Does Sleep Help with Alzheimer’s?

The brain is the center of the nervous system and controls thought, memory, emotion, touch, motor skills, vision, respiration and every process that regulates your body. As we age, it becomes increasingly important to care for the brain — especially to prevent conditions, like Alzheimer’s and other neurodegenerative diseases.

Considerable’s recent article entitled “Deep sleep may clear the brain of Alzheimer’s toxins” explains previous studies noted that people who sleep poorly are more prone to developing Alzheimer’s. However, scientists were never clear why this was so. A 2013 study performed on mice revealed that while they slept, toxins like beta amyloid (which may contribute to Alzheimer’s disease) were washed away. Nonetheless, scientists had no answers as to the question of why.

This new study says that during sleep, electrical signals (or slow waves) appear, followed by a pulse of fluid that “washes” the brain. The scientists now found an answer to their question, presuming that this fluid is vital in removing dangerous toxins associated with Alzheimer’s.

The study suggests that people might be able to reduce their risk of Alzheimer’s, by getting high-quality sleep.

To come to this conclusion, the researchers used MRI techniques and related technologies to monitor what was going on in the brains of 11 sleeping people. In particular, they monitored cerebrospinal fluid (CSF), which is vital liquid that flows through the brain and spinal cord. They saw that during sleep, large, slow waves of CSF wash into the brain every 20 seconds. The report said that electrical activity in the neurons provokes each of these waves — the scientists compared all of this to the workings of “a very slow washing machine.”

This groundbreaking finding suggests that people may be able to decrease the risk of Alzheimer’s, by making certain that they get high-quality sleep, says William Jagust, a professor of public health and neuroscience at the University of California, Berkeley, in an interview with NPR.

Thus, quality sleep plays a critical part in brain protection, toxin elimination and neurodegenerative disease prevention.

Previous Alzheimer’s medications have targeted specific toxins that are readily present in diseased brains, such as beta amyloid. However, these drugs all failed once going into clinical trials, perhaps because they were only targeting one part of the issue.

The current study opens a new pathway for treatment that would concentrate on increasing the amount of CSF in the brain all together, instead of targeting specific toxins. That’s according to Maiken Nedergaard, a neuroscientist at the University of Rochester, who led the 2013 study on mice, told WIRED.

Speak to an experienced elder law attorney if you have questions.

Reference: Considerable (Sep. 29, 2020) “Deep sleep may clear the brain of Alzheimer’s toxins”

 

Make Sure Your Estate Plan Protects Digital Assets

Today’s estate plan needs to expressly declare an “agent” or a “fiduciary” to gain access and control of “digital assets” in case of incapacity or death. If your estate plan has not been updated in the last four or five years, it’s likely that your digital assets are unprotected, advises the article “Properly addressing digital assets on your estate plan” from Southern Nevada Business Weekly.

Digital assets have value not only to owners, but to family members, beneficiaries and heirs. Some assets have sentimental value, like videos and photos, while others, like business records, URLs and gaming accounts, have financial value. Failing to address these issues in an estate plan could result in your executor and heirs being denied access and control of digital assets during incapacity or death.

Here are some examples of digital assets:

  • Email accounts–contain communications and history, including information about other digital assets.
  • Social media accounts/apps: Facebook, Twitter, Pinterest, YouTube, TikTok, etc.
  • Photo Sharing Accounts: Instagram, Shutterfly, Snapfish, Flickr, etc.
  • Gaming and Gambling Accounts/Apps: DraftKings, Esports Entertainment
  • E-Commerce Accounts/Apps: Amazon, PayPal, Etsy, PayPal, Venmo, etc.
  • Financial Accounts/Apps: Banks, Scottrade, E*Trade
  • Retail Accounts: Any store, online shopping that has a username and a password
  • Security Information: Two factor authentication, mobile phone PIN/PW, facial recognition, etc.

Here’s a little-known fact: without the proper legal authority to access these assets, the “agent” or “fiduciary” could be committing a crime. The Consumer Fraud and Abuse Act provides that it is a federal crime to access a computer and obtain information without authorization or when exceeding authorized access.

Most states have adopted the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA 2017). The Act contains specific language to be used in wills, trusts or power of attorney to name a “designated recipient” or “fiduciary” to access, control, transfer, or close digital assets upon incapacity or after death. RUFADDA also provides specific procedures for companies to disclose digital assets to a designated recipient or fiduciary.

