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Health Care Decisions Day April 16, 2014

A Message from Myra Gerson Gilfix

We at Gilfix & La Poll Associates believe that estate planning includes planning with regard to what will happen to us – not just to our property and other assets – when we're at the end of our lives. We make it part of our service to you to enter into a discussion about what you want and don't want to happen when the end of life is near. This is only the first conversation; we encourage you to share your feelings, values and wishes with your loved ones and medical practitioners. We practice what we preach. If we don't engage in this planning, we’re vulnerable to what can transpire by default – spending our last few days in an ICU, even if that’s at odds with our needs and preferences.

“Dying well” is quite personal. Your conversation(s) with the people you’re closest to lets them know how you want to die and how they, surviving friends and family members, can help carry out your wishes without uncertainty and guilt. People who’d prefer to die at home can do so, and benefit from pain management and comfort over costly and "heroic" measures. Having this conversation before a crisis – or being open to such conversations – gives everyone time to digest, reflect and integrate the information.

We want you to be clear about end of life treatment so that family members and medical providers have the guidance they need to respect your preferences. Loved ones need to talk to one another when circumstances aren’t so charged. Better that these conversations occur around a dining table than around a hospital bed.

Most of you have already signed an Advance Health Care Directive. That is a huge benefit to you and to your loved ones. But be sure to keep the conversations going. The person you appointed to make decisions on your behalf when you are unable to speak for yourself needs to feel comfortable with your wishes and to understand your values. Having the rest of your family "on board" is also important.

Wednesday, April 16, is Health Care Decisions Day. Let this be a reminder to communicate with those you care about so that your life can reflect your values and wishes – even at its end. Then go out and celebrate life!

Myra Gerson Gilfix was the founding Chair of Healthcare Decision-making Special Interest Group (SIG) for the National Academy of Elder Law Attorneys. This SIG dealt with multiple issues regarding health care, including health care advance directives, durable powers of attorney, DNR orders, biomedical ethics, issues relating to pain relief, dying at home, palliative care, and informed consent.



Face Lifts, Dementia, and Elder Financial Abuse

It takes a lot for the California medical board to take any action against a physician. They recently revoked a concord, California plastic surgeon’s license when he went too far.

He performed a face lift – a “lifestyle lift” – on an 82 year old gentleman with dementia and many other chronic illnesses. A two week stay in extensive care was needed to save the patient’s life.

While it would appear to be a unique incident that we brush off as one physician’s excess, it reveals a larger truth.

We must remember that physicians are in business. In this matter, the physician was employed by a health care chain based in Michigan. They no doubt had incentives, quotas, and rewards for financially successful physician staff members.

In fact, this is a matter of financial abuse. Regardless of whether this elderly patient or his surrogate gave permission for the operation, it was unnecessary and costly. Cognition was no doubt limited.

This happens everyday as vendors and business people of every stripe – from gardeners to home care providers to financial advisors – take advantage of elders who are simply unable to make reasoned financial decisions.

While we do not want to admit it, any one of us could fall victim to such intrusions and abuse as we age. None of us are immune.

What can be done?

Signing Advance Directives and Durable Powers of Attorney are essential steps. Sometimes more challenging is the question faced by the agent or surrogate: When is it necessary to step in and take over – or at least influence decisions?

These matters are addressed in well drafted Durable Powers of Attorney, Advance Health Care Directives, and revocable living trusts. The responsibility lies with the named agent or successor trustee to be involved and to know when to step in.

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Handling a Large Inheritance Can Be More Difficult than It May Seem

As they plan their estates, many people consider themselves fortunate if they are able to leave substantial inheritances to their children — and the children will be grateful to receive it. However, large inheritances bring certain responsibilities that can be overwhelming to some heirs, especially because they arrive during a grieving process.

Those who inherit a large sum and have not previously handled such amounts may be unsure of how to manage the money. The details can easily become overwhelming. Many heirs make the mistake of promising gifts or loans to friends and family before they sort out their own financial plans. Others make substantial investments too quickly, without analyzing the positive and negative aspects of different investment strategies. Still others make significant purchases; this is something we refer to as "The Lamborghini Effect."

New heirs must remember to slow down. Before making any investments or promises with new wealth, it is wise to consult with a financial adviser and to begin to learn about money management. Keep in mind that it can take years to adapt to new responsibilities and make long-term decisions about one's investments. Most importantly, protective estate planning documents must be put in place to ensure ongoing management and capture protections.

