Happy Fourth of July

The Disabled Military Child Protection ActHappy Independence Day from Four Pillars Law Firm!

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Supreme Court Rules Inherited IRA’s not Bankruptcy-Protected

Supreme Court Rules Inherited IRAs Not Bankruptcy-ProtectedIn a sweeping decision in Clark v. Rameker, the U.S. Supreme Court held that funds in an inherited IRA are not protected in bankruptcy.  The Court’s analysis focused on key legal distinctions between the type of IRA you set up and fund yourself and the type that you inherit as a beneficiary from someone else upon their death.  In making this ruling, the Court clearly holds that an inherited IRA is an asset of the bankruptcy estate and may be used to satisfy creditors’ claims.

In making this holding, the case clearly favors establishing special trusts as beneficiaries of retirement accounts that do allow for the creditor protection not afforded individual beneficiaries.  For more information on this type of trust, please visit:

Four Pillars Law Firm- IRA Inheritance Trusts

Four Pillars Law Firm- Advanced Estate Planning

For more information on the holding of Clark v. Rameker, click here.

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All Things Considered

All Things ConsideredWhat’s the fastest growing group of individuals in the United States? Those who are 85 years and older. And what’s one of the key needs for this group? Social support.

Read more here.  Or listen to these clips from All Things Considered, the flagship news program on National Public Radio.

When Older People Walk Now, They Stay Independent Later

‘Silver Tsunami’ And Other Terms That Can Irk The Over-65 Set

A Cartoonist’s Funny, Heartbreaking Take On Caring For Aging Parents

Why Bring Up Death When We Could Talk About ‘Something More Pleasant’?

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Kelly Answers the $64 Question

Kelly with Tom PecharDid you know that The $64 Question was a popular radio quiz show? During the 1940s, “That’s the $64 question” became a common catchphrase for a particularly difficult question or problem.  When the show moved to television, it became The $64,000 Question!

Recently, Kelly was interviewed on the Cape Fear Seniors Radio podcast.  She donned her best ‘radio voice’ and had a great time chatting with host Tom Pechar.  She answered all sorts of “$64 questions,” such as how she came up with the name Four Pillars, why we think creditor-protected trusts are the best way to set up inheritances, and the reason we personalize our services for the individual families with whom we work.

You can listen to the 25 minute interview here.



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Asset Protection Amid Creditors

Asset Protection Amid CreditorsMany people only contemplate the need for asset protection when they find themselves amid the call of creditors.  The sad truth, however, is that there is normally very little to be done.  Trying to protect assets from current and known potential creditors, by creating trusts or various entities, is generally illegal.  If you want to protect your assets, you need to do so when you have no known creditors or financial woes.

The people who normally consider creating business entities to separate their personal from business assets are often small business owners themselves.  They create the separate entity to “house” their business assets so that if they are sued through the business, their personal assets will not be lost.  Many of these business owners create an entity themselves on the Secretary of State’s homepage.  Simple enough; however, if they do not have the underlying operating agreements and/or corporate documents and  are not maintaining the proper protocol annually, any creditors may be able to “pierce the corporate veil” of their business and expose their personal assets to business liabilities as well.

Even though people may be able to create a business entity themselves, experienced legal counsel is necessary to ensure the proper supporting business documents are in place and formalities are being maintained so as to ensure business and personal assets are truly separate in the face of creditor liens or lawsuits.

With that said, though business people are normally the ones who take efforts to establish creditor protection, similar proactive steps may greatly enhance your family’s financial security through the use of trust-based asset protection planning.  Perhaps you, personally, don’t think you’ll ever need creditor protection because you are financially secure through savings and insurance. But what about your children? Are they similarly secure?

If you leave their inheritance to your children outright (which most people do) and they face creditors . . . whether due to a car accident and resulting lawsuit, bad investment deal, spendthrift habits, or a divorce (yes, a soon-to-be ex-spouse is also a creditor) . . . then they could lose their inheritance that you worked so hard to leave them.  Instead, you may want to consider an estate plan that incorporates asset protection trusts for your beneficiaries.  In doing so, the money is still available to them to enjoy for their benefit during their lifetime.  However, if they ever have creditors looming (for whatever reason), then their inheritance is protected and off-limits for judgment purposes, even if your beneficiary otherwise loses his or her personal life savings.  In a nutshell, you are able to create a layer of protection for their inheritance that would otherwise be exposed.  If you intend to pass on any level of substantial assets to your beneficiaries, this is something you should definitely take into consideration and incorporate into your estate plan with an experienced estate planning attorney.

