Partners through the aging process
We’ve helped a number of clients navigate the aging process. Read their stories to see how we can help you.
Estate Planning: Protecting assets from taxes, legal fees and care costs
The Client: Mark and Theresa have been married for 57 years. Mark is a retired auto assembly worker and Theresa was a stay-at-home mom to three children and held various retail positions. Between Social Security and a good pension, their monthly income is $5,500. They have accumulated $375,000 from a frugal lifestyle and various wise investments, plus a 401(k) plan.
Mark and Theresa were worried that inheritance taxes, legal fees and long-term care costs would deplete the assets they had hoped to leave for their children and grandchildren. They needed a comprehensive plan that will provide them with financial security for another 15+ years and ensure they will have assets remaining to pass along to their heirs.
The attorneys at Pfalzgraf Beinhauer brought Mark and Theresa, their three children, their financial advisor, and their accountant together to formulate a comprehensive plan. Pfalzgraf Beinhauer helped Mark and Theresa establish an irrevocable trust to hold all of their non-retirement assets. This coordinated plan is flexible, allowing it to respond quickly to changes in the health or financial status of either Mark or Theresa. Life is unpredictable, but Mark and Theresa’s plan can adapt to the unexpected.
Long-Term Care and Medicaid Planning: How do I preserve my assets if I need long-term care?
The Client: Richard is a retired industrial equipment salesman. He saved money through his company’s 401(k) plan and some personal investments. At age 81, Richard was diagnosed with early-stage Alzheimer’s. A widower, he has two married daughters and three grandchildren.
With Richard’s Alzheimer’s diagnosis, his daughters were concerned about the cost of his care. With the help of his daughter who lived nearby and home care aides, the goal was to keep Richard in his home as long as possible. Richard and his family needed a comprehensive plan to take advantage of the financial assistance that was available through various programs while preserving as many of his assets as possible to give to his daughters after his death.
Together with Richard and his daughters, the attorneys at Pfalzgraf Beinhauer reviewed existing legal documents and financial statements to create a plan to maximize asset preservation in coordination with a long-term care plan. With the help of a geriatric care manager, they arranged for home services to allow Richard to stay home longer while they transferred assets into an irrevocable trust. This will ensure Richard’s safety while starting the Medicaid lookback period to limit the amount he should ever spend on nursing home costs.
After reviewing his accumulated assets, it was determined that Richard had significant investments outside of his retirement account that he wasn’t using and hoped to give to his daughters at some point in the future. As a widower, these assets would have to be spent down to $15,000 before he could access long-term care benefits from Medicaid to pay for future long-term care.
Estate Administration and probate: What happens when someone passes away without a will or estate plan?
The Client: A wise investor and successful painter, William was just 56 when he died unexpectedly of a heart attack. In addition to his investments, he had accumulated significant assets from the sale of his paintings. He owned a large home in Western New York and a vacation condominium in Florida. He was survived by his widowed sister and her three adult children.
Because he was never married, William felt that it was unnecessary to create a will. His sister Marie was not only coping with the unexpected loss of her brother, but also left to sort out his money and property. Marie needed help with the entire process of valuing and distributing William’s assets and making sure all claims against his estate were valid and addressed.
Our attorneys met with Marie and her children, William’s accountant, his financial advisor, and a real estate appraiser to determine the value of his estate, coordinate Surrogate’s Court proceedings, sell his home and condominium, and distribute his assets quickly and equitably. Marie was appointed the administrator and sole heir of William’s estate after payment of all lawful debt.
Marie was able to establish a trust for her children that will provide for their health, education and welfare through college and beyond.
Family Law: Litigating complex matters in a divorce proceeding
The Client: Bob and Joanne, both 57, were married for twenty years when Bob commenced an “Action for Divorce” on the basis that their marriage has been irretrievably broken down for a period of at least 6 months. Bob and Joanne both earned approximately $75,000 annually and had two children over the age of 21, so there were no issues of spousal support or child custody to resolve.
- Issue # 1: Joanne refuted Bob’s allegation that their marriage had been irretrievably broken down for a period of at least 6 months.
- Issue #2: Joanne and Bob purchased a home together. Joanne used inheritance money for the down payment. She wanted to recoup the down payment money.
- Issue #3: Both Joanne and Bob had 401(k) accounts. Joanne’s account had a balance of $300,000, while Bob’s account had a balance of $150,000. Bob wanted Joanne to transfer $75,000 to Bob to equalize their balances.
- Issue #4: Bob spent $5,000 on a shopping spree after the divorce was commenced. He wanted Joanne to pay half of this debt.
- Issue #5: To pay his attorney’s retainer fee, Bob received a loan from his friend, while Joanne used the funds she inherited from her father. Bob argued that Joanne should pay 50% of the loan he took from his friend.
Pfalzgraf Beinhauer was able to successfully litigate all of the aforementioned terms of the divorce. The outcomes of each issue are as follows:
- Issue #1: Joanne could not refute Bob’s allegation. As long as both parties have been married for at least six months, the allegation cannot be refuted.
- Issue #2: Joanne was able to prove that the down payment she paid when Bob and Joanne purchased their home was from an inheritance. Joanne also maintained her inherited funds in a separate account and never deposited any other funds into this account. The inherited funds remained her separate property against which Bob has no claim.
- Issue #3: Because all funds were contributed to the 401(k) accounts during the parties’ marriage, both balances are subject to distribution. While equitable distribution does not mean “equal,” the courts will frequently equalize retirement accounts under these circumstances. Thus, Bob was awarded the sum of $75,000 from Joanne’s 401(k), leaving each with a balance of $225,000.
- Issue #4: Because the debt occurred after the divorce action was commenced, Joanne was not responsible for the debt.
- Issue #5: Typically, the spouse making less money should have some or all of his/her attorney’s fees paid by the spouse making more money. However, since both parties made the same amount, Joanne had no obligation to repay 50% of Bob’s loan.
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