Arizona Funeral Homes And Potential Financial Abuse
Arizona Funeral Home

Arizona Funeral Homes And Potential Financial Abuse

U.S. Navy veteran Robert Heiskell was a quiet and reclusive man, whose wife had died years before. A concerned neighbor called the police, who on March 22, 2017, discovered the 80-year-old dead in his home.

AZ Central’s recent article, “Phoenix funeral home took control of dead people’s estates, then charged them excessive fees, complaints say,” reports that Heiskell didn’t have will, and no one claimed his body. A Phoenix area funeral home, Abel Funeral Services—under a contract with Maricopa County for indigent burial—retrieved his body and placed it in refrigeration, while they looked for the next of kin. That meant a meter began running on Heiskell’s funeral expenses.

When the county saw that Heiskell had too much money to qualify for indigent burial, funeral home owner Spencer McBride got court approval to become the personal representative of Heiskell’s estate and settle Heiskell’s financial affairs. The funeral home owner had done this many times for other estates.

By the time he was finished, McBride had racked up costs of more than $30,000 from Heiskell’s estate to his funeral home, according to court records. Compare that to the average cost of a funeral and burial of $7,360, according to the National Funeral Directors Association.

While state law permits funeral home owners to act as both executors and creditors of an estate, many don’t care for the headaches. Now the Arizona Board of Funeral Directors and Embalmers, which regulates the profession, is looking into several other complaints that McBride assumed control of estates and charged excessive fees for funeral services.

Three complaints in the past year claim that McBride did not exert a sufficient effort in locating the next of kin, while his funeral home charged estates excessive fees for funeral services. Another complaint didn’t dispute fees, but the family of an Air Force veteran was upset over a delay in burial.

Heiskell’s closest living relative, a cousin, questioned the bill and alleged that all but about $8,000 of the charges were “excessive.” This included fees to refrigerate Heiskell’s body for 115 days. The matter was settled out of court for an undisclosed sum. In statements to the funeral board, McBride has denied using his position as personal representative for profit.

Even if you believe you have no heirs, it is important that you speak with a qualified estate planning attorney to create a mindful plan that tells people what you want to happen to your assets and personal belongings. Book a call today. 

Reference: AZ Central (June 21, 2019) “Phoenix funeral home took control of dead people’s estates, then charged them excessive fees, complaints say”

 

What Debts Must Be Paid During Probate?
Which debts do I pay during probate?

What Debts Must Be Paid During Probate?

Everything that must be addressed in settling an estate becomes more complicated, when there is no will and no estate planning has taken place before the person dies. Debts are a particular area of concern for the estate and the executor. What has to be paid, and who gets paid first? These are explained in the article “Dealing with Debts and Mortgages in Probate” from The Balance.

Probate is the process of gaining court approval of the estate and paying off final bills and expenses, before property can be transferred to beneficiaries. Dealing with the debts of a deceased person can be started, before probate officially begins.

Start by making a list of all of the decedent’s liabilities and look for the following bills or statements:

  • Mortgages
  • Reverse mortgages
  • Home equity loans
  • Lines of credit
  • Condo fees
  • Property taxes
  • Federal and state income taxes
  • Car and boat loans
  • Personal loans
  • Loans against life insurance policies
  • Loans against retirement accounts
  • Credit card bills
  • Utility bills
  • Cell phone bills

Next, divide those items into two categories: those that will be ongoing during probate—consider them administrative expenses—and those that can be paid off after the probate estate is opened. These are considered “final bills.” Administrative bills include things like mortgages, condo fees, property taxes and utility bills. They must be kept current. Final bills include income taxes, personal loans, credit card bills, cell phone bills and loans against retirement accounts and/or life insurance policies.

The executors and heirs should not pay any bills out of their own pockets. The executor deals with all of these liabilities in the process of settling the estate.

