Tag Archive | "Law Tips"

Law Tips: Preventing Financial Exploitation of Your Elderly and Disabled Clients

Welcome back. Thanks to the generous contributions of Jim Voelz, Voelz Law Firm, Columbus, Indiana, Law Tips is looking into the “hidden epidemic” of financial exploitation of the elderly and disabled. This week Jim’s counsel delves into advising clients on gifting of assets and limiting their financial power of attorney. He will also recommend protective steps clients can take to avoid being financially exploited.      

To Gift Or Not To Gift:

Elder law attorneys are frequently asked to give advice about whether the client’s home and other assets should be gifted. Many of our clients and their families know about the high costs of care in the home, an assisted living facility, and a nursing home. They have heard about other folks who have lost their homes, farms, and other assets to pay for the costs of their care, and they do not want that to happen to them. So how are we going to help these clients, and what are we going to advise them to do about their concerns?

I want to focus on the situation where you are asked to give your client advice about gifting when your client is elderly with no immediate health issues that would require care at home, in an assisted living facility, or in a nursing home at any time in the foreseeable future. The issue is whether the client should gift their home and/or other substantial assets now to protect them.

One  option is to advise the client to gift the home and/or other assets now in the hope of getting past the five year lookback from the date of a future Medicaid application that requires the reporting of uncompensated transfers that give rise to a period of ineligibility to receive Medicaid benefits (“transfer penalty”). An argument for this could be that gifts that are made more than five years prior to the filing of a Medicaid application are protected and have no effect on Medicaid eligibility.

What advice should you give?

Your advice should protect the best interests of your client. I suggest that you review in detail all of the potential risks and disadvantages of gifting with your client.

(Law Tips note: The Voelz Law Firm outlines issues for clients in a firm letter describing the potential problems that can arise as a result of gifting assets, such as estate planning problems, loss of control of property and tax consequences. The letter is shared during Jim’s CLE presentation.)

We keep copies of this letter in our conference rooms, because we use these letters often. We give a copy to our client and a copy to each of the family members or other persons who are attending the conference with the client, and we keep a dated copy in our client’s file as documentation of our advice.

After this review, in almost all of our cases, our client decides not to make any gifts. However, if a client still wants to make a gift of their home or other assets, then we usually ask our client to think about what we discussed and schedule a second appointment to have further discussions. If, at that second appointment, the client still wants to gift, then we meet with the client alone, if other family members or others attend this conference, to make sure this is really what our client wants to do without being influenced by other persons who are attending the conference.

We always advise our clients to have a Financial Power of Attorney in place, and we have discussions with our clients about whether they should include certain provisions in their Financial Power of Attorney that could lead toward protecting some of their property if it would make sense to qualify them for Medicaid or other governmental benefits, such as the VA Aid and Attendance Pension, in the future. (See Indiana Code 35-46-1-12.)

If an attorney prepares a Financial Power of Attorney that gives the attorney-in-fact unlimited and unrestricted authority to gift or loan in unlimited amounts, then these provisions can subject your client to the risk of being financially exploited by the attorney-in-fact.

I would suggest the following to reduce or eliminate this risk:

1. Prepare power of attorney provisions that require other persons to agree before gifting or loaning can be done and/or that require the prior approval of an attorney in conjunction with a plan to qualify the client for Medicaid or other governmental benefits.

2. Meet with the client and with the attorney-in-fact to explain the power of attorney and its provisions. This will serve to educate the attorney-in-fact and will also provide an opportunity for you to introduce yourself to the attorney-in-fact, as your client’s attorney, so that you will be consulted in the future.

3. Provide the attorney-in-fact with instructions on how to properly use the power of attorney.

Advice For Your Clients On How To Avoid Being Financially Exploited

An elder law attorney should also be able to advise a client about how to avoid being financially exploited. Here are some suggestions that could be made to a client:

– You should establish your safety net of trustworthy and reliable persons. Sign a Power of Attorney that appoints a person who is 100%trustworthy and who will always act in your best interests. Do this before you have a serious health issue or impairment. If you do not have such a person, then appoint a bank or credit union who has a trust department who will agree to be appointed to handle your financial affairs, if necessary.

– You should establish relationships with experienced professionals who have a good reputation such as an accountant, financial advisor, and attorney and consult with your appropriate advisors before you engage in any questionable transaction.