Click here to visit our website for more information on advanced estate planning.

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Selecting Trustworthy Lifetime Agents

Planning for an Uncertain Life ExpectancyLast week’s blog discussed Mickey Rooney’s legal and financial struggles in later years as a victim of elder abuse.  Victims of elder abuse are almost always isolated in their surroundings, otherwise they would have the chance to reach out to others in the community when they needed help and protection from abuse.  Therefore, one way to protect our loved ones from abuse is to keep them actively involved in the community and being vigilant in protecting them from any abuse they may encounter (whether financial exploitation, mental abuse or physical abuse).  That is one way we may proactively combat potential abuse against our loved ones.

Our loved ones may still put measures in place to proactively combat such financial and emotional abuse as well.  Normally, this is done by establishing a comprehensive estate plan which not only includes a Will (which only becomes active upon death), but also includes a General Durable Power of Attorney and Healthcare Power of Attorney (for financial and medical decisions during life).

When I speak to clients about implementing these documents into their estate plan, at first some may be taken aback.  They ask why they need to appoint anyone to handle their financial and medical affairs right now when they are able to handle everything fine on their own.  The truth of the matter is that anyone can get in a car accident on the way home or suffer a debilitating stroke.  It happens every day.  If you postpone putting these documents in place while you are able, you very well may not be able to establish them when they are needed due to issues of capacity.

The additional benefit of establishing these documents during your capacity is that you can choose who you want to make these decisions for you.  If you are married, perhaps you appoint your spouse as the primary person to make financial and/or healthcare decisions, should you become unable to do so.  If you are not married, or are widowed, perhaps you have a trusted child or children that you would appoint.  Regardless of who you appoint, the benefit of establishing these documents is that you are making the decision(s) of who you trust most to take care of you during your life if you become unable to do so.  If your selections change over your lifetime, because you see an agent taking advantage of the trust and authority you have provided them, you can revoke the authority granted and entrust it to another.  You retain that flexibility so long as you have mental competency and capacity.

If, instead, you fail to implement these documents as part of your estate plan and need someone to manage your financial and/or medical affairs during life, there is no other option than to have a public guardianship before the courts during which time you are adjudicated legally incompetent to make any decisions moving forward.  Not only does the court effectively strip you of your rights and autonomy, but it also appoints who will serve as your guardian.  This guardian may not be the person you otherwise trusted most to make decisions in your best interest.  In fact, this guardian could be someone you have never met, such as a local attorney.  Not only is this guardianship public and costly, but it is also impersonal and your guardian will have to account to the courts for any financial decisions made during your incapacity, which ultimately leads to a very costly practice.

All of this difficulty can be overcome, should you elect to sign a General Durable Power of Attorney and HealthCare Power of Attorney into effect, appointing those you entrust to best care for you should you need someone to look over you.  Proactively granting those you entrust with your financial and healthcare decision-making authority, should you need such assistance later in life, enables you to appoint who you trust most to care for you during your time of need.  Giving power and authority to those you love and entrust, and who hopefully love and respect you in return, should greatly curb your susceptibility to elder abuse later in life.

For more information regarding a General Durable Power of Attorney and Healthcare Power of Attorney, as well as the other recommending core estate planning documents to care for you during your life, click here.

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My Parents Were Unprepared for a Health Crisis (But Fortunately, Four Pillars Was There to Help)

Four Pillars Law Firm Happy Sad EggsIn September of 2011, I dropped by my parents’ house for quick overnight visit.  I had been there less than a month earlier, and at that time, our Dad exhibited some of the forgetfulness one expects with an aging parent.  This time, however, there was a noticeable shift for the worse that was not normal and quite scary.  It was as if he had lost the ability to generate new memories; he repeated every question he had over and over again as if he never retained the answers.  Indeed, soon after that visit, he was diagnosed with vascular dementia.

My brother and I began making the respective two-hour trips to my parents’ home on a weekly basis to try and give some support to our Mom in her sudden new role as Dad’s caregiver and as the head of the of household.  But how much help can one really be during a once-a-week visit in a situation that requires continual ‘round the clock attention seven days a week?  My father had managed the family finances, so my brother and I focused on assuming this duty, locating and scheduling additional outside help, and trying to offer emotional support.

