Redkey Gordon P.C.

Did you really think that would work?

http://blogs.findlaw.com/legally_weird/2015/03/mans-carpool-dummy-fights-the-law-the-law-wins.html

Paper Stock vs. Electronic – What Can We Learn from Ronald Read?

He kept much of his holdings in paper stock certificates locked away in a safe-deposit box. While Mr. Read invested the time needed to stay on top of all of his positions, experts say that for many investors, holding physical stock certificates just isn’t practical and can create difficulties for heirs.

In addition to his paper stock certificates, Ronald Read had stock positions held directly at transfer agents (the official record-keepers for share ownership), as well as in a Wells Fargo brokerage account.

Is this a good idea?

The Wall Street Journal explains more in an article titled “Should You Invest Like Ronald Read?”

Read was on top of all of his investments (he left behind a nearly $8 million estate); however, experts say that many investors don’t like the idea of holding physical stock certificates. They can also create headaches for heirs, as finding paper certificates and all of the holdings can be a nightmare.

Mr. Read was up to date with his investments, but that’s not always the case. Sometimes, you have to do some detective work. For stocks that pay dividends, you have to obtain the owner’s tax return and trace all stocks owned through the dividends over the year. This is exactly what happened with some of Mr. Read’s stocks that weren’t in physical form or in his brokerage account.

It’s much easier if an investor converts his certificates into electronic form and consolidates them with a broker or financial adviser to save heirs from having to search frantically down the road. You may also want to speak with an experienced estate planning attorney about a revocable trust. This will help your heirs avoid a lengthy probate-court process to transfer the title of the assets after the original holder dies. In order to avoid probate, the securities have to be transferred to the revocable trust before the trust creator’s death.

Contact your local Northern California estate planning attorney, Robert A. Gordon of Redkey Gordon Law Corp for additional information.

Reference: Wall Street Journal (March 20, 2015) “Should You Invest Like Ronald Read?”

Keep the Giving Going with a Charitable Remainder Trust

Detroit businessman Dick E. Morand is giving to the causes close to his heart. Morand died in Detroit in 1977 at the age of 87. He was founder and owner of D.E. Machinery Company and was vice president of Addy-Morand Machinery Company. His wife, Helen, died in 1976 and the couple had no children. Now, five Metro Detroit nonprofits are benefiting from Morand’s trust.

Morand’s trust is really the gift that keeps on giving.

After the 2013 deaths of the two remaining beneficiaries to his special trust, five organizations discovered that they would benefit from his gift, with each charity to receive $2.7 million.

The Detroit News, in its recent article titled “Philanthropist gives $13M decades after death,” reported that the United Way For Southeast Michigan decided to place the gift in its endowment. Officials at the United Way said this would ensure that Morand's gift would have a positive effect on the community for many years to come. Morand created a charitable remainder annuity trust to provide the money to the organizations.

The original article suggests that a charitable remainder annuity trust is a subject best broached with an experienced estate planning attorney. You might use this trust in your own estate planning to lower your tax liability, give income for life to your beneficiaries, and provide a gift to your favorite charities.

Forty years on, and Mr. Morand’s charitable remainder annuity trust is still helping others.

Want to find out more? Contact an experienced estate planning attorney, Robert A. Gordon of Redkey Gordon Law Corp.Estate

Reference: The Detroit News (March 20, 2015) “Philanthropist gives $13M decades after death”

Caregiving Expert Gives Advice on Advanced Estate Planning

“I’m a caregiving expert, with more than 30 years of experience in the field of aging, so you’d think I’d be fully prepared for a loved one’s death, especially when that person is older or has been battling illness. Yet even for me, death caught me by surprise.”

There are many things caregiving expert Amy Goyer wished she would have asked before her mom and sister passed away.She says that it’s harder for her to feel that she totally lived up to her responsibilities as executor of their estates.