For some of the liabilities, heirs may have a decision to make about whether to keep the assets with loans. If the beneficiary wants to keep the house or a car, they may, but they have to keep paying down the debt. Otherwise, these payments should be made only by the estate.

The executor decides what bills to pay and which assets should be liquidated to pay final bills.

A far better plan for your beneficiaries, is to create a comprehensive estate plan that includes a will that details how you want your assets distributed and addresses what your wishes are. If you want to leave a house to a loved one, your estate planning attorney will be able to explain how to make that happen, while minimizing taxes on your estate.

Reference: The Balance (March 21, 2019) “Dealing with Debts and Mortgages in Probate”

 

Choosing a Trustee: Family or Professional?

Selecting a trustee to manage your estate after you pass away is an important decision. Depending on the type of trust you’re creating, the trustee will be in charge of overseeing your assets and the assets of your family. It’s common for people to choose either a friend or family member, a professional trustee or a trust company or corporate trustee for this critical role.

Forbes’s recent article, “How To Choose A Trustee,” helps you identify what you should look for in a trustee.

If you go with a family member or friend, she should be financially savvy and good with money. You want someone who is knows something about investing, and preferably someone who has assets of their own that they are investing with an investment advisor.

A good thing about selecting a friend or family member as trustee, is that they’re going to be most familiar with you and your family. They will also understand your family’s dynamics.  Family members also usually don’t charge a trustee fee (although they are entitled to do so).

However, your family may be better off with a professional trustee or trust company that has expertise with trust administration. This may eliminate some potentially hard feelings in the family. Another negative is that your family member may be too close to the family and may get caught up in the drama.They may also have a power trip and like having total control of your beneficiary’s finances.

The advantage of an attorney serving as a trustee, is that they have familiarity with your family, if you’ve worked together for some time. There will, however, be a charge for their time spent serving as trustee.

Trust companies will have more structure and oversight to the trust administration, including a trust department that oversees the administration. This will be more expensive, but it may be money well spent. A trust company can make the tough decisions and tell beneficiaries “no” when needed. It’s common to use a trust company, when the beneficiaries don’t get along, when there is a problem beneficiary or when it’s a large sum of money. A drawback is that a trust company may be difficult to remove or become inflexible. They also may be stingy about distributions, if it will reduce the assets under management that they’re investing. You can solve this by giving a neutral third party, like a trusted family member, the ability to remove and replace the trustee.

Talk to your estate planning attorney and go through your concerns to find a solution that works for you and your family.

Reference: Forbes (May 31, 2019) “How To Choose A Trustee”

 

Legal Documents For Graduates

It is wonderful to bring up the children, make sure they are educated and see that 18th birthday come along. However, it is important to recognize that many things change from a legal standpoint, according to grbj.com in “Give your graduate the gift of legal documents.”

Here are recommended steps to take so parents can still be involved in their children’s lives when they are needed:

Health care proxy/medical power of attorney. Even if you are the person paying for health insurance, you are not legally permitted to make decisions on their behalf. Have your child sign a proxy/POA form designating who has the primary authority to make health decisions, if he or she is unable to do so. This is especially important when parents are divorced: both parents need to have the proper forms. Your estate planning attorney will be able to prepare these for you.

Durable power of attorney. If your child has signed a durable POA, you will be able to handle their financial matters, especially if your child becomes incapacitated.

HIPAA authorization. Medical providers may not disclose a patient’s medical status, unless they have legal permission. Your child should sign a HIPAA authorization with each of their providers, giving the parent access to all their information. This is especially necessary for a child with health or mental issues.

FERPA waivers. This one takes many parents by surprise. Even if you are the one paying for tuition and all college expenses, the college will not provide academic records, including grades and tuition bills, due to the Family Education Rights and Privacy Act. Contact the college and find out exactly what forms they need to be sure you have access to all of your children’s information, including any health and mental health treatment.

Wills and trusts. If a child has assets and no descendants, they need a will or revocable trust to protect the parent’s taxable estate and allow someone to manage these assets, if they die prematurely.