If your estate planning assets do not address the issue of digital assets or do not use the specific language of RUFADDA, or generally if your estate planning documents were created before 2017, it’s time for a review that includes digital assets.

Even if all you have is a personal email account, you have digital assets to protect. It’s not a big problem to address them in your estate plan but can become a bigger program if they are neglected.

Reference: Southern Nevada Business Weekly (Sep. 17, 2020)“Properly addressing digital assets on your estate plan”

 

The Biggest Mistake in Trusts: Funding

Failing to put assets into trusts creates headaches for heirs and probate hassles, says the article “Once You Create a Living Trust, Don’t Forget to Fund It” from Kiplinger. It’s the last step of creating an estate plan that often gets forgotten, much to the dismay of heirs and estate planning attorneys.

Are people so relieved when their estate plan is finished, that they forget to cross the last “t” and dot the last “i”? Could be! Retitling accounts is not something we do on a regular basis and it does take time to get done. However, without this last step, the entire estate plan can be doomed.

Here are the steps that need to be competed:

Check the deeds on all real estate property. If the intention of your estate plan is to place your primary residence, vacation home, timeshare or rental properties into the trust, all deeds need to be updated. The property is being moved from your ownership to the ownership of the trus, and the title must reflect that. If at some point you refinanced a home, the lender may have asked you to remove the name of the trust for purposes of financing the loan. In that case, you need to change the deed back into the name of the trust. If your estate planning attorney wasn’t part of that transaction, they won’t know about this extra step. Check all deeds to be certain.

Review financial statements. Gather bank statements, brokerage statements and any financial accounts. Confirm that any of the accounts you want to be owned by the trust are titled correctly. You may need to contact the institutions to make sure that the titles on the statements are correct. If there is no reference to the trust at all, then the account has not been recorded correctly and changes need to be made.

It’s also a good idea to review any accounts with named beneficiaries. Talk with your estate planning attorney about whether these accounts should be retitled. The rules regarding beneficiaries for annuities changed a few years ago, so naming the trust as a beneficiary might not work for your estate plan or your tax planning goals as it did in the past.

IRAs and other retirement accounts. These accounts need to be treated on an individual basis when deciding if they should have a trust listed as a primary or contingent beneficiary. Listing a trust as a beneficiary can, in some cases, accelerate income tax due on the account. If the trust is listed as the beneficiary, the ability to distribute assets to trust beneficiaries may be impacted.

The main reason to list a trust as a beneficiary to an IRA or retirement plan is to protect the asset from creditors, financially reckless heirs, or a beneficiary with special needs. An estate planning attorney will know the correct way to handle this.

Making sure that your assets are in the trust takes a little time, but it is up to the owner of the trust to take care of this final detail. The estate planning attorney may provide you with written directions, but unless you make specific arrangements with the office, they will expect you to take care of this. The assets don’t move themselves – you’ll need to make it happen.

Reference: Kiplinger (Oct. 26, 2020) “Once You Create a Living Trust, Don’t Forget to Fund It”

 

Retirement Account Beneficiary Choices and Your Estate

Even if you have done all the right estate planning, mistakes with beneficiaries can happen. Just remember this very simple fact: your will does not control your retirement accounts and it may not control any accounts where you have been asked to name the person who inherits the asset, like a life insurance policy.

A designated beneficiary is the person named on a retirement or investment account to inherit the asset if you die. That’s the simple part. What gets complicated is when people don’t think it’s such a big deal, says a recent article “5 Mistakes To Avoid With Retirement Account Beneficiary Selections” from Forbes. Mistakes made about beneficiaries can be costly and sometimes, unfixable. You could accidently disinherit a child or leave money to an ex-spouse.

A will can also push your estate into the probate process which can have some significant pitfalls. If you have a living trust but neglect to fund it, the assets left outside of the trust might also have to go through probate. The best way for most people to pass assets like retirement accounts is to have them go directly to a beneficiary.

Other accounts that pass via beneficiary designation are usually 401(k)s, IRAs, Roth IRAs, life insurance, annuities, and investment accounts that have Transfer on Death (TOD) options. Using beneficiary designations may allow your heirs to receive assets in a tax-efficient and fast manner.

