Online Services Offer Estate Planning for Digital Assets

Once upon a time, when life was less complicated, the key to a safe deposit box was all loved ones needed to gain access to important documents and accounts following a death. Today, many aspects of our lives — both financial and personal — are lived in places accessible only by password. We have e-mail addresses, Facebook and MySpace profiles, and accounts with PayPal, eBay, and online brokerages and banks. In addition, many people communicate regularly with people they know only through game or social networking sites.

When a person dies, access to these accounts and contacts can be lost or extremely difficult to retrieve. As a result, a small online industry has sprung up to help people pass on the digital keys to their online lives should they die or become disabled. Call it “digital estate planning” or creating a “virtual executor.”

On a typical site, users sign up and pay an annual fee to upload everything from crucial online passwords to gym locker combinations into a private account. Upon the user’s death or disability, the individuals they have designated to receive this private information are notified about how to open the account and access the information. These people may also receive final wishes and a farewell e-mail from the deceased. Some sites even allow users to store estate planning documents like wills and advance directives.

For example, AssetLock (formerly YouDeparted.com) offers a “secure safe deposit box” to hold such things as digital copies of important documents, final messages for family and friends, passwords, hidden accounts, and lock combinations. Once a minimum number (set by the owner) of recipients sign in and confirm the owner’s death, the account is unlocked after a time delay (which also can be set by the owner). Similar services are offered by Deathswitch, LegacyLocker and Slightly Morbid

Other services focus on assisting people in sending important messages to loved ones. GreatGoodbye allows users to store e-mails, photos and videos that will be sent to those closest to them in the event of their confirmed death. Similar services are offered by EternityMessage and Last Post.

You can read more about these services in articles in USA Today, PCWorld and the Everyday Estate Planning Blog.

To discuss Elder Law matters with an attorney, please email the Elder Law Center or call 630-844-0065. The Elder Law Center is located in Aurora, IL, Kane County, in the Chicago Western Suburbs.

Tips for Preventing, Detecting, and Reporting Financial Abuse of the Elderly

As the economy worsens, incidences of elder financial abuse are reportedly on the rise. The elderly are particularly vulnerable to scams or to financial abuse by family members in need of money.

A recent study found that up to one million older Americans may be targeted yearly. Family members and caregivers are the culprits in 55 percent of cases, although financial losses are higher with investment fraud scams.

While it is impossible to guarantee that an elderly loved one is not the victim of financial abuse, there are some steps you can take to reduce the chances. One option is to have more than one family member involved in caring for the loved one. You can also encourage the elder to get involved in community activities to ensure he or she has a wide range of support. Using direct deposit as much as possible is also helpful. And of course you should always screen caregivers carefully and verify references.

Financial abuse can be very difficult to detect. The following are some signs that a loved one may be the victim of this kind of abuse:

• The disappearance of valuable objects
• Withdrawals of large amounts of money, checks made out to cash, or low bank balances
• A new “best friend” and isolation from other friends and family
• Large credit card transactions
• Signatures on checks look different
• A name added to a bank account or newly formed joint accounts
• Indications of fear of caregivers

If you suspect someone of being financially abused, there are several actions you can take:

• Report the crime by calling your local Adult Protective Services and state attorney general’s office. File a police report.
• Explore options at your local probate court if your state has such courts. The court can intervene if someone in the family is misusing a power of attorney or their role as guardian or conservator.
• Contact advocacy organizations. The National Center on Elder Abuse offers guidance on how to investigate and seek justice for elder abuse. State laws vary, but some have elder abuse statutes and may be able to get restitution for breach of fiduciary duties.
• Try to get a temporary restraining order from a court while building your case.

To discuss Elder Law matters with an attorney, please email the Elder Law Center or call 630-844-0065. The Elder Law Center is located in Aurora, IL, Kane County, in the Chicago Western Suburbs.

Mediation Can Facilitate an Amicable Senior Divorce

As people live longer, the divorce rate among seniors is growing. Older couples confront different problems than younger ones do when getting divorced, and a mediator can help sort through these issues and facilitate an amicable settlement.

While divorces among younger couples usually focus on child support and visitation issues, some of the considerations that seniors must take into account when getting divorced include:

• Health Insurance. Is one spouse on the other’s health insurance?
• Retirement benefits. Is one spouse relying on the other’s retirement benefits? Does the beneficiary need to be changed?
• House. Seniors may have more value in their home than younger couples and they are more likely to own more than one home.
• Life Insurance. Is there value in a life insurance policy?

These issues can be complicated to deal with and expensive to litigate. A mediator can help to work them in a cheaper and less contentious way than what would happen in court. Mediators meet with couples and allow them to discuss their needs in a non-confrontational manner. The goal is to produce a settlement that addresses the interests of both spouses.