Over the course of a few months, Dad’s condition continued to decline and so did Mom’s.  The increasingly challenging physical and mental stresses left her exhausted.  We continued to seek out additional methods of assistance but found few options, other than paying for in-home help out of pocket.  Medicaid sent a nurse weekly, but their visits only offered a few hours of support per week.  We were maxed out financially, paying people to assist in the home five days a week, but it still wasn’t enough support for Dad’s situation.   Aside from abandoning our own jobs and lives and moving back home, we were unable to do more.   It was very painful to watch our mother’s own decline as she attempted to provide a level of care for our father that wasn’t sustainable for one person.

About a year after that fateful September visit, we planned a big family Thanksgiving that we hoped would cheer our Mom up.  We had adjusted to the impending feeling of doom and were probably in some level of denial about where we were in the larger scheme of things.  We rented a beach house near my parents’ home thinking it was close enough for Mom to spend time at home, and that the beach house would serve as a refuge and an escape for her, even if for just a few hours each day.  Although we intended for this time to be a refuge for Mom, it was a time of realization and reckoning for the family.  Mom was so beaten down, she was one step away from a nursing home herself.

On the Monday morning after Thanksgiving weekend, my brother and I made the decision that Mom would not have let herself make.  We found a skilled nursing facility with an open bed, paid the required $5000 advance for a month of care, and checked him into the facility.  At this point, we only had enough money for a month or two of care.  We had already exhausted the other limited funding in the family’s budget.  We had previously applied for government assistance from Medicaid, but had been denied because my parents owned property.  At this point we were out of options, up against a ticking clock, and very afraid of what the future held for our family.  We had tried, but the truth was we knew nothing about how to navigate the sea of healthcare regulations to find the help we needed.

In a desperate search, we made contact with a friend of a friend who works as a financial planner in Greensboro.  He did some online research for attorneys in the Wilmington area, and based on his experience and knowledge, he recommended that we go to Four Pillars Law Firm first.  It was the best advice we could have received

Other than securing supplemental health insurance, our parents had not done much planning for a situation like ours.  Personally, I didn’t even know that this type of help or planning existed.  But it did, and finding Four Pillars Law Firm changed everything for us.

Kelly Shovelin and Matt Schrum literally rescued our family; I do not know of a better way to put it.  They are highly skilled and a pleasure to work with, and I am not overstating my feelings when I say that I firmly believe they are the reason our Mom still has quality time left to spend with us.

There is no cure for my father’s condition, but at least now he has the right help in the right place; we’ve been able to make the best of a bad situation.  My brother and I can rest easy knowing that both of our parents’ needs will be met.

I am not sure that there is any way for people to emotionally prepare for a situation like this, but the right health care and financial planning make a tremendous difference in one’s ability to endure the experience.  If this type of planning had already been in place for our parents, it would have helped immensely.   My wife and I will be doing this same planning with Four Pillars Law Firm for ourselves in the near future.

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Fortunately, My Parent Planned Ahead

Four Pillars Law Firm Happy Sad EggsI was blessed with wonderful parents who were married for 63 years.  Years ago, they wrote a standard will.  After my Mom passed away in 2011, my Dad, an active, independent 80-year-old in relatively good physical and mental health, decided he wanted to revisit his own documents.  He knew that with a standard will, all of his assets could go into probate in the courts.  It was important to him to keep our family’s asset distribution private and fair for all remaining family members if something should happen to him.

Dad’s financial planner recommended Kelly Shovelin of Four Pillars Law Firm.  Working with both my father and me, she offered solutions like an irrevocable trust to help protect Dad’s assets if he ever needs a nursing home and ensure our family avoids probate court during the eventual execution of his will.  Like many modern families, ours is a bit complicated due to divorces and other issues.  The trust dictates the exact terms of asset distribution and precisely for whom said assets are intended.

As the adult child residing nearest my father and the person named as his executor, this lifts a tremendous burden from me.  The documents that are now in place clearly state my father’s wishes and exactly how his estate should be distributed, meaning no bias on behalf of the executor and leaving less room for debate.   Everything is clear, transparent and final.   In other words, by planning in advance, Dad isn’t just protecting “the money,” he’s also protecting the relationships between his children.  We will be able to avoid the hurt feelings and family bickering I’ve seen all too often when loved ones pass away.

