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Law Office of Michael D. DellaMonaca

Have a Plan for Life

What’s Happening with Tom Petty’s Estate?

Rocker Tom Petty’s widow, Dana York Petty, planned to include unreleased tracks from her late husband’s celebrated 1994 solo album as part of a 25th anniversary edition box set.

However, Tom’s daughters Adria and Annakim, his children from a previous marriage, have blocked the release, according to iHeartRadio’s article, “Tom Petty’s Widow, Daughters Battling Over His Estate.”

Dana says the daughters are interfering with her ability to manage Tom’s legacy. She’s reportedly requested that a judge name a day-to-day manager for the estate.

Adria argues that she and her sister were promised an equal share of control in their father’s estate, according to his will. She says her father’s “artistic property” was supposed to be placed into a separate company to be jointly administered by the three women. However, Dana disagrees.

Annakim seems to reference the battle in a recent Instagram post. She displayed a photo of her father with the caption, “We don’t sell out. No Vampires 2019.”

A subsequent reply in the comments section mentions Petty’s will.

Wildflowers was initially designed to be a double album, with Petty completing more than 25 songs in the initial sessions. However, he was convinced by his record label to take some some songs off for the final version.

Throughout the years, a few of the extra songs were released on various collections. However, Tom never relinquished his idea of releasing the set as a double LP.

Petty was reportedly planning a Wildflowers tour, before his death in October of 2017, to showcase all the leftover material.

Perhaps it’s time for  you to do some estate planning as well. Contact an experienced estate planning attorney in your area.

Reference: iHeartRadio (April 3, 2019) “Tom Petty’s Widow, Daughters Battling Over His Estate”

Suggested Key Terms: Will Contest, Estate, Artistic Property,

Social Media Helps to Catch Social Security Disability Fraud

The Social Security Administration (SSA) used to have investigators try to catch people in the act of performing activities, like bouncing on a trampoline, that prove they were not disabled and their applications for Social Security Disability benefits (SSDI) were fraudulent. Having to document this behavior by being physically present and snapping photographs as evidence, required many hours of following people around and running stake-out operations.

Some people now unwittingly hand the investigators all the proof they need, through what the disability benefits applicants post on Facebook and other platforms online. Here are some of the ways that social media helps to catch Social Security disability fraud, and some of the objections to this use of online content.

Appropriate Use of Social Media Postings to Deny Disability Claims

Let’s say that someone files an application for SSDI benefits, claiming that she cannot leave the house because of her illness or impairment. She then posts photographs online of herself going shopping, meeting friends for lunch or coffee and attending events around town.

The investigator can use those postings to look further into the claim that she is unable to leave her house. The investigator should not automatically deny the disability benefits, because the photographs might be from some time in the past before the applicant became ill or injured.

Security Settings Do Not Protect You

Most experts say that security settings on social media are a joke, because they do not prevent others from seeing what you post. Once you post something online, you lose control over the item, whether you posted words or a photograph. Any of the people on your friends list can repost or share your posting, and others can share, and so on. That is how online content “goes viral.” If there is one person on the planet whom you would not want to see or read something, do not post it online.

Objections to the Use of Social Media Postings to Evaluate Disability Claims

Unless the situation involves an outrageous fraud, some members of the disability communities think it is unfair for the SSA to use social media postings, when evaluating applications for SSDI benefits. For example:

  • Many people want to create a better-than-reality image of their lives online, only posting content that makes them look good. They might avoid posting photographs and comments that might cause their peers to view them unfavorably.
  • It is discriminatory to assume that all people with disabilities are shut-ins, who do not participate in social activities or in the community.
  • Adding another facet – the review of social media postings – to the already long process of evaluating applications for SSDI benefits, will further delay the approval of legitimate petitions for benefits.
  • The SSI evaluators have many methods for rooting out fraud, like reviewing the applicant’s medical records and sending the person to a medical expert of the SSA’s choosing.

