Case Illustrates Dangers of Do It Yourself Wills

George Zeevering probably thought he could save some money by writing his own will without getting the advice of a lawyer. 

It seemed simple enough. He had five children but was close to only two of them, his son Wayne and his daughter Diane. He wanted to be sure that Diane got his red pick-up truck, so he put that in his self-drafted will. He also wanted to make sure that Wayne got his summer property in Maryland, so he put that down as well.  

Apparently he didn’t want anything to go to his other three children so he wrote the following sentence in his will: “The failure of this will to provide any distribution to my children, Laura Bonner, Kathleen Archacki, and Jennifer Rios is intentional.” 

More likely than not, this meant he wanted the rest of his estate (worth $217,000) to go to his favored children, Wayne and Diane. But he didn’t specifically say that in the will he wrote for himself.  And now we will never know for sure what he wanted, because Mr. Zeevering died on August 3, 2011. 

Diane did get the truck. And Wayne did end up with the Maryland summer property. But George’s will failed to specifically describe who should get the remainder of his estate. Judge’s call this a “residuary clause.” George’s will didn’t have one. 

When there is no residuary clause, the undesignated portion of the estate goes according to the laws of intestacy. Those are the state laws that say who inherits from you if you didn’t leave an adequate will, trust, or other instructions. In George’s case, the Pennsylvania intestate laws say that his remaining estate should go equally to all five of his children. 

Of course George didn’t know that. He wasn’t a lawyer. He probably thought that the remainder of his estate would go to Wayne and Diane. But the law can be very demanding. It contains traps for unwary people like George. He made a mistake that anyone could make. And his children Wayne and Diane ended up paying for it.   

Now it’s bad enough that George’s carelessness in writing his own will meant that all of his children ended up in a lawsuit. And that the lawyer’s fees were many times more than George would have paid to have legal help to write his will. 

Even worse, his favored children lost the lawsuit, and 60% of his estate went to the three children he probably wanted to get nothing.  That’s the big problem with wills – if you make a mistake, or are unclear about something – it’s really hard to fix it when your will is read after you are dead. 

Don’t be penny wise and dollar foolish. Don’t create a mess for your family as you leave this life behind. Save your family from unnecessary conflicts and expense. See a lawyer for advice when you are ready to prepare your will.  

If you live in NorthCentral or Northeastern Pennsylvania, you can make sure your family doesn't end up in mess like George's by calling the elder law and estate planning lawyers at Marshall, Parker and Weber at 1-800-401-4552. There is no charge for your initial appointment. 

The case is: In Re: Estate of George Zeevering, case number 316-2012, decided November 7, 2012 in Delaware County Pennsylvania Orphans Court.  

Getting Care at Home – How to Find and Pay for it

As I get older I find that there are many fine attributes of aging. (Personally, I think wisdom is one of them - though my children seem to disagree).  Unfortunately, aging also increases our risk of frailty and illness and advances the potential that we may someday need the assistance of others to help us be able to remain at home.

Most seniors who need help with their daily care needs are able to live at home, either in their own home or that of a close relative. Their care needs are most often met through the unpaid help of family members. An estimated 16 percent of American adults, or 33.9 million adult caregivers, provide unpaid care to a recipient age 50 and older. (National Alliance for Caregiving Report, Caregiving in the United States).

According to a 2011 survey by the National Caregivers Association, more than two-thirds of caregivers are 45-64 years of age, nearly one-half have household incomes less than $40,000 and about one-third are employed full time. A typical caregiver is a married woman in her mid-forties, who provides 20 hours of care-giving per week, often while working full-time.

Despite the love, sacrifice and often heroic efforts of family, there may come a time when a care recipient’s needs overwhelm the unpaid family caregivers. The family may have to look to supplement the care it can provide with paid assistance. 

A family seeking paid in-home help to care for Mom or Dad faces a complicated array of issues and options.  Where do you start?  How can you find quality help?  How are you going to pay for it?

Assessing Needs

An early step should be to assess the situations of the senior and the family caregivers, and create a realistic plan. You may wish to seek the advice of the care recipient’s physician, and seek help from your local Area Agency on Aging (AAA). The government-funded AAAs will provide a care manager at no charge to assess the senior’s needs and help create a plan to provide in-home services. A listing of Pennsylvania AAAs by county is available here and at the Department of Aging website: www.aging.state.pa.us.