What are the top five mistakes people make for beneficiary designations?

Forgetting to name a beneficiary. This happens very commonly when people are young adults. It’s hard to imagine needing to name an heir when you are young and healthy, but not naming anyone creates headaches.

Ignoring special circumstances. When you have an heir with an addiction problem, one who has trouble managing money or who is preparing to leave a marriage, leaving them a large sum of money can create more problems. If your loved one has special needs and receives benefits from the government, an inheritance could put all their aid at risk. An estate planning attorney can help create a Special Needs Trust and plan for their future.

Using the wrong name. It sounds silly, but it happens often. If your loved one’s name is Jane Doe, or there are family members with very similar names, you’ll need to use more information to identify them, like birthdates, Social Security numbers and even details about their relationship to you. Not providing enough clear information, could send your asset into the wrong hands.

Neglecting to update your beneficiaries. The person you name as your beneficiary when you are in your 30s, may not be the same person you want to inherit your assets in your 60s. If you have remarried, you must change all beneficiary designations to protect your current spouse. If you have had children or additional children since you first purchased a life insurance policy, you’ll need to be sure that all your children are named on that policy. Every few years, just as you need to review your estate plan, you need to update your beneficiaries.

Failing to discuss your beneficiaries with your estate planning attorney, tax, and financial advisor. There are complications that can occur with an inheritance. Being pushed into a higher bracket sounds like a nice problem to have, until the tax bill comes due. Your estate planning attorney will be able to work with you and your loved ones to protect your legacy and their future.

Reference: Forbes (Oct. 25, 2020) “5 Mistakes To Avoid With Retirement Account Beneficiary Selections”

 

What Trusts are Available for Estate Planning?

A trust is a legal agreement that has at least three parties. The same person(a) can be in more than one of these roles at the same time. The terms of the trust usually are embodied in a legal document called a trust agreement. Forbes’s recent article entitled “Here’s What You Need To Know About The Most-Popular Estate Planning Trusts” explains that the first party is the person who creates the trust, known as a trustor, grantor, settlor, or creator.

The trustee is the second party to the agreement. This person has legal title to the property in the trust and manages the property, according to the instructions in the trust and state law. The third party is the beneficiary who benefits from the trust. There can be multiple beneficiaries at the same time and there also can be different beneficiaries over time.  The trustee is a fiduciary who must manage the trust property only for the interests of the beneficiaries and consistent with the trust agreement and the law. Although a trust is created when the trust agreement is signed and executed, it isn’t really operational until it’s funded by transferring property to it. An estate planning attorney would be a good trustee as they understand the trusts.

A living trust, also called an inter vivos trust, is a trust that’s created during the trustor’s lifetime. A testamentary trust is created in the trustor’s last will and testament. A trust can be revocable, which means that the trustor can revoke it or modify the terms at any time. An irrevocable trust can’t be changed or revoked.

Assets that are owned by a trust avoid the cost, delay and publicity of probate. However, there are no tax benefits to a revocable living trust. The settlors-trustees are taxed as though they still own the assets. The trust assets are also included in their estates under the federal estate tax.

An irrevocable trust typically is created to reduce income and/or estate taxes. This type of trust can also protect assets from creditors. When assets are transferred to an irrevocable trust, the income and gains are taxed to the trust when they are retained by the trust and taxed to the beneficiaries when distributed to them.

Under the federal estate tax and most state estate taxes, assets that are retitled to an irrevocable trust aren’t part of the grantor’s estate. Transfers to the trust are gifts to the beneficiaries. The grantor’s gift tax annual exclusion and lifetime exemption can be used to avoid gift taxes, until gifts exceed the exclusion and exemption limit.

An irrevocable trust typically is created to reduce income and/or estate taxes. This type of trust can also protect assets from creditors. When assets are transferred to an irrevocable trust, the income and gains are taxed to the trust when they are retained by the trust and taxed to the beneficiaries when distributed to them.

A grantor trust is an income tax term that describes a trust where the grantor is taxed on the income. That’s because he or she retained rights to or benefits of the property. The revocable living trust is an example of a grantor trust.

A trust can be discretionary or nondiscretionary. A trustee of a discretionary trust has the power to make or withhold distributions to beneficiaries as the trustee deems appropriate or in their best interests. In a nondiscretionary trust, the trustee makes distributions according to the directions in the trust agreement.