The issue of using social media postings when processing applications for SSDI benefits, raises many questions about the individual’s right to privacy, whether the review of online postings constitutes spying, and whether it is fair for people to get disability benefits if they can, for example, run marathons.

It is a good idea to talk with an elder law attorney near you to find out how your state’s regulations might differ from the general law of this article.

References:

AARP “Social Security May Step Up Facebook, Instagram Checks in Disability Fraud Probes.” (accessed April 11, 2019) https://www.aarp.org/retirement/social-security/info-2019/ssa-social-media-disability-fraud.html

 

What You Need to Know About IRS Impersonators

You get a phone call from someone who says he is from the Internal Revenue Service (IRS). He says that you owe back taxes and that the authorities will come and arrest you, unless you wire money or buy prepaid debit cards immediately. Of course, these callers are not with the IRS. They are thieves. These con artists target older Americans and bilk people out of millions of dollars a year. Here is what you need to know about IRS impersonators.

We only have hard numbers for the people who have reported the theft to the Treasury Inspector General for Tax Administration (TIGTA), so the total scope of the crimes is likely much larger. The TIGTA started keeping track of these cases in late 2013. Since then, more than 15,000 people have lost nearly $75 million to these illegal schemes.

The average amount stolen is nearly $5,000 per victim. One man paid the crooks more than $500,000. The agency knows of at least one person who killed himself after realizing he had paid money to the scammers.

Thankfully, the word is getting out about these con artists, and would-be victims are reporting the impersonators. More than 2.5 million people have contacted TIGTA to report suspicious calls from people claiming to be with the IRS.

What to Do If You Get a Suspicious Phone Call

The TIGTA agents say that if you get a phone call from someone who claims to be an IRS employee, just hang up. Do not engage in conversation with the person. Do not try to pull a prank on him or blow an air horn into the phone. Get off the phone immediately.

There have been several instances in which crooks got angry at the people they tried to victimize and took revenge. They spoofed the phone number of the person they called and reported fake accounts to the police of violent criminal activity, like an armed home invasion happening at the person’s house. This behavior is “swatting,” named for SWAT teams that respond, sometimes with deadly force.

Therefore, hang up immediately and call the authorities. If someone called but you did not fall for the scheme, report the crook at the TIGTA website, tigta.gov. Call the TIGTA hotline (800-366-4484), if the con artists got some of your money.

What to Do If You Might Owe Back Taxes

The IRS contacts people by mail about delinquent taxes. They do not start the process, by telephoning people and threatening to arrest them, throw them in jail, or kick them out of their houses. The best thing to do if you are worried about whether you owe taxes, is to go to the IRS website, irs.gov, and ask them if you owe any back taxes. If you do, they will work with you and set up a payment plan. It will not involve going to WalMart to buy prepaid debit cards for the IRS.

Keep yourself safe from financial predators. Do not anger them, but do not ignore the situation if you actually do owe taxes. Interest and penalties can add up quickly. You will sleep better at night, if you get a payment plan and know what to expect.

Your state’s regulations might be different from the general law of this article, so it would be a good idea to talk with an experienced elder law attorney in your area.

References:

AARP. “Meet the Lawman Who Went After IRS Imposters.” (accessed April 11, 2019) https://www.aarp.org/money/scams-fraud/info-2019/timothy-camus-interview.html

 

 

What to Do When Your Spouse Hides Money from You

You have worked hard, planned and saved to have a comfortable retirement together. Then, one day, something happens that makes you question whether your spouse is being honest with you about money. There might be a perfectly innocent explanation, or your spouse might be leading a double life that poses a threat to your financial future. Here are some suggestions about what to do when your spouse hides money from you.

Reasons That Spouses Hide Money from Each Other

Many different factors can motivate a person to hide money from a spouse, such as:

  • Planning to separate from the spouse and building up a nest egg to fund the new path in life,
  • Paying for activities, like gambling or drugs,
  • Lack of trust because of an experience with a previous spouse,
  • Has not paid taxes or other bills, and is stockpiling money instead,
  • Is having an affair, or
  • The current relationship is dysfunctional and the “hiding” spouse feels the other spouse is a control freak about the finances.