If the care recipient is being discharged from a hospital, limited discharge planning assistance should be available from the facility. In some localities, a private geriatric care manager (GCM) can be hired to help assess an older individual’s needs, create a care plan, and locate the assistance required to implement the plan.  Unfortunately, GCMs may be unavailable in more rural areas.

Finding caregiving services that are suited to your needs is complicated and requires thought and research. You can start by making a listing of which types of services will be needed. In searching for home care providers consider the level and quality of care they can provide, their availability and ability to provide the services you need, their training and experience, and how to pay for the care.

Finding Paid Caregivers

Once you have assessed needs and created a plan, the next step is to locate individuals and companies who can fill those needs. In some cases you will need to decide whether to try to hire help yourself or go through an agency. 

The main advantage of handling this task yourself is that privately hired caregivers are usually less expensive.  And you have the flexibility to hire family members or friends who are already known by the senior. But if you hire the home care worker yourself, you are responsible for the burden of dealing with employment rules and taxes. In some cases families choose to pay caregivers illegally “under the table.” This is not recommended.  

If you need help in locating paid caregivers, you may turn to either a home care registry or a home care agency. Both home care registries and home care agencies help supply families with paid caregivers who care provide “unskilled” assistance with needs such as:

• Assistance with self-administered medications

• Personal care such as assistance with personal hygiene, dressing, and feeding

• Homemaking such as assistance with household tasks, housekeeping, shopping, meal planning and preparation, and transportation

• Companionship

• Providing a respite for unpaid family caregivers

  

Registries are a kind of “matchmaker” that provide a list of names of people interested in providing home care services. The registry is typically paid a fee for its services but does not employ or supervise the worker. Those responsibilities remain with the family.  If you use a registry it is important to note that the workers you hire are subject to employment taxes for which you are responsible.  You may need an accountant’s help to set up your books. 

Home Care Agencies differ from registries in that agencies directly employ the care workers. This can free the family from bookkeeping and tax responsibilities and generally makes life easier for the family. Agencies handle all of the paperwork involving payroll and related taxes. The agency will find the workers, screen them, and monitor their work. If an agency offers a full range of services, the care may be better coordinated and more comprehensive. An individual care worker’s sudden unavailability can be better managed, since the agency can fill the gap.

In Pennsylvania, home care registries and agencies are both licensed by the Pennsylvania Department of Health and are subject to regulations.   

Although the names are confusingly similar, Home Health Care Agencies (also known merely as “Home Health Agencies”) are different from home care registries and home care agencies. A Home health agency can deliver skilled care like nursing, physical therapy, and occupational and speech therapy, along with unskilled assistance. Importantly, Medicare, Medicaid, and your private insurance plans may pay for services that are provided by a licensed home health agency. Payment will depend on whether the care is medically necessary and you meet qualification criteria. You may opt to pay out-of-pocket for services that are not covered by other sources. 

The Pennsylvania Department of Health website has a complete listing of licensed home care registries, home care agencies and home health agencies in each county: http://app2.health.state.pa.us/commonpoc/content/publiccommonpoc/normalSearch.asp

Your local Area Agency on Aging (AAA) may also be able to help the family locate and retain the services of paid caregivers.  Find a list of Pennsylvania AAAs here.

Paying for Care    

Seniors needing home care assistance can use private funds to pay for the care. Some commercial insurance policies may help with the cost of care. Some specialized “long term care insurance” policies specifically designed to pay for long term care may cover some home care costs.  But few seniors currently own this type of policy. 

Reverse mortgages may also provide a funding source for private payment of home care. A "reverse" mortgage is a loan against your home that you do not have to pay back for as long as you live there.

There are many publicly funded programs that may also help families pay for needed care.

Medicare – This program has some home health care coverage which can be of importance to seniors who require skilled care at home. Home health agencies are very familiar with Medicare and can help the senior qualify for any available benefits. The recipient must be homebound and require skilled care which is ordered by a physician. The official U.S. government booklet about Medicare home health care benefits for people with Original Medicare is available here. 