Medical records. Make sure the child has access to their medical records, including medications, allergies, immunizations, etc.

Insurance. See if the family’s medical, homeowner’s and auto insurance coverage extend to a child living away at school and in another state. If the child is renting a house or apartment, make sure they have renter’s insurance.

Proof of identity. Make sure the child has access to their passport, birth certificate or Social Security card so they can get an internship or a job.

Bank accounts and credit cards. If the family’s regular bank does not have a branch where the child is attending school, the parents should consider opening a basic checking account at a local branch. Both parents and child should be on the account.

Registration. It’s time to register to vote and sons will need to register with Selective Service.

An estate planning attorney can advise you on the proper documents needed for your family.

Reference: grb.com (June 7, 2019) “Give your graduate the gift of legal documents.”

Talk To Your Kids About Their Inheritance
Talk to your children about their inheritance.

Talk To Your Kids About Their Inheritance

For some parents, it can be difficult to discuss family wealth with their children. You may worry that when your kid learns they’re going to inherit a chunk of money, they’ll drop out of college and devote all their time to their tan.

Kiplinger’s recent article, “To Prepare Your Heirs for Future Wealth, Don’t Hide the Truth,” says that some parents have lived through many obstacles themselves. Therefore, they may try to find a middle road between keeping their children in the dark and telling them too early and without the proper planning. However, this is missing one critical element, which is the role their children want to play in creating their own futures.

In addition to the finer points of estate planning and tax planning, another crucial part of successfully transferring wealth is honest communication between parents and their children. This can be valuable on many levels, including having heirs see the family vision and bolstering personal relationships between parents and children through trust, honesty and vulnerability.

For example, if the parents had inherited a $25 million estate and their children would be the primary beneficiaries, transparency would be of the utmost importance. That can create some expectations of money to burn for the kids. However, that might not be the case, if the parents worked with an experienced estate planning attorney to lessen estate taxes for a more successful transfer of wealth.

Without having conversations with parents about the family’s wealth and how it will be distributed, the support a child gets now and what she may receive in the future, may be far different than what she originally thought. With this information, the child could make informed decisions about her future education and how she would live. Do you or your spouse have children from a prior marriage or relationship? Read more about planning for blended families.

Heirs can have a wide variety of motivations to understand their family’s wealth and what they stand to inherit. However, most concern planning for their future. As a child matures and begins to assume greater responsibility, parents should identify opportunities to keep them informed and to learn about their children’s aspirations, and what they want to accomplish.

The best way to find out about an heir’s motivation, is simply to talk to them about it. Talk to your kids about their inheritance.

Reference: Kiplinger (May 22, 2019) “To Prepare Your Heirs for Future Wealth, Don’t Hide the Truth”

 

So You Want To Retire In Arizona
Retirement in Arizona.

So You Want To Retire In Arizona

Arizona’s population increases in the winter months, which is just one thing it has in common with Florida, says Kiplinger in the article “9 Things You Must Know About Retiring to Arizona.” Many retirees have settled in Arizona year-round. The nation’s first active adult retirement community was in Youngtown, Arizona in 1954. Now 17% of the state’s 7.2 million residents are 65 and older. Let’s look at the Grand Canyon State as a retirement destination.

You’ll have lots of company. Between 2010 and mid-2018, Arizona’s population grew by 12.2%. By comparison, the population of New York (state, not city) only grew 0.8%. In 2018, Arizona ranked number five (behind Vermont, Oregon, Idaho, and Nevada) among states with the most inbound movers. Retirement was the reason for the relocation cited by 37% of the Arizona newcomers in a United Van Lines survey. Arizona has more than 100 age-restricted retirement communities.

It’s a dry heat. You’ve heard it before, and it’s true. The dry heat is more tolerable for most people than the humidity and heat of Florida. Annual precipitation ranges from 3 inches in the arid southwest to 40 inches in the mountains of east central Arizona, according to the Arizona State University’s climate office.