How Spouses Hide Money from Each Other

There is no end to the ways people can take money right under the noses of their significant others. Here are a few examples:

  • Selecting the “cash back” option, when paying at the grocery store, gas station or other places,
  • Taking money that is supposed to pay for other things, but keeping it,
  • Not telling a spouse about a raise or bonus, scratch-off ticket winnings and other unexpected money,
  • Hoarding cash, gold coins, or other valuables and hiding them in the garage, attic, office or a storage unit, and
  • Selling items online and not telling one’s spouse.

How to Avoid Financial Infidelity

Many people have an underlying communication problem, and money can be a particularly uncomfortable topic. Ignoring this situation will not make it go away. Experts offer these tips to make sure that you and your spouse are honest with each other about money:

  • Both parties should handle the financial management tasks. When one person controls all the finances and the other person merely signs papers without reading them, you have a recipe for disaster. No matter how much you might dislike dealing with the bills and other financial matters, you have to protect your future, so that you will not be destitute when you retire. Alternate the bill-paying chores monthly or quarterly.
  • Give your financial picture a check-up twice a year. You should both pull your credit reports twice a year and go through them together. Doing this prevents your spouse from having secret bank accounts or investments. Contact an experienced estate planning attorney to update documents.
  • Agree on a budget and retirement plan together.
  • Get copies of the tax returns and statements from the retirement accounts, investments, and bank accounts right away, if you suspect that something shady is happening.
  • Know the signs of financial infidelity. If your spouse is over-controlling or is unwilling to talk about money, you need to get to the bottom of the situation. If the accounts are lower than you thought they should be, or your spouse has changed her wardrobe, lost weight, or has new expensive hobbies, you need to ask questions.

An experienced elder law attorney can help you protect yourself financially.

References:

AARP. “When Your Spouse Cheats on You – Financially.” (accessed April 11, 2019) https://www.thegirlfriend.com/money/spouse-cheats-financially/

 

How Loneliness Can Affect Your Health

Many older Americans spend their days alone, isolated from companionship and without social interaction. While we all know that loneliness is not a happy state, we did not have much evidence of the significant impact of isolation. A recent study by the University of Michigan reveals that chronic loneliness can shorten your life as much as smoking. Here are some things you need to know about how loneliness can affect your health.

The Study Respondents

The study asked Americans nationwide about their levels of companionship and social isolation, and how they feel about those factors. The survey also inquired about each person’s health status and health behaviors, such as diet, exercise, sleep habits and tobacco use. The participants were between the ages of 50 and 80.

How Chronic Loneliness Affects the Health of Older Americans

According to the survey, being lonely on a regular basis can harm seniors by:

  • Decreasing life expectancy,
  • Deteriorating memory,
  • Weakening physical well-being, and
  • Increasing the incidence of mental health issues.

Survey respondents who reported that their mental health was fair or poor, were more than eight times more likely to feel isolated than other participants. The rate of fair or poor health was more than twice as high among people who felt socially isolated than other people in the study.

The Chicken or the Egg?

The tricky bit is that some health problems can cause a person to feel more isolated, and isolation can lead to health problems. A person with hearing loss might feel left out at a social gathering, because he cannot hear well enough to participate in the conversations and activities. Out of frustration, he might stop attending social functions. The difficulty in getting around because of the lack of sidewalks, curb cuts, and wheelchair access might also cause a person with mobility issues to have fewer opportunities for interactions.

Healthy habits tend to go hand-in-hand with social activity. For example, older Americans who said that they have a nutritious diet, exercise regularly and get plenty of sleep, were less likely to report feeling lonely or isolated. On the other hand, those who smoke or use tobacco were more likely to say that they felt a lack of companionship and that they felt isolated, than non-smokers and people who do not use tobacco.

