Recently, our former president, Jimmy Carter, decided to stop his own life-sustaining treatments to receive at-home hospice care so he can spend his final days surrounded by family and friends. When I was serving as my father’s healthcare surrogate, I had to make the decision to enroll him in hospice services at the end of his life.Whether or not to enroll a family member in hospice care is an issue that many families face and it can be very confusing. Here is an article outlining what hospice is, how to find one, and also how to spot a hospice company that might be practicing some Medicare fraud:

When faced with a terminal illness or condition, more people than ever are choosing hospice care over starting or continuing expensive medical treatments. Hospice care is for patients who choose not to undergo specific treatments or when they are no longer effective. Instead, the focus is on the patient’s comfort and quality of life. Care is received at home or in a facility, such as a hospital or a nursing home.

In addition to supporting the patient’s end-of-life needs, hospice care includes the needs and concerns of the patient’s family. Before opting for hospice care, patients should talk with their doctor and their family. Doctors recommend hospice care when they believe their patient has less than six months to live if their condition runs its course naturally.

The hospice care concept was brought to the United States in the 1960s by an English doctor and social worker named Cicely Saunders. It was designed to allow terminally ill patients to die with dignity in their homes surrounded by their loved ones instead of in hospitals while receiving expensive treatments that weren’t helpful. By the early 1980s, many hospice programs had become available throughout the United States. Recognizing the potential cost savings of hospice care over expensive and ineffective end-of-life treatments, President Ronald Reagan authorized Medicare to cover the costs of hospice care.

Benefits of Hospice Care

The biggest benefit for the hospice care patient is avoiding unnecessary and costly treatments when fighting a losing battle against their illness. Hospice patients can receive care that brings them pain relief and comfort while living their final days in their homes.

Though opting for hospice care means waiving treatment for the terminal illness, it doesn’t mean discontinuing all treatments. For example, if a patient has cancer that is not responding to chemotherapy but is also receiving treatment for high blood pressure, they can choose to start hospice care. Their chemotherapy would cease, but they could continue treatment for their high blood pressure. Hospice patients are less likely to receive medications and undergo tests they don’t need compared with patients without hospice care.

Even after starting hospice care, patients may choose to return to treatment for their terminal condition. They may choose to do this for any number of reasons. For example, they may be expecting a grandchild or great-grandchild. Later, the patient may continue with hospice care.

Medicare pays for some or all hospice care costs, and some private insurance plans may also cover certain expenses. Patients should check with their insurance provider to understand their coverage.

Some Hospice Care Providers are Exploiting the System

What started as a field of medicine primarily handled by nonprofits and charities now has a rapidly growing number of for-profit enterprises. According to a ProPublica article published in November 2022, for-profit hospice providers accounted for 30% of providers in 2000, and now they account for more than 70% of providers. The article states that between 2011 and 2019, the number of hospices owned by private-equity firms tripled.

Since Medicare covers hospice care expenses for eligible patients, providers bill Medicare for their services. Medicare pays hospice providers a set rate per patient per day, regardless of how much care they receive. Under this reimbursement arrangement, providers more interested in profiting from their patients than caring for them are incentivized to have as many patients as possible. 

Since hospice patients often choose to live out the ends of their lives in their homes, a significant portion of their care is handled by family members who aren’t compensated for their efforts. Nurses aren’t required to visit more than twice a month. This makes it easy for unscrupulous providers to receive payment for minimal care. 

Also, judging a patient’s eligibility for hospice care is difficult. Regulating the hospice care industry is challenging because no government agency wants to be seen as limiting a valuable service. Surveyors are only required to inspect hospice operations once every three years, allowing providers to operate with very little oversight.  

A Call for More Oversight

In response to ProPublica’s article, the National Hospice and Palliative Care Organization released a statement condemning fraudulent and abusive behavior by bad actors. The NHPCO asserts that most hospice care providers are committed to the original vision of what hospice care should be: providing relief from suffering as well as comfort and support to people nearing the end of their lives. 

