If you are single, you may not think you need to plan your estate, but single people are in as much need of a plan as anyone else. Estate planning not only involves determining where your assets will go when you die -- it also helps you plan for what will happen should you become incapacitated, perhaps as the result of a stroke, dementia, or injury. If you don't make a plan, you will have no say in what happens to you or your assets.

Without a properly executed will in place when you die, your estate will be distributed according to state law. If you are single, most states provide that your estate will go to your children, parents, or other living relatives. If you have absolutely no living relatives, then your estate will go to the state. This may not be what you want to have happen to your assets. You may have charities, close friends, or particular relatives that you want to provide for after your death.

If you become incapacitated without any planning, a court will have to determine who will have the authority to handle your finances and make health care decisions for you. The court may not choose the person you would have chosen. In addition, going to court to set up a guardianship is time-consuming and expensive. With proper planning, you can execute a power of attorney and a health care proxy, which gives the people you choose the authority to act on your behalf, as well as an advance directive giving instructions on what type of care you would like. The power of attorney can also dictate exactly what powers the individual has.

Single individuals who are divorced need to make especially certain that the beneficiary designations on their IRAs, life insurance policies, and relevant bank accounts are up to date. If you don't, your ex-spouse could get the funds. And for single people of means, opportunities to avoid state or federal estate taxes can be more limited than for married couples, although advance planning can close the gap.

Berger Estate & Elder Law P.A. has been finding solutions throughout Kansas City for over 30 years providing Trusted Counsel with Proactive Solutions for many. We’ve been helping our clients establish trusts tailored for their desires and needs and being upfront about trust funding, doing it for you or helping you every step along the way. Give us a call today at (913) 491-6332, visit our website berger-lawfirm.com or stop by our conveniently located offices at 11233 Nall, Suite 140 Leawood, KS 66211 for more information.

While everyone should have a durable power of attorney that appoints someone to act for them if they become incapacitated, in some circumstances it is not enough. In these cases, a revocable trust can help. 

A durable power of attorney allows you to appoint someone you trust to step in for you to handle financial and legal matters if you become incapacitated. We all are at risk of incapacity from illness or injury, whether temporary or permanent. Of course, this risk rises as we get older. Without someone in place to handle legal and financial matters, bills can go unpaid, contracts can't be signed, homes can't be refinanced, leases can't be terminated, investments go unmonitored and unadjusted, and families often fight over who is in charge. The remedy of seeking court-appointed conservatorship is expensive, cumbersome, and time-consuming. It's best that you pick your own person or people for this role.

Nevertheless, however important taking this step can be, it's not always enough. There are two reasons for this: financial institutions often don’t honor older powers of attorney and agents sometimes don't step in until it's too late. Both problems can be remedied through the use of a revocable trust.

Powers of Attorney Can Be Rejected
Financial institutions often reject older powers of attorney, claiming that they can't know whether the document has been revoked since first signed. Sometimes the institution will require the drafting attorney to attest to the fact that the document hasn't been revoked, even though the attorney may not have met with the client for many years and, of course, can't know everything the client did during that time.
Financial institutions are uncomfortable honoring powers of attorney because they do not want to be held liable for any malfeasance by the agent appointed under the document. In the opinion of most estate planning attorneys, such institutional rejection is contrary to law, but there is no good remedy when this occurs since any lawsuit against the likes of Bank of America or Fidelity will be expensive and time consuming.
Fortunately, there are three ways to avoid this institutional intransigence:
​

• Refresh your documents periodically. Financial institutions are more accepting of newer documents than older ones, so it's a good idea to execute new durable powers of attorney every five years. Of course, this is perverse. If the power of attorney is being used because of your incapacity due to dementia, you are more likely to have been experiencing cognitive challenges a year prior to its use than ten years earlier.
• Use the financial institution's forms. Most banks and investment companies have developed their own durable power of attorney forms that they are more comfortable accepting than general ones you may have found online or the one your attorney prepared. Contact each financial institution where you have an account and ask whether it has a durable power of attorney form. You'll still need a general durable power of attorney, since the financial institution's form only governs accounts held at that institution, but using its form should prevent any problems with its acceptance.
• Create a revocable trust. Financial institutions seem to accept revocable trusts more readily than durable powers of attorney. Revocable trusts have the added advantage that you can appoint a co-trustee to serve with you, so that if you become incapacitated, the co-trustee can step in and act.