– Sign-up for the “do not call” list to help stop telephone solicitations at www.in.gov/attorneygeneral (Register For Do Not Call). This does not eliminate all telemarketing calls so do not talk to unknown persons who are trying to sell or give something to you.

– Do not keep a large balance of money in your checking account, arrange for direct deposit of your income, and set-up automatic bill pay for your utility bills and other regular expenses.

– Do not hire caregivers or others who would work in your home without a background check.

– Do not leave your mail in an unsecured mailbox and shred documents with personal identifying information.

– Do not give any stranger or new acquaintance your birth date, Social Security number, or any information regarding your accounts or financial information.

– If you lack mental capacity or become impaired, then allow someone who is 100% trustworthy and reliable and who will always act in your best interests to take over management of your financial affairs.

– Report any questionable request or solicitation to your trusted relative or person.

– Report any suspected or attempted financial exploitation to law enforcement and/or to the Adult Protective Services officer in your area.

 

Thanks again to Jim Voelz for sharing his expertise in the prevention of financial exploitation of elderly and disabled clients.  If you missed his first Law Tips column, you will find it below.  For a comprehensive update in elder law from an outstanding panel, check out the 2014 Elder Law Institute on October 9-10, 2014.

_________________________________________________________________________________

About our Law Tips faculty participant:
James K. Voelz, Voelz Law, LLC, Columbus, Indiana. Mr. Voelz ‘s law practice primarily involves estate and disability planning, estate and trust settlement, elder law, and Medicaid qualification services. Jim is a member of Hoosier Hills Estate Planning Council, National Academy of Elder Law Attorneys and its Indiana Chapter, and the Indiana State Bar Association’s Elder Law and Probate, Trust and Real Property Sections. Mr. Voelz serves on the Committee on Character and Fitness of the Indiana Supreme Court.  And he is also the author of “Senior Moments” newsletter.

About our Law Tips blogger:
Nancy Hurley has long-standing connections with Indiana lawyers. She was formerly a member of the ISBA and IBF staffs for over 30 years. Nancy’s latest lifestyle venture is with ICLEF. We are utilizing her exceptional writing and interviewing skills while exploring how her Indiana-lawyer background fits with ICLEF’s needs. When she isn’t ferreting out new topics for Law Tips, her work can be found in our Speaker Spotlight blogs, postings on the ICLEF Facebook and Twitter pages, and other places her legal experience lends itself.

Thank you for reading Law Tips. You may subscribe to this weekly blog through the RSS link at the top of this page.  Also, you are encouraged to comment below or email Nancy. She welcomes your input as she continues to sift through the treasure trove of knowledge of our CLE faculty to share with you.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

Posted in Law Tips, News0 Comments

5 Hot Tips On Trust Administration

If you are involved in trusts, this is your opportunity to brush up. I have five tips for you on trust administration from Ellen Deeter, a lawyer with extensive background in the area. Ms. Deeter spent most of the past 35 years working in bank trust departments, including as senior trust counsel.  Ellen generously agreed to share her expertise with Law Tips readers.

Tip #1 – Read the entire trust agreement!

• After you have read the trust agreement from beginning to end, including the “boilerplate”, read it again. And then a third time.

• Next, write out a synopsis of the trust agreement, highlighting key provisions. Pay particular attention to the provisions identifying the beneficiaries (current and future), noting mandatory and discretionary distributions, termination provisions, and allocations between principal and income.

• Every time you receive a request for a distribution refer back to the document and make sure that the request is:

1. from someone entitled to receive it.

2. for a purpose that is allowed in the document.

Tip #2 – Read and know the Indiana statutes on trusts (make Indiana Code Title 30 your friend).

• In addition to the Indiana Trust Code, also become familiar with the Indiana Probate Code, the Uniform Principal and Income Act, Total Return Unitrusts. Don’t forget the Internal Revenue Code and the provisions governing the taxation of trusts.

Tip #3 – Establish a process, follow it consistently; communicate.

• Don’t wait until you get a request from a beneficiary for a discretionary distribution to let him or her know the type of information you will need to evaluate the request. Establish ground rules ahead of time for how the request is to be made and the types of documentation that they will need to provide.

• Explain to beneficiaries that the trustee has a duty to both income beneficiaries and remaindermen.

• Let beneficiaries know how the trust (and beneficiaries) are taxed on income earned in the trust and when to expect to receive their Schedule K -1s.

Tip #4 – Understand the difference between accounting income and accounting principal.