In its statement, NHPCO referenced a letter that they, along with other national hospice care organizations, sent to the head of the Centers for Medicare & Medicaid Services (CMS) expressing concern about the rapid increase of new hospice care providers in certain states. Their letter to CMS encouraged the organization to increase federal oversight of their industry and invited them to meet and discuss suggestions for better regulation in this area of the healthcare industry.

Avoiding Hospice Care Providers Involved in Medicare Fraud

Knowing that unethical hospice care providers are out there looking for new patients can make it challenging to find a good provider. However, there are helpful resources. 

A simple but effective way of finding a reputable provider is talking with trusted people. A patient's family, friends, and members of their religious organization are a great place to start. Online reviews can narrow down the selections, along with deeper research on the top choices. Learn whether a hospice provider is a nonprofit or for-profit company, how long they have been in business, and who owns them. 

NHPCO has a program called CaringInfo that is a resource for people looking for hospice or palliative care. CMS's Hospice Center and the National Institute on Aging are other great resources for end-of-life questions.

It’s February already, and today is another gloomy, drizzly day. As I’m writing this, it is getting close to February 28, the day when most people give up on their New Year’s resolutions. How are you doing with those resolutions?  I’m trying to stick with my resolution to go outside every day for 23 minutes, but days like today make it much more difficult to get out the door.
 
One resolution I would urge you to keep, is to get an Advance Directive for Healthcare, or help someone you are caring for complete one. Clients often get stuck because they don’t really know what care they might want at the end of life, or don’t know who should make the decisions about end-of-life care. Here is an article about the duties of a health care surrogate that might help with the decision about who should be your agent under an Advance Directive for Healthcare:

What It Means To Be A Healthcare Surrogate

When nominated to become a surrogate healthcare decision maker for someone, you may be asked to make decisions about what healthcare procedures and care will be appropriate for someone other than yourself. You will only be asked to make healthcare decisions if the person is not able to make or communicate those decisions. You may have to decide what medical care the person would want without ever having discussed the issue with them.

In general, as a healthcare surrogate, you will have the right to:

• Make choices about all medical care for the person, to include surgery, medical tests and pain management;

• Make choices about where the person will receive treatment;

• Take legal action in order to have the person’s wishes honored;

• Apply for insurance, including Medicare and Medicaid for the person.

In order to make these decisions, learn as much about the person’s health care as possible.  For instance, introduce yourself to the person’s physicians, dentists, caregivers, etc. to learn about any diagnosis of illness or disease, and the treatment the person is receiving for that illness or disease. 
 
Get copies of the medical records for the past few years to learn whether the person had surgery, what medications the person is currently taking, or has taken in the past, and what disease or illness the medication is meant to treat. Have a discussion with the physician and other healthcare providers to determine whether the current treatment and medications are necessary. Find out whether there are any side effects of the prescribed medications or treatment. Determine whether the disease normally requires a specialist, whether the current physician is such a specialist and, if not, whether to seek out a specialist.
 
If you know you have been nominated as a surrogate, and the person who nominated you is still able to discuss their wishes, have a conversation with them to determine what treatment they would want to authorize. 
 
While many of the decisions you may be asked to make as a surrogate do not involve end of life decisions, at some point you may be asked to determine whether to authorize treatment that cannot cure someone, but may prolong life. 

In his book, “Being Mortal: Illness, Medicine, and What Matters in the End”, Dr. Atul Gawande explored the subject of end-of-life treatment and good death, and provided some ideas about ways to approach someone to discuss their desires for end-of-life care.
 
Dr. Gawande proposed five questions to ask to help determine what actions to take at the end of that person’s life:

1. What is your understanding of where you are and your illness?

2. What are your fears and worries for the future?

3. What are your goals and priorities?

4. What outcomes are unacceptable to you?  What are you willing to sacrifice and not willing to sacrifice?

5. What does a good day look like for you?

According to Dr. Gawande, the answer to these questions may help determine what kind of end-of-life care to give. He acknowledges that the answer to those questions may change with the age and disease progression of the person.  In his book, he tells the story of one man, who, when asked what he would consider to be a good quality of life, responded that he thought that a good day would be if he could eat ice cream and watch football on T.V.  Dr. Gawande also talks about his father’s final illness. His father was a social person, he would not want any aggressive treatment that would leave him a quadriplegic or might cause him to require a ventilator or a feeding tube. Dr. Gawande contrasts that with the young mother facing a terminal illness who might opt for more aggressive treatment in order to remain with her young children because a good day for her might be just being around those children. 
Although the conversations are very difficult, Dr. Gawande suggests that the more you know about what the person believes is a good quality of life, the better decisions you can make for her or him.