The Good News

Nearly three-fourths of survey respondents said they have frequent social contact with people who do not live with them, including neighbors, friends and relatives. Almost a third interact socially every day.

With today’s technology, a person who has difficulty leaving the house, can video chat with loved ones who are hundreds of miles away or enjoy an event through the use of VR (virtual reality) or AR (augmented reality) devices. While electronic participation is not the same as being there, this level of interaction is better than not being connected at all. Many people were critical of telephones when they were a new invention, because the devices were not the same as a face-to-face conversation.

Best Odds

The participants with the lowest rates of loneliness and isolation were:

  • Male,
  • Still working,
  • Had an annual household income of more than $60,000,
  • Did not have children in the home, and
  • Did have at least one other adult in the home.

References:

University of Michigan. “Loneliness and Health.” (accessed April 10, 2019) https://www.healthyagingpoll.org/report/loneliness-and-health

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Estate Planning with Loved Survivors In Mind

There is a strong need for clarity regarding the rules about what happens when a spouse from a second marriage, who is not an owner of the home, wants to remain in the home after the death of the owner. A kind-hearted practice is to allow the surviving spouse to remain in the home and enjoy the memories the couple shared, says The Union in the article “Estate planning from the heart.”

Giving the surviving spouse the ability to remain in the home, honors the relationship of the spouse with the decedent. It is an act of kindness. However, it does need to be made legally enforceable, in case there are any challenges. Several considerations need to be evaluated in the estate plan:

Can the surviving spouse manage the cost of the home? This may include a monthly mortgage payment, property taxes, homeowner’s dues, insurance, yard upkeep, interior and exterior maintenance and any repairs that are needed to keep the home working.

Another concern is whether the surviving spouse will continue to be able to maintain the home in the immediate and distant future.

The surviving spouse’s health, including physical and mental abilities, needs to be considered. Will the survivor be able to manage if dementia strikes, or if they are afflicted by a serious illness and left in poor health? All of these challenges need to be considered, when drafting language regarding the rights of a person to remain in the decedent’s home. For instance, if a person is not mentally competent to live on their own, health problems or the declining condition of the property may arise.

A standard of care needs to be made regarding home maintenance and update. It may get very specific, including details like pet care and clean-up, internal cleanliness, the presence of roommates or boarders and an annual or semi-annual inspection to be sure that the home remains in good condition.

The most common problem for a surviving spouse is the financial ability to remain in the home and pay the bills. One solution may be to permit the survivor to stay in the house for two years, creating a trust that can support the cost of maintaining the home during the hardest period of mourning. This gives the surviving spouse time to recover and adjust to the loss.

If the surviving spouse does not have the mental capacity to remain in the house, the choices are difficult. Ideally, both spouses are involved in planning for this possibility, long before the owner of the property dies. There is nothing pleasant or easy about this. However, it must be done. Ignoring it, makes a bad situation worse. Will the person need care, how will that care be paid for, etc.? Don’t leave it for the family to manage.

In the case of a second marriage, leaving the house to an individual who does not have the ability to manage it, creates a difficult situation, unless the decedent is able to leave enough assets in trust for the surviving spouse to maintain the home. There should be no assumption of the ability of the surviving spouse to care for the home, as an unexpected illness or accident could make a person who is healthy at the time of the signing of the agreement, change to one who needs a great deal of help.

The key to a surviving non-owner spouse is to address the “what-if’s” early on, in the context of the estate plan. A plan should be put in place, which may involve trusts or other estate planning tools, to allow the surviving spouse to remain in the home, if that is the couple’s wish, and a plan “A,” “B,” and “C” for the unexpected events that occur in the course of aging.

An estate planning attorney will be able to create a plan that makes sense for the spouse, the surviving spouse and the heirs. A family meeting will be helpful to ensure that everyone involved knows what the plan is, so there are no misunderstandings, and all can act from a place of kindness.