Another type of trust is a spendthrift trust. This is an irrevocable trust that can be either living or testamentary. The key term restricts limits the beneficiary’s access to the trust principal, and the beneficiary and the beneficiary’s creditors can’t force distributions. The spendthrift provision is used when the settlor is worried that a beneficiary might waste the money or have trouble with creditors. Many states permit spendthrift trusts, but some limit the amount of principal that can be protected, and some do not recognize spendthrift provisions.

Finally, a special needs trust can be used to provide for a person who needs assistance for life. In many cases, it’s a child or sibling of the trust settlor. It can be either living or testamentary. Critical to a special needs trust is it has provisions that make certain the beneficiary can receive financial support from the trust, without being disqualified from federal and state support programs for those with special needs.

For more about trusts and how one may fit into your estate planning, contact an experienced estate planning attorney.

Reference: Forbes (Oct. 26, 2020) “Here’s What You Need To Know About The Most-Popular Estate Planning Trusts”

 

What Key Estate Planning Terms Should I Know?

Estate planning can help you accomplish several objectives including naming guardians for minor children, choosing healthcare agents to make decisions for you should you become ill, minimizing taxes so you can give more wealth to your heirs and saying how and who would like to pass your estate at death.

Emmett Messenger Index’s recent article entitled “13 Estate Planning Terms You Need to Know” provides some important terms to understand as you consider your own estate plan.

Assets: This is anything a person owns. It can include a home and other real estate, bank accounts, life insurance, investments, furniture, jewelry, collectibles, art, and clothing.

Beneficiary: This is an individual or entity (like a charity) that gets a beneficial interest in an asset, such as an estate, trust, account, or insurance policy.

Distribution: A payment in cash or asset(s) to the beneficiary who’s designated to receive it.

Estate: All of the assets and debts left by a person at death.

Fiduciary: An individual with a legal obligation or duty to act primarily for another person’s benefit, such as a trustee or agent under a power of attorney. An attorney or estate planning attorney can also hold this position.

Funding: The process of transferring or retitling assets to a trust. Note that a living trust will only avoid probate at the trustmaker’s death if it’s fully funded. A trustmaker also may be known as a grantor, settlor, or trustor.

Incapacitated or Incompetent: The situation when a person is unable to manage her own affairs, either temporarily or permanently, and often involves a lack of mental capacity.

Inheritance: These are assets received from someone who has died.

Probate: This is the orderly court-supervised process of distributing the assets of a person who has died.

Trust: This is a fiduciary relationship where a trustmaker gives a trustee the right to hold property or assets for the benefit of another party, known as the beneficiary. The trust is a written trust agreement that directs how the trust assets will be distributed to the beneficiary.

Will: A written document with directions for disposing of a person’s assets after their death. A will is enforced by a probate court. A will can provide for the nomination of a guardian for minor children.

Contact a local experienced estate planning attorney for assistance in preparing your estate planning.

Reference: Emmett Messenger Index (Oct. 28, 2020) “13 Estate Planning Terms You Need to Know”

 

Do I Need to Name a Guardian for My Children in the Will?

Many young couples with children and bills to pay may look at you askance, when asked about estate planning and say, “what estate?” However, a critical part of having a will—one frequently overlooked—is naming a guardian. If you don’t name a guardian, it could result in issues for your children after your death. Your child might even be placed in a foster home.

For a young family, designating a guardian is another good reason to draft a will. If you and your spouse die together with no guardian specified in a will, the guardian will be chosen by the court. In a worst-case scenario, if you have no close family or no one in your family who can take your child, the court will send them to foster care, until a permanent guardian can be named.  The judge will collect as much information as possible about your children and family circumstances to make a good decision.  However, the judge won’t have any intimate knowledge of who you know or which of your relatives would be good guardians. This could result in a choice of one of the last people you might pick to take care of your child.

Try to find common ground, by agreeing to a set of criteria you want in a guardian. This could include the following:

  • The potential guardian’s willingness to be a guardian
  • The potential guardian’s financial situation
  • Where the child might live with that person
  • The potential guardian’s values, religion, or political beliefs
  • The potential guardian’s parenting skills; and
  • The potential guardian’s age and health.

