"A lonely widower struck a bargain with his son that he would be taken care of in his old age in return for turning over his property to the son while he yet lived. Later on, when the father became quite invalid, the daughter-in-law nagged her husband to move the old man to the barn.  The son, ashamed to do it himself, required the grandson to take the old man to the barn and wrap him with a horse blanket.
   "The grandson tearfully obeyed his dad, only tore the horse blanket and wrapped the old man in only half of it.  When the dad found out, he was angry: 'How could you be so cruel as to leave your grandfather in the barn to freeze with only half a blanket?'  The son replied: 'Father, I feel obligated to save the other half for you.'"

 

     There are no clearly defined rules in our society for the inter-relationship between generations.  In some other societies, such as Japan, the "older folk" are not only honored, but the son takes great pride in how well he is able to take care of his parent's needs. For our society, independence appears to be very important for all generations.  Yet, as our society ages, more and more women are finding that they are the care-givers to both their own parents as well as that of her husband's parents.  This often occurs while she is still concerned about her own adult children.

 

   Termed the "Sandwich generation," this care-giver is often in retirement years herself with parents in their 80's and 90's. Even though family ties are considered important to our society, the strain of "going it alone" in these situations can emotionally harm both the care-giver and the parent.  Reaching out for help is important, and helps strengthen family ties.

 

    Senior Citizen Centers, by law, are the "Information and Resource" centers that should be consulted.  Other professionals, who have had experience with aging, should also be used. Since people live so very much longer than they used to, new social patterns need to emerge in how older generations should be respected and interrelate with their children.  But for now, use resources around you to help.

 

Drivers License/State ID
    Some older drivers, due to illness or injury, find that they are forced to give up their driver's license. Others voluntarily give up their license for various personal reasons. In both cases, however, a problem exists: cashing checks and other financial transactions often require a "pictured" identification. Utah, as well as most states, has a "State Identification card" under the Good Drivers Incentive Program. At no charge a pictured State ID card will be provided to those turning in their driver's license. Qualified drivers will then be mailed a certificate of recognition and a letter of appreciation for their years of safe driving.

 

Second Marriages Considerations
     "You need your parent's permission to marry the first time-- but your children's permission the second time!"
    There are several areas which should be looked at before entering into a second marriage. This is often difficult because, as you are beginning a new relationship, everyone is looking at the situation through "rose-colored" glasses.  However, a few moments spent discussing these important matters at the start of the relationship may save many hours of distress later.

 

Prenuptial Agreements
 A prenuptial agreement is a contract which is entered into before a marriage is performed. The purpose of the agreement is to define the respective parties' interests in their assets. This applies to the assets which they have before the marriage as well as the assets which they acquire after the marriage. It is important to discuss how these assets should be handled if one or both of
the parties pass away.  After you have decided what your wishes are, legal counsel in drafting the agreement would be advisable.

 

Durable Power of Attorney
   A Power of Attorney gives an individual the ability to act on behalf of another individual.  This can be particularly important with someone who is in a different state or traveling a great deal, or has become diminished in capacity so that they are unable to take care of their own affairs. Most Powers of Attorney will terminate when an individual becomes incompetent. 

    But a "Durable Power of Attorney" will allow an agent to continue to act on the behalf of someone who is no longer competent to handle their own affairs. A Durable Power of Attorney can be important in avoiding the publicity and expense of a conservatorship or guardianship hearing in a court.  There are many times when an older person needs assistance with bank accounts, vehicle titles, and real estate.  Without a Durable Power of Attorney it is often impossible for a spouse or family member to render such assistance.

 

Inventory of Assets
    In many situations one of the partners in a marriage has not been made familiar with the financial situation of the marriage. As a result, if that individual survives the other, they are often ill equipped and unable to deal with the financial requirements. Many times they are not even aware of insurance policies, bank accounts or other assets which should be gathered for their benefit.  By making a list of assets and discussing it with each other this problem can be avoided. Suggestion:  Use Chapter 4 in this book.

 

Living Wills
    A living will is not actually  a will designed to direct the disposition of a person's property at death.  Rather a living will is an arrangement to ensure that artificial or lengthy means are not used to keep a person alive who has a terminal condition.  It is a legally binding document which instructs physicians, hospitals, and other medical providers that, if an individual has an injury or
disease which is certified as terminal,  life sustaining procedures may be withheld or withdrawn.  Many states, including Utah, have authorized living wills by statute.

 

Ownership Effects
 SOLE OWNERSHIP - When you own assets alone in your individual capacity, you are the sole owner.  As sole owner, you possess complete power to direct the use and disposition of such assets.  At death, sole ownership property will pass, subject to probate,  to your survivors in accordance with your will, or in the absence of a will, intestacy law.

 

 JOINT TENANTS With Right of Survivorship - As joint tenants with right of survivorship, you and your spouse each own an equal undivided interest in the joint tenancy property. At the death of either joint tenant, the property will pass directly to the surviving spouse by operation of law.  It is, therefore, not subject to probate, and automatically goes to the survivor. 

 

TENANTS-IN-COMMON - As a tenant-in-common, you own an undivided fractional interest in the tenancy in common property. Unless otherwise specified, the interests of each tenant-in-common are deemed to be equal and may be freely sold, transferred or gifted at any time.  Tenancy in common provides no right of survivorship.  At death your interest is subject to
probate and will pass in accordance with your will or intestacy law. However, documents to indicate one of the joint tenants has passed away must be given to the institution which maintains the record of ownership. The disposition of the property held in joint tenancy with the right of survivorship cannot be altered after death, either by will or through intestacy.