As solid decisions about investments are made with the help of a financial adviser, an estate planning attorney go further and assist an heir with plans to provide for his or her own legacy.

This topic — the impact of inherited wealth — is discussed in the second edition of Michael Gilfix's book:  Beat Estate Tax Forever (2014).  The book is available from the offices of Gilfix and La Poll.

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Damage Done by Explosive Growth in ADHD Diagnoses

A New York Times article by Alan Schwarz (December 15, 2013) explores the dramatic growth in diagnoses of Attention Deficit Hyperactivity Disorder (ADHD). His timely and revealing article explains the role the pharmaceutical industry has played in this phenomenon over the last twenty years. The pharma industry has been successful.

In 2002, there were well under $2 billion in the sales of prescription stimulants. In 2012, such sales approached $8.5 billion.

The Centers for Disease Control and Prevention reports that 15% of high school students now have this diagnosis and that the number of children on such medications has increased from 600,000 in 1990 to 3.5 million currently.

What is perhaps most striking is the loosened definition of ADHD. A child may be diagnosed if, for example, she “makes careless mistakes” or “often has difficulty waiting his or her turn.”

This means that there is a similarly striking increase in the number of children who are diagnosed with this disability and have a right to an Individualized Educational Plan (IEP).

The cost to school districts is enormous. They must pay for aides, special services, and sometimes private tuition in a specialized school if the mainstream educational system is not able to handle a severely disabled child. As a result, there are fewer resources for those who are most severely disabled.

If given a choice, every parent would choose a course of action that will allow a child to perform brilliantly.

One doctor who has published prolifically on this point, told Reuters Health: “If a child is brilliant but is doing just okay in school, that child may need treatment, which would result in their performing brilliantly at school.” The New York Times article quotes Dr. Joseph Biederman, a “prominent child psychiatrist at Harvard University in Massachusetts General Hospital.” Dr. Biederman’s research has been substantially funded by the pharmaceutical industry.

Today one in seven children is diagnosed with ADHD by the age of 18. Because the medical literature and pharmaceutical information indicates that one never graduates from this condition, it is a life long diagnosis.

The article points out that the drug industry is now targeting adults.

In 2012, the article points out that almost sixteen million prescriptions for ADHD medication were written for individuals between ages 20 and 39. This is triple the amount from just five years before.

Impact on Public Benefits, Social Services

The excellent and very lengthy New York Times article did not identify or explore the impact on our public benefits and social services systems. With an explosive growth in diagnoses, there has not been a comparable growth in funding for needed support services. The impact on income programs – SSDI and SSI – has not been explored. Yet, the impact is profound. Millions of adults are now receiving or seeking “disability” status so that they can receive government income benefits and Medicaid and/or Medicare as their health insurance programs. This places enormous fiscal strains on such income and health programs. Again, those who are severely and, some would say, legitimately disabled are now sharing limited resources with a dramatically expanded pool of public benefits recipients. The bottom line is that they receive fewer services and, inevitably, lower quality services.

To understand how loose, all inclusive, and arguably inappropriate this is, look at the New York Times article and take the online test that asks “whether you could have ADHD, too.” They reprint a web page of drug marketer Shire and its quiz that, in effect, encourages adults to believe they have or might have ADHD. The New York Times conducted a poll of 1,106 Americans. Almost half had a result of “ADHD possible” or “ADHD may be likely.”

The quiz asks, for example, “How often to you fidget or squirm your hands or feet while you have to sit down for a long time?” It asks, “When you have a task that requires a lot of thought, how often do avoid or delay getting started?” The other four questions identify behaviors that, arguably, the vast majority of us have on a daily basis.

I took the test. I scored 14, which means “ADHD may be likely.” I wonder what would have happened if, when I was in high school, I was given this test. Would I have been medicated? Would I have been as successful?

There is no doubt that millions of Americans have conditions that can be helpfully addressed by sport, counseling, and sometimes pharmaceutical assistance. The inescapable conclusion of the article – a conclusion reinforced by my experience – is that the pharmaceutical industry has been far too successful in generating millions of additional ADHD diagnoses. All of us are harmed as a result.

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Does Your Living Trust Need Fixing?

You may have a living trust and think that you are done with your estate planning. That may or may not be the case. Trusts can take many forms. They could be complete or incomplete, appropriate or inappropriate. Here are some things to think about.