Did it cost a little bit more for Dad to revisit all of this paperwork and make changes?  Yes, but now he feels more settled and he can sleep at night.   I’m also relieved knowing all bases are covered, and if something does go wrong, I know exactly what to do.  I won’t have the headaches and the heartbreak of having to sort out such important matters during times of stress or grief.

As someone who has spent 32 years working in the medical field, I’ve seen time and again how life can change in an instant and how an ounce of prevention is worth a pound of cure.  I am grateful to my father for his foresight, and grateful to Four Pillars Law Firm for creating a thoughtful, solid plan that will protect him and all of us for years to come.

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Mickey Rooney: His Life, Death & Legacy

Purple PowerMickey Rooney died over the weekend at the age of 93, but his legacy will live on!  Many Americans probably reflect fondly on his nine-decade long career in show business.  However, his real legacy may prove to be his personal battle as a victim of elder abuse in his later years and his public battle to fight back for control over his life.  Thankfully, Rooney was able to regain control after being subjected to elder abuse by his stepson and stepdaughter for years, against both of whom he ultimately filed restraining orders.  Over the last two years of his life, he lived with his son and finally found happiness after years of distress.  In a statement to CNN, Rooney’s son (Mark Rooney) recounted that his father “led a full life but did not have enough time to finish all he had planned to do.”

Nothing could be so true.  Mickey may have been reinvigorating his acting career, but the spotlight he shed on the dangers of elder abuse and the need for better safeguards against such abuse remains an issue for the aging American population.  Mickey originally testified to the U.S. Senate in 2011 about his experience as a victim of elder abuse and how he suffered silently for years.  According to a report by the Government Accountability Office around the same time, Rooney was not suffering alone.  In fact, the report stated that more than 14% of non-institutionalized seniors experienced some form of elder abuse in 2009.  With advances in modern medicine and Americans’ correlating longer life expectancies, greater attention needs to be placed upon elder abuse and exploitation which may evidence itself in many forms, including financial, emotional and physical.

To learn more about the cautionary tales of elder abuse and exploitation, as well as to hear some of Mickey Rooney’s testimony, click here.

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Nightmares of Joint Ownership

Nightmares of Joint OwnershipI cannot begin to fathom how many times I have discussed the issues surrounding jointly held property (both real and investment/bank account properties) with clients who are not husband and wife.  In reality, it seems as though people add family members and other trusted loved ones as joint account owners on a regular basis.  The overwhelming reason?  To “keep things easy”; that way, if something happens to me, my joint account holder can take care of me and my bills.  The second reason?  To avoid “dealing with the courts” when my loved one dies.

Unfortunately, this strategy can prove to be a nightmare in reality.  What most people do not realize is that by adding another person to their account as a joint account owner, that persona actually becomes an “owner” of the account.  Should they choose, that person could remove all of the money from your account without your approval or knowing until it is too late.  Perhaps that argument alone isn’t sufficient to change your mind.  So, consider instead that your joint account owner executes a General Power of Attorney and appoints someone to handle their legal and financial matters for them.  There is little chance you will even know about the existence of this document, let alone who is appointed.  However, the person appointed could just as easily, in your joint account holder’s stead, wipe out your bank/investment account on their own, without you and/or your joint account holder being aware until it is also too late.

Still not convinced?  Consider the possibility that your joint account holder comes upon misfortune and has creditors looming over him/her.  These creditors could come in the form of financial creditors due to unpaid bills, accidents in which your joint account holder is found liable, as well as soon-to-be ex-spouses.  Considering 1 in 2 American marriages ends in divorce, even happy marriages can dissolve.  If your joint account holder is going through a divorce, your assets will be pulled into their division of marital assets (due to their joint ownership of your account).

Is expediency really a reason to bring all of these harsh realities upon you and your financial well-being?  Of course not!  There are legal solutions to all of your concerns that alleviate the issues which may have you concerned while also protecting you and your financial/legal future.  Consider checking out these links to learn more about some of the legal opportunities that can accomplish all your goals while safeguarding you and your future:

General Durable Power of Attorney

Revocable Living Trust

Asset Protection Trust

Long Term Care Planning

If, after reviewing this information, you are reconsidering decisions you may have made in the past, please take the time to consult with an experienced estate planning attorney regarding how you may best be able to achieve your goals while also protecting yourself.

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