 

      There are potential problems associated with jointly held property with rights of survivorship.  If one owner dies first, the other joint owner becomes sole owner.  This could mean unintentionally disinheriting someone else.  The interest in the property cannot be left to one or more heirs by a will, nor can it go to a trust for special management.
      Taking joint ownership makes the decision for the joint owner, that is, one owner gets sole possession of the property if the other owner dies. Joint-ownership can also make your property liable to claims by your joint-owner's creditors.  Individuals should avoid making someone other than their spouse joint-owner of saving accounts or other very liquid assets, because by doing so they may put their own funds at risk if that someone else is involved in financial difficulties or a lawsuit.

    The main problem of joint-ownership of property is that it generally limits the flexibility needed to design an effective tax and
cost savings plan. Trust arrangements are often used to save estate taxes or probate expenses.  Trusts are covered in the next section, "Estate Planning".

 

The Terminally Ill and Finances
 Along with the emotional trauma of handling the illness itself, very practical questions arise for the terminally ill:
 - How will the medical bills get paid?
 - With the loss of income, how will the family meet day-to-day expenses?
 - What about the cost of funeral expenses?

   Besides following the doctor's advice, the patient needs to have some feeling of control over what is happening:
 1. The patient and family need a support network to help them. Getting into a hospice program and a support group should be a priority.
 2. Financially, an "estate viewpoint" should come next. This viewpoint concerns itself primarily with "conservation" of existing assets and moves away from risk taking.  Review Wills and Trusts and business arraignments.
 3.  Next comes financial implications of the alternatives in  treatment.  This step is helped greatly by the two above steps. By now the support groups can give "experience" to the equation and the "estate viewpoint" may have freed up  cash flow concerns.
 4.  Now review insurance, government programs, family and neighbor help, and other sources as to the assistance they may provide.
 5.  Implement changes that will benefit the patient. If possible, the patient should be encouraged to review  alternatives and make decisions (with assistance) to help  preserve individual dignity.  All too often well-meaning  assistance may become too aggressive and leave the patient  feeling more helpless, so care should be taken.
 6.  The patient should know that the survivors have a grief- support network that they will continue to work with after  he/she has past on. One example is "Good Grief" operating  in Ogden, Utah.

 

 Check List for Survivors after the death of a loved one
 1.  Contact your city or county Social Services or Welfare  Agency if emergency assistance is necessary.
 2.  Gather together all important documents.
 3.  Arrange a meeting with your lawyer for the purpose of  conserving and disbursing estate assets, recording deeds and
revising the survivor's will.  In the instance where the services of a lawyer are not fully utilized, it may be advisable to contact the Probate Judge's office to determine what steps must be taken for proper distribution of probate assets.
 4.  Obtain several certified copies of the death certificate of the deceased.  Birth and marriage certificates may also be needed.
 5.  Contact the decedent's place of employment for  information on benefits and on continuance of dependent's coverage.
 6. Contact all life insurance companies with which the  insured had life, hospital, medical and disability income  policies and
complete the necessary forms for receipt of the  proceeds.
 7. Make an appointment with your local Social Security  office and apply for benefits.
 8. Contact all other groups and organizations from which  you may receive benefits such as unions, the Civil Service  Commission, the Veteran Administration, and Clubs or lodges.
 9. If you and the deceased had joint checking and savings  accounts, or investment assets, make requests for release.
 10.  Change title to personal property, such as automobile and real property, such as a home.
 11. Change ownership of insurance covering real estate and  personal property.
 12. In order to preclude repossession of estate assets,  contact all companies to which the deceased owed money and  determine whether credit life insurance or the estate must  pay off the debts.
 13. Contact Federal and State authorities for information  on death, estate, income and inheritance taxes.
 14. Evaluate survivor financial condition for:
  a.  expected income/debts.
  b.  possible repositioning of lump-sum assets.

 

Life Insurance Issues
    Venita Van Caspel's book The Power of Money Dynamics (and subsequent issues of the book with slightly differing names), has a chapter on Life Insurance that is one of the controversies over the concept of life insurance. Her basic idea is that it should be treated in like manner with other types of insurance: You do not buy more than what you need on car insurance, so why buy more than you need on life insurance?
     Earlier we presented the idea of risk management, and this applies equally to life insurance. You should only buy that which is in the final risk category: that amount of risk that you must "transfer" to others (including payment of any death estate taxes) after you have exhausted other risk management methods. Investments and savings, as presented earlier, should also be kept in mind as part of this risk management. If you have been properly successful in gaining such assets, they become a part of your "retain the risk pool."

    When the need for life insurance is apparent, you face one more controversy: "whole life" vs "term"  life insurance. Term insurance is much less expensive in younger ages and grows more expensive as you age. Whole life type policies (and there are many varieties) strive for a "level" premium over the life of the policy. That means it initially is more expensive at younger ages
than term, but does not become more expensive as you age.
    There are many debates over the "term: invest the difference" and "whole life." As in all planning situations, recognizing the need for individualistic planning is more important than the industry controversies. Perhaps one is better in one case, the other in another, and both in yet a third situation. Remember to be flexible, starting with the client's needs and then searching for an answer to fill those needs.
    In the same manner that you cover both spouses (and children) on one car insurance policy, consider this: you can cover all under one life insurance policy and save "policy fees" (typically $20-60 / year / policy). A "childrens'" rider is often purchased not because of expectations of the child's death, but the rider will insure their "insurability." Should they become uninsurable for any reason by a certain age (usually 22), the rider can be exchanged for a policy at regular rates.

 

 Chapter 10 in Retrospect
1- Are there members of your family who have special medical or emotional needs that should be provided for or protected against?
2- If you expect to receive an inheritance, have you considered this in your planning?
3- Do you wish to create a "Living Will" to deal with  the possibility that you may suffer from a terminal injury or illness?