The Montana Estate Lawyer

Thursday, May 8, 2014

What does Obamacare mean for you?

I really don't want to debate whether we should have Obamacare in the first place, but in preparing for a recent workshop for our Peace of Mind Protector client service program, I asked my friend Bruce Lahti of the Junkermier office, who is an expert in the area, what I should share with our clients about the new program.  Here's what he said are the top 5 things to know about the Affordable Care Act (ACA) if you have Medicare:

         1.         Your Medicare coverage is protected.
Medicare isn’t part of the Health Insurance Marketplace established by ACA, so you don't have to replace your Medicare coverage with Marketplace coverage.  No matter how you get Medicare, whether through Original Medicare or a Medicare Advantage Plan, you’ll still have the same benefits and security you have now. 
You don’t need to do anything with the market place during Open Enrollment.

         2.         You get more preventive services, for less. Medicare now covers certain preventive services, like mammograms and colonoscopies, without charging you for the Part B coinsurance or deductible. You also can get a free yearly “Wellness” visit. 

         3.         You can save money on brand-name drugs. If you’re in the donut hole, you'll also get a 50% discount when buying Part D-covered brand-name prescription drugs. The discount is applied automatically at the counter of your pharmacy—you don’t have to do anything to get it. The “donut hole” will be closed completely by 2020.

         4.         Your doctor gets more support. With new initiatives to support care coordination, your doctor may get additional resources to make sure that your treatments are consistent.

         5.         The ACA ensures the protection of Medicare for years to come. The life of the Medicare Trust fund will be extended to at least 2029—a 12-year extension due to reductions in waste, fraud and abuse, and Medicare costs, which will provide you with future savings on your premiums and coinsurance.

Friday, April 25, 2014

Estate Planning 101: Make Sure Your Beneficiary Designations Coordinate With Your Estate Plan

When you die, your property is transferred to your family/beneficiaries in one of several ways, depending on what arrangements you have in place.  If you have a Will, your property is transferred pursuant to its terms.  If your property is held in a Trust, the terms of the Trust dictate how the property is distributed.  Some or all of your property may even be distributed in accordance with written beneficiary designations.

Today my focus is on beneficiary designations. You, as an investor or account holder, have the option of naming beneficiaries on a wide range of financial accounts. The general appeal for some is that when you die the assets in the account go directly to the beneficiaries named on the account, bypassing probate because the beneficiary designations trump your Will provisions. The downside to this is that because the beneficiary designations do indeed override your Will or Trust provisions, they need to be coordinated with your overall estate plan or you will have unintended consequences.  An incorrect or a not well thought out beneficiary designation can have the effect of unintentionally disinheriting one or more family members or making a disabled child ineligible for governmental benefits, just to name a couple examples. 

If you do have beneficiary designations, review them regularly to confirm that the designations comply with your overall estate plan.  Also, if there has been a life altering event, such as a birth, death or divorce in the family, you need to make sure to review your beneficiary designations as well as your overall estate plan.  Also, I would not recommend, if you do use beneficiary designations, that you name different beneficiaries for each of your accounts as a means to equalize your estate. You never know what life is going to throw at you and you may need to use one or more of those accounts for expenses, long-term care, etc.  If you were to cash out one of the accounts with no thought as to the beneficiary designations, this would also disrupt your estate plan and result in uneven distributions to your heirs.

The bottom line is that beneficiary designations, as a way of passing property at death, may not be the most appropriate  way to transfer all of your property.  There are many occasions where beneficiary designations play a part in your estate plan, but the lesson to be learned is that whenever beneficiary designations are used, care must be given to ensure that your estate plan is maintained and implemented in the way that you intend.


Thursday, April 3, 2014

Estate and Long-Term Care Planning – Lessons From Baseball

Another baseball season is upon us.  I'm always excited about the new season because that means spring is here and that my hopes and dreams are still alive that my favorite team will win the pennant.

My wife Rhonda and I attended a major league baseball game last July in Baltimore and sat in seats just behind home plate.  Rhonda has not been a big major league baseball fan and she was amazed about just how hard and unpredictable the game can be.  I have to admit that while watching a professional baseball game up close and personal, I shared her sentiment.

