Preserving Open Spaces in Colorado

I am privileged to live and work in Colorado, a state with grand and beautiful open space areas and many outdoor recreational opportunities.

Colorado Coalition of Land Trusts (CCLT) * is an organization committed to the establishment of areas for land use in the state and preserving those areas for recreational use and for future generations to enjoy.  Their website (www.cclt.org) offers opportunities to attend various events and tours across the state – for members and non-members.

One of the events noted on the CCLT website currently is a conference held by the Colorado Open Space Conference (COSA)

The conference is open to the public. The dates are September 18-20, 2017 at the beautiful Beaver Run Resort in Breckenridge, Colorado.

For more information go to the COSA website (www.coloradoopenspace.org).

Of Legal Note: A conservation easement is a voluntary legal agreement between the owner(s) of land and a land trust (or a government agency) that permanently limits uses of the land.  The easement is established in order to protect the land’s conservation values.

There are various other easements – notably: preservation; affirmative; negative; and covenants (which differ in form)

* From the website: “CCLT is Colorado’s statewide membership organization for the land conservation community. We work to be a voice for the community and to secure support for increasing open space, and preserving agricultural land and water ways. We provide continuing education for our membership to ensure we have the knowledge and skills to conserve land in a way that is collaborative, cost-effective, and lasting.”

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Pitfalls and Pratfalls in Estate Planning

Why not take the Do-It-Yourself approach to Estate Planning? If you have very few assets, self- help might be one approach.

But Estate Planning is much more than having a Will, Power of Attorney; and Health Care Directives in place.

When it comes to hidden pitfalls, there are quite a number of special circumstances where you would be ill-advised to use an “estate planning app”’.

Here is just a short- list of some situations that might create “pratfalls” and unexpected outcomes:

* Blended families and step-families– his, hers, mine, yours, ours, theirs

*Common law couples; same sex couples; unmarried couples

*Changing dynamics of a family structure – divorce(s), remarriage(s) – who is in and who is out of a new will?

*In vitro fertilization, artificial reproductive therapy, adoption

*Dual citizenships – or one spouse is not an American citizen

*Living/retiring abroad

*Temporary overseas work assignments-illness/death in a foreign country

*Discord and long- term alienations among family members

*Complex estates/Hi Net Worth Estates with complicated tax implications

*Small business ownership

*Complicated business/employment contracts

*Frequent changes in domicile

*Complex divorce/marital agreements and pre nups

*Family farms/acreage

*Special needs family member

*Widely differing views of inheritance between spouses

*Tax-sheltered assets

*Overseas assets

*Diminished mental capacity/dementia/cognitive decline of testator

*Bankruptcy filings

*Medicaid planning

*Residing in Community Property States

And the list goes on….

In such cases, there is a higher probability of unexpected outcomes from a poorly structured estate plan.

It is worth the effort to have a ‘specialist’ in Estate Planning law review your legal documents.

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The Good Pre Nuptial

For many the phrase ‘good pre nuptial’ is an oxymoron. Aren’t all pre nuptial agreements in essence an admission of defeat and of not having faith that the marriage will last?

The short answer is ‘it depends’. One might suggest that a ‘bad pre nup’ is one in which one of the parties feels that they are ‘helpless’. The ‘weaker’ party signs the pre nup so that the relationship can move forward to a more stable level. The ‘stronger’ party feels that they must be ‘protected’ from circumstances should the relationship falter.

A good pre nuptial agreement, in actuality, protects both parties and can promote fairness in the relationship moving forward. It can, in some cases, establish the legitimacy of the ‘rights’ held during the marriage if one spouse dies.

Pre nuptial agreements can prevent inter and intra family disagreements, particularly in ‘blended’ families (where both parties have children from prior marriages).

For high net worth individuals the pre nup can promote security and fairness for both parties.

For the previously divorced or recently widowed, the pre nup can offer the knowledge that both parties are approaching the marriage for the ‘right’ reasons.

One important factor of the ‘good pre nup’ is to approach the agreement with an ‘all cards on the table’ approach to finances. Disclosing assets and debts prior to marriage means that both parties can expect honesty and integrity moving forward in the relationship.