A Trust Provides Financial Protection
As we age, we all become increasingly susceptible to making financial mistakes and falling victim to scammers. Having a financial advocate in place can help avoid both. An important step is to name an agent under a durable power of attorney. However, such agents often don't step in until it's too late and the senior has already lost a significant amount of money.

A co-trustee on a revocable trust, however, is already named on the accounts in trust. Even if the co-trustee doesn't take an active role, he or she can monitor the accounts to make sure nothing untoward is occurring. Further, when it's necessary to step in, the co-trustee can do so immediately and seamlessly. In contrast, an agent under a durable power of attorney must present credentials to the financial institutions and go through the institution’s vetting procedure, delaying access to accounts and prohibiting the agent from protecting the accounts or being able to pay bills on behalf of the grantor.

Conclusion
For these reasons, revocable trusts often work better than durable powers of attorney. However, two caveats are in order: First, trusts only control the accounts actually held by them. So, for the trust to work, you must retitle your accounts into your trust.

Second, even if you have a revocable trust, you still need a durable power of attorney. This is for two reasons: First, you may not have transferred all your accounts into the trust and will need to give your agent control over those accounts and the ability to transfer them into the trust. Second, the trust only governs financial matters. Your agent under your durable power of attorney can also handle legal ones on your behalf, including signing your income tax returns.

Berger Estate & Elder Law P.A. has been finding solutions throughout Kansas City for over 30 years providing Trusted Counsel with Proactive Solutions for many. We’ve been helping our clients establish trusts tailored for their desires and needs and being upfront about trust funding, doing it for you or helping you every step along the way. Give us a call today at (913) 491-6332, visit our website berger-lawfirm.com or stop by our conveniently located offices at 11233 Nall, Suite 140 Leawood, KS 66211 for more information.

The rules surrounding taxes on gifts often create confusion during tax season or any other time. Below are some of the nuts and bolts of the gift tax, including when a gift tax form needs to be filed.

The annual gift tax exclusion is $16,000 for 2022. This means that any person who gave away $16,000 or less to any one individual (anyone other than their spouse) in 2022 does not have to report the gift or gifts to the IRS. Any person who gave away more than $16,000 to any one person, however, is technically required to file a Form 709, the gift tax return. But just because you are required to file a Form 709 doesn't mean you necessarily have to; this depends on your past gift-giving history.

The IRS allows you to give away a total of $12.06 million (in 2022) during your lifetime before a gift tax is owed. This $12.06 million exclusion means that even if you are technically required to file a Form 709 because you gave away more than $16,000 to any one person last year, you will owe taxes only if you have given away more than a total of $12.06 million in the past. As a result, the filing of a Form 709 is irrelevant for most people because the vast majority of people do not have $12.06 million to give away.

For those who have the means, there are several ways to give away more than $12.06 million over a lifetime without owing taxes. Keep in mind that Form 709 is only required when you give away more than the annual exclusion. So a married couple with a married child can give away $64,000 in one year without having to report the gift: each parent gives the child and the child's spouse $16,000 each. If a couple did this for 25 years, they would have given away $1.6 million without even having to report the gifts, much less having them count against their lifetime $12.06 million exclusion. Also it would be possible for the couple to give away $128,000 within a short span of time -- $64,000 in December and $64,000 in January of the next calendar year. (Note that if both spouses have made gifts, each must file a separate Form 709.)