Her recent AARP article, titled “5 Questions I Wish I Had Asked Before They Died,”explains that she is going to ask her other sisters and other loved ones about this type of information now—long before she hopes she’ll ever need it. She has in place the proper advance directives, estate and financial planning, but she says that she’ll also be more thorough with the finer details. To that end, the author recommends asking these questions:

Where is important paperwork located? The author of the original article thought she had the most recent valid copies of her sister’s legal documents; however, that wasn’t the case. She had to search through mountains of paper! Your loved ones may know where their financial and legal documents are located—but that’s no help after they’re gone.

What are the details of what you want for your memorial service? Obviously with the stress of losing a loved one, any decisions about the service that can be made in advance are most helpful when relatives are deep in shock and grief. Discuss details with them like music, the service location, speakers, flowers, and food.

Who should get your personal items? The article urges you to catalog your collectibles, jewelry, and special mementos. Most people fail to list these items in their wills.

Who is in that picture? Many folks have stacks of family photographs of people who look familiar, but they’re not sure who they really are. To avoid this, label each photo when discussing it with your loved ones and hang on to that family history.

Finally, the original article stresses that you don’t let your hesitancy to talk about death keep you from bringing up these subjects with your family. Start the conversation early and have them often; it will help reduce the awkwardness.

Remember, as much as we hate to face it, death is inevitable for all of us. The better prepared we all are—in addition to the basic legal documents—the easier it will be when the time comes.

Contact Robert A. Gordon of Redkey Gordon Law Corp, an experienced estate planning attorney who can help you get prepared.

Reference: AARP (March 19, 2015) “5 Questions I Wish I Had Asked Before They Died”

Put Me in Coach! A Trust Helped Legendary Coach Dean Smith Continue to Give to His Players

Trusts are private—the only reason Smith's gesture went public is because players put photos of the letters and checks on social media. "I don't think he would have wanted to draw attention to himself," says the trustee of Smith's trust, Tim Breedlove. "That was his whole life and legacy. He preferred the attention to be on others and the players."

Revocable trusts are a very popular estate planning tool used by many to keep the details of an individual’s estate private. Wills, by contrast, are public documents. Coach Smith may not have intended for his gifts to be public knowledge, but his generosity is clearly treasured by his players.

Read the full story in a Bloomberg.com article, titled “Dean Smith's Generosity Got Lots of Press. His Estate Plan Deserves Some Too.”

A revocable living trust allows a person to change their mind and dissolve the trust at some point. That’s not a problem. But if you don't, whatever assets you transfer into the trust don't go through probate when you die. They’re not frozen (and are unseen by the public).

The original article emphasizes that you’ll still need a will to account for any assets that are left outside the trust, like a car. This type of will is called a "pour-over" will. It’s designed to take everything left outside the trust and pour it in.

Trusts aren't designed to be used in place of a last will and testament, but they become the main estate planning document. A revocable living trust isn't for everyone, the original article cautions. In Illinois, for instance, when a revocable living trust is used as the main document for an estate, creditors have two years to make claims—much longer than the typical six-month period allowed when a will is the primary document.

Talk to Robert A. Gordon of Redkey Gordon Law Corp, an experienced estate planning attorney about revocable living trusts and all of your estate planning questions.

Reference: Bloomberg.com (March 27, 2015) “Dean Smith's Generosity Got Lots of Press. His Estate Plan Deserves Some Too”

Is an IRA Trust for You?

An IRA Trust can be a very valuable tool in certain circumstances. Unfortunately though, many people are unaware of the IRA trust and its benefits.

Trusts are only for the super wealthy, right? Wrong!

The Kokomo Perspective recently posted an article titled “Are You Trustworthy?” The article explains that due to all the recent rule and distribution changes to IRAs and other retirement accounts, the IRA Trust has become much more popular and effective. An IRA Trust is a special type of revocable living trust that’s designed to receive your IRA accounts for the benefit of your loved ones after you pass away. The IRA Trust offers both protection and control.

The original article explains that an IRA is frequently one of the largest assets passed on to beneficiaries. However, as we hear about in the news, the inheritance of large sums of money by children or other heirs unable to handle wealth can cause many problems. The U.S. Supreme Court held last year that inherited IRAs are not protected from bankruptcy, so many individuals worry about losing an inherited IRA to creditors, divorce, taxes, or reckless spending. These concerns have sent many IRA owners searching for a better way to protect this money for their heirs.

