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Mark Gilfix Discusses Estate Planning With the Star of the Investigation Discovery Show, “Reasonable Doubt”, Melissa Lewkowicz

Mark Gilfix recently sat down in the offices of criminal defense attorney, and cable TV star, Melissa Lewkowicz, to discuss the 3 key estate planning documents that every American needs. Watch the Facebook video below.

You can watch Melissa Lewkowicz in Reasonable Doubt on Investigation Discovery or see clips at https://www.investigationdiscovery.com/tv-shows/reasonable-doubt/.

Why a durable power of attorney is a valuable estate planning tool

A Durable Power of Attorney (DPOA) allows an individual to give a designated person — known as an “attorney in fact” — authority to sign documents and act on their behalf. The legal document is particularly beneficial for individuals who are worried about mental or physical incapacity in the future. For example, an elderly person may be aware of their gradual memory loss, which may soon render them incapable of making important decisions.

Some people might view the idea of preparing and signing a DPA as a sign of losing their independence. However, it allows individuals to specify how they want things handled while they are still alive but unable to manage their affairs. Without a DPA in place, family and friends will not be able to make any important financial decisions in the event of unforeseen incapacity.

The attorney in fact has a significant amount of control over an incapacitated individual’s financial and legal affairs. They have the power to make decisions about assets, enter into contracts, manage businesses, and handle tax and trust matters. Therefore, it is critical to choose a trusted individual such as a family member or friend and to fully discuss the scope of responsibility.

The DPA can either be effective immediately once signed, or when and if a person becomes incapacitated. The document is legally valid for a person’s entire lifetime unless he or she revises or revokes it at any time while being of sound mind.

An experienced estate planning attorney can provide guidance on selecting the best approach to protecting one’s future interests. For example, in some cases a court-appointed conservatorship may be necessary when the individual lacks the capacity to sign a DPA or does not have anyone to name as an attorney in fact.

“We all want to avoid court involvement,” warns nationally known attorney Mark Gilfix. “Signing a well-drafted Durable Power of Attorney is therefore an essential part of proactive planning.”

California couple’s eviction highlights dangers of elderly financial abuse

The elderly can be vulnerable to various forms of elder abuse, one of which is financial exploitation. Financial exploitation involves unauthorized use of an elderly person’s finances or property, either by a family member, caregiver or an unknown scammer.

The media recently reported the case of an elderly California couple who faced eviction from their home of 56 years after falling victim to a scam devised by their grandson. Chad Moore defrauded his grandparents Hank and Helen Kawecki out of their deed, defaulted on nearly $500,000 in loans and lost their Thousand Oaks house to foreclosure.

Moore convinced the couple he would provide them with lifelong financial support if they transferred the house over to him. After taking out a loan, he initially kept his promise to give his grandparents monthly payments. However, he stopped the payments after a few months and allegedly spent all the money in Las Vegas.

Instead, Moore put the house up for sale. He also lured his grandparents out of their home while realtors hosted open house events for potential clients. The couple filed a lawsuit against Moore with their neighbor’s help. Police are investigating the case.

The National Committee for the Prevention of Elder Abuse has identified a number of behaviors commonly associated with financial fraud. These include: taking money or property, forging the elderly person’s signature, and failing to follow through on promises for lifelong care in exchange for money or property. An older person may also be coerced or deceived into signing a will, power of attorney or deed.

Creating an estate plan can help protect the elderly from financial exploitation. A living trust, Durable Power of Attorney and Advance Directive are all excellent safeguards. Each document names a trusted individual who can manage assets and health care according to specified wishes in the event of incapacity.

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Three major life events that require an estate plan review

Life is ever-changing, and so are an individual’s estate planning needs. A key feature of estate plans is that they should be flexible enough to adapt to circumstances at various stages throughout one’s lifetime. There are a number of major life events that can help shape the scope of an estate plan. Any major life changes will likely require wills and related planning documents to be reevaluated and updated.