We are now living in “The Sandwich Generation” era. The Sandwich Generation refers to those caregivers, generally between the ages of 45 and 59, who are caring for aging parents while also caring for young children or dependent young adult children.  

One of the issues facing many of those caregivers is how to pay for the aging parent’s long-term care needs.  Long-term care refers to ongoing assistance to meet some of the basic activities of daily living, such as bathing, eating, dressing, using the toilet, transferring from bed or chair, caring for incontinence or eating.  The type and cost of long-term care depends on the services necessary for the health and safety of the person.

Keep in mind that Medicare does not pay for long-term custodial care.

There are four basic ways to pay for long-term care.

1. Self-Pay: The person will use their own personal resources to pay all of the costs of their long-term care.  How much should you expect to pay for that care?

According to a recent Genworth Cost of Care Survey, the average cost of an assisted living facility in the Atlanta area is about $46,140 for a private one-bedroom apartment, or about $3,845 per month. The annual cost for homemaker services in the Atlanta area is about $51,480 for a 44- hour work week for 52 weeks, or about $4,290 each month.  The annual cost of a semi-private room in a nursing home is $90,338, or $7,528 per month.  For a private room, that rate is over $103,113 per year.

2. Insurance: With Traditional Long-Term Care Insurance, typically you pay an annual premium or monthly premium until you need long-term care.  The long-term-care insurance begins to pay a daily or monthly amount once you have met the criteria. For most policies, you must be deficient in a number of the activities of daily living and be receiving home care, or be in an assisted living or nursing home.

Depending on the policy you have purchased, there is usually a waiting period of 30-90 days when you will privately pay before the long-term care insurance begins to pay.   The downside for some people is that if you are never deficient in the activities of daily living, you or your family will not receive any of your money back from all of the premiums you have paid over the years. 

Hybrid Insurance- hybrid insurance is generally a life insurance policy with long-term care coverage that allows you to draw down the death benefit amount to pay for your long-term care, subject to a monthly maximum amount.  The policies usually require a single, up-front premium. The amount of the up-front premium can vary based on several factors.  The advantage is that even if you use the entire death benefit the life insurance company would still provide additional long-term coverage. Another type of hybrid policy is a long-term-care annuity, which provides long-term care coverage at a multiple of the initial investment amount.  The long-term care annuities are not as available right now because of the low-interest environment we are in now.

3. Veterans Benefits: The good news for war veterans and their surviving spouses is that the VA has a program that can pay for some of that care.

The program is called a Pension, but it is nothing like a Pension awarded to a long-time employee who retires.  Rather, a Pension for VA purposes refers to a monetary amount paid to a wartime veteran, or a surviving spouse of a wartime veteran, who is disabled, and has low income and assets.

The Pension has three levels of payment, the amount of the monetary award depends on the level of care needed by the veteran or surviving spouse and the number of dependents the veteran or spouse has. 

For 2022, the top amount of the Pension is for a veteran with one dependent (the spouse is considered to be a dependent) is $29,175 per year, or $2,431 per month.  For a surviving spouse, the maximum pension is $15,816 per year, or $1,318 per month in 2022. (Click for more information) However, every year the VA adjusts the amount of benefit based on the Social Security Administration’s annual cost of living increase. If approved by Congress, the increase for a veteran with one dependent (the spouse is considered to be a dependent) will be $31,714 per year, or $2,642 per month.  For a surviving spouse, the maximum pension will be $17,192, or $1,432 per month in 2022.