Take the batter, for example.  He must approach the at-bat with a strategy in mind given the pitcher’s tendencies and the game situation.  He gets only three strikes against him and to be successful he must withstand the pitcher's arsenal of weapons--the wicked fastball, the knee buckling curveball, the deceiving changeup, and the bottom dropping, nasty slider.  Success comes only with a game plan and attention to detail.

The lessons from baseball can be applied to estate and long-term care planning.  Like the batter, we never know what life is going to throw at us.  We need to establish a game plan and monitor and maintain that plan in order to ensure that our assets are managed for us if we can no longer handle our affairs, and to ensure that our assets go to whom we want, the way we want, when we want, and to do so with the least amount of taxes, professional fees and court costs possible.

Delaying or failing to implement our estate and long-term planning or failing to monitor and maintain our plan is like taking two strikes in baseball with the bases loaded and the game on the line.  We always feel we have plenty of time to get things in order, but what comes at us is always unpredictable.  In baseball, there is no worse feeling as a batter than to get caught looking at a called third strike, especially with the bases loaded.  In real life, getting caught looking, i.e., failing to plan, can be devastating to a family.  Instead of failing to plan and taking that third strike, strive to hit that estate planning home run and get your affairs in order.  You, and your heirs, will be glad you did.


Thursday, March 13, 2014

To Die at Home

Don’t get me wrong.  I’m not criticizing nursing homes.  They have a real place in our healthcare system.  For some people a nursing home is the best alternative. Like my mom; she’s in one right now.  She needs to be there.  If she can get her stronger we’ll take her back home, but for the time time being the nursing home is her only good option.

But, when  I come to the end of my days if at all possible I’d like to die at home.  

Whether I can do so will depend on my physical condition and my financial condition: can I afford to pay for in-home care?  But it will also depend on whether I’ve done planning ahead of time to make it happen.

Let me share a story that’s really been bothering me.  One of my farmer clients, let’s call him Bob, was in his eighties.  Bob was very successful. He had a big, debt-free farm and a loving family.  He was a little hard of hearing, but otherwise his health was pretty good.  He was sharp and fun to talk to.  

Then one day he had a stroke and ended up in a nursing home.  He hated it, especially the constant noise and lack of privacy.  He wanted to get out and go home.  But, despite his millions, he couldn’t.  And I couldn’t help.  We had done his basic estate planning, but it didn’t help.

At that point Bob had lost control of his life.  His family had assumed control.  That’s exactly what Bob had said should happen if he became disabled when we did his estate planning.  And Bob’s family loved him and wanted to do what was best for him.  

The healthcare professionals told the family that the nursing home was the best place for Bob.  (And, anyway, that is where “everyone” who needs a high level of care ends up, isn’t it?)

And it takes a lot of work - and money - to get a family home set up to take care of an invalid.  Handicap accessible bathroom, hand rails, a hospital bed.  Home healthcare people.   Where do you even find someone to do such work?  There are a lot of moving parts.   What would it cost?  

 So, Bob’s family never seriously considered doing what Bob told them he wanted as he lay in the nursing home bed.  Even though there was plenty of money to pay for twenty-four hour care and to retrofit the home for his care.

The lawyer in me has to point out that the heirs were in a conflict of interest situation: every extra dollar spent on Bob’s healthcare reduced their inheritance by a dollar.  But I don’t want to point fingers.  Except at Bob and - myself.

Bob couldn’t die at home because he had not done the planning ahead of time - while he was still in control. When we were doing Bob’s estate planning, he said that he didn’t want his money to be “wasted” on a lot of medical expenses.   But I wish I had prodded him.  I’ll bet he also would have said that he would like to die at home if he could - and that it was okay to use part of his ample estate for that.  If we had put a specific plan in place and he had discussed it with the family, I’m sure they would have agreed and followed his wishes.

Not everyone will have the same viewpoint, and many won’t have the financial means to die at home if that is medically possible.    

