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Today, in a special report to the Daily Report, attorneys Alan Levine and Dawn Levine published their article ‘Saving Grandma from the Grifters in Georgia‘.

According to the article, on May 3, 2013 Governor Nathan Deal signed House Bill 78 into law, enhancing Georgia’s criminal code and the Disabled Adults and Elder Persons Protection Act to protect Georgia’s seniors.

The Risk of Abuse

The elderly are vulnerable to financial and physical abuse not only because of diminished capacity but also as a result of undue influence.   Even a mentally competent person can suffer from domination, trickery or a combination of both, and the elderly are particularly at risk.  Seniors – especially the widowed – are often lonely, which also opens the door for fraud. Add even the slightest amount of diminished capacity into the mix, and the situation is ripe for abuse.

In my practice, I have come across seniors who have given money to their caretakers, promptly forgotten, and later given the gift again (much to the caretaker’s delight); seniors tricked into changing phone providers and then charged exorbitant fees for discontinuing the expensive new service (a scam called slamming); and seniors fed pharmaceuticals causing drowsiness and then robbed by home health aids over a period of months. I have seen caretakers help themselves to groceries and other goods on their client’s credit card.  I even remember my grandmother getting a call from someone saying he was from the bank and he needed her account number to verify a transaction.  Months passed before someone realized that several hundred dollars had disappeared from her account each month.

Hedging the Risk

As the baby boomers retire and our population continues to age, these problems will become more and more prevalent.  In my opinion, if there is even the slightest chance or the appearance of impropriety, caregivers and other family members should avoid taking any hand outs from vulnerable seniors. The fact that seniors are often unwilling to accept or admit their own vulnerability does not help. Still, the best defense is good planning.  If planning falls short, criminal and civil remedies are available, and I am glad to see Georgia take a proactive stance to protect our seniors.

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Today, the Supreme Court of the United States declared that the Defense of Marriage Act (“DOMA”) is unconstitutional as a deprivation of the equal liberty of persons that is protected by the Fifth Amendment.

This means that the federal government must recognize same-sex marriages as valid.

It does not mean that states themselves must allow same-sex marriage.

Estate planning is especially important for same-sex couples. Under Georgia law, if a married person dies without a will, his estate will go to his spouse (or spouse and children, if there are any).  Since Georgia has a constitutional ban on same-sex marriage, this isn’t true in the case of a same-sex couple. In addition, one’s partner would not be treated as next of kin for the purposes of medical decision-making and sharing of protected health information under HIPAA, and is not on the priority list for the appointment of a guardian or conservator.  However, with the help of an estate planning attorney same-sex couples can execute documents necessary to overcome these hurdles.

At last, same-sex couples who are legally married in states allowing it can enjoy the tax, financial and other benefits bestowed on married couples by the federal government.  Until this state joins suit, we will continue helping same-sex partners protect themselves to the fullest potential under the law.

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What if you want to make a gift to charity but you do not want anyone – other than the IRS – to know about it?

Someone recently asked me this very question, and it took me a bit of research to find the answer.  After some internet sleuthing and a conversation with a trusted accountant,  I identified these options:

1.  Use an advisor as an intermediary.

As an example, a client could transfer funds to our law firm escrow account, from which we would make a transfer to the charity.  The paper trail from donor to charity should be sufficient for the IRS to allow the donor his charitable deduction without the charity or others knowing where the funds came from.

2.   Create an Entity.

Establish a LLC or living trust with an anonymous name.  Transfer the funds into the entity, and from the entity to the charitable organization.  This requires more work than option one, but the entity could be used repeatedly which may decrease the cost and/or hassle of dealing with the escrow process.

3.   Set up a private foundation.

The private foundation can then make transfers to public charities.  However, be advised that Federal law requires private foundations to report the names of their significant contributors—those who give $5,000 or more during a taxable year—on their annual tax returns. Those names, submitted on Schedule B of Form 990-PF, are a matter of public record.

4.   Donate online.

This may offer some privacy.  Websites like Network for Good serve as a clearing house for donations and can help keep donations anonymous.

Any other ideas on how to keep your charitable acts private?  Would you want to?

Happy giving!

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Do you have an IRA, 401K or other type of retirement account?  First, you should! And, you should also know how these kinds of “tax-qualified” retirement accounts affect your estate plan.

Without getting too much into the nitty-gritty, the gist of a tax-qualified retirement account is that while the account grows and produces income, you don’t have to pay income taxes until you make a withdrawal from the account, or in the case of a Roth account, ever.  There are also limits to what you can put in and take out.  Without income taxes depleting the funds, more money remains to invest and grow (we call this “compounded growth“).  Bottom line – at the end of the day, you’ll have a lot more money sitting in your IRA than you’d get from the same investments sitting in a non tax-qualified account.

When it comes to estate planning for tax-qualified accounts, remember these three points:

• If you name individual beneficiaries directly on the tax-qualified account, the beneficiaries can keep the account tax-qualified; but
• If you name “my estate” or “the Family Trust” or leave the beneficiary line blank, the funds must leave the account, which means paying all the income taxes due, and no more compounded growth; and
• You must name the beneficiary on the form provided by the financial institution, not in your will.

The distinction is that only an individual [human] beneficiary can take the account as an inherited tax-qualified account.  Better, if the beneficiary is a spouse, he/she can roll it over into his/her own tax-qualified account.  

Or, if there are reasons not to name an individual directly (perhaps a certain human needs someone to manage the account for him because, say, he’s 3), special trusts can work. However, the rules are tricky so you should engage a qualified estate planner to help.

The lesson for the day is to check the beneficiary status on your tax-qualified retirement accounts to be sure that they are up to date, because a mistake in this area can cost your beneficiaries big time.

AN IMPORTANT CAVEAT here: I have explained a VERY complicated area in grossly simplistic terms. This is not intended as legal advice.  This post and the information contained herein have been prepared for educational purposes only.  The information on this blog does not constitute legal advice, which would be dependent upon the specific circumstances of a particular case.  In addition, because the law can vary from state to state some information on this site may not be applicable to you.

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A few weeks ago I published a post on Estate Planning for Digital Assets, and thanks to information provided by my friend and colleague Morgan Bembry, I am happy to share this update:

According to N.Y. Times article Bequeathing the Keys to Your Digital Afterlife, Google has a program called Interactive Account Manager.  This feature allows you to direct that Google deactivate all related accounts after a selected period of ‘silence’.

Also, other programs such as SecureSafe allow you to store username and password information.  In fact, I would expect that these types of apps and programs abound.

Or, as the Times article points out, there’s always your sock drawer. Not that I’d recommend it.