Medicaid – Medicaid is an increasingly important source of payment for home care for seniors. In addition to the services provided under regular Medicaid, Pennsylvania’s Aging Waiver program can provide home care to individuals over age 60 who would otherwise require institutional care in a nursing facility.  For those who qualify, there are no co-payments. Your AAA will have information available about the Aging Waiver and an elder law attorney may be able to help seniors qualify for Medicaid Aging Waiver benefits. 

Veteran’s Benefits – Unfortunately, these benefits are often overlooked. Older veterans (and the spouses of deceased veterans) may qualify for VA pension benefits even though they don’t have a service connected disability.  Benefits are increased if the veteran is homebound or in need of the aid and attendance of another person.

Office of Aging – several additional programs like Pennsylvania’s Caregiver Support program are operated through your local AAA. 

A combination of unpaid family care supplemented by privately or publicly paid services can allow a frail senior to remain in the home for as long as possible.  Publicly funded programs often have financial qualification limitations.  A knowledgeable elder law attorney can often help the senior find out about programs and meet qualification requirements.   

Bill would Eliminate PA tax on Inheritance of Family Business

Pennsylvania imposes a death tax on assets inherited by children and other non-spouse family members. The inheritance tax rates range from 4.5% to 15%. 

Last year, Pennsylvania eliminated the tax on the inheritance of agricultural real estate by family members, provided the property continued to be devoted to agriculture for a period of 7 years. See my earlier article: Pennsylvania eliminates tax on inheritance of family farms if law's conditions are met.     

A number of Pennsylvania Republican legislators are seeking to enact a similar law with regard to the inheritance of assets related to a family owned business.  

In Pennsylvania, House Bill 48 has been introduced. With a nice marketing touch proponents are calling it “Mom & Pop Shop” Death Tax Elimination. It would eliminate PA Inheritance tax on the transfer of all business assets, including real estate between members of the same family, provided that after the transfer, all assets, including real estate, continue to be devoted to the same business for a period of five years beyond the transferor's date of death.

The term “members of the same family” is defined in Pennsylvania Inheritance Tax law as “Any individual, such individual's brothers and sisters, the brothers and sisters of such individual's parents and grandparents, the ancestors and lineal descendents of any of the foregoing, a spouse of any of the foregoing and the estate of any of the foregoing. Individuals related by the half blood or legal adoption shall be treated as if they were related by the whole blood.”

Exactly what will qualify as “business assets” as that term is used in House Bill 48 may need clarification if the legislation is to become law. 

House Bill 48 has quite a few Republican sponsors and similar legislation was introduced in the Pennsylvania Senate last year by the powerful Senate Majority Leader, Dominic Pileggi. This would seem to auger well for serious consideration and possible enactment of the legislation later this year. It is estimated that the new family business inheritance tax exemption would cost Pennsylvania approximately $10 million in annual lost tax revenues.  

The legislation is getting some press coverage – see:  Proposal would exempt family businesses from Pennsylvania inheritance tax.

Supreme Court Denies Certiorari in Lewis v. Alexander

The US Supreme Court has refused to hear the Commonwealth of Pennsylvania’s appeal in the pooled trust case, Lewis v. Alexander. On January 14, 2013, the Supreme Court denied Pennsylvania’s request to grant a writ of certiorari.

The Supreme Court denial leaves intact the June 20, 2012 decision of the Federal Third Circuit Court of Appeals in the case. The Third Circuit upheld a lower court’s invalidation of various restrictions that Pennsylvania had tried to place on pooled trusts. The Supreme Court’s denial of certiorari means that the lower appellate court’s decision stands and Pennsylvania may not impose those restrictions.

In Act 42 of 2005, Pennsylvania enacted a number of limitations on the use of pooled trusts. Section 1414 of Act (62 Pa. Stat. Ann. §1414) imposed restrictions based on (1) the disabled individual’s age; (2) the characteristics of the individual’s needs in relation to disability; (3) what expenditures a trust could make to improve the disabled individual’s quality of life under the trust instruments; and (4) the percentage of any funds remaining in the trust after a beneficiary's death that could be retained by the pooled trust to assist other disabled individuals.

 
For more on the Lewis v. Alexander case see the Third Circuit Court’s opinion at http://www.ca3.uscourts.gov/opinarch/113439p.pdf. 

See also my earlier post discussing this case “Federal Court voids Restrictions on Pooled Trusts.”