There are plenty of great places to retire. The state isn’t one big arid desert. There are a variety of climates that offer seasonal changes. If health care is important, look at Mesa, one of 10 U.S. cities celebrated by Kiplinger’s Personal Finance in 2018 as great places to retire for your health. Mesa received high scores for its proximity to top-rated hospitals, a cost of living that’s lower than the national average and a variety of activities.

Snowbirds and rental property. Planning to rent before you buy to look at different communities? In most spots, January through March or April is peak snowbird season. Migrators often book the same place for the coming year, before they leave in the spring. Others start booking their rentals as early as August. Early birds get the biggest blocks of time and the most-desirable properties. Expect to pay monthly rent (excluding fees and taxes) of $2,500 to $3,500 for a standard condo (two-bedroom, two-bath) or $3,000 to $9,000 for a single-family home (three-bedroom, two-bath) from January through March.

It’s a seller’s market in late spring. The best time to buy a home in Arizona is usually in the late spring, when the competition from snowbirds ends. In summer and fall, you’ll have fewer options to buy.  However, the remaining sellers may be more motivated and willing to deal. Thinking of buying? Read more about trust planning for your real estate.

Arizona’s income tax for retirees is mixed. Your state tax bill in Arizona will depend a lot on your retirement income sources. Arizona doesn’t tax Social Security benefits, and on most other income that is taxed, rates are low—from 2.59% (for married filers with as much as $20,690 of taxable income) to 4.54% (for married filers with more than $310,317 of taxable income). However, private pensions are fully taxed at ordinary income tax rates. The same is true for government pensions from other states. For those with military, civil service and Arizona state and local government pensions, only the first $2,500 in this income is exempt from Arizona state taxes.

Sales taxes vary. Arizona’s state sales tax is 5.6%. However, localities can add their own sales taxes. As a result, you could pay as much as 5.3% more in sales tax, depending on where you live (and shop).

You don’t need to reset your clocks. Arizona is one of only two states (with Hawaii) that don’t have daylight saving time. Arizona aligns with Pacific Daylight Time in spring, summer, and part of fall. However, they are on Mountain Standard Time during most of the fall and winter.

Reference: Kiplinger (April 19, 2019) “9 Things You Must Know About Retiring to Arizona”

 

Are “Digital Assets” Part Of My Estate?
Don't forget about your digital assets.

Are “Digital Assets” Part Of My Estate?

Most of us have digital assets and online accounts. It’s time to think about what will happen to them when we die.

Estate planning attorneys are now talking with clients about their digital assets and leaving specific instructions about what to do with these online accounts and social media, after they pass.

There’s a trend of creating video messages to loved ones and posting them online for the family to see after they pass. Facebook has a feature that allows the page owner to set a legacy contact to manage the account, after the account owner has died. Other technologies are emerging to allow you to gather your digital assets and assign an individual or individuals to manage them after you die.

It is now just as important to think about what you want to happen to your digital assets, as it is to your tangible, earth-bound assets when you die. What’s also important: considering what you want to happen to your data, how accessible and enduring you want it to be and how it will be protected.

People in their older years have seen amazing leaps and changes in technologies. We’ve moved from transistor radios to VHS to DVD to Blu-Ray. We’ve gone from land line home phones to smart phones that have the same computing power or more than a desktop. The first social media site was launched in 1997, and websites like Myspace have come and gone.

Will the current websites and software still be available and commonly used in five, ten, fifty, or one hundred years? It’s impossible to know what the world will look like then. However, unless a plan is made for digital legacies, it’s unlikely that your digital assets will be accessible to others in the near and far future.

Here’s the problem: even if your executor does succeed in memorializing your Facebook page, will there be things on the page that you don’t want anyone to see after you’ve gone? There’s a wealth of data on social media to sift through, including items you may not want to be part of your digital legacy.