Reference: The Union (April 7, 2019) “Estate planning from the heart”

 

Make Sure Your Power of Attorney Works When Needed

If you present a POA (Power of Attorney) to a bank and the agents are described as Bill and Samantha, for instance, instead of Samantha or Bill, the bank clerk may bristle. John as agent under power of attorney with Mary as successor agent is more likely to be acceptable. The use of the word “and” in a POA often presents a problem to banks. Did the document get drafted with the intent that Bill and Samantha both be present for any transactions?

In Pennsylvania, major changes were made to the POA law in 2014 that addressed wording, witnessing and other requirements and protections for the party accepting the POA. The “Vine fix” law describes what a bank, financial institution or other party who is presented with a POA can and cannot do. The “Vine fix” provides immunity to anyone who accepts a POA in good faith, without actual knowledge that the POA is invalid, says The Mercury in the article “Planning Ahead: Will your bank honor your power of attorney?”

This law came about as a result of a case, Vine v. Commonwealth of PA State Employees’ Retirement Board. A Pennsylvania State employee, who was incapacitated following a car accident and a stroke, was given a POA to sign by the man who was then her husband. He changed her retirement options and later filed for divorce. At issue was the question of whether Mrs. Vine could invalidate his option and file for disability benefits. She did not have legal capacity, when she signed the document.

This was a case of hard facts making bad law. The State Supreme Court found that a third party (the Pennsylvania State Employees Retirement Board) could not rely on a void power of attorney, even where it did not know it was void when it was accepted. Banks saw the decision and were concerned that they could be sued for damages in similar cases.

The new law offers some immunity and additional protections for banks. However, as a result, there’s a little more push back with banks recognizing agents under power of attorney. The bank can request an agent’s certification or affidavit or opinion of counsel, as to whether the agent is acting within the scope of his legal authority. There is still a civil liability for refusing to accept a power of attorney that meets all the requirements.

Some estate planning attorneys have their clients obtain Power of Attorney forms directly from the institutions. This decreases the chances of any problems, when POAs are presented. It’s also a good idea to update the POA when you update your estate plan, which should be every three or four years. Regardless of your state of residence, a POA dated 10 or 15 years ago is likely to meet with some scrutiny. Talk with your estate planning attorney about the best way to address this in advance.

Reference: The Mercury (April 2, 2019) “Planning Ahead: Will your bank honor your power of attorney?”

 

What Happens When Unmarried Couples Don’t Have Wills?

There can be serious problems when people live together without the benefit of marriage. One is that they don’t have any legal right to make medical decisions for each other. Another is that without any will or estate plan in place, the surviving spouse has no legal right to any of the decedent’s property. That’s just for starters, explains the article “Longtime unmarried couple hasn’t planned for future” from the Santa Cruz Sentinel.

The couple may be pleased with their decision to live on their own terms.  However, by refusing to plan for the inevitable, they are creating an unnecessary difficulty for their loved ones. The children and grandchildren of the couple are likely going to end up having to sort out the mess, after one of the couple dies. They may end up in court, battling over the house or other assets.

If the couple wants their property to end up in the hands of their children when they pass away, having no estate plan is not the way to make that happen. When one spouse dies, any assets they own in joint tenancy will go to the surviving partner. When the surviving partner passes, those assets will go to their children, and nothing will be passed to the other family.

The surviving partner will have no legal right to the assets of the deceased partner, other than any that have been titled to joint tenancy. There is no community property between cohabitating couples, unless they have registered as domestic partners. This is how the law works in California, and every state has its own rules. Assets owned by the deceased partner that are titled in his or her name only, belong to the decedent’s probate estate and will pass to their children. If the gentleman dies first, in this example, will his companion be left homeless?

This is a situation that can be easily remedied with an estate plan, creating wills and trusts that clearly spell out how they want their assets to be distributed upon death. There are many different ways to make this happen, but they will need to work with an estate planning attorney. Where the surviving non-homeowner will live after the homeowner dies is a serious issue, unless other plans have been made. One way to do this is to leave a life estate in the home in his will, or by creating a trust that holds the home for her use. When she dies, the home can then pass to his children. In that case, a series of agreements about how the home will be maintained may need to be created.