But it all starts with planning.  I’m making this part of our estate planning process.  I’m working with another family right now who want to make sure they can die at home.  I owe it to them, and I owe it to Bob.



Wednesday, January 29, 2014

How We Approach Estate Planning for Our Clients

At Scott, Tokerud & McCarty we help our clients pass their property to whom they want, when they want and how they want - while minimizing expenses. We work to help our clients maintain control of their lives and pass their non-financial legacy on those they love. Please see our latest video blog below on this topic:

Monday, December 23, 2013

Make your estate planning really meaningful. Use it to transfer your most important assets.

When you think of "estate planning,"  what comes to mind?  Perhaps how best to transfer wealth to the next generation.  Well, what about passing on your most important assets?  How about expanding your estate planning to include transfer of your insight and wisdom?  Why not prepare an ethical will?

An "ethical will" is sometimes also called a legacy letter, letter of instructions or a personal legacy statement.  It's a way of passing down what is meaningful.  Values, ideas, personal reflections, family stories.  Since ancient times people have shared stories, wisdom and blessings with future generations using a written statement.

An ethical will can take many forms.  It might be a single letter.  Or it might be separate letters to different family members.  Today it might also be a video, a Power Point, or an audio recording.  And if you want help, companies have been formed to help you prepare it in any of these formats.

I started writing one myself about ten years ago (even though I'd never heard of an "ethical will.")  I just began spending a few minutes every morning writing a letter to my daughter, Hannah, so she'd know more about me and our family if something happened to me.  It became what I started calling my "book" for her.  

It starts with a chronology beginning in 1900 when both my grandfathers were born. I have a section on people from my life (particularly relatives Hannah didn't know), a section on my dogs (of course!), a section on the "big" issues we face in life, a section on me (what I consider my strong and weak points and highlights of my life), and one on Hannah (what is so great about her).  Over time it somehow has grown to 168 pages.

Why write an ethical will?  It's a way to pass down what we value so the family can keep the values alive. My grandma Hannah very successfully ran several nursing homes.  She always had a Cadillac, and she traveled alone to Norway twice in the 1950's.  Her generosity to the family was huge: she gave my dad a down payment for a farm, and she sent me spending money at college.  I want my Hannah to know about her great grandma (and be proud of her, as I am).

An ethical will can also be practical, sharing ideas on how to protect, use and grow the family's wealth. In my practice advising family businesses I have many times heard young family members faced with a business decision remind one another about what Mom or Dad said when faced with a similar issue years before.  It can make a real difference.

The biggest reward for writing an ethical will may be for the writer.  The process gives you an opportunity to reflect on your life.  It can provide a deeper sense of meaning and peace of mind.  It helped me sort out conflicting ideas of how I felt about several important people in my life.

So, how do you draft an ethical will?

You just start jotting down some ideas.  Then, you prepare a simple draft.  It might be one page.  That's okay; it's a start.  And if you leave that one page document for your family, I guarantee that they'll treasure it.

It might be easier if you address it to one person like I did.  Or you might imagine you're having a conversation with an ancestor.  The questions you'd want to ask him or her are likely the same ones your family would like to ask you.

Of course, preserve the original, make copies, and make sure your family can find it when you're gone.

The most important thing?  Start now!

Monday, November 25, 2013

What Am I Thankful For This Thanksgiving? Jury Duty!

Most of us at some point have received in the mail an official looking envelope from the local city, state or federal Clerk of Court, and upon opening it, discovered it was a summons for jury duty. While many of us have been summoned for jury duty, very few of us, I'm sure, have actually served on a jury. I now can be counted as one of the few.

To my surprise, I spent 5 days as a juror in early October in state District Court. Why was I surprised? Most people think of me as a friendly, likable guy, with no particular biases or extreme viewpoints. These would add up to, I suppose, the attributes that both the plaintiff and the defendant and their respective counsel were looking for as a juror to decide their case. So, again, why the surprise? Well, I was of the mindset that because I am a practicing attorney, there would be no way that the parties would want me to serve on their jury. I'd show up for jury selection that first day at 8:30 a.m. and be back to the office in short order––certainly no later than noon, right? Wrong! At 4:30 p.m. that afternoon the jury selection process concluded and I found myself, you got it, on the jury.