A change in marital status — whether it involves getting married, divorcing or remarrying — is likely to have significant impact on asset management, advance directives, powers of attorney and other estate planning documents. A new spouse does not automatically become the chief heir. Additionally, some couples may choose to draft a prenuptial agreement to manage inheritance rights to each other’s estates. For example, a spouse may choose to protect their biological children’s inheritance in the event their partner remarries.

The arrival of children is a significant life-changing event. Although it may be unpleasant to think about death or incapacity, parents must address the question of how their children will be cared for in case something happens to either one or both of them. Drafting a will provides the opportunity to name a guardian to care for the child. Parents may also consider establishing a trust in order to manage assets.

Moving to a different state also entails estate planning revisions. Each state has its own estate planning and tax laws. Therefore, related documents should be reviewed accordingly. For example, community property states and common law states have different rules on spousal ownership. An existing estate plan should match current requirements and anticipate future needs.

While these are just a few major life events to consider, there are countless others that may prompt an individual to periodically review their estate plan to ensure it meets their objectives.

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Estate planning implications of winning the lottery

Although winning the lottery can be exciting, it carries enormous estate and gift tax implications. Finances can dwindle away in no time if they are not managed properly.

Lottery winners have the option of taking the prize as a lump sum or an annuity that is divided into 30 annual payments. California exempts lottery winnings from income tax. However, a chunk of winnings are withheld for federal taxes. The annuity payments are also subject to the same federal tax albeit spread over each installment.

Establishing a trust can help lottery winners maintain a degree of anonymity and provide a tool for managing assets and finances. Trusts can also allow the future transfer of wealth to children and other heirs with minimal estate tax exposure. If a prize is assigned to a qualifying revocable living trust, the lottery will make installment payments to the trust.

Lottery winnings present a number of estate planning challenges. If a person with special needs wins the lottery, the winnings are likely to affect eligibility for government benefits such as Medicaid.

If the prize is received in an annuity towards the end of a winner’s expected lifetime, they could die before receiving all the installments. The balance of future payments then become part of the estate, like other assets. In such cases, the estate’s representatives will begin the process of transferring payments to heirs. The process is simpler if the winner has designated beneficiaries.

One of the first things a lottery winner should do is consult a lawyer to prevent making major mistakes. The cost of not taking the necessary estate planning measures can be devastating.

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Why young adults should consider estate planning

Under California law, once a child turns 18 years of age they are viewed as an adult. Entering adulthood involves taking steps to prepare for the unexpected, whether it is a sudden illness or a serious accident. No one likes to think of themselves in such terrible circumstances in which they are unable to make their own informed decisions. However, preparing for the future can help provide peace of mind.

Few young adults are aware of the need for at least a basic estate plan. According to a 2015 study by Fidelity Investments, 41 percent of millennials have not discussed wills and estate planning with their parents. Parents tend to assume they are entitled to make legal decisions for their college-aged children. However, once a person turns 18, they have “the legal right to privacy and to govern their own lives” as an adult.

Key estate planning documents a young adult should have are a will, power of attorney, advanced health care directive and HIPAA release. A HIPAA — or Health Insurance Portability and Accountability Act — release gives doctors permission to share medical information with those named on the form in case of an emergency.

While it is not necessary for every 18-year-old to have a will, they should appoint a trusted friend or family member to serve as a health care proxy. This person has the authority to make medical decisions on the young adult’s behalf in the event they are unable to.

Young adults would also benefit from a general power of attorney. In many cases parents are named appointees. However, without the proper documents, they would be unable to access their child’s financial accounts. Not having such estate planning documents could create serious complications in case of an accident or other unforeseen circumstances.

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Robin Williams’ family battles over estate

Robin Williams’ widow Susan Williams settled out of court a lawsuit over the late actor’s estate last year. The highly publicized dispute with his children revolved around an estate worth an estimated $100 million.

Disagreements over trusts and wills between family members tend to be fraught with strong emotions and can quickly escalate. Although a loved one may have left instructions regarding the division of assets upon their death, beneficiaries may question their legitimacy and accuracy. Upon a family member’s death, challenges to a trust or will can be asserted by any interested party — whether it is a spouse, children or other heirs and possible claimants — when there is a perceived unequal division of assets. In such circumstances, a resolution may have to be sought in court.