Taking the time and making the investment in an estate plan, is for the benefit of the individual and the family. An indifferent attitude about the future is hurtful to those who are left behind. Contact a local, reputable estate planning attorney.

Reference: Santa Cruz Sentinel (April 7, 2019) “Longtime unmarried couple hasn’t planned for future”

 

Should My Estate Plan Include a Trust?

There are as many types of trusts, as there are reasons to have trusts. They all have benefits and drawbacks. What type of trust is best for you? The answer is best discussed in person with an estate planning attorney. However, an article from U.S. News & World Report titled “8 Things to Know About Trusts,” gives a good overview.

Revocable or Irrevocable? Revocable trusts are usually established for a person (the grantor) during their lifetime, and then pass assets to the named beneficiaries, when the grantor dies. The revocable trust allows for a fair amount of flexibility during the grantor’s lifetime. An irrevocable trust is harder to change, and in some cases cannot be changed or amended. Some states do allow the option of “decanting” trusts, that is, pouring over assets from one trust to another. You’ll want to work with an experienced estate planning attorney to be sure trusts are set up correctly and achieve the goals you want.

Trusts can protect assets. Irrevocable trusts are often used, when a grantor must go into a nursing home and the goal is to protect assets. However, this means that the grantor no longer has access to the money and has fundamentally given it away to the trust. Putting assets into an irrevocable trust is commonly done to preserve assets, when a person needs to become eligible for Medicaid.  The trust must be created and funded five years before applying for benefits. Irrevocable trusts can also be used to obtain veteran’s benefits, if they are asset-based. VA benefits have a three-year look-back period, as compared to Medicaid’s five-year look-back period.

Trusts can’t own retirement accounts. Trusts can own non-retirement bank accounts, life insurance policies, property and securities. However, retirement accounts become taxable immediately, if they are owned by a trust.

Trusts help avoid probate after the grantor’s death. Most people think of trusts for this purpose. Assets in a trust do not pass through probate, which is the process of settling an estate through the courts. Having someone named as a trustee, a trusted family member, friend or a financial institution, means that the assets can be managed for the beneficiaries, if they are not deemed able to manage the assets. Another good part about trusts: you can direct how and when the funds are to be distributed.

Trusts offer privacy. When a will is filed in the courthouse, it becomes part of the public record. Trusts are not, and that keeps assets and distribution plans private. A grantor could put real estate and other personal property into a trust and title of ownership would remain private.

Tax savings. Before the federal estate tax exemptions became so high, people would put assets into trusts to avoid taxation. However, state taxes may still be avoided, if the assets don’t reach state tax levels. You can also transfer funds into an irrevocable trust to transfer it to others, without making it become part of a taxable estate. This is something to discuss in detail with an estate planning attorney.

Irrevocable Trusts can be expensive. If you are considering an irrevocable trust as a means of controlling the cost of an estate, this is not the solution you are looking for. Trusts require careful administration, annual tax filings and other fees. You may also lose the advantage of long-term capital gains by putting assets into trusts, since they are taxed upon withdrawal, and usually based upon current market value. The marginal rates for trust income of all kinds apply at much lower levels, so that the highest marginal taxes will be paid on very low levels of income.

Work with an experienced trusts and estates lawyer. Trusts and their administration can be complex. Seek the help of a trusts and estates attorney, who will be able to factor in tax liability and the impact of the trusts on the rest of your estate plan. Remember that every state has its own laws about trusts. Finally, an estate plan needs to be updated every few years. For example, trusts that were set up for a far lower federal estate tax exemption several years ago are now out of date, and may not work to achieve their intended goal. The laws changes, and the role of trusts also changes.

Reference: U.S. News & World Report (March 29, 2019) “8 Things to Know About Trusts”