Mediation works best if it is started right away and not after the couple has already been to court. Going to court can create bad feelings, which may make mediation more difficult. Starting mediation early can also save on attorney’s fees and other costs. Expenses quickly add up when you bring a case in court. Once a mediated agreement is signed, it is binding and needs only to be filed with the court. In addition, divorce can be difficult on children, even if they are adults. Mediation can help keep the divorce civil so children are not forced to take sides.

For an article on divorce mediation by a mediator, click here.

To discuss Elder Law matters with an attorney, please email the Elder Law Center or call 630-844-0065. The Elder Law Center is located in Aurora, IL, Kane County, in the Chicago Western Suburbs.

Estate Taxes: What’s a Taxpayer to Do?

After almost a decade of changes in the federal estate tax code, and many states changing their tax structure in response to the federal changes, clarity appears to be on the horizon. Congress’s recently passed budget resolution would make the current estate tax rules permanent, taxing only estates over $3.5 million in value with the tax rate set at 45 percent. Although no actual legislation has yet been voted on, the nonbinding budget resolution sets guidelines for Congress to follow when writing tax and spending legislation later this year.

In light of this and other changes, taxpayers need to review their estate plans with the following issues in mind:

1. Simplify if possible. The increase in the tax threshold from $600,000 at the beginning of the decade to $3.5 million today, coupled with the drop in most taxpayers’ net worth over the past year, means that many people who had taxable estates no longer do. They may be able to significantly simplify more complicated estate plans that were necessary in the past to eliminate or decrease taxes due at death.
2. But beware state tax laws. In the past, most states had very similar estate tax laws that were tied to the federal laws. As a result of changes in the federal estate tax, though, many states that were tied to the federal system found that their estate tax revenue was dropping to zero. To increase their revenue, these states “decoupled” and established their own estate tax plans. Taxpayers need to learn what the law is in their state and whether their existing plan is up to date. This is especially true for taxpayers who have moved from one state to another since signing estate planning documents.
3. Review life insurance. All consumers should have their life insurance policies reviewed if they have had them for more than a few years. Some universal life policies that were based on projections made when the economy was stronger may be “underwater” and may need more robust premium payments to sustain them over the long term. With other policies where the premiums were based on old tables measuring life expectancy, the consumer may be able to lower her premium payments or increase the death benefit. Finally, consumers should never simply drop policies they no longer need or can afford. They may be giving up a large benefit for their heirs and they may be able to sell the policy for a larger return than the policy’s cash surrender value.
4. Refocus estate planning. The threat of the estate tax had the beneficial effect of prompting many consumers to do estate planning. But it also sometimes diverted them and their advisors from the real purpose of estate planning: to leave the legacy they want. The estate plan people leave can benefit children and grandchildren for decades to come, or it can cause familial strife that tears the family apart. The choice of executor and trustee and the terms under which heirs will receive property are vital issues that deserve your full consideration, regardless of whether taxes are an issue.

For more on estate taxation, click here.

To discuss estate taxation and other Elder Law matters with an attorney, please email the Elder Law Center or call 630-844-0065. The Elder Law Center is located in Aurora, IL, Kane County, in the Chicago Western Suburbs.

Nursing Home Residents May Keep $250 Stimulus Payment

Just about everyone who gets Social Security, Social Security Disability Insurance (SSDI), Supplemental Security Income (SSI), or a Railroad Retirement or Veterans Administration disability pension, will receive a one-time payment from the U.S. government of $250 as part of the American Recovery and Reinvestment Act of 2009 (aka the stimulus bill). The extra payment is scheduled to arrive by the end of May the same way you receive your usual benefit.

Among those receiving the one-time stimulus payment will be long-term care facility residents on Medicaid who draw Social Security benefits. (But note that SSI beneficiaries who live in a nursing home and get a monthly SSI benefit of $30 are not eligible for the payment.)

Medicaid-eligible long-term care facility residents and their families should know that the stimulus payment is not considered income and will not be counted as a resource for 10 months (including the month of receipt) in calculating benefits under Medicaid (or any other federal program or state program with some federal financing). The $250 will also not count as gross income for tax purposes. Recipients can save the payment if they want to, but they should make sure that it will not put their savings over the asset limit for any program benefits they may receive as of February 2010.

Because the $250 payment will not be counted as income, it will not put a Medicaid-eligible resident over the state’s income limit. In addition, a Medicaid nursing facility resident should not see an increase in his or her patient pay for the month the payment is received.

“This money is yours. Your home or facility is not allowed to take it to pay your bill, even if you get help from your state paying for your care,” says the National Council on Aging (NCOA) in an informational handout directed at residents of nursing homes, assisted living facilities and board and care homes. If the nursing home takes your $250, NCOA advises contactingyour state long-term care ombudsman immediately.

For Social Security’s explanation of the payment and Frequently Asked Questions, click here.

For NCOA’s page on the payment, click here.

For NCOA’s handout for long-term care facility residents, click here.

To discuss Elder Law matters with an attorney, please email the Elder Law Center or call 630-844-0065. The Elder Law Center is located in Aurora, IL, Kane County, in the Chicago Western Suburbs.