Next, make a decision, get the chosen guardian’s consent, write it all down, and then set out to create a will.

Ask an experienced estate planning attorney to help you do it correctly.

Reference: Lifehacker (Oct. 27, 2020) “Why You Should Name a Guardian for Your Kids Right Away”

 

Good Planning for Life Is Also Good Planning for a Pandemic

The fear of the unknown and a sense of loss of control is sending many people to estate planning attorney’s offices to have wills, advance directives and other documents prepared, reports the article “Legal lessons from a pandemic: What you can plan for” from The Press-Enterprise.

However, people are not just planning because they are worried about becoming incapacitated or dying because of COVID. High net-worth people are also planning because they are concerned about the changes the election may bring, changes to what are now historically advantageous estate tax laws and planning to take advantage of tax laws, as they stand pre-December 31, 2020.

Regardless of your income or assets, it is always good to take control of your future and protect yourself and your family, by having an up-to-date estate plan in place. Anyone who is over age 18 needs the following:

  • Health Care Directive
  • Power of Attorney
  • HIPPA Release Form
  • Last Will and Testament

Any assets without beneficiary designations should be considered for a trust, depending upon your overall estate. Trusts can be used to take assets out of a taxable estate, establish control over how the assets are distributed and to avoid probate. You don’t have to be wealthy to benefit from the use of trusts.

Preparing estate planning documents in a last-minute rush, is always a terrible idea.

If you have more free time during the pandemic, consider using some of your free time to have your estate plan implemented or updated. This should be a top priority. The state of the world right now has all of us thinking more about our mortality, our values and the legacy we want to leave behind. Most estate planning attorneys encourage clients to think about the next three to five years. What would be important to you, if something were to happen in that time frame?

Estate planning is about more than distributing assets upon death. It addresses incapacity—what would happen if you became too ill or injured to care for yourself? Who would make medical decisions for you, such as what kind of medical care would you want, who will your doctors be and where will you live in the short-term and long-term? Incapacity planning is a big part of an estate plan.

When naming people to care for you in the event of incapacity, provide your estate planning attorney with three names, in case your first or second choices are not able to act on your behalf. Most people name their spouse, but what if you were both in an accident and could not help each other?

In recent months, Advance Health Care Directives have received a lot of attention, but they are not just about ventilator use and intubation. An Advance Health Care Directive is used to state your preferences concerning life-sustaining treatment, pain relief and organ donation. The agent named in your health care directive is also the person who will carry out post-death wishes, so provide as many details as you can about your wishes for cremation, burial, religious services, etc.

Trusts are a way to preserve a family legacy. A living trust gives you the ability to decide who you want involved, in case of your death or incapacity. You decide on your beneficiaries, and if you want your assets going directly to those beneficiaries or if they should be held in trust until certain goals are met, like finishing college or reaching a certain age or life milestone.

Your estate planning attorney will help you clarify family legacy goals, whether they include a beneficiary with special needs, a supplement for children who go into public service careers, etc.

Reference: The Press-Enterprise (Oct. 18, 2020) “Legal lessons from a pandemic: What you can plan for”

 

What Do I Need to Do after the Death of My Spouse?

It probably is the last thing on your mind, but there are tasks that must be accomplished after the death of a spouse. You might want to ask for help and advice from a trusted family member, friend, or adviser to sort things out and provide you with emotional guidance.

Kiplinger’s recent article entitled “Checklist: Steps to Take after Your Spouse Dies” provides a checklist to help guide you through the most important tasks you need to complete:

Don’t make any big decisions. It’s not a good time to make any consequential financial decisions. You may wish to sell a home or other property that reminds you of your spouse, but you should wait. You should also refrain from making any additional investments or large purchases—especially if you weren’t actively involved in your family’s finances before the death. Contact your estate planning attorney.

Get certified copies of the death certificate. You’ll need certified copies of your spouse’s death certificate for any benefit claims or to switch over accounts into your name. Ask the funeral home for no fewer than 12 copies. You also may need certified marriage certificates to prove you were married to your late spouse.

Talk to your spouse’s employer. If your spouse was working when he or she passed, contact the employer to see if there are any benefits to which you are entitled, such as a 401(k) or employer-based insurance policy. If you and your dependents’ medical insurance was through your spouse’s job, find out how long the coverage will be in effect and begin making other arrangements.

