Here in Massachusetts, people who act as fiduciaries, like executors or trustees, are entitled to a “reasonable” fee for their services.  The question then becomes the definition of “reasonable”.  It varies based upon the size of the estate, type of assets, issues involved, actual time necessary, skills used, and results accomplised.  It’s usually an hourly rate for the services actually performed.  For a lay-person, that is generally $25-75/hour.

If the fiduciary is someone who normally bills their time at an hourly rate, then they can bill at that hourly rate, assuming they can show the lost income from acting as fiduciary.  So, if you were a bookkeeper and normally bill for your services at the rate of $125/hour and performed your duties as fiduciary during the work-week, you could bill the estate at $125/hour.  The idea is that since acting as fiduciary prevented you from working for your clients, you should be reimbursed at the same rate a client would have paid.

We recommend our clients keep a notebook to record the time they spend and what they do during that time.  Spontaneous time-keeping records help later if an heir contests the fee charged.  Creating the records later from memory are never sufficient, and are suspect in and of themselves.  How could anyone know that the records weren’t fabricated to support the fee requested?

Professional or corporate fiduciaries, like banks and trust companies, generally have rate schedules that bill an estate based upon a percentage of the estate value.  These percentages range from .5% to 3 or 4%, depending upon the size of the estate involved.  Two percent is average for estates less than $500,000; the larger the estate, the smaller the percentage.  That percentage is intended to cover all time spent by the corporate fiduciary.  It may request reimbursement for out of pocket expenses, like filing fees, but may not also charge for time spent by its in house attorneys.

That said, while 2% might be an average fee, or at least in the ballpark of reasonable, if a fiduciary had to perform a lot more work than one might expect for an estate, he/she shouldn’t be limited to that percentage.  Thus, the hourly rate for time actually spent.  For example, I served as administrator of an estate where the family was constantly fighting one another, making endless allegations, and could never agree upon anything.  We were in court numerous times for petty things that could not be resolved through agreement.  In that case, my fee for my time, at my usually hourly rate (not $25-75/hour), ended up at something like 25% of the total estate value and was approved by the court.  (All this could have been avoided with an up to date estate plan, utilizing a trust, but that’s another blog entry for another day.)

Ultimately, it all comes down to what the heirs will approve.  If the fiduciary wants to charge 5% and all the heirs agree, then 5% it is.  You really only need to worry about the rate or percentage if there’s a disagreement with one or more heirs, and the fiduciary must defend the fee in court.   Regardless, when a fiduciary takes a fee from an estate, there should be a 1099 generated, and the fee reported as income on the fiduciary’s income tax return.  It almost never happens, and I doubt the IRS is in a position to track down such small potatoes, but the fiduciary should at a minimum report the fee as income.

So, the next time you’re asked to serve as executor or trustee, or you’re naming someone to serve, keep in mind that they can ask for a fee for their services.  This can sometimes offset the emotional burden, what I call the put-upon-ness one sibling feels when serving to the benefit of other siblings.  It can also make you feel a little less burdening when asking a friend or trusted associate to serve.

“ . . . The elder law practitioner handles general estate planning issues and counsels clients about planning for incapacity with alternative decision making documents. The attorney would also assist the client in planning for possible long-term care needs, including nursing home care.  Locating the appropriate type of care, coordinating private and public resources to finance the cost of care, and working to ensure the client’s right to quality care are all part of the elder law practice.”

Despite this, people continue to equate elder law with the preparation of legal documents and qualification for Medicaid.  It is so, so much more.  Engaging in asset protection planning in a vacuum will NOT fulfill the true goal of most families, namely enhancing the quality of life for the aging or ill family member, without sacrificing one’s own family, finances or health.

As time goes by, we are leading healthier lives, which is good.  We are avoiding lengthy nursing home stays.  Also good.  We are instead in need of chronic care in our homes.  Not good.

Caring for an incapacitated elder is not intuitive