In this case, much of the dispute concerned what items constituted celebrity memorabilia and what counted as personal keepsakes. Susan Williams was unhappy with trustees claiming many possessions as memorabilia for the estate. She also said she was not receiving enough money from the actor’s estate to maintain their home in Tiburon, California.

Robin Williams’ trust had established guidelines about how his assets were to be distributed among his family members. The actor left the majority of his estate to his three adult children from his first two wives. The children’s attorney said they had been “following both the letter and the spirit of Robin’s instructions” and could not understand why Susan Williams “acted against his wishes by challenging the plans he so carefully made for his estate.”

In the settlement, Susan Williams received just a fraction of the overall estate — enough for the lifetime upkeep of the home. She was also able to keep some sentimental objects such as wedding gifts and clothing. The children received the bulk of the items, including bikes, watches and their father’s Academy Awards statue.

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Celebrity divorce highlights importance of updating advance directives

No one likes to think about themselves in a life-threatening medical situation. However, it is essential to establish what your wishes would be in case of an emergency. Living wills and other advance directives can provide you and your family with the peace of mind that important end-of-life and medical decisions will be made by someone you trust.

Last year, media outlets reported that former NBA player Lamar Odom was hospitalized in a Nevada hospital in a comatose condition. What surprised many was that his ex-wife Khloe Kardashian was responsible for making medical decisions about his treatment. Although the couple signed divorce papers several months before the incident, their divorce was not yet finalized due to the backlog of paperwork in California courts.

In the absence of a living will or other legal documents specifying Odom’s wishes in such a situation, as his legal spouse Kardashian found herself in the awkward position of having to make medical decisions on his behalf. Some couples end their marriages even though they still care about each other very much. As a result, they would not hesitate to entrust medical and end-of-life decisions to their former spouse. However, more commonly an ex-spouse may not be the person of choice for such important decision-making.

In preparation for any potential emergency that may arise, one should remember to update these planning documents as soon as possible whenever a major life change occurs. Consult with an experienced attorney to draft appropriate medical directives, powers of attorney, living wills and health-care proxies. Medical directives will specify a person of your choice to assume responsibility for medical decisions on your behalf should the need arise.

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Michael Gilfix, National Experts Form Trump Policy Analysis Group

THE TRUMP POLICY ANALYSIS GROUP (TPAG) – FOCUSING ON OLDER AMERICANS AND THOSE WITH SPECIAL NEEDS

The Trump Policy Analysis Group (TPAG)1 has convened to consider probable changes in law that will affect older Americans and those with special needs. Initial TPAG focus is on entitlements, public benefits, tax, special needs planning, and veterans’ benefits.

DOWNLOAD THIS ARTICLE AS A PDF

We used a three-fold analysis:

  • Stated policy (declared Trump policies and those of the Republican Congressional Leadership);
  • “Realpolitik” (circumstances and factors rather than explicit ideology, often considered “pragmatism”); and
  • Educated speculation (based largely on experience and knowledge of TPAG members who have been leaders in these fields for decades).

STATEMENT OF PURPOSE

On January 20, 2017 both the White House and both houses of Congress will be in Republican hands, not seen since 2006. As president Obama said shortly after being elected in 2008, elections have consequences. We acknowledge this reality.

During the long and divisive campaign, differences in priorities and agendas between the major parties, particularly in social and health policy, were greater than in any recent election. In our opinion, the uncertainty and challenges now facing seniors, disabled, and medically needy Americans are unequaled and unsettling.

Our goals are twofold. First, to objectively analyze real and probable changes in government policies that directly impact older Americans and Americans with disabilities. Second, to identify planning and other steps these populations should take to preserve or, ideally, to increase quality of health care and quality of life.

SOCIAL SECURITY AND MEDICARE

President-elect Trump has consistently stated that the Social Security and Medicare programs are to remain intact and (presumably) solvent. How solvency would be achieved in light of impending bankruptcy of both programs (Medicare long before Social Security) remains to be seen.  Government and non-government economists only disagree about when insolvency will occur, not if it will occur. As one of their proposals to counter insolvency, Trump and Congressman Ryan (Speaker of the House) are promoting Social Security and Medicare privatization.

