The Flu Balancing Act - Keeping Staff Productive

 My previous post about "Business Plan to Prepare for the Flu" has generated a local look at flu preparations from the Daily Record.  In "Employers craft 'stay-home' policies - Workplace can be 'point of spread' for virus"  reporter Jake Remaly looks at what Morris County businesses are doing to address the flu this season - how to take reasonable steps to balance staff being ill or staff needing to care for a sick family members with maintaining productivity and efficiencies.  

The first point mentioned is to communicate a uniform policy.  It is no good to have a sick policy that nobody is aware of - Bayer's 15,500 U.S. employees were recently advised via email  "the two best ways to protect yourself and others from influenza are to practice good hygiene, and stay home if you are ill."  Whatever policy you have, it needs to apply across the board to all staff - employment attorney Jonathan Nirenberg points out the potential legal issues of sending some staff home if sick but not others.

My contribution to the article was to address the question of "My employee is home and work isn't getting done - what now?".  One solution is to look to your technology - do you have a means of having staff work from another location?  While this might not be a long term policy you wish to implement, for staff whose job responsibilities are computer based, the ability to access their desktops from home might be the perfect solution to bridge the gap between addressing illness and maintaining productivity.  

Death in the Family - A Guide to the First Steps to Take

Death is part of life - but for the surviving family it is a time of stress, both emotional coping with loss and knowing what to do to handle the paperwork and the practicalities of what happens when a family member dies.

For the emotional question many psychologists offer services to help you address grief.  Look to your health insurance plan for coverage questions.

For the practical questions, CBS Money Watch has created a very useful guide "Death in the Family: 12 Things to Do Now".  It can be printed out and kept with important family papers.  I have outlined the 12 steps below with some thoughts and comments.

General To-Do List

1 - Call a funeral director - These professional will help with the choices to be made.  Many people have a prepaid funeral or have created burial instructions - look for these to help celebrate the life of your loved one.  IN setting the date, keep in mind travel arrangements that close family may need to make.

2 - Contact close friends and family - Speak to key people who can contact others.  You may want to change your voice mail or set an email with answers to questions about the details of the memorial services, where a donation in lieu of flowers could be made.

3 - Make burial arrangements - The funeral director can help you with these, but note that you will want to again check to see if prior arrangements had been made by the person during their life (and if you have a plan for your memorial, write it down, don't leave it to guess work).

4 - Write an obituary - You should consider where it should be placed - local paper, papers where the person once lived, alumni publications, etc.

5 - Plan a reception - If you are having a gathering to celebrate a life, delegate to a friend or family member - they want to help you, and this are some details somebody else can run with.

6 - Find the original will - Our practice is to retain the original and give the client copies. Look at the copy and call the law firm on it.  Note only about 30% of the population has written a will - there may not be one to find, in which case the law of the state the person lived in when they died will determine who gets what property.

7 - Make like an accountant - You will need to gather all financial information.  First starting place - the mail and monthly statements - put each in a separate file so you are aware of the assets.  Next place, review the tax return - are the assets listed on there you don't get monthly statements for. Third - keep a record of all bills being paid.  At the very beginning you won't have access to the decedents funds, so one or more people may be making loans to the estate by paying expenses - these should be repaid as soon as the Executor of Administrator has access to the funds.

8 - Contact the person’s employer - Contact the employers human resources office to see if there are employer provided benefits.  If the person has retired and gets pension benefits, a former employer should be contacted as well.

9 - Watch the mail - After the initial monthly statements, other asset information may eventually arrive by mail.  For assets that only report once a year (life insurance for example), many give statements in early February for income tax return preparation, so you may find additional information then.

10 - Pay the bills - You can call and advise don't have access to the funds if bills will be delayed.  This will also usually get any interest charges waived.  Keep good copies of all bills paid as these will be reflected on the tax returns.