I immediately tensed up and started thinking about my schedule, the client meetings that needed to be canceled, and trying to figure out how to get my work done. I had a bad attitude that I carried into the first full day of trial the next morning. But then I got to know the other jurors who were serving with me. They too had busy schedules and responsibilities. It wasn't just me. I wasn't any more special or inconvenienced than anyone else there.

Once I realized this and focused my mind on the task at hand – the trial – my attitude changed, and much for the better. I enjoyed my experience and, when it was all said and done, was grateful for the opportunity to perform my civic duty. After all, I'd want others to do the same for me.

There are two big takeaways that I’ll long remember from my jury experience. The first is just how much I enjoyed getting to know my fellow jurors, laughing and joking during breaks and over lunch, even if it were only for a short period of time. The second is, as an attorney, gaining a whole new and invaluable perspective on the jury trial process – – from the viewpoint of a juror. I went into this matter thinking it an inconvenience and harmful to me and my law practice to spend my valuable time on a jury.  I came out of it being a better lawyer, I hope, from the insights I have gained.  For that I am thankful.


Friday, November 22, 2013

The time bomb facing Montana businesses

Many Montana businesses are corporations or LLC's with several owners.  Many of these businesses are sitting on a time bomb.  The bomb will explode when one of the owners dies, becomes disabled, wants to sell out, gets fired or wants to quit.

That's when the company owners will dig out the shareholders' or operating agreement to see what it says about buyout.  (There is an agreement, right?) That's when the parties will realize that their agreement doesn't have reasonable terms in place to deal with the situation.  And that's when they'll learn how hard it is to hammer out an agreement in a crisis - or face litigation.

Based on many years of experience reviewing these agreements I can say that the agreement probably doesn't even come close to providing reasonable solutions to the problem facing the company.  

The odds are high that the agreement doesn't provide a mechanism to set value that comes near to fair market value. The payment terms for buyout are likely not reasonable either.  The company and remaining owners may be faced with payment terms they can't afford - or the departing owner (or his estate) may be faced with an unsecured note that strings out payment over decades at an unreasonably low interest rate.

Then, if the agreement calls for life insurance to fund a buyout upon death, is there actually a policy and what is the death benefit?  (Often the death benefit is based on what the company was worth 20 years ago.)  Who will receive the death benefits?  If that's mixed up (as it often is), there's no guarantee that the life insurance will actually be available for the buyout.

So, was I exaggerating about a time bomb?

You already know what the solution is:  get out the agreement now - before something bad happens - and make sure it says what it should.  Based on actual company value, reasonable buyout terms and the realities facing the owners today.  I know some lawyers and CPA's who could help.

Wednesday, October 30, 2013

At least one person thinks I'm right about medical records.

Don't let anyone ever tell you that spouses never listen to one another.  As soon as I posted my piece on medical records last week my wife, Becky, went into action.  She even wrote a guest blog post that I want to share with you.

Enter Becky:

When I read Keith's blog post last week on medical records, I had already started collecting my medical records, but I didn't have them organized like Keith suggested.  So I went to work and put together a binder organizing the records.  This may seem like a daunting task. However, you never know when you are going to have to track the last chest x-ray you had or the most recent blood work. Your binder, having medical information in one place, in your keeping, can make accessing such information relatively easy. And your efforts at organization will reward you.

Here’s what I have done and some suggestions for you:

1.     I made a list of my health care providers and appointments, procedures and tests that I’ve had.

2.    As to collecting medical records, with all the privacy laws you will need to complete some paper work and sign release forms to obtain any files.  Most large facilities like clinics or hospitals post the forms online. You can download them, print, fill them out, and then fax or mail them back. Smaller offices will often ask that you stop by and pick the form(s) up, or they will mail or fax it to you. I found records over 10 years old are often archived or lacking images. (They probably aren’t that helpful anyway). Health care providers are set up to do this. You just have to ask and follow the correct procedures.