Consider the comparison to people who lived during previous ages. We may not be able to see their lives online, but they have left behind physical artifacts—letters, diaries, photographs—that we can hold in our hands and that tell us their stories. These artifacts will survive through the generations.

A digital estate plan can ensure that your data is managed by someone you trust. Talk with your estate planning attorney to learn how to put such a plan in place, when you are creating your legacy. Your last will and testament is a starting point in today’s digital world.

Reference: The Scotsman (May 16, 2019) The ghost in the machine—what will happen to online you after death?”

 

Will a Reverse Mortgage Help Me in Retirement?
Will a reverse mortgage help me in retirement?

Will a Reverse Mortgage Help Me in Retirement?

It’s not uncommon for a homeowner to take out a home equity line of credit or borrow against an existing one. This can provide the funds to pay some bills and stay afloat. Another option if you’re at least 62 with a home that’s not heavily mortgaged, is to take out a reverse mortgage. A reverse mortgage gives you tax-free cash. No repayments are due, until you die or move out of the house.

However, these loans are expensive, and not for those people who want to give their home to heirs, because most or all of the home’s equity may be eaten up by the loan principal and interest.

Fed Week’s recent article entitled “Considerations for Borrowing in Retirement” explains that reverse mortgages work best for seniors who need cash, who want to stay in their homes and who have few other options.

These HECM reverse mortgage loans are insured by the Federal Housing Administration (FHA). They let homeowners convert their home equity into cash with no monthly mortgage payments. Borrowers are still required to continue to pay property taxes and insurance. They also must maintain the home, according to FHA guidelines.

People use reverse mortgage loans to pay for home renovations, as well as medical and daily living expenses. Some homeowners who have an existing mortgage will use their reverse mortgage loan to pay off their existing mortgage and get rid of their monthly mortgage payments.

When the homeowner moves, sells the house, or passes away, the loan becomes due. If the house is held until death, heirs have the option to take out a conventional mortgage, pay off the reverse mortgage and continue to live there.

Other options include loans against your life insurance or your securities portfolio.

It is imperative that you talk with a trusted advisor about how a reverse mortgage might fit into your situation. Book a call and become a client today.

Reference: Fed Week (May 16, 2019) “Considerations for Borrowing in Retirement”

 

Power of Attorney: Which Type Do I Need?
What type of power of attorney do I need?

Power of Attorney: Which Type Do I Need?

A power of attorney is a document that grants a person the legal authority to make decisions about certain aspects of another person’s life. It gives a trusted person of your choosing the right to act as your agent in either highly specific or general decisions, depending on the type of power of attorney. As reported in Wicked Local’s article “Investors, Plans & Money: Power of attorney,” the person you name does not have to be an attorney, nor does it have to be a spouse.

Each type of power of attorney works to achieve a slightly different goal. As you work with your estate planning attorney on developing your overall estate plan, you will want to know which type you need and what your state’s requirements are. You will have to be of sound mind, with awareness of what you are signing, when the documents are prepared and signed.

Here’s a look at the basic powers of attorney:

A General Power of Attorney gives the named agent the broadest scope and authority to act and make decisions for another person. The document ideally lists the actions the person wishes them to take. This requires absolute trust, because it gives the agent complete control.

A Limited, Specific or Special Power of Attorney is a document that gives an agent the authority to act on your behalf in a very specific area of your life, task, or within a specified time frame. An example would be if you wanted someone to sell, maintain, or manage property for you. The State of Arizona requires a separate “Mental Health Power of Attorney” to make mental health care decisions for another person when that person is incapable. This is a serious consideration and should be discussed and drafted by your attorney. Contact Elisabeth Pickle Law for more information.

The Springing Power of Attorney is “triggered” (hence the name) when, and only when, certain conditions are met. That might be a loss of mental capacity, for example. This document also must be very carefully defined, and proof of the condition being met may need to be presented.