You may be eligible for the Veterans Pension program if you meet these requirements. (Click for more information)

Both of these must be true:

• You didn’t receive a dishonorable discharge, and
• Your yearly family income and net worth meet certain limits set by Congress. Your net worth includes all personal property you own (except your house, your car, and most home furnishings), minus any debt you owe. Your net worth includes the net worth of your spouse. Find out about Veterans Pension rates

And at least one of these must be true about your service:

• You started on active duty before September 8, 1980, and you served at least 90 days on active duty with at least 1 day during wartime, or
• You started on active duty as an enlisted person after September 7, 1980, and served at least 24 months or the full period for which you were called or ordered to active duty (with some exceptions) with at least 1 day during wartime, or
• You were an officer and started on active duty after October 16, 1981, and you hadn’t previously served on active duty for at least 24 months

And at least one of these must be true:

• You’re at least 65 years old, or
• You have a permanent and total disability, or
• You’re a patient in a nursing home for long-term care because of a disability, or
• You’re getting Social Security Disability Insurance or Supplemental Security Income

4. Medicaid is a medical assistance program that provides medical care for some people who cannot afford to pay for health care or health insurance on their own.  Medicaid pays for long-term care in skilled nursing facilities, and provides services and medical supplies for persons with disabilities who meet eligibility criteria.

In general, Medicaid only pays for long-term care that is provided in a skilled nursing facility, or at home for persons who would otherwise be in the skilled nursing facility but for the fact that they can be cared for in their home.  The home care program is called is CCSP, and provides a caregiver to come into the home for a set number of hours during the week.

I just got back from a trip to the beach where there were back-to-back weddings near the ocean.  So many new brides and grooms!

Are you planning to get married or divorced in the near future?  How will that affect your estate plan?

An estate plan has lots of pieces and moving parts, but let’s start with how marriage and divorce affect the basic legal documents you should have in your estate plan.

WHAT HAPPENS TO MY OLD WILL?

If you marry after signing a will and you have not specifically stated in the document that you are executing the will in anticipation of a future marriage, that will signed previous to marriage will not be valid.  If you then die without executing a new will, you will die intestate and the rules of the state of Georgia will control distribution of your assets. That means that if you have a wife and children, your new spouse will share the assets in your probate estate with your children.  Here is a link to my blog What happens if you die without a will in Georgia? 

If you have married since your last will was signed, you should do a new one as soon as possible.

WHAT HAPPENS TO MY WILL IF I DIVORCE?

If you divorce, your will is still valid, but the law presumes you did not want to leave anything to your ex-spouse and the probate assets will be distributed as if your ex had predeceased you.  The other provisions in your will - such as nominating guardians for minor children - will remain intact.  If you wish to leave anything to an ex-spouse, a will executed after divorce will be valid as to any provisions made for the ex-spouse.

HOW ABOUT MY LIVING TRUST?

The same rules will apply to a living trust, so if marrying or divorcing,  you will want to sign a new trust or an amendment to your trust following marriage or divorce.

A POWER OF ATTORNEY:

In Georgia, a divorce does not automatically invalidate a Power of Attorney (POA), so if you have named your spouse as your agent under a POA and you no longer want that spouse to serve as your agent, you will want to have a new POA prepared and executed before or after your divorce.  If you marry, your spouse does not automatically have the ability to serve as your POA, so you will need to have a POA prepared if you wish to nominate a spouse.

ADVANCE DIRECTIVE FOR HEALTHCARE:

If you have nominated your spouse to make healthcare decisions for you under an Advance Directive for healthcare, that designation is automatically revoked upon divorce or annulment, so you will want to have a new advance directive prepared in the case of divorce.  Marriage also revokes nominations of your agent under Advance Directive for Healthcare, so you will need to prepare a new Advance Directive if you get married.

BENEFICIARY DESIGNATIONS are not affected by marriage or divorce, and the beneficiary designations on the accounts will control distributions. For example, if you have your spouse as the beneficiary of your life insurance and you get a divorce, if you die before changing the beneficiary your ex-spouse will receive the benefits of your life insurance policy. Check out this article on “Check Your Beneficiary Designations”.