Contact your spouse’s insurance company and file a claim. Get the documentation in order prior to contacting the insurance company and make certain that you understand the benefit options to claim a life insurance benefit.

Probate the estate. Get a hold of the will. Contact the attorney for help in settling the estate. If your spouse didn’t have a will, it will be more complicated. Reach out to an experienced estate planning attorney or elder law attorney for advice in this situation.

Collect all financial records. Begin collecting financial records, including bank records, bills, credit card statements, tax returns, insurance policies, mortgages, loans and retirement accounts. If your spouse wasn’t organized, this might take some time. You may be required to contact companies directly and provide proof of your spouse passing, before being able to gain access to the accounts.

Transfer accounts and cancel credit cards. If your spouse was the only name on an account, like a utility, change the name if you want to keep the service or close the account. Get a copy of your spouse’s credit reports, so you’ll know of any debts in your spouse’s name. Request to have a notification in the credit report that says “Deceased — do not issue credit.” That way new credit won’t be taken out in the spouse’s name.

Contact government offices. Have your spouse’s Social Security number available and call the Social Security Administration office to determine what’s required to get survivor benefits. Do this as soon as possible to avoid long delays before you get your next Social Security payment. You may also qualify for a one-time death benefit of $255. If your spouse served in the armed forces, you may be eligible for additional benefits from the Department of Veterans Affairs. Therefore, contact your local office.

Change your emergency contact information. Change any of your or your family members’ emergency contact info that had your spouse’s name or number listed as someone else’s primary point of contact.

This checklist is a good way to help with the pressing tasks. You can also contact an estate planning attorney or elder law attorney for help.

Reference: Kiplinger (Aug. 27, 2020) “Checklist: Steps to Take after Your Spouse Dies”

 

Special Needs Plans Need Regular Reviews to Protect Loved Ones

Special needs planning is far more detailed than estate planning, although both require regular reviews and updates to be effective. For creating a wholly new plan or reviewing an older plan, one way to start is by writing a biography of a loved one with special needs, recommends the article “Special needs plan should be carefully considered” from The News-Enterprise.

Write down the person’s name, birth date and their age at the time of writing. Include information about favorite activities, closest friends and favorite places. Consider all of the things they like and dislike. Make detailed notes about relationships with family members, including any household pets. Think of it as creating a guide to your loved one for someone who has never met them. This guide will be useful in mapping out a plan that will best suit their needs.

Follow this by writing down what you envision for their future, in three distinct scenarios. A good future, where you are able to care for them, a not-so-great future where they are alive and well, but you are not present in their life and a bad future. You should be as specific as possible. This exercise will provide you with a clear sense of what pitfalls may occur, so you and your estate planning attorney can plan better.

Your plan needs to consider who will become the person’s guardian. You’ll need to list more than one person and put their names in order of preference. Consider the possibility that the first person may not wish to or be able to serve as a guardian and have second and third guardians. Talk to each person to be sure they are willing and able to take on this responsibility.

Next, consider living arrangements. Will your loved one be able to live independently, with regular check ins? Could they live in an accessory apartment with a guardian close at hand? Or would they need to live in a group care facility with an on-site social worker?

A special needs plan usually includes a Special Needs Trust (SNT), with comprehensive details for the trustee. Just as you need multiple guardians, you should also name several trustees. The guardian is responsible for a person and the trustee is responsible for the property.

The question is raised whether a family member or a professional should be the trustee. Having a family member manage the finances is not always the best idea. A professional fiduciary will be able to manage the funds without the emotional ties that could cloud their ability to make good decisions. This is especially important, if the beneficiary has a drug dependency problem, does not have a strong family network or if the estate is large.

Consideration should also be given to having the trustee check in on the beneficiary on a regular basis to ensure that the beneficiary’s needs are being met. The trustee should have permission to make decisions about the use of the trust funds in special circumstances. The trustee will need to be someone who is skilled with managing money and is well-organized and responsible. Special needs planning is complex, but careful planning will give you the peace of mind of knowing that your loved one will be cared for by people you choose and trust.

Contact an experienced estate planning attorney to help you establish a special needs trust.

Reference: The News Enterprise (Oct. 13, 2020) “Special needs plan should be carefully considered”