on July 21, 1969.  He is now 88 years old.

Stan Lee

In June, Stan Lee’s caregiver, Keya Morgan, came under investigation by Los Angeles police for elder abuse.  Morgan is accused of exploiting Lee’s impaired vision, hearing, and judgement by isolating Lee from his family and friends and moving him out of his longtime home.

Morgan is a memorabilia dealer who befriended Lee’s only child, J.C. Lee, and began taking control over Lee’s assets and home.  A restraining order filed by an attorney for Lee claims Morgan used Lee’s advanced age and impairments to unduly influence him and isolate him.

Morgan reportedly fired Lee’s workers, including the longtime attorney who filed the restraining order, and isolated Lee from friends and family, including his only daughter.

Investigations are ongoing.

Buzz Aldrin

In late June, Buzz Aldrin filed a lawsuit against 2 of his children and a former business manager. He accuses them of improperly using his credit cards, transferring his money without his permission, and slandering him by wrongfully claiming he is suffering from dementia.

A week before Aldrin filed his lawsuit, the 2 children named in the lawsuit filed a case in Florida asking to be named as his legal Guardians.  They claimed Aldrin was the subject of elder abuse by new friends who isolated him from family, gained control over his assets, and were spending his assets quickly.

The Petition claimed Aldrin suffers from confusion, memory loss, and delusions. In April, Aldrin took an evaluation with a geriatric psychologist and was found to be in superior mental health. A Court-appointed mental health evaluation was set to take place the week Aldrin filed his lawsuit.

Aldrin’s case asked the Judge to remove his son as Trustee from his accounts and claimed he revoked a power of attorney he issued to his son earlier, but his son continued to make financial decisions and business decisions on his behalf.

Aldrin accuses his daughter, and also his former business manager Christina Korp, of conspiracy, fraud, elder abuse and exploitation, and unjust enrichment.  Aldrin’s lawsuit  includes several businesses and foundations he owns.

The lawsuit is currently pending.

Take Away

As people age, their hearing, eyesight, mobility, and reasoning can become affected.  In order to properly protect their accounts, homes, and businesses, those close to retirement age should put plans in place to protect their assets and name people they can trust to work on their behalf when they cannot.

These documents usually decrease the need for a court intervention and guardianship.  But, if a guardianship becomes necessary, they often name someone the person trusted prior to their impairments to act for them.

Everyone should have a proper estate plan. If you or someone you love is reaching retirement age and hasn’t made an estate plan, reach out to a professional you trust today!

 

6 Trustee Duties We Can Learn From Lisa Marie Presley’s Suit Against Elvis’s Trustee and Business Manager

By Sarah Stewart Legal Group

In February of this year, Lisa Marie Presley filed suit against Barry Siegel, Elvis Presley’s former business manager. Presley claims that Siegel squandered her $100 million inheritance down to tens of thousands of dollars while managing Elvis Presley’s trust he established for his family. Lisa Marie Presley is the only surviving heir to that trust.

Presley brought her suit in probate court, alleging the probate court system was the proper forum, since Siegel accessed the money as Trustee of the Presley trust.  She alleges Siegel acted in his own best interests in spending the money, contrary to his role and responsibilities as Trustee.

Siegel tried to get the case thrown out.  He argued Presley brought the suit in the wrong court.  But, a Judge ruled this week that the suit could continue.

Trustee Responsiblities

Presley’s case accuses Siegel of ignoring his responsibilities as Trustee to manage the trust.  A Trustee has certain duties and rules he or she must follow when handling trust assets.  If Presley prevails in proving Siegel breached these duties and responsibilities, he could be liable to her for the money he lost.

If you are choosing a Trustee, or have been named a Trustee yourself, you should be aware of the duties Trustees have. Your trust document will control a lot of the responsibilities and duties of the Trustee, but if the document is silent as to some responsibilities, the default duties are below:

(1) Duty of Loyalty

Trustees must be loyal to the beneficiaries of the trust.  Trustees must manage the trust in the best interests of the beneficiaries and not gain anything personally from the business they conduct for the trust.

(2) Duty of Fariness

Unless the Trust makes specific provisions otherwise, the Trustee must be fair and impartial to all beneficiaries and treat them equally.

(3) Duty to Account

Trustees must provide beneficiaries with information about the administration of the trust. This includes information about the income and expenses of the trust and the assets in the trust.

(4) Duty to Protect Trust Assets

Trustees must follow the terms of the trust when managing the assets of the trust.

(5) Duty to Separate

Trust assets must be owned by the trust and kept separate from the Trustee’s personal assets.  Trustees cannot comingle the trust’s assets with their own.

(6) Duty of Care

Trustees cannot invest trust assets in high risk investments.  They must keep the beneficiaries in mind at all times. Trustees must also manage the assets of the trust carefully, paying all bills associated with the trust and taking proper care of income from the trust.

Choosing your own Trustee can be difficult when you consider the many challenges  Trustees face when managing estates. Being a Trustee can be a hard job.  It becomes harder the more assets the Trustee must manage for the trust.

If you have questions about establishing a trust and choosing a Trustee, or acting as a Trustee of an existing trust, reach out to an experienced Estate Planning attorney today!

 

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