RETIREMENT ACCOUNTS

Of course, most people divorcing will split up their assets during the divorce proceeding, and retirement accounts are generally divided in a divorce.  Retirement assets may be different from other assets, in that when a distribution is made there will be taxes due potentially making the retirement account worth less than a non-taxable account.

401(k) Retirement accounts are generally split through a qualified domestic relations order QDRO, which is an order issued by a judge.  Roth and Traditional IRAs are divided as a transfer incident to divorce.  The receiving spouse can roll over the  part of the account received in their divorce settlement, but will be required to pay taxes on the distribution when they take money out of the account.  In addition, if the receiving spouse takes distributions early – before they reach age 591/2, there may be additional taxes due as a penalty for the early withdrawal.

If you die before changing beneficiary designations on a retirement account, the beneficiary you have named will be entitled to receive the proceeds of your retirement account.

REAL PROPERTY

You will also need to check the deeds to your real properties.  If you marry, your spouse does not automatically have ownership rights to the property (but see the article on Petition for Year’s Support) and if you wish to give them an ownership right, you will want to transfer an ownership interest via a new deed.  Similarly, if you divorce and your ex-spouse still has an ownership interest as stated in a deed, you will need to make sure your deeds reflect what, if any, ownership interests the ex-spouse retains in real property. 

A PRE-NUPTIAL AGREEMENT can address many of the estate planning issues, so if you intend to leave your estate to someone other than a spouse, it would be a good idea to address it before marriage.  A pre-nup can address property and assets you own before the marriage, but can also address property acquired after marriage. 

WHAT IS A PETITION FOR YEAR’S SUPPORT AND HOW COULD THAT AFFECT MY ESTATE PLAN?

One area that the pre-nuptial agreement should address is whether a surviving spouse can file a Petition for Year’s Support after your death, seeking to have property awarded for his or her benefit, or for the benefit of minor children. Here is a link to an article on Petition for Year’s Support.

If you or someone you know is recently married or divorced, or planning to be married or divorced, feel free to call our office to discuss planning your estate (770) 416-0776.

Click here for your September Checklist

What can happen if you name the wrong beneficiary or No beneficiary?

What happens if the wrong beneficiary is named?

This can happen when people marry, divorce, or have children without changing the original beneficiary designation forms. For example, if Jane establishes her IRA at the local bank, names her mother, Sue, as the beneficiary, and then marries Frank and has two children after her marriage without changing her IRA beneficiary designation form. Who do you think will get the IRA proceeds in the event Jane forgets to change the beneficiary designations? Most likely Sue will receive those proceeds. 

What if Sue precedes Jane in death? Who gets the proceeds then?

This can happen when people marry, divorce, or have children without changing the original beneficiary designation forms. For example, if Jane establishes her IRA at the local bank, names her mother, Sue, as the beneficiary, and then marries Frank and has two children after her marriage without changing her IRA beneficiary designation form. Who do you think will get the IRA proceeds in the event Jane forgets to change the beneficiary designations? Most likely Sue will receive those proceeds.

When should you check your beneficiary designations?

If a person dies without a will, they are said to have died “intestate”.  When that happens, the person’s assets will be passed to the heirs based on the rules that Georgia’s intestate succession rules. 

The probate process for a person who is intestate is called an administration and the person named to take care of your estate after your death is called an administrator.  The administrator will file a petition in the probate court, and once appointed and sworn in by the judge, the administrator will first pay the debts of the estate and then make distributions to the living heirs of the deceased person.

• If you have a spouse but no children, the spouse will get the entire estate; 
• If you have children, but no spouse, your children will divide the estate equally.  This includes both biological and adopted children.  If you have a spouse and one child, they will divide the estate equally;
• If you have a spouse and more than one child, your spouse will get 1/3 and the children will divide the 2/3 equally;
• If any child is deceased, his or her share will go to your grandchildren;
• If you have no spouse or children;
• Your estate will go to your living parents;
• If you have no living parents, the estate goes to your siblings;

If you don’t have spouse, children, parents, or siblings, then the estate goes in the following order:

• Grandparents;
• If no grandparents, the split among aunts and uncles.  If you have aunts or uncles that are deceased, their children will split their share;
• If you have no aunts or uncles, then your first cousins split the estate

If you have none of the above, then distant cousins will inherit based on OCGA sec. 53-2-1(b)(8).