The Affordable Care Act took some steps designed to extend the solvency of Medicare. Trump, as President-elect, announced that he would keep parts of the Affordable Care Act but did not explain how he would pay for it. With so many members of younger generations convinced that Social Security will not be there for them, preservation of the fiscal health of both Social Security and Medicare is one of the main challenges facing this Administration.

MEDICAID

1. Rising Fears of Significant Restrictions

A significant majority of Americans are seriously worried about the cost of health care and long term care, in particular. Restrictions on benefits and legislative changes that restrict or limit access to government programs such as Medicaid can only heighten such fears.

2. The Trump and Ryan Block Grant Proposal

Currently, Medicaid is administered at the federal level by the Center for Medicare and Medicaid Services (CMS). While each state has its own state Medicaid Plan, there are mandates and there are constraints.

Block grants, which were first proposed by then Speaker of the House Newt Gingrich in 1995, presumably mean that each state would receive a certain number of Medicaid dollars. Each state would then decide how to utilize and spend those dollars.  In some states, little would change. In other states, changes could be profound. For individuals who may rely on Medicaid, this is a time of uncertainty and concern.  This means, in turn, that planning needs will vary from state to state.

TPAG is aware of some details and elements of proposed plans. Some are designed to restrict protective planning – to make it much more difficult for older Americans to protect their homes and other assets while qualifying for Medicaid, particularly in a long-term care setting. Planning challenges could therefore become dramatically more difficult. Increasingly, older Americans and their families will need up-to-date information and advice to understand and qualify for needed services. This will be particularly true for the majority of older Americans who will need home care services and who need to reside in skilled nursing facilities.

Americans with special needs and their families face as many worries, including concerns about possible reductions in protections and services.

TPAG believes that planning will increasingly involve multiple generations to enhance quality of life, quality of care, and asset protection.

3. Protection of Family Assets: Focus on Protecting the Family Residence

The vast majority of older homeowners will view protection of the residence as a core value, a legacy for future generations. Appropriate legislation must be preserved. Appropriate planning steps must be taken, particularly in light of possible changes in Medicaid, the only federal program that can subsidize or pay for the cost of skilled nursing care. No specific proposals to threaten existing tax and Medicaid protections for the residents have yet emerged.

TAX PROPOSALS – GIFT, ESTATE, INCOME, AND CAPITAL GAINS

1. Gift and Estate Tax

President-elect Trump calls for the elimination of gift and estate tax, perhaps replaced by a “mark to market” tax of capital gains at death. Perhaps a compromise package will not eliminate the tax but will significantly increase the level of estate and gift tax protection. Note that the current level of federal protection is historically high at $5,450,000 per person. If any estate tax remains, it would likely be reduced from the current 40% tax rate.

2. Capital Gains Tax

Different proposals have been proffered by President-Elect Trump, Speaker Ryan and others regarding limitations on “stepped up basis” upon an individual’s passing. For some families, this could result in net tax increases.

For high-end practitioners, those who focus on avoiding estate tax, the challenges are obvious. The number of individuals requiring such sophisticated planning will, at best, dramatically diminish. For most older Americans, the avoidance of estate taxes will have little or no impact from a tax planning perspective and the focus will shift to income taxation. Further, the impacts on entitlements and family financial security could be profound.

3. Corporate and Individual Income Tax

Corporate and individual tax rates for higher earners, in particular, would be substantially reduced. The long-term impact – beyond the obvious increase in after tax income, is impossible to predict. As with most modeling and forecasting, projected outcomes depend on presumptions.

AMERICANS WITH SPECIAL NEEDS

No proposals have yet been made that would directly affect services for special needs children and adults.  Medicaid block grants could adversely affect special needs residents of states that decide – at the state level – to reallocate or otherwise restrict funding for both governmental and non-governmental providers. The reach of Medicaid block grants could significantly reduce or even eliminate the benefit of special needs trusts which maximize assets for the person with a disability.