11 - File tax returns - At a minimum, a final income tax return (Form 1040) will need to be filed with the IRS and State.  Depending on the state you live in, the size of the estate, and who the beneficiaries are, you may also have to file one or more of a Federal Estate Tax Return (estate is in excess of $3.5 million), a State Estate Tax Return (estates over $675,000 in New Jersey, and varies by other states), and/or and Inheritance Tax Return (for beneficiaries other than spouse, parent, child, grandchild in New Jersey)>

12 - Consult an attorney - This is likely the first estate you have ever handled.  Estate attorneys are professionals in working through an estate.  Being an Executor is a temporary job - with all the responsibilities of a real job, but one for which you may have no training. When we partner with our clients we map out the estate administration process for them and assign responsibilities among us, as the estate attorney, an the Executor, as the Representative of the estate. The Executor can choose what actions they feel comfortable handling, and understand those we as professionals will address. This keeps costs down while allowing the Executor to be as involved as their schedule permits, while moving the estate along to conclusion.  The author of the CNN Money article puts the use of an attorney into good perspective

If you’re not comfortable handling an estate, you may want to bring in an estate attorney. At the very least, check in with one after you’ve completed what you can. (Financial planner Jonathan Pond, of Newton, Mass., also has published an excellent, exhaustive checklist for executors.) “I’d recommend just saying ‘Hey, this is what I’ve done, here’s where I’m at, am I missing anything?’” says Diane Park, a financial planner in Minneapolis. “That might take just an hour or two of an attorney’s time.”

This will always be a challenging time - it helps to remember you are not alone and that there are family, friends and professionals you can rely on.

What if Congress Doesn't Fix the Estate Tax this Year?

Under the present law the federal estate tax expires midnight December 31, 2009. For the next 365 days death is tax free - but, the federal estate tax comes back as of midnight December 31, 2010. Much has been blogged about the fact that Congress will act this session to change the federal estate tax law, but what if they don't?

Gideon Alper of Gay Couples Law Blog has an excellent post "Estate Tax Repeal in 2010 Not a Big Deal Because Congress Can Pass Retroactive Tax Amendment".  In it, he proposes that if Congress fails to act in 2009, they still have a chance to act in 2010, and can make the law retroactive to dates of death after December 31, 2009.

After all, there is quite a lot on Congress's plate for the remainder of the year: a war in Afghanistan, health care reform, to name a few. Gideon also takes a bit more cynical view noting that 2010 is an election cycle, and although the federal estate tax affects less than 2% of the United States population, it's a great issue for political fodder, and political fodder creates campaign contributions.

I have to disagree that from a planning perspective it would make not make much difference if the estate tax was "un-repealed" retroactively. I base this upon the fact that Congress can never leave well enough alone. I believe that the chance of them making the estate tax retroactive for deaths in 2010 in exactly the same way it currently applies in 2009 to be very small -- if they have to pass the Bill, why not tinker around with the tax code?  After all, there are some good estate tax proposals out there. For example, one looks to defer estate tax payments from working family farms until the family cashes out of the farming business (Family Farms to be Exempted from Estate Tax?").

New Jersey retroactively applied its new "de-coupled" estate tax in 2001. The existence at a New Jersey estate tax separate from the federal estate tax was announced in June 2001, and made retroactive to dates of death as of January  1, 2001. The problem of course, was exemplified by my client who died in March 2001, and never had the opportunity to create an estate planning documents tax effective under the New Jersey estate tax law, because the law did not exist at the time that he in fact died.

The root of the problem here is the political play of passing tax laws that expire --the supporters of the Bill get a "quick win", and it is generally left to another Congress to deal with unwinding of the transaction. The lack of certainty in the tax code creates a planning nightmare -  documents have to be drafted to incorporate the laws that exist today, the laws that are slated to exist in the future, and then best guesses as to what the law might actually be at some point in time in the future.

Congress created this problem -- it's incumbent upon them as responsible representatives of the citizens of this country to fix it -- this year. 

Care of Parents Means Care of Finances - Underscoring the Need for a Power of Attorney

In a companion piece to "How to Talk Money with Mom and Dad" ,  in Money Magazine this month, the New York Times has an article "Taking Care of Parents Also Means Taking Care of Finances".

The article illustrates that "care" goes beyond health and safety - caregivers also have to look to where the money is coming from and how they, as caregivers, can have access to it.  I appreciate the article emphasizing caregivers to READ and UNDERSTAND their parents General Durable Power of Attorney.