Become familiar with the Indiana Uniform Principal and Income Act. Read the document to detennine if the trust agreement makes provisions contrary to the act (which it may) or whether the trust agreement gives the trustee discretion on allocating receipts and disbursements between income and principal.

• Explain to the beneficiaries what the term “net income” means. General (simplified) rule: interest, dividends, rents, royalties less 1/2the trustee fee.

Tip #5 – Document your files.

• Beneficiaries are entitled to inspect your files. Remember that as you write notes to the file.

• Beneficiaries have been known to be litigious (surprise, surprise). Keep copies of all correspondence and emails. Make written, contemporaneous notes of telephone conversations and meetings. Follow meetings up with letters confirming the discussion

Ms. Deeter’s bonus tip: Realize what you DON’T know and engage professionals to assist you. 

I hope you polished your trust administration skills through Ellen Deeter’s review. If you would like to take advantage of the CLE program that includes her discussion of trusts, look for the Video Replay or On Demand Seminar of 120 Hot Tips in Probate, Guardianships, Trusts and Tax by Clicking Here.

_________________________________________________________________________________

About our Law Tips faculty participant:
Ellen M. Deeter earned her J.D. magna cum laude from Indiana University School of Law at Indianapolis in 1982. She started her career as an inheritance tax examiner for the Indiana Department of Revenue in 1978. Since that time Ms. Deeter has spent most of her career with bank trust departments, including Indiana National Bank, Wachovia Bank, N.A. and Merchants National Bank. She recently retired from The National Bank of Indianapolis, where she worked in various roles over 18 years, including serving as the Manager of the Personal Trusts and Estates Group and as Senior Trust Counsel.  She also is a Certified Trust and Financial Advisor.

About our Law Tips blogger:
Nancy Hurley has long-standing connections with Indiana lawyers. She was formerly a member of the ISBA and IBF staffs for over 30 years. Nancy’s latest lifestyle venture is with ICLEF. We are utilizing her exceptional writing and interviewing skills while exploring how her Indiana-lawyer background fits with ICLEF’s needs. When she isn’t ferreting out new topics for Law Tips, her work can be found in our Speaker Spotlight blogs, postings on the ICLEF Facebook and Twitter pages, and other places her legal experience lends itself.

Thank you for reading Law Tips. You may subscribe to this weekly blog through the RSS link at the top of this page.  Also, you are encouraged to comment below or email Nancy. She welcomes your input as she continues to sift through the treasure trove of knowledge of our CLE faculty to share with you.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

Posted in Law Blogs, Law Tips0 Comments

Ten Reasons to Use Supplemental Jury Questionnaires

I want to welcome Law Tips participant, Inese A. Neiders, Ph.D, J.D., jury consultant from Columbus, Ohio. She assists lawyers in trial preparation, jury selection and trial presentation. It’s a pleasure to be sharing Dr. Neiders expertise with our readers.

How do you accurately and fairly test potential jurors’ qualifications? Do you believe that some prospective jurors are intimidated or influenced by another juror’s oral answers? Can you recall each answer you hear from each person interviewed? Dr. Neiders brings you her seasoned opinions on these and other issues encountered in the jury selection process.  Here’s her food-for-thought:

Ten Reasons to Use Supplemental Jury Questionnaires

The cornerstone of a good jury trial is the selection of a jury that is, to the greatest extent possible, free of bias. It is the duty of Court and counsel to select such a jury and to remove those potential jurors who will not be able to follow the court’s instructions and evaluate the evidence fairly.

In testing the qualifications of potential jurors to serve free of bias and prejudice, the voir dire of a prospective jury can be greatly enhanced by the use of a good jury questionnaire. Jury questionnaires are now widely accepted by the courts as a tool of modern science practice that can be cost effective and time saving in jury selection.

The important reasons for the use of a supplemental jury questionnaire:

  1. Assure Fairness for All: Both sides of the case and the Court have input in drafting the questionnaire. Everyone has equal access to the information generated by the instrument.
  1. Ask Better Questions: The questionnaire allows for a larger number and greater variety of questions of each juror. The variety of types of questions that can be drafted by the jury consultant and counsel (open ended, multiple choice, or forced choice) and the use of reliable “lie scales” can produce a better understanding of the jury than traditional oral examination.
  1. Save Time: Having each juror answer each question in writing in advance of oral examination avoids repetitious questions to the panel. Help from the jury consultant provides a chance to study and analyze responses and conserves attorney time for more strategic work.
  1. Assure Better Recall: Even attorneys with great memories tend to lose recall of juror responses to oral questions over a period oftime. This can be particularly troublesome in a case involving a lengthy jury selection process. Being able to turn directly to the jurors’ written response aids recall and analysis.
  1. Save Money: Among the tools available to help in jury selection, questionnaires are less expensive than mock juries or opinion surveys. The lower cost makes this valuable tool more widely available.
  1. Learn More about the Literacy Level of Jurors: Written answers of potential jurors can reveal a great deal about the ability of the jury to understand the case. This is especially critical in cases dealing with difficult legal issues, scientific evidence, or complex testimony, particularly from expert witnesses.
  1. Learn about All of the Jurors: Uniform questions to the entire jury panel assure that all the jury candidates, not just those in the box, answer all of the questions. The uniformity of questions also guarantees that each juror is presented each question in the same manner. Important issues are less likely to be overlooked for jurors who may be questioned late in the proceedings.
  1. Protect Jurors from Contamination by Other Juror Answers: The requirement of answering privately, in writing, insulates the panel members from being influenced by the way lawyers phrase questions or by the answers given by other, more articulate jurors. They will be unable to learn from others the kinds of answers that can assure selection to, or excuse from the panel.
  1. Get Better Answers from Jurors: The less-pressured atmosphere in which the questionnaire is administered makes it more likely that answers will be truthful and thoughtful. They are more likely to be the juror’s own response rather than no response or a response copied from others. The privacy afforded eliminates the tendency to try to please the judge or lawyer asking an oral question.
  2. Be Better Prepared: Even if the Court rejects the use of your questionnaire, or if circumstances change and you decide not to use it, the work in preparing is not wasted. The question development and pretesting with the jury consultant will assure that you are going to be prepared for court.

Jury questionnaires are just one tool to use to measure attitudes in jury selection. In high profile cases, those with high potential penalties, when bias and prejudice are particular concerns, a unique case or venue, the use of jury questionnaires prepared with the help of competent consultants is indispensable.

I appreciate Dr. Neiders contribution to Law Tips. Hopefully her review provided you with ideas to contemplate as you prepare for your next jury selection. ICLEF litigation seminars that can assist you further are available statewide as Video Replay Seminars or from your home or office as On Demand Seminars. Take a look at:  “Special Issues in Automobile Accident Cases,” “Trying the Traumatic Brain Injury Case,” and “Recent Developments in DUI Defense.”

_________________________________________________________________________________

About our Law Tips faculty participants:
Inese A. Neiders, Ph.D., J.D. is a jury consultant who assists lawyers in trial preparation, jury selection and trial presentation. She earned her Ph.D. in sociology from The Ohio State University and her J.D. is from Case Western Reserve. She has assisted lawyers in jury selection throughout the country. Learn more about her at www.juryselectionexpertise.com.

About our Law Tips blogger:
Nancy Hurley has long-standing connections with Indiana lawyers. She was formerly a member of the ISBA and IBF staffs for over 30 years. Nancy’s latest lifestyle venture is with ICLEF. We are utilizing her exceptional writing and interviewing skills while exploring how her Indiana-lawyer background fits with ICLEF’s needs. When she isn’t ferreting out new topics for Law Tips, her work can be found in our Speaker Spotlight blogs, postings on the ICLEF Facebook and Twitter pages, and other places her legal experience lends itself.

Thank you for reading Law Tips. You may subscribe to this weekly blog through the RSS link at the top of this page.  Also, you are encouraged to comment below or email Nancy. She welcomes your input as she continues to sift through the treasure trove of knowledge of our CLE faculty to share with you.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

Posted in Law Tips, Sale/Featured Items0 Comments

Divorce Law v. Estate Law: What Divorce Lawyers Can Do To Protect Clients’ Estate Rights

Welcome back to Law Tips. I hope you took advantage of the insights Kent Jeffirs, shared a few weeks back, to kick off this two-part segment on the issues that can arise when one party dies before the final dissolution decree is entered. (Click Here to read, or scroll down) Kent’s continued guidance this week moves specifically into what divorce lawyers can do to protect clients’ estate rights. His foremost piece of advice is: Advise divorce clients about estate and beneficiary designation issues early and often!

In many cases (especially those involving employer sponsored plans) there is no clear answer to the questions that arise when a client dies who failed to change his or her beneficimy designations following a divorce. Therefore, the first and most urgent advice any lawyer should give a divorcing or recently divorced client: CHANGE YOUR BENEFICIARY DESIGNATIONS ASAP!