Another way for a gift to be exempted from reporting requirements, no matter the gift's size, is to pay for someone else's medical care or educational tuition. It is important to note that the money must be paid directly to the school, university, or health care provider to be exempt, and that pre-payments can often be made as soon as the person is admitted to the school (schools include not just colleges but nursery schools, private grade schools, or private high schools). However, if you contribute to someone else's 529 college savings plan, you are subject to the $16,000 gift exclusion rule. A special regulation in the tax code enables a donor to use up five years' worth of her exclusions and gift $80,000 (in 2022) to a 529 at one time.

Also note that gifts to a spouse are usually not subject to any federal gift taxes as long as your spouse is a U.S. citizen. If your spouse is not a U.S. citizen, you can give only $164,000 without reporting the gift (in 2022). Anything over that amount has to be reported on Form 709.

If you have given away property other than money, like stock, you have to report that on your gift return, too, if the value is more than $16,000. If the stock had gone up in value since you bought it, you report the value as of the date that you gave it away. You may want to inform the recipient that the basis, or the amount that you bought the stock for, becomes their basis. The basis is used when the property is sold to determine the profit or loss.

Finally, tax deductible gifts made to charities need not be reported on a gift tax return unless the donor retains some interest in the gifted property.

Berger Estate & Elder Law P.A. has been finding solutions throughout Kansas City for over 30 years providing Trusted Counsel with Proactive Solutions for many. We’ve been helping our clients establish trusts tailored for their desires and needs and being upfront about trust funding, doing it for you or helping you every step along the way. Give us a call today at (913) 491-6332, visit our website berger-lawfirm.com or stop by our conveniently located offices at 11233 Nall, Suite 140 Leawood, KS 66211 for more information.

The Centers for Medicare and Medicaid Services (CMS) announced that it will add data on staff turnover rates and weekend staffing levels to its Care Compare website, giving consumers another tool when choosing a nursing home. 

The official Medicare website includes a nursing home rating system. Care Compare (previously called Nursing Home Compare) offers up to five-star ratings of nursing homes based on health inspections, staffing, and quality measures. Users can search for nursing homes by location and directly compare how they measure up.    

Nursing homes have been plagued by chronic understaffing and high turnover rates for years, and this problem has been exacerbated by the COVID-19 pandemic. CMS found that lower turnover is often correlated to high nursing home ratings. 

CMS announced that it would begin posting the following information for each nursing home on its website:

• Weekend Staffing: The level of total nurse and registered nurse staffing on weekends provided by each nursing home over a quarter. 
• Staff Turnover: The percent of nursing staff and number of administrators that stopped working at the nursing home over a 12-month period. 

CMS will begin adding the information to the Care Compare website in January and it will be incorporated into the rating system in July 2022. 

In adding the information, CMS noted in a memo that the correlation between nursing home quality and turnover may be because “facilities with lower nurse turnover may have more staff that are familiar with each resident’s condition and may therefore be more able to identify a resident’s change in condition sooner.” Therefore, the staff may be better able to prevent the resident from falling, getting an infection, or requiring hospitalization, all of which affect a nursing home’s quality rating. The staff’s familiarity with the facility’s policies and procedures as well as more steady leadership and direction may also affect staff turnover and nursing home quality. 

With regard to weekend staffing, CMS acknowledged that consumers may not realize that nursing home staffing levels can vary on weekends. CMS hopes to encourage facilities to hire more weekend staff by adding weekend staff numbers to the nursing home rating system. 

To read CMS’s announcement about this new policy, click here.

Berger Estate & Elder Law P.A. has been finding solutions throughout Kansas City for over 30 years providing Trusted Counsel with Proactive Solutions for many. We’ve been helping our clients establish trusts tailored for their desires and needs and being upfront about trust funding, doing it for you or helping you every step along the way. Give us a call today at (913) 491-6332, visit our website berger-lawfirm.com or stop by our conveniently located offices at 11233 Nall, Suite 140 Leawood, KS 66211 for more information.