As an Elder Law Attorney, I believe that a General Durable Power of Attorney is the single most important document for seniors to have and to update.  A General Durable Power of Attorney allows you to name an person to make financial decisions for you if you cannot.  

  • Without any General Durable Power of Attorney should you become incapacitated, a court supervised Guardianship proceeding must take place (trust me, a circumstance to be avoided at all costs).  
  • Without a complete and current General Durable Power of Attorney, a Guardianship may still be necessary because your attorney-in-fact is not clearly authorized to take some action (making gifts is a big one here in NJ).
  • Without looking at State law, a General Durable Power of Attorney may be new and done, but not address all the issues of agency law in that state.  New York just substantially changed its General Durable Power of Attorney laws this month, and out of state forms (or Internet generated forms) may not be effective.

The article ends with great advice - search the National Association of Elder Law Attorneys Website for a attorney who can advise you if your General Durable Power of Attorney is working for or against you.

Talking to Your Parents About Money

Money is always a touchy subject - particularly when you are an adult child trying to see if your adult parents need help.  I was featured in an article in Money Magazine this month about this very subject: "How to Talk Money with Mom and Dad".  

The market plunge has not just effected you, but everyone around you.  For elderly parents, they likely won't make up 20% to 40% losses in their lifetimes. Their financial pie is smaller, but their potential long terms needs are only growing in cost.  Couple this with the fact that social security payments are not increasing this year, and likely not next , and mom and dad might be facing a financial bind.

One key to remember is that while your parents may be elderly, unless incompetent, they are still entitled to make their own decisions - even if that means they are making bad ones in your opinion (I suggest to adult children that  they think back to their teenage years when their parents supported their decisions - misguided or not).  Your role may be to educate your parents about risks they  may not be aware of (stairs in the house, need for a caregiver, risky investments, etc.) and suggest solutions to those risks.  To do that, you may need to educate yourself as to what are true costs of aging, and what might be hype (ie: if dad goes into a nursing home, mom will definitely lose the house).  At our office we facilitate these conversations by putting recommendations in writing to be circulated to all family members, and  having the parents and children attend at least one meeting (in person or on a conference call) to get everyone on the same page in terms of asset protection planning.

Florida Medicaid Key Figures - 2009

In response to my post NJ Medicaid Key Figures - Starting July 2009 I received 2 questions if it was "better" to move to Florida for Medicaid purposes.  Not being a Florida practitioner, I cannot really compare Medicaid rules in the two states.  Note the Medicaid is federal law - so while it is implemented on a State by State level, the overarching rules are the same for everybody.  What I can do is give you the Florida Key Medicaid figures, courtesy of The Law Offices of Sean W. Scott, Esq.

 2009 Florida Medicaid Asset/Income Numbers.  

  • Gross income for the applicant - Less than $2,022* per month
  • Gross income for the spouse - Unlimited 
  • Spousal income diversion - min. $1,750 max. $2,739
  • Spousal excess shelter standard - $525 
  • Assets** allowed for the applicant - $2,000
  • Assets** allowed for a low income (less than $808 per mo.) $5,000
  • Assets allowed for the well spouse - $109,560
  • Transfer penalty divisor - 5,000

*If income is higher an income trust will be required.

**Assets must below the limit at least one day during each month the application is pending for approval.

If you need Florida specific legal counsel, search for Florida Elder Law attorneys through the Attorney Locator of the National Academy of Elder Law Attorneys.



Vetrans Can Have Home Care Coverage - VA Aid and Attention Pension Benefits

Did you know that as a veteran you may be eligible for additional benefits if you need a caregiver at home and you have financial need?  The Veterans Administration Aid and Attendance program provides an additional monthly benefit to Veterans and surviving spouse who need a caregiver to help them with things such as eating, bathing, dressing.  This care can take place at home or in a nursing home or assisted living facility. Per the "The A&A Pension can provide up to $1,632 per month to a veteran, $1,055 per month to a surviving spouse, or $1,949 per month to a couple."