Talk with Robert A. Gordon of Redkey Gordon Law Corp, an experienced estate planning attorney about the IRA trust and its benefits. See if this tool will work for your situation.

Reference: Kokomo Perspective (March 29, 2015) “Are You Trustworthy?”

Only in Canada...

http://blogs.findlaw.com/legally_weird/2015/03/spocking-currency-is-it-legal-to-write-on-money.html

Divorce Will Impact Your Estate Planning

Once you're divorced you should immediately create a new estate plan -- a will or revocable living trust, a healthcare power of attorney, and a living will ("pull the plug") designee. Read on for more estate planning must-do’s regarding divorce.

A recent article in the The Huffington Post, titled “Divorce and Money,”says that you should always listen to your attorney about the applicable laws in your state regarding divorce and your estate. In addition, the article says that you should also look at the following issues.

The division of property in a divorce is typically not taxable to either party. However, if instead of dividing marital property, one spouse agrees to monthly maintenance (alimony), this will be taxed as ordinary income. And it’s deductible to the paying spouse. The original article also notes that the spouse receiving the maintenance checks must make a quarterly estimated federal and state tax payment, so you need to plan accordingly.

There aren’t really any tax issues associated with child support payments, except for deciding who claims the children as dependents on their tax return. However, as you can imagine, these financial decisions for the children carry the potential for some problems down the road. Usually the parties agree as to who will fund college costs. Yet, when college tuition needs to be paid, that parent just might have a new family and new responsibilities. One option to avoid this headache is to set up a 529 college savings plan now to begin saving for that day.

Many divorce agreements include life insurance to fund future promises of payments. The spouse receiving the death benefit should be the owner and beneficiary of the policy with the ex-spouse making the premium payments. Without this arrangement, there’s nothing to keep an angry ex from changing the beneficiary on that policy.

Another critical issue after a divorce is estate planning. Once you're divorced you should create a new estate plan right away. This can include a will or revocable living trust, a healthcare power of attorney, and a living will. The court will have the ultimate say over the guardianship of your children; however, in a contested divorce, the court will take your written wishes into account. Consult with Robert A. Gordon of Redkey Gordon Law Corp, an experienced estate planning attorney and make sure he takes you through a discussion on all of your options.

It isn't easy getting divorced, but when it’s over, you'll need to rebuild. Think about these areas as part of your divorce documentation.

Reference: The Huffington Post (March 18, 2015) “Divorce and Money”

Beatles Lyrics May Not Get Same Answer Today with Rising Long-Term Care Costs

"Will you still need me? Will you still feed me? When I'm 64?" The Beatles first released these quaint, clarinet-fueled lyrics in 1967 when the loving answer to these questions was a resounding, "Yes!" Traditional marriage vows echo this sentiment in that they presuppose a relationship span that encompasses young and old age, wellness and serious illness, wealth and poverty. However, as modern aging has come to be defined by living longer with chronic care needs, and providing long-term care has shifted to the public sector, with two thirds of long term care services paid for by Medicaid, loving spouses may be forced to answer, "No," to these questions. The future of elder care may depend on divorce.

Aging and care are already expensive and stressful, and even the young Beatles in 1967 wondered if love now would translate into care in old age. It should.

In case you haven’t heard, long-term care needs are expensive. In 2014 the average annual cost of a semi-private room in a skilled nursing facility was $83,114! The majority (70%) of people over 65 need some level of long-term care at some point—whether that will be provided in a home, an assisted living center, or a nursing care facility, according to The Huffington Post in a recent article titled “Is Divorce the Best Option for Older Americans?”