Mary, an independent, strong-willed woman all of her life, realized that she might need help managing her finances.  She came to me with concerns that her memory might be slipping a little, and she was afraid that she might forget to pay her bills.  After assuring her that she was fine, I encouraged her to consider placing her assets in a trust so that she could write her own rules for management of those assets.  Mary was skeptical.  “Trusts are way too complicated for me!  I don’t even know what a trust is. And who would be the trustee?” 

I explained that a trust is very much like that little red wagon you had when you were a kid.   I have a picture of my sister hauling me around in a red Radio Flyer wagon when I was about three years old, and I remember using that wagon to cart my Barbie dolls to the neighbor’s house.  I also remember that I was the boss of that wagon, and would only let my best friend, Paula, touch that wagon and the Barbies in it.

A wagon is a receptacle – a place to put your “stuff”.  When you were a kid, you probably put all of your important toys, and things you found by the side of the road, inside that wagon.  You took the handle of the wagon and pulled the “stuff” wherever you wanted it to go.  You could take things out of the wagon, or put new things in the wagon, whenever you wanted.  When you got tired, you put down the handle.  If you wanted, you could allow someone else to take the handle and haul your stuff for you.  You made the rules for your wagon.

A trust is like that.  You put your assets – your adult “stuff” – in the trust.  While you are alive and well, you can be the trustee.  The trustee is the person that puts the stuff in the trust, makes sure the stuff in the trust is taken good care of, and takes the stuff out of the trust whenever necessary.  When you no longer want to be the trustee, or you can no longer serve as trustee because of incapacity or death, someone else will pick up the handle and serve as the trustee. 

As the trust maker, you get to decide the rules of the trust.  Just like you could decide who got to pull your wagon, you get to decide who will be the trustee.  You can also decide who will benefit from the things in that trust and when they can benefit. 

Unlike the rules you made up as a child, though, the rules of the trust are written in a document so that the person serving as trustee knows the rules and must legally follow those rules.

Mary has several businesses, a real estate partnership with one other person, another business organized as a Limited Liability Company of which she owns 51%, and a third business organized as a corporation which Mary owns 50% of the shares and her brother owns the other 50%.

Mary has three children, two are well into adulthood, but her youngest is 17 and will be starting college next year and plans to study medicine after she completes her undergraduate degree.  Her oldest child, Lindsey, has been working in Mary’s LLC for several years, and has expressed interest in becoming an owner at some point in the future.  The other adult child, Hunter, has no interest in working in any of the businesses.

As a single mother, Mary is concerned about what will happen to her businesses because they are her main source of income and her largest assets. She wants to know what to do if she becomes disabled, and how she should plan for her businesses after her death. 

Here is a list of things to do to start planning for your business during disability or after death:

1. Set aside time to get your business affairs organized. Make sure you have a copy of your organizing document for each of the businesses.  The organizing document may be called the Articles of Organization or the Certificate of Formation.  It is the document that was filed with the Secretary of State in order to begin operating as an LLC or a corporation. 

2. If you have an LLC or Corporation, check to make sure you are up to date with your annual fees. If you are in Georgia, you can check the Secretary of State’s website to see if you are in compliance. 

3. Check to see if you have an Operating Agreement if your business is organized as an LLC, or a Shareholder’s Agreement if organized as a corporation.

An LLC operating agreement is a document that spells out the terms of a limited liability company according to the needs of the members. It also outlines the decision-making structure of the organization. An LLC operating agreement should spell out the following:

• The ownership interest of each owner, which is normally stated as a percentage

• Responsibilities and voting rights of members

• Duties and powers of the members

• Rules regarding when and where meetings should be held

• How profits and losses will be allocated

• Management of the LLC

• Buyouts, transfers, and sales of shares of members

A shareholders' agreement is usually a document outlining the arrangement among shareholders regarding how a company should be operated, and the shareholders' rights and obligations.