Yes, it can be embarrassing to have to admit that you have a large outstanding debt to your ‘soon- to- be- spouse’. But it is far better to disclose that before the marriage rather than burden your new spouse with unforeseen debt at the outset of the marriage. Such a financial ‘secret’ could spell doom to the new couple.

For a ‘good pre nup’, both parties should enlist the services of separate attorneys, someone who is knowledgeable in contractual agreements. Sufficient time should be allocated prior to signing the agreement. It is no advisable to present the request for a pre nuptial agreement one day prior to the wedding date!

Because your pre nup is a legal document, make sure that it is properly executed according to all state laws. The pre nup should be in accordance with any trust documents in existence and there should be no conflicts between the documents. One simple example would be if the pre nup states that the new spouse would have financial rights to an asset, but that asset has a different beneficiary or is held as a joint asset with another party – that is a conflict to be resolved.

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Free Help For Small Businesses

Our friends at the NFIB are offering a free live webinar for small business owners.  The webinar explores “OSHA’s Top 10 Most Cited Violations” as well as information about heat stress; natural disasters and weather emergencies.  There will also be free mobile apps on offer.

The webinar is Wednesday, May 24 and for more information got to http://www.nfib.org to sign up

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Help For Families Coping With Dementia

My inbox received an interesting posting about the Alzheimer’s Foundation of America (AFA) , a non profit organization that supports programs to help families with loved ones suffering from Alzheimer’s or a related dementia.

The AFA awards grants- the stated purpose of the grants is to help families “alleviate the cost or respite care for families caring for loves one with Alzheimer’s disease or a related dementia.”

According to the posting, the grants are awarded to AFA’s nonprofit member organizations. To learn more about the grants, the application process, the work of the AFA and FAQ’s about the grant program – go to the website  www.alzfdn.org/AFAServices/FamilyRespiteCareGrant.

The grant funds must be utilized for scholarships for respite services, such as adult day program, in-home aides, companion care or overnight respite.

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Family Care Agreements

I have been reading more about agreements made between family members for the care of their loved ones.

This “movement” is a natural progression of the aging of an entire generation of ‘baby boomers’ who a) want to stay in their homes b) rely on the services of a family member to help them c) recognize the significant role of a family member who becomes the primary caregiver for a parent/loved one.

The reality of a family care agreement may be more involved than it first appears and such agreements should be considered legal documents.

First, we can explore the TERMINOLOGY:

family care agreements can be known as

family care contracts

care contracts

caregiver agreements

family caregiver agreements

personal care agreements/contracts’

or a myriad of other titles.

For the purposes of this article I will use the title ‘family care agreements” (FCA).

An FCA in general is a written agreement between an ‘older adult(s)’ and a family member.

The agreement will outline the duties and responsibilities of the family member who provides assistance to their loved one(s) and the agreeement will give the specific terms of compensation to be made to the family member.

The adult child (or other family member) providing the care, we will call the ‘Caregiver’

The family member receiving the care, we will call the ‘Recipient’

Note: that is most cases there will be other family members involved in some decisions, e.g. other adult children who cannot or choose not to take on the role of ‘Caregiver’.

On the surface, FCA’s are quite straight-forward, but as with any agreement/contract; the devil is in the details.

It is a question of how to fairly compensate an adult child who has taken on the duties and becomes the Caregiver of an older adult family member (or in some cases a couple)

Consider that there are many variations of the caregiver role:

  1. a) the adult person who assumes the role of Caregiver may be married and their partner may be otherwise employed
  2. b) the Caregiver may live in their own home, but more than likely will move in with the older family member (Recipient)
  3. c) the Caregiver may have been fully employed elsewhere and given up their employment, or they may continue to be employed part-time or work from home
  4. d) there may be additional state supported in-home care available to supplement the role of the Caregiver
  5. e) the Caregiver may have older children still living with them

The variations/issues are as numerous as there are families who have an aging parent/loved one.

One common element is that in most cases the older adult (Recipient) will – over time – require more care rather than less care to remain in their own home.

Duties and Responsibilities:

These should be clearly stated/identified under the terms of the FCA.

Normal duties might include Nutrition; Housekeeping (or supervision of housekeeping); Personal care; Transportation; Maintenance of home e.g. gardening/supervision of landscapers/Repairs, etc.; Maintaining health records and Physician visits.

Will there be limitations/restrictions on the use of the home? E.g. can the Caregiver have Guests? Hold Parties? Start a home-based business? Write checks? Have unlimited use of credit cards?