To find a way to pay for these services, many Americans look to the Medicaid Long-Term Care benefit. This program can pay for the room and board or home health services of qualifying individuals over age 21. To be eligible, an individual must meet the age and medical necessity criteria, as well as financial criteria concerning income determined by the federal government. Medicaid will look at an individual’s assets—like their banking accounts, real property, investments, household belongings, life insurance, and one car. However, all income and assets are subject to a five-year look back period: you can’t just give away stuff to avoid it being counted as an asset for eligibility. However, if a person has financial excess, Medicaid allows him or her to "spend down" their income and assets in order to be poor enough to qualify. Doesn’t that sound a little tricky?

The original article explains that for married couples Medicaid has what are called "spousal impoverishment" rules. These rules cap the assets for a couple living together, although the rules are totally different if one spouse resides in an institution. The spouse living in the community typically is allowed to retain a larger portion of income for his or her living expenses. Medicaid will not try to recoup the costs for the long-term care from the estate of the deceased recipient until the community spouse passes away.

While all of these rules enable elderly and chronically ill individuals to access needed long-term care services, the original article argues that these rules also tacitly encourage divorce. "Medicaid Divorce" isn’t a new phenomenon. It’s been considered a legal option for avoiding the five-year look-back period for Medicaid eligibility and for avoiding the estate recovery process. Legal experts emphasize that asset protection is super-complicated, and it may be different in another state. All that said, the solution of divorce is still a hot topic, as these rules discourage couples from living together and looking after each other. A couple's combined assets are only protected if the Medicaid recipient doesn’t live with his or her spouse, so by divorcing, a couple can cohabitate and still protect the income and assets of the spouse not receiving Medicaid home health benefits.

According to the original article, a divorce could also protect the primary residence from the Medicaid Estate Recovery program: the surviving spouse is given the right to use and enjoy it even though it’s owned by someone else. The surviving spouse lives there until his or her death, then the state is able to recoup the costs of care from the estate. That means that the next generation pays for the care of their loved ones by losing a potential inheritance. A divorce could keep the real property in the name of the community spouse and protect it from recovery for Medicaid care expenses.

Is this really the answer? Talk to Robert A. Gordon of Redkey Gordon Law Corp, an experienced elder law attorney and find out about divorce and other options.

Reference: The Huffington Post (March 16, 2015) “Is Divorce the Best Option for Older Americans?”

“House of Cards” on Retirement: You Are Entitled to Nothing

Frank Underwood is not a real person. He’s the crooked politician portrayed by Kevin Spacey in the Netflix series “House of Cards” who claws his way into the White House by manipulating the press and ruthlessly crushing anyone that might get in his way. But sadly, with one line, he delivered more honesty than I have seen from any president, senator or House representative, from either party, in my lifetime: “We’ve been crippled by Social Security. By Medicare. Medicaid. Welfare. And entitlements. And that is the root of the problem. Entitlements. Let me be clear: You are entitled to nothing.”

Frank Underwood, Kevin Spacey’s character on House of Cards, gives us the cold, hard truth about retirement. Social Security and Medicare are not “rights” in any legal sense. Congress decides on the payout, and Congress can change it—or eliminate it—at any time. You really are not “entitled” to anything and certainly nothing is guaranteed, according to a recent Forbes article titled “Life Lessons From House Of Cards: "You Are Entitled To Nothing".

You are entitled to nothing. It’s not fun to hear, but it’s important to remember when you’re planning your retirement. You should plan under the assumption that your benefits in retirement will be lower than currently promised. With that in mind, here are three specific recommendations from the article’s author on how to approach your planning:

1. Focus on income rather that the “magic number.” Most financial planning is driven by creating a nest egg of a certain size. But this doesn’t take into consideration the market yields. Focus on the income generated instead of only a certain net worth number.
2. Consider investments you might not have looked into before. Investments like preferred stock and closed-end bond funds can be good income producers if bought at a reasonable price.
3. An immediate annuity can be a smart method of converting part of your nest egg into a safe stream of income resembling a pension.

Take President Underwood’s words to heart—You are entitled to nothing—and start planning accordingly. Contact Robert A. Gordon of Redkey Gordon Law Corp, an experienced estate planning attorney.

Reference: Forbes (March 20, 2015) “Life Lessons From House Of Cards: "You Are Entitled To Nothing"