Additionally, it is possible that support for expanded charter schools and school choice could expand options. This has become more probable than just possible what with Trump’s appointment of Betsy DeVos, as Secretary of Education, an outspoken advocate for charter schools and the dismantling of publicly funded schools. Many special education advocates fear these expanded options could come at a price of diminishing procedural and substantive protections of the Individual with Disabilities Education Act (IDEA), and even reduce or remove the funding formula that follows eligible individual students with special needs under IDEA).

VETERANS’ BENEFITS

President-elect Trump is presumably supportive of maintaining and perhaps expanding services for veterans. At the same time, proposals that predate the election have been introduced that could restrict access to needed programs, such as Aid and Attendance, which provides financial assistance for veterans and spouses of veterans who need higher levels of home care assistance. While new legislative and perhaps regulatory restrictions could make it more difficult for veterans and their spouses to obtain benefits, proactive planning will be an inevitable need across the nation.

LGBTQ PROTECTIONS

President-elect Trump has said that he accepts the United States Supreme Court decision effectively legalizing gay marriage. (His Vice President, Mike Pence, may have a different viewpoint.) The Supreme Court ruled that the U.S. Constitution guarantees the right for same-sex couples to marry in all 50 states creating uniformity across the nation in recognition of the rights of same-sex couples.

IN TIMES OF UNCERTAINTY, FAMILIES WILL PROTECT THEMSELVES

A core conclusion of TPAG is that families will become more insular, more protective of themselves, their assets, and future generations. They will be more focused on what they can control and truly value – their families – and less on public policies that are difficult to influence. This has myriad implications for attorneys, financial planners, and other professionals who work directly with America’s elders, those with special needs and their families. A premium will be placed on advance planning. Inevitably, this will increase involvement of younger generations.  The demand for multi-generational planning – planning that involves and relies on involvement of children and grandchildren – will expand dramatically.

WHAT SHOULD YOU DO?

TPAG thoroughly understands that most Americans, and older Americans in particular, are fearful at this point in time. Above all, do not panic. The stock market panicked at the end of Election Day but soon resolved and moved higher than ever. TPAG believes that the stock market’s response to the election is a lesson for everyone: Learn, watch, be advised, and protect yourself and your family. The changes in store will take time.

TPAG’s goal and its purpose is to turn fear into hope. This is what good planning does.

TPAG will continue to be a source of balanced, objective information about developments at the national level. TPAG is working hard to track initiatives by President-elect Trump, Republicans and responsive proposals of Democrats.

TPAG will work hard to be “one step ahead.”

**Members of the TPAG group include Michael Gilfix of Palo Alto, California, Vincent J. Russo of Garden City, New York, Harry S. Margolis of Boston, Massachusetts, Frank Johns of Greensboro, North Carolina, and Tim Nay of Portland, Oregon.

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National Gilfix & La Poll Article on Multigeneration Strategies and “New Economy” Services

At Gilfix & La Poll, we take pride in innovating new ways to serve our estate planning clients. We recently published an article in Estate Planning magazine covering two ways in which we build beneficial relationships with our clients that address modern, timely issues.

The first is helping clients take advantage of “new economy” services. These are online-based businesses that are exploding in popularity. Many are very well suited to seniors and retirees, but awareness of these services among these groups remains low.

We divide new economy businesses into two categories: “getting help” and “providing help.” The first group comprises businesses that help seniors live productive, fulfilling lives even as their mobility may be decreasing. These include home health and safety monitoring services, transportation services and grocery delivery. The second group allows retirees to earn supplemental income by providing services such as rooms for rent, dog-sitting and transportation using their own vehicles.

We also cover in our article the importance of multigenerational estate planning. Some firms, in an effort to stay competitive, resort to churning out as many wills and trusts as possible, as quickly as possible. They may pay little regard to either the big picture that includes older generations’ estate plans, or the critical details that can make or break a plan.

We take the opposite approach. When possible, we consider a client’s estate plan and that of their living parents together as one comprehensive, carefully crafted strategy. This brings families together and allows us to avoid surprises down the road, giving clients greater peace of mind and allowing them to better care for their parents and/or their heirs.

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