Divorce lawyers must advise, advise, advise. While a divorce lawyer may not be able to force clients to change their beneficiary designations (even when they are clearly in such clients’ best interests), divorce lawyers do not want to leave themselves exposed to claims that “you never said that could happen” by former clients or their family members. When it comes to making proper beneficiary designations, an ounce of prevention could be worth a substantial inheritance or years of contentious litigation.

Divorce lawyers must discuss issues of estate planning and beneficiary designations with their clients at the very beginning of representation and while the divorce is pending. If allowed to change beneficiary designations prior to the divorce being filed or while it is still pending, advise clients to change their designations unless prohibited from doing so by a court order. If the divorce is already filed or if there is a restraining order or provisional order already in effect prohibiting any changes to beneficiary designations, consider petitioning the divorce court to provisionally allow specified changes to designated beneficiaries based on the hardship or inequitable results that would occur if a party died before the divorce was finalized.

While this may seem overly precautious to some for provisional orders when there is no immediate threat to the health or life of a client, the small effort necessary to include such provisions in provisional orders and to make such beneficiary changes before or at the time the divorce is filed or even while a divorce is pending is nothing compared to the financial devastation that could occur to the deceased client’s family members without such changes. Remember, the surviving spouse in a divorce where no final decree of dissolution was entered can claim any individually titled property he stood to lose in the divorce, all jointly titled property as the surviving co-owner, plus a spousal allowance of $25,000 and an intestate or elective share of any assets of the deceased spouse’s estate that were titled in her name alone if the surviving spouse was fortuitous enough to have his spouse die while the divorce is pending.

In furtherance of divorce lawyers documenting their disclosure and advice concerning these issues, it is recommended that divorce lawyers include in their engagement agreements that it is the client’s responsibility to make appropriate changes to his or her estate plan and beneficiary designations and request that the client provide the attomey with a copy of any beneficiary designation changes for the attorney’s file when the client changes their beneficiary designations.

Finally, upon the entry of the dissolution decree and the finalizing of the representation, divorce lawyers should send an appropriate closing letter which sets forth all of the client’s responsibilities following the entry of the final dissolution decree including the client’s responsibility to make appropriate changes to his or her estate plan and beneficiary designations. Just as suggested above for inclusion in engagement agreements, the closing letter should also request that the client provide the attorney with a copy of any beneficiary designation changes for the attorney’s file when the client changes their beneficiary designations.

Thanks again to Kent Jeffirs for his generous contributions to Law Tips. FYI, Kent offers a comprehensive discussion of the situations you may encounter with your clients during his CLE presentation, addressing subjects such as, executors, ERISA and divorce court jurisdiction. If you are interested in the Video Replay or the On Demand Seminar of  “The Main Event: Divorce Law vs. Estate Law & Designated Beneficiaries,”  Click Here.

_________________________________________________________________________________

About our Law Tips faculty participants:
Kent A. Jeffirs is a sole practitioner in Crown Point, Indiana, who for the last 22 years has concentrated his legal practice in estate planning, probate and trust administration, guardianships, real estate and small business counseling. In 2007, Mr. Jeffirs was one of the first group of Indiana attorneys to be board certified as a Specialist in Wills, Trusts Estates by the Indiana Trust and Estate Specialty Board. He has also testified in court proceedings as an expert witness on probate matters. Mr. Jeffirs received his B.A. degree, with honors, from the University of Notre Dame, and his J.D. degree, magna cum laude, from Indiana University, Bloomington.

About our Law Tips blogger:
Nancy Hurley has long-standing connections with Indiana lawyers. She was formerly a member of the ISBA and IBF staffs for over 30 years. Nancy’s latest lifestyle venture is with ICLEF. We are utilizing her exceptional writing and interviewing skills while exploring how her Indiana-lawyer background fits with ICLEF’s needs. When she isn’t ferreting out new topics for Law Tips, her work can be found in our Speaker Spotlight blogs, postings on the ICLEF Facebook and Twitter pages, and other places her legal experience lends itself.

Thank you for reading Law Tips. You may subscribe to this weekly blog through the RSS link at the top of this page.  Also, you are encouraged to comment below or email Nancy. She welcomes your input as she continues to sift through the treasure trove of knowledge of our CLE faculty to share with you.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

Posted in Blog, Law Tips, News0 Comments