The question of course is "How do I qualify for these benefits?".  My colleague Don Vanarelli this week posts on his blog "What Is The Resource Limit For Applicants Seeking VA Aid and Attendance Pension Benefits?"  In it, he notes that the VA Aid and Attendance Pension is a needs based benefit.  However, there is no clear formula to determine needs:

The VA considers an applicant’s income and resources (called the allowable “net worth” of the applicant), among other factors. However, there is no formula published by the VA used to determine the applicant’s allowable net worth. The factors considered in any net worth analysis include the total household assets, total household gross income, total household unreimbursed medical expenses, and the life expectancy of the applicant. Simply stated, this means that the older the applicant, the fewer total resources he or she can own.

Don points us to the The VA Claims Adjudication Manual M21-1MR for more information on evaluating net worth, with particular reference to M21-1MR, Part V, Subpart iii, chapter 1, section J.


New Jersey Taxpayers are Done - For this Year

Sunday September 6 was a banner tax for New Jersey residents - you won't find it on your calendar, but day 249 of the year was the day New Jerseyians finally paid their tax bill for the year.  For the first 249 days of the year New Jersey residents were working to pay for government spending programs - federal, state, local.  For the remaining 116 days of  the year, you work for yourself  - to pay mortgage, utilities, food, clothes, car, vacation, and all the things you value.

Americans for Tax Reform reports that New Jersey has the second longest cost of government time span:

Today is the day on which New Jerseyians have finally paid off the burden imposed by state, local and federal spending and regulations. While the national average fell on August 12 in 2009, taxpayers in the Garden State had to work an astounding total of 249 days out of the year to pay for the cost of government. Only one state, Connecticut, has a later COGD [Cost of Government Day] than New Jersey. 

Note that this is different from Tax Freedom Day, which was April 29 for New Jersey in 2009 (again, the second latest in the country).  According to the Tax Foundation, Tax Freedom Day is "calculated by dividing the official government tally of all taxes collected in each year by the official government tally of all income earned in each year."  Cost of Government Day is different, and later, because it is calculated by the cost of spending, a much greater number than income these days.  For a full breakdown of each states Cost of Government Day, look to Americans for Tax Reform.

I love living in New Jersey, and taxes are necessary to run the government and pay for services, but 48 other states do a better job than we do - not something to be proud of.  

Fleeing Florida? More News on Florida Exodus

I love being ahead of a news story.  

I blogged back in August: Moving From Florida?? A Reverse Trend that May Prove Expensive for Residents -  noting that Florida is seeing its first population decline since demilitarization after World War II and that its tax revenue system may be to blame.  The result may be that Florida may be losing its status as the go-to residence for New Jerseyans looking to get out from under New Jerseys tax system particularly its low $675,000 state tax exemption.

 That post of course raises the question of where else is a person to go?  I noted in "Southern States a Tax Lure for New Jersey Residents?" that other states are going out of their way to try to attract retirees as new residents through the structuring their state tax system to give retirees a financial incentive to transplant to sunnier climates.

Now it seems that TIME magazine has caught up to the story in their feature "Florida Exodus: Rising Taxes Drive Out Residents".  TIME notes:

There are many things public officials probably shouldn't do during a severe recession, but no one seems to have told the leaders in Floridaabout them. One thing, for instance, would be giving a dozen top aides hefty raises while urging a rise in property taxes, as the mayor of Miami-Dade County recently did. Or jacking up already exorbitant hurricane-insurance premiums, as Florida's government-run property insurer just did. Or sending an army of highly paid lobbyists to push for a steep hike in electricity rates, as South Florida's public utility is doing.

For states, attracting new residents is good for business - more people equals more revenue. If Florida can't manage its budget in a way that will continue to attract residents, perhaps other states will start offering "deals" to retirees so that dollars will go further in your silver years. perhaps say "CA$H for Change of Address" program is in the making.




Family Farms to be Exempted from Estate Tax?

The federal estate tax is applied to property as it passes from one generation to another.  Family farms have always been uniquely affected by the tax, as the family may have vast and valuable land holdings, but not much in way of liquid assets.  This can result in the property needing to be sold or mortgaged to pay the estate tax.