At the most basic level, is it up-to-date? Are there births or deaths in the family that need to be acknowledged? Have you named the correct person as your trustee? Are you still comfortable with those who are to inherit your estate?

Is your trust far too simple or “vanilla?” I have never met a family that is plain vanilla. Everyone has issues and special circumstances.

If your trust planning does not do all of the following, it should be reviewed and upgraded:

  • Does your plan protect inherited assets if your children ever have a divorce?
  • Does your trust maximize asset and litigation protection on behalf of your children?
  • Does your trust avoid estate tax exposure for your children, your grandchildren, and perhaps more?
  • Did you set up a proper protective trust for a child who is a spendthrift or is incredibly naive?
  • Does a child or grandchildren have “special needs?” If so, did you establish a Special Needs Trust?
  • Do you address the possible need for long-term care?
  • Are asset protection planning options built into your plan?

You do not need to have a fortune to benefit from an appropriate, sophisticated, and comprehensive trust and estate plan. Put differently, an appropriately drafted trust can protect assets you built up over a lifetime and it can protect assets you leave your children and not allow them to be exposed or perhaps squandered.

Your trust and estate plan should be reviewed every couple of years. It must be reviewed by an attorney who truly understands trust, tax, and asset protection planning.

Above all, do not use a “one size fits all” trust service, regardless of whether it is offered by an attorney or online software.

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Hiring Caregivers – Guidelines and Caveats

If you hire someone, you are responsible for many payroll, tax, and labor law requirements. Take care of these issues at the time you hire an individual. Do not wait until the last minute when you may expect your accountant to magically and efficiently prepare tax returns and other documentation.

  • 1. Be sure that the worker is properly classified. See IRS guidelines (opens new window)
  • 2. Obtain a Workers’ Compensation insurance policy. Your homeowners’ insurance agent will likely be able to help you with this. This should cover medical expenses and lost wages if a problem arises. It protects you and it protects the caregiver.
  • 3. Be very careful to keep these tax records separate. Do not intermingle them with family records or records maintained for another business you may have.
  • 4. Carefully budget to pay for employer taxes and to take advantage of tax breaks. See the IRS Employer Guide (opens new window) and the 2014 California Employer's Guide (PDF).
  • 5. This person will almost certainly be your employee, not an independent contractor.
  • 6. Most household employees are “non-exempt.” This means that they have a right to overtime pay when they work over 40 hours in a seven day week. There may be exceptions for live-in workers or companion care.

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Gifts to Grandchildren: UGMA and UTMA

Two attractive financial options for some of our clients exploring estate planning options for their grandchildren can be found with the Gifts to Minors Act (UGMA) and the Uniform Transfers to Minors Act. These are two college savings accounts which allow a grandparent to gift money to an account set up by the parent of a minor child as a custodial account. The account, in the name of the child, allows gifting without tax liability; such gifts are irrevocable, but you can keep control of the funds in terms of where it will be invested.

The Gifts to Minors Act is typically limited to investments towards certificates of deposit, life insurance and cash, while the Uniform Transfers to Minors Act allows you to invest in stocks, bonds, real estate and mutual finds. Both types of accounts should be managed by someone other than a parent; a parent would incur taxes on the account income.

The potential downside: When the child reaches the age of majority (18 in California), the child owns the account funds. This could jeopardize the child's eligibility for college financial aid, and may not be the age at which you want them to have access to the funds. An 18 year old is not likely to be the wisest money manager, as well.

If you are considering establishing a fund, or would like to explore your estate options, please speak with the estate planning attorneys at Gilfix And La Poll.

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Estate and Financial Planning Basics

We tell clients that it is never too early to begin estate planning. You've worked hard to build your estate, accumulating assets and some sense of financial stability. Planning now for the future can help retain your home and your savings in the event of a catastrophic illness or sudden death. Preplanning also will allow your loved ones to retain the assets to bequeath them when you are gone.

Estate planning is more complicated that leaving a will. You may wish to develop a Advance Health Care Directive, designating someone to make medical choices for you if you become unable to make them for yourself. You may also wish to ensure your loved ones do not have to pay exorbitant estate taxes, and work to ensure that you are medically and financially secure in your later years.

You can work with an experienced estate planning attorney to determine what financial assistance you may need under your health insurance plan, disability insurance plan and government benefits, should you need them. You also want to avoid property tax increases when assets are passed along to your children.