Note: A good idea is for Caregiver to maintain a daily log/schedule of all activities and how their time has been spent.

Compensation of the Caregiver:

  1. a) Determine what is reasonable and customary in the area
  2. b) Does compensation include room and board- for how many people?
  3. c) Consider/Identify the number of hours to be worked, sick leave, vacation days, holidays
  4. d) What would constitute grounds for termination of the FCA? Of the Caregiver?
  5. e) Consider what modifications of the FCA might be required over time e.g. pay increases

Note: the Recipient in essence becomes the “employer” of their Caregiver.

Consider all issues of how Caregiver will be paid and their compensation package. For the Caregiver – Will there be health benefits; sick leave; overtime pay; medical insurance; liability insurance; tax withholding?  Pension?

Who will handle the finances, issues of social security and taxes, write paychecks?

Undue Influence:

What would constitute ‘undue influence’ e.g. the Recipient bequests large sums of money to the Caregiver? The Recipient gives away valuable items to the Caregiver? Gives loans to the Caregiver?  Places the house into the name of the Caregiver? Buys a life insurance policy with the Caregiver as Beneficiary?

Note: One idea might be to make a complete inventory with photographs of all items in the house, safe deposit, financial statements/documents, etc.  before the FCA becomes effective and update/review the listing annually.

Legal:

Consider the laws of your state as they apply to such contracts/agreements and the enforceability of such documents.

Coordination of the FCA with any existing Estate Planning documents

What impact could the FCA (and payments to Caregiver) have on any Medicaid planning?

Who will hold the power of attorney and make medical decisions?

What are the healthcare directives?

Who will handle annual tax filings for the older Recipient?

Who will handle bank account; check book; pension payments; credit cards, stock transactions, etc.; pay the mortgage? Pay the utilities?

Will the Caregiver be permitted to enter into contracts on behalf of the Recipient?

Consider the “WHAT IFS”:

If the Recipient moves into a health facility, will the Caregiver be permitted to stay in the residence? If so, for how long?

If the Recipient decides to marry?

The Caregiver marries/remarries?

The Caregiver resigns or has an accident in the home?

Family Meetings:

It may be advisable to have a family meeting to draft the terms of the FCA and coordinate with any estate planning that has taken place.

The presence of a knowledgeable, non-family member to ‘negotiate’ any issues between family members could be helpful.

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Of Grief and Grieving for a Pet

As an estate planning attorney I am often in touch with clients at difficult times in their lives. I have written previous articles about grief and grieving; about pets and about providing for pets in an estate plan.*

These thoughts intersected for me when someone sent me a link to the website www.dogquotations.com.

The website offers a compassionate rendering of quotations, memorials and poems about dogs – The memories that pet owners (or pet parents if you prefer) want to share about the ‘furry friends’.

If you have recently lost your ‘best friend’- a visit to the website may help with the grief.

* Note that Colorado enables people to provide for their pets/companion animals through the provision of the Colorado Probate Code. For more information about the code you can access- Colorado Probate Code CRS 15-11-901 Part 9 Honorary Trusts, Trusts for Pets.

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Older Workers and Job Changes

One of my previous articles made the point that younger workers will change jobs- often as many as ten job changes during their career. (see article titled: Employee Retention and Small Business – March 2017)

These job changes are not only expected, but data show that the changes that younger workers make are either lateral moves or jobs with higher pay; with better benefits or offer more ‘family’ time.

For older workers the pattern is different. Job changes that happen later in life, often are moves into a ‘lesser’ job.  According to a recent * Squared Away research article: Older Workers’ Job Changes a Step Down (March 30, 2017)  “…older workers who switch jobs often take a hit on their earnings and benefits.”

However, on the positive side, these later career job changes are often into less stressful and demanding positions.  And they are positions where an older worker can continue a meaningful career; continue to build social security benefits and delay taking their social security benefits for a longer period.

For more interesting data on late life career changes:   access the Abstract:

Occupational Transitions at Older Ages: What Moves are People Making?By Amanda Sonnega, Brooke Helppie McFall and Robert J. Willis #WP 2016-352

on the Michigan Retirement Research Canter , University of Michigan website (www.mrrc.isr.umich.edu)

 

* Squared Away is published by The Center for Retirement Research at Boston College

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Sharing The Music

Our friends at The Digital Beyond have offered up another gem for contemplation.

