A post on a blog that I do not frequent, but that I look at occasionally because other blogs I do frequent link to it from time to time, got me thinking about what’s often the trickiest question for families doing estate planning: who would be responsible for your children if you aren’t around?
The post that got me thinking about that question was one about some survey suggesting that grandparents aren’t up on all the latest parenting tips. My reaction is, why would they be, and so what? Does that make grandparents any less important?
That made me think about the estate planning question because in the wills I draft for parents of minor children, grandparents are probably nominated as guardians more often than anyone else. I doubt that the parents who have made those nominations gave too much thought to whether or not their parents are up on all the latest parenting tips.
You didn’t include the birthday check from your grandmother on your income tax return, so why would you have to include the money you receive from her estate? That question and a few others are answered in my latest Estate Planning Law Report. You’ll find it in the same place where it’s posted every month: in the publications section at deconcinimcdonald.com.
Your comments are welcome, as always.
End of life care is a subject I have addressed before, most recently in my June, 2017, Estate Planning Law Report. Charlie Gard was an infant born in England who died recently after living for only a few months. The case attracted international attention when a court in the United Kingdom denied the child’s parents the opportunity to seek experimental treatment for Charlie in the United States. It’s a difficult situation with no easy answers, and I know this is controversial, but I found it pretty appalling that a court would deny the child’s parents the opportunity to seek experimental treatment for him at their own expense. There’s a brief commentary at The American Interest that sums it up pretty well.
If you are concerned about who will have the ability to make decisions for you, consider a health care power of attorney.
You can read my Estate Planning Law Report here. It’s about new law on end of life care. I also wrote a short item about the origins of inheritance law.
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This is the first sentence of the abstract for a paper by some guy at Harvard: “Historically, it is safe to say that very few laws did as much to stoke inequality as laws touching descents and hereditary transmissions.”
What exactly does he mean when he refers to “laws touching descents and hereditary transmissions?” Well, he gives us a hint in the last sentence of the abstract: “Hence, inheritance taxation is most likely necessary from a classical liberal point of view as an instrument of social mobility to counter notable problems of social immobility, say hereditary vocational stratification, which a system of private property rights creates.”
This is what I think he means: modern law allows you to leave your lifetime accumulation of assets to your children, as opposed to when no one but the King could own anything, so commoners couldn’t leave anything to their children (i.e. before the system of private property rights was created). Therefore, it is necessary for the government to take (at least some of) the assets you would otherwise leave to your children, to prevent your children from having an economic advantage over others whose parents didn’t leave them anything.
Via Taxprof Blog.
I found this article in the Arizona Republic interesting. It’s about new assisted living facilities in the Phoenix area that offer reduced rents for people with modest incomes. That could really fill a need, since there are many people who need some assistance but don’t meet the medical criteria for assistance from the Arizona Long Term Care System (ALTCS).
What the article doesn’t say, however, is whether there is an asset test in addition to an income test to qualify for the reduced rent. Many people that I talk to would qualify for benefits from ALTCS based on their income, but have too much in assets to qualify, with the result that they have to use their assets to pay for their care until the assets are all expended, then qualify for benefits because they don’t have enough income to pay for their care.
This kind of planning is often necessary, but is not widely understood. I have been doing it for a long time. The need for it has definitely not decreased.
Some people might not like to hear it, but I think it must be said: making yourself responsible for the actions of someone else is dangerous. Don’t do it unless you either (1) have a contract with the other person, or (2) trust the other person with everything you have.
What made me think of that? I saw an article in the Arizona Republic that talked (very superficially) about joint bank accounts, joint credit cards, joint business ownership, and co-signing for a student loan. If you enter into any of those joint arrangements, you are making yourself responsible for the actions of someone else.
This is a topic that I have touched on in the past, and will undoubtedly address again in the future. If you have any of these joint arrangements, it can be an important consideration in estate planning.
STOP AND THINK FOR A MINUTE: WOULD A U.S. GOVERNMENT AGENCY ASK YOU TO PAY A TRANSACTION FEE WITH ITUNES GIFT CARDS?
I really don’t mean to be critical or demeaning toward the people who are victimized by these scammers. I just can’t help thinking that if the victims would stop and think for a minute, they would realize that they were being scammed. In this story, the caller said he was calling from the “U.S. Government Grant Department,” and had $9,000 in federal grant money for the victim. All she had to do was pay a $150 “transaction fee.” The scammer told her to get $150 worth of iTunes gift cards and give him the card numbers, which she dutifully did.
The scammer then decided to go for more, telling the victim that since it was an “out of state transaction” she would also have to pay $900 for “insurance.” When she said that was beyond her means, the scammer reduced the price to $425. Perhaps because at that point she was starting to catch on, the victim called her bank, who told her she had been scammed.
Are there enough red flags in that script? I’m not sure how you could get many more in there without the integrity of the scam falling apart completely. Stop and think: if something sounds too good to be true, then it probably is too good to be true.
The term “mandatory saving floor” caught my eye in the abstract for a paper titled “Getting Americans to Save: In Defense of (Reformed) Tax Incentives.” I didn’t have time to read the paper, but I’m curious what the author, a tax professor at a major law school, meant by that. Is he proposing mandatory retirement account contributions for all wage earners? That’s an idea that’s been around for a while, but I think there are serious questions about its viability. Anyway, isn’t that essentially what the social security tax was meant to be?
The contents of this blog, this web site, and any writings by me that are linked here, are all my personal commentary. None of it is intended to be legal advice for your situation.