Michael Gilfix is an estate planning attorney in Palo Alto California and is one of the pioneers of elder law. To learn more, visit Gilfix & La Poll Associates LLP at

How to Protect Your House Before and After Moving to an Assisted Living Facility or Nursing Home

Many people worry that they will have to lose their home and other assets to qualify for Medicaid, known as Medi-Cal in California.

It is not standard procedure for someone to be required to sell their residence in order to qualify for Medi-Cal coverage when they need nursing home care, because it is an exempt asset, its value is not counted in determining eligibility, but it's possible that the state will file a claim against that individual's home after they die.

If an individual uses Medi-Cal to finance nursing home care, the state will likely require that the individual's estate pay back what it can to cover these costs. "Estate recovery" happens when Medi-Cal goes after whatever assets remain in the person’s estate. In most cases that means a personal residence. That is why individuals who are considering entering a nursing home are strongly advised to work with an elder law or estate planning attorney before making any decisions, in order to protect their home and assets. The residence can be protected, particularly in California.

The federal Deficit Reduction Act of 2005 puts a limit on the value of a residence for a single person if it is to be considered exempt. Exempt status can be lost if the equity of the home is less than $500,000 (or $750,000, depending on the state). Regardless of the state, the resident is allowed to hold onto the home without an equity limit if their spouse or some other dependent relative resides there. California is yet to implement the DRA, so there is no limitation on the value of an exempt residence in California.

Some people choose to transfer their home to an adult child or other family member, in an attempt to protect it from Medicaid. Many states impose a Medicaid penalty period; they become ineligible for Medicaid for a set period of time. However, there are times when transferring a home is legal. Again, this is when consulting an elder law or estate attorney is in everyone's best interest. A home may be transferred without a transfer penalty to a spouse or to a child under the age of 21 or an adult child who has a disability, or to a caretaking child, or to a sibling who has resided in the home for a set amount of time prior to the individual's move to a nursing home or other institution and who hold s equity in the home. A home may also be transferred into a trust for the sole benefit of a disabled individual who is below the age 65. Each of these situations has restrictions and caveats, and should be run past an attorney.

Even more can be done in California. A residence can be transferred to any one or to any trust without a penalty period for Medi-Cal eligibility. This is largely because California has implemented neither the DRA nor other relevant provisions of federal Medicaid law.

Simply stated, the residence can be completely protected in California with property tax sensitive planning.

For information about how to protect your estate and assets, contact an elder law or estate planning attorney at Gilfix & La Poll.

Michael Gilfix is an estate planning attorney in Palo Alto California and is one of the pioneers of elder law. To learn more, visit Gilfix & La Poll Associates LLP at

Trusts Success Stories: Real World Examples

There are three major benefits to a Family Protection Trust™: (1) protection of inherited assets if a child gets a divorce, (2) protection for inherited assets if the child is sued, and (3) protection from estate taxes at the time of a child’s death.

Two recent, real life examples illustrate how appropriate this trust can be.

Mrs. D and her daughter, Andrea: – protection from divorce: Mrs. D is 87 years of age with failing health. Her estate is valued at $900,000 and she has one daughter, Andrea. Andrea is in her second marriage. That marriage is not going well. Mrs. D is very concerned that her daughter, a warm, trusting, ingenuous individual, will again be divorced. Mrs. D worries deeply about Andrea’s future and security.

Before meeting with us, Mrs. D’s trust simply provided for the distribution of her estate to her daughter. With our assistance, Andrea’s inheritance will instead go into an irrevocable Family Protection Trust©

If Andrea is divorced after her mother’s death – and after Mrs. D’s estate goes into the FPT for Andrea’s benefit – 100% of the assets are safe and secure for Andrea’s well being.

Mr. T and his son, John: John is 44 years of age, well educated, single, gregarious, and a serial entrepreneur. He has made large amounts of money and lost large amounts of money. Mr. T will leave half of his $1 million estate to John, but is deeply worried that John, who has been sued twice by disgruntled partners, will again be sued and lose his inheritance.

Mr. T is placing John’s share of the inheritance in a Family Protection Trust©. Mr. T is visibly relieved and gratified to have found an approach that will let him irrevocably protect inherited assets from litigation and for his son.

**Remember, half of marriages end in divorce, and litigation in California is rampant. The FPT enables you to give your children the gift of financial security. It protects them from two visible and worrisome threats: divorce and litigation. We understand that you have questions about how the FPT would be structured and how it would operate.