The website – mylastsoundtrack.com has a very unique idea, offering the opportunity of memorializing yourself in music.

If you love music, or perhaps have a fondness for only certain music, whether it is ‘the oldies’, hip hop, classical, rock and roll, or the sound of the big bands – you can let others know something about the music you love.

Celebrate your life with music and let others know what songs matter to you.

“Where words leave off, music begins.”              ― Heinrich Heine

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Changing Behaviors

Much is written about the role of estate planning and the “hand from the grave” – Trusts that “rule” after the death of the person establishing the Trust.

First, let’s review some legal terminology for the sake of this article:

The person establishing the Trust is known in legal parlance as Donor, Settlor, Trustor and in some cases also the Trustee.

The Trustee is the individual(s) or institution/entity administering the Trust. The Trustee is responsible for carrying out the terms of the Trust.

(Usually, the Trustor and the Trustee are different entities, but in some cases they can be the same entity.)

The Beneficiary is the person(s) who will receive ‘something’ from the trust (money, land/property, art work, etc.) In short, the Beneficiary ‘benefits’ from the Trust – now or into the future.

Now that we have some simplified legal terminology in place — what happens if a parent or grandparent wants to make a bequest to a child/grandchild, but that child/grandchild is not quite reliable?

The Beneficiary may suffer from conditions such as an addiction to alcohol, gambling, gaming, narcotics, etc. – or they may just be unprincipled  with money or have poor decision- making skills.

ENTER…the Incentive Trust… a trust that may encourage good habits; motivate in some way; prevent ‘misuse’ of inheritance funds; reward ‘good’ behavior (or at least behavior in line with the Trustor);  and assist loved ones to make better decisions for the long term.

But, and there is always a ‘but’…the Incentive Trust is ‘tricky’.

Money can sometimes be the means of destruction, particularly for those with addictive personalities.

But the withholding of funds is equally difficult.

Incentive Trusts, like all trusts, must be structured with great care if the Trustor is to obtain the outcome they anticipate. They should have the labeling – “Use With Care”

Take one simplest example of an Incentive Trust –

A grandparent establishes an Incentive Trust for their grandchild. The grandparent really wants the grandchild (the Beneficiary) to graduate college.  So they state that the grandchild, in order to receive his/her Trust funds, must graduate college. So far…simple.

But…what about grade point average? Which accredited college?  Does an On-line college qualify? Length of time to graduate (4 years or twenty years)? Will the type of degree matter?  Where are the funds to attend college coming from? Will payments for college be made to the Beneficiary or directly to the college?  How much discretion will be given to the Trustee (the person or institution administering the Trust)?  Will there be benchmarks?  How many different colleges can the Beneficiary attend (how often can they change colleges?)  How many courses must Beneficiary take each semester?  Can the Beneficiary marry and have children while attending college?

Well…You get the idea. Simply stating for Trust purposes that the Beneficiary must graduate college….is not nearly enough of a directive.  Such a lack of directive can leave much to the discretion of the Trustee.

Likewise; preventing bad behavior is equally fraught with serious questions.

An example: a child is addicted to drugs; to gambling;  or to alcohol.  The parent wants that child to be provided for (under the terms of a Trust.)

What precise behavioral changes will qualify for the child (the Beneficiary) to receive their funds from an Incentive Trust?

What if the child ‘substitutes’ one addiction for another?

Will child be required to submit to periodic drug testing? Help programs?

What specifically would ‘qualify’ as alcohol abuse or gambling?

How long will the child be required to remain drug free?

At what age, if any, will all Trust funds be given to the Beneficiary? Or should funds be administered as a monthly ‘stipend’?

If the child cannot keep to the terms of the Trust, what happens to the funds in the Trust?

Will the Trust provide for ‘intervention’ or help for the child to cope?

 

Is an Incentive Trust the best trust vehicle for every circumstance? As with many things…the devil is in the details.

A qualified Estate Planning attorney is probably the best ‘investment’ that you can make when establishing a Trust – if you want to achieve the outcome that you anticipate in the future.

Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.”                 –Ayn Rand

Working to Preserve Your Wealth and Protect Your Future…in a Constantly Changing World

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