3.     Keith suggested one binder, but I put my records into two binders. One, for my primary care providers, is organized chronologically. The other one is organized both chronologically and then by the duration of treatment, or event. With some doctors I have an ongoing relationship. They are in the front. The ones that were a one-time event, like a surgery, are towards the back.

4.     I used a large 3-ring binder, section tabs, pens, labels, and scissors. You'll also want to have standard office supplies like paper clips, staple removers, a hold punch, and tape handy.

5.     You can get section dividers that are a heavy colored plastic and have an envelope pouch built into the page. These work great for unused prescriptions or smaller papers or flyers. I included basic medical information in the front like my blood type, along with identifying stats like my name, birth date, insurance information and social security number. I suggest you add an index or table of contents to the front page of your binder.

6.     And finally include the list of doctors - and nurses - that care for you and their phone numbers. Often it is difficult to reach the doctors themselves, but you can talk to their nurse.

7.   As you compile the files it is a good time to review the documents. Perhaps you'll end up with questions or concerns as you read. Make a list of these. (It doesn’t hurt to make a doctor’s appointment if your concerns need to be addressed.)

8.  This notebook is for you. But it is also can be useful for someone caring for you, too. It can be taken to appointments for reference and be updated as you go along. It will be easier to maintain once you’ve set the system up. When you are finished pat yourself on the back for a job well done. 

Good luck and best of health to you.


Wednesday, October 23, 2013

You want the best health care? Take charge of your medical records.

The best way to get better health care?  Take charge!  Your doctor won't be offended.  You'll be helping your health care providers do their best work.

You probably already know this, but your medical records are really yours.  You're entitled to copies of everything.  You need to start collecting your medical records.  It will probably be uncomfortable when you first start asking for copies, but get over it!  It's important.

Make it a habit to get copies of the records of all your doctor visits, hospitalizations, tests, etc.  Staff can either give you copies right away or send them in a few days.  They'll do so if you'll just ask. Then put the records into a three-ring binder organized by health care provider.  Update the binder every time you get a new document.

Now, here's where your work will pay off.  Take your binder with you to your doctor visits.  

Then, when your doctor asks you when you first started experiencing shortness of breath, you won't have to rely on your memory.  You'll be able to show your doctor the record of your medical exam in 2002 when you first started having the problem.  Your doctor will be able to see what your condition was then and what the other doctor did for you.  Your doctor can help you way more today when she has exact information about your symptoms, test results and the treatment that you received way back when.

Yes, maybe your doctor already has the records from your earlier exam.  But there's a good chance she doesn't.

And, yes, it's not easy always asking for records, and it's a pain to organize the records and tote your notebook along with you to appointments.  But isn't your health worth it?

Tuesday, October 8, 2013

Getting better health care.

As we age, we deal more and more with the health care industry.  More doctor visits and tests. More hospitalizations.  More medications.

And more questions, confusion and stress.

How can we get the best health care results?  Jon and I have been thinking about this a lot and learning what we can.  I'd like to share some ideas with you in my next few posts.

Of course, you know where I'll start: with having really good estate planning documents in place.  For health care, the most important is the health care power of attorney (where you designate who will make decisions about your health care when you can't).  You want to give a lot of thought to whom you name.  

If possible you should choose someone who can be your "medical advocate."  A medical advocate is someone who is willing and available to get involved in your health care.  You let your health care providers know who this person is and you make sure they meet your providers.  This person is in your corner, and you want everyone to know that.

Most importantly, your medical advocate should accompany you on all doctor visits and hospitalizations.  They can help you prepare questions before appointments and make sure you ask about what is bothering you the most.  If you are "out of it" they will be the ones asking the questions.

When the doctor gives answers they'll be making sure that you and they both understand the doctor's answers.  You'll want to make sure they know you want them to be persistent with your doctor when you don't understand at first what has been said.

That's a lot to ask someone to do for you.  And not everyone can help this much.  But, it's worth asking.  If you can enlist your healthcare agent to be your medical advocate, we guarantee you'll get better health care.

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