Legislation has been introduced in the House of Representatives that would exempt farms from the federal estate tax so long as the farm property passed to a family member and continues to be used as an agricultural operation (HR 3524).  It would also exempt land subject to a qualified conservation easement from the estate tax.

This bill make sense in that it is akin to section 1031 of the Code where if you sell real estate and buy different real estate it is not a tax realization event, as you are still invested in real estate.  Here, so long as you remain a family agriculture business, a death would not be a tax realization event.  Instead, the tax would be deferred until the property is sold or the agricultural business stops.  This makes sense from a timing standpoint as the timing of the tax would be when the dollars would be realized - you have cash, you can pay cash.  The question is, will a sensible proposal become law?  

To get a farmers perspective look to Estate tax proposal would help farm families from the California Farm Bureau Federation.

Payment for Future Services in a Family Care Contract May be Improper


A new ruling out of New York raises questions about the efficacy of a Family Care Contract where a lump sum payment is made in return for promising a lifetime a care services.  Medicaid may find the Care Contract to really be a disguised gift and apply a penalty period.  

A Family Care Contract is an agreement whereby a parent might pay a child or other relative to provide care in lieu of hiring an outside third party to provide that same care.  While it is reasonable on its face that a daughter-in-law should be entitled to the same compensation dad would pay a caregiver (after all, you shouldn't be financially punished for being related), it is easy to see that these types of agreements could be abused. In making a Medicaid application, Medicaid will closely review these contracts to see if services were actually provided and a fair market rate was paid.  The concern is that a Family Care Contract could not be "real" and instead just a shield for gifts or transfers, which should generate a transfer penalty period.   To see what a Family Care Contract Should have, look to my prior post Caregiving Contracts Valuable Tool Between Family Members.

Some attorneys have taken the position of transferring a large sum to the caregiver child as an "advance payment" for future services.  New York in Matter of Barbato v. New York State  has recently looked at several cases where a large sum was given to a child to prepay for a lifetime of services under a Family Care Contract.  In those cases, the appeals court found that there was a transfer or gift from the parent to the child, and not a payment for services. This is a huge distinction.  A "transfer" causes a penalty period, where a person who otherwise is qualified for Medicaid cannot receive it (i.e.: in a nursing home and has no assets left).  A payment for services does not create such a penalty.

The New York court's approach is well reasoned - if the agreement does not set objective standards, it can be a windfall to the caregiver if either (1) less services needs to be provided, or (2) the person dies in a short timeframe.  And a windfall seems like a gift.  Anyone 

In the 5 Care Contracts at issue, all provided a large lump sum payment in return for a lifetime of care.  One said "15 hours a week of care" and others care "as needed".

The court found that the agreements didn't have standards to show that the "services" provided were at fair market value. Also, there was no refund provision if the person died before the dollars were reasonably spent.

For more detail, look to



Business Plan to Prepare for Flu

Should we be worried about the flu this year?  Is it being hyped out of proportion, akin to the sensational news coverage of the first major snowfall of the season, which never seems to materialize?  Or is the idea of a pandemic flu is so "unreal" in this day and age that workplaces ignore its potential threats?

A great source I found is  This is the federal government site dealing with questions about the flu. This information on the site is straightforward and practical (wash your hands!)  Within the site there is must read article for business owners and executive , Guidance for Businesses and Employers to Plan and Respond to the 2009 – 2010 Influenza Season.  The article looks to business continuity preparation, as well as best practices a company might want to employ to address absenteeism and productivity during the the flu season.  

As an additional preparatory matter, do you you have the capability to allow employees to work from a remote location? If a local school closes, do any parents of younger children have job functions that might allow them to work from home? If so, do you have the technological capabilities allow that to happen? This may be the time to look at investing in infrastructure so your business can continue to be productive even if your employees are not at the office, either because they have to care for family members, or they have been experiencing symptoms themselves and you have made a business determination that sick people need to stay home.

Addendum - After I posted I came across this consumer oriented AP article - same message, while the flu may not be more deadly then others, it is more contageous, so don't panic, but take some practical steps:  Swine flu: 10 things you need to know