One purpose of the shareholders' agreement is to protect the rights of shareholders and make sure that shareholders are treated fairly.

The agreement should also address how shareholders will make decisions about who may become future shareholders and safeguards the position of minority shareholders.

4. Talk with your family and any business partners or investors to discuss the future of the business.  Can the business continue if you become disabled or die?  Or is this a business that requires a license you have or a set of skills that only you have?

If you don’t have operating documents, set up a meeting with any partners, co-owners, or members to discuss how the business should be run in the event of the disability or death of one of the owners.
 
For example, Mary and her brother own equal shares of the corporation, and have equal say in business matters.  What happens if Mary is no longer able to participate in the business?  Is she able to leave her shares in the business to her children?  Would the children have the ability to make decisions with her brother?  Is that a good idea?

5. The owners of the companies should decide whether they will have a buy-sell agreement allowing the surviving owners to purchase the interest of the deceased or disabled owner, and how they will finance that agreement.  Should they purchase disability and/or life insurance so the survivor(s) can purchase the shares of a disabled or deceased owner? 

6. Work on a succession plan.  Could you gift or sell ownership interests to a child that is working in the business?  If one child gets the business, is there another asset to leave to other children? If none of your children are interested, should you seek to hire an employee now or in the future that might eventually want to buy your share of the business?

7. Make sure to get your will and/or trust in place.  You will want to make sure to choose a personal representative or trustee that can manage the business interests if you become disabled or die.  In addition, make sure that you have a durable financial power of attorney that allows someone to manage your business interests in case of disability.  (A power of attorney is no longer in effect after your death)

8. Visit with your CPA or other tax professional to make sure all your tax planning is in place for the business.

Here is the August checklist:

Parents want their children to be taken care of after they die. But children with disabilities have increased financial and care needs, so ensuring their long-term welfare can be tricky. Proper planning by parents is necessary to benefit the child with a disability, including an adult child, as well as assist any siblings who may be left with the caretaking responsibility.

Special Needs Trusts
The best and most comprehensive option to protect a loved one is to set up a special needs trust (also called a supplemental needs trust). These trusts allow beneficiaries to receive inheritances, gifts, lawsuit settlements, or other funds and yet not lose their eligibility for certain government programs, such as Medicaid and Supplemental Security Income (SSI). The trusts are drafted so that the funds will not be considered to belong to the beneficiaries in determining their eligibility for public benefits.

There are three main types of special needs trusts:

• A First-Party Trust is designed to hold a beneficiary's own assets. While the beneficiary is living, the funds in the trust are used for the beneficiary's benefit, and when the beneficiary dies, any assets remaining in the trust are used to reimburse the government for the cost of medical care. These trusts are especially useful for beneficiaries who are receiving Medicaid, SSI or other needs-based benefits and come into large amounts of money, because the trust allows the beneficiaries to retain their benefits while still being able to use their own funds when necessary.
• The Third-Party Special Needs Trust is most often used by parents and other family members to assist a person with special needs. These trusts can hold any kind of asset imaginable belonging to the family member or other individual, including a house, stocks and bonds, and other types of investments. The third-party trust functions like a first-party special needs trust in that the assets held in the trust do not affect a beneficiary's access to benefits and the funds can be used to pay for the beneficiary's supplemental needs beyond those covered by government benefits. But a third-party special needs trust does not contain the "payback" provision found in first-party trusts. This means that when the beneficiary with special needs dies, any funds remaining in the trust can pass to other family members, or to charity, without having to be used to reimburse the government.
• A Pooled Trust is an alternative to the first-party special needs trust.  Essentially, a charity sets up these trusts that allow beneficiaries to pool their resources with those of other trust beneficiaries for investment purposes, while still maintaining separate accounts for each beneficiary's needs. When the beneficiary dies, the funds remaining in the account reimburse the government for care, but a portion also goes towards the non-profit organization responsible for managing the trust.