A Healthcare Power of Attorney goes by different names depending upon the state. However it is named, this is the legal document that gives the authority to make healthcare decisions, if the person is incapacitated through illness or accident. The person named as your healthcare agent should have a clear understanding of your wishes regarding extreme life-sustaining measures, as well as critical care procedures, like blood transfusions or organ transplants.

There can be problems with powers of attorney. The person named to act as an agent must be entirely trustworthy and reliable. Other issues arise, if the documents are not prepared properly. This is why an experienced estate planning attorney is the best source. Here are some examples of what can go wrong:

  • Details are lacking, so the document is declared invalid;
  • The wrong type of power of attorney is created;
  • The state requirements are not met;
  • An agent is named who the attorney would immediately know is a bad choice; and/or
  • A generic document does not contain the correct language.

Properly prepared, a power of attorney can save a tremendous amount of stress, provide the ability to make time-sensitive decisions and allow your wishes to be followed. Speak with your estate planning attorney to determine the type of power of attorney your estate plan needs.

Reference: Wicked Local (April 24, 2019) “Investors, Plans & Money: Power of attorney”

Guest Blog – Millennial Trend for Retirees: The Side Hustle
Financing retirement

Guest Blog – Millennial Trend for Retirees: The Side Hustle

Today’s blog is a guest blog written by Heidi Cookson, Marketing Director for Vinnie Bonazzoli’s firm, Family Estate Planning Law Group. Vinnie has been practicing law since 1985, and his law firm is changing the way people view estate planning through their relationship-oriented practices and ongoing client care program. Vinnie also runs a law firm consulting business called Client Care Academy that trains firms in how they can successfully implement their own client care program. 

Instead of droning on about how the majority of retirees don’t have enough savings and telling you the numbers, let’s talk about how you can supplement your income like a millennial! Millennials, you love them, you hate them, you have one or many in your life, and interestingly enough, they have actually paved the way for retirees to make extra money without having to pick up a traditional part-time job.

According to Experian, over 50% of millennials have a side gig. If you read our last blog, The $1,000,000,000,000 Generation, you’ll recall that millennials are actually a fairly conservative group in that they like to save money, and we have also talked about how many of them want to retire early in a previous blog, New Millennial Retirement Method. It is no surprise that, since this age group is strapped with debt while wanting to save and retire early, they came up with a method to get extra cash: side hustles, aka, side gigs.

The gig economy is growing and by 2021, it is expected to comprise of 9.2 million Americans according to Entrepreneur. What is so appealing about the gig economy is the flexibility, it plays to your talents and knowledge base, and your home base is, well, your home! Retirees should seriously consider tapping into the gig economy because, as you know, most retirees do not have the funds to comfortably cover the entire span of their retirement. Another benefit, money aside, is that having a side hustle allows you to keep structure in your life or continue doing work you love and sharing your talents.

A few entertaining side hustle options you can look into are:

  • Sweatcoin: go for a walk and get paid to exercise
  • TaskRabbit: run errands for people
  • Thumbtack: offer your expertise, clean houses, teach, etc.
  • Swagbucks: be paid for taking polls and surveys and watching videos
  • Vayable: be a tour guide and share all those random facts you’ve collected about your area
  • Air BnB: rent out your house while you visit family, or continually rent your guest bedroom

For retirees who love dogs, check out Wag, you can be paid to walk people’s dogs! You may not want a dog at this stage in life for practical reasons, but it doesn’t mean you can’t have dogs in your daily life, and you’ll be getting some low impact exercise in as well (combine these walks with Sweatcoin to really maximize your earnings).

Check out this article from The Balance that goes into more detail about other side hustle options you might want to consider!

If you are taking social security, note there are certain limitations to income you can receive, but the extra money is a great way to put money in investments, travel, make contributions to a grandchild’s 529, or supplement your current income.

To learn more about Vinnie and his team, visit his website and check out their Twitter, Facebook, and Instagram.

Reference: MarketWatch, December 1, 2018, Retirees Can Earn Money with These Easy Side Jobs