Life Insurance
Not everyone has a large chunk of money that can be left to a special needs trust, so life insurance can be an essential tool. If you've established a special needs trust, a life insurance policy can pay directly into it, and it does not have to go through probate or be subject to estate tax. Be sure to review the beneficiary designation to make sure it names the trust, not the child. You should make sure you have enough insurance to pay for your child's care long after you are gone. Without proper funding, the burden of care may fall on siblings or other family members. Using a life insurance policy will also guarantee future funding for the trust while keeping the parents' estate intact for other family members. When looking for life insurance, consider a second-to-die policy. This type of policy only pays out after the second parent dies, and it has the benefit of lower premiums than regular life insurance policies. 

ABLE Account
An Achieving a Better Life Experience (ABLE) account allows people with disabilities who became disabled before they turned 26 to set aside up to $15,000 a year in tax-free savings accounts without affecting their eligibility for government benefits. This money can come from the individual with the disability or anyone else who may wish to give him money.

Created by Congress in 2014 and modeled on 529 savings plans for higher education, these accounts can be used to pay for qualifying expenses of the account beneficiary, such as the costs of treating the disability or for education, housing and health care, among other things. ABLE account programs have been rolling out on a state-by-state basis, but even if your state does not yet have its own program, many state programs allow out-of-state beneficiaries to open accounts. (For a directory of state programs, click here.)

ABLE (Achieving a Better Life Experience) accounts offer people with disabilities a great, tax-free way to accumulate money without jeopardizing their qualifications for Supplemental Security Income (SSI) and other means-tested programs. Withdrawals are tax-free as long as the money is used for “qualified disability expenses.”  The arguments for starting and maintaining such funds are overwhelming, not least of which is the wide variety of things on which the money can be spent.

To build 529A ABLE accounts, beneficiaries (and other contributors) can put up to $16,000 total into these funds each year. Other restrictions apply. Only those whose disabilities were diagnosed before turning 26 are eligible for an ABLE savings plan.  The total value of the account must remain below $100,000 for the beneficiary to qualify for government benefits. Also, the money must be spent only on items, services and activities that the Internal Revenue Service (IRS) deems qualified disability expenses (QDEs).

The ABLE Act, passed by Congress in 2014, originally defined QDEs as:

• education, housing, transportation
• employment training and support
• assistive technology and personal support services
• health, prevention, and wellness
• financial management and administrative services
• legal fees
• expenses for oversight and monitoring
• funeral and burial expenses

The language of the Act concludes this list with: “and other expenses which are approved by the Secretary under regulations and consistent with the purposes of this section.”

Subsequent regulations and recent revisions by the Social Security Administration (SSA) and the IRS have expanded the list. As of 2022, for instance, the SSA has determined that food qualifies as a QDE, whether in the form of groceries or restaurant meals. ABLE money can also go toward vacations.

To clarify the purpose of ABLE accounts, the Treasury Department and IRS issued a bulletin in 2015 to the effect that “qualifying disability expenses” should be “broadly construed” to include any benefit related to the designated beneficiary “in maintaining or improving his or her health, independence, or quality of life.”

“There is no complete list of QDEs, but the category is very broad, including any expense paid for the benefit of the eligible beneficiary,” Juliana Crist, senior consultant at AKF Consulting, an advisor to state-run municipal plans, told Investopedia.

The ABLE National Resource Center offers advice on what to spend ABLE funds on and when, stressing that an expenditure need not be disability related. Need a car? That’s eligible, as is a smartphone. As noted above, education qualifies, as does anything needed for classes, such as books and a laptop.

It is always best to use ABLE funds on those things that are explicitly described as QDEs, while using money from other sources for those things that might not qualify. The ABLE National Resource Center advises using public benefits for key expenditures, reserving ABLE funds for those things less likely to be covered by such things as Medicaid. Experts advise keeping records on what you have spent ABLE funds, should the IRS decide to include you on one of its random audits. Misuse of ABLE account funds could result in tax penalties and possible loss of public benefits.

But the rationale for starting and building an ABLE account is compelling — and keeping the account growing more so, as more items are included in allowable expenditures. Before you open an ABLE account for yourself or a family member with disabilities, or if you have questions on how the money should be spent, be sure to consult with your special needs planner.

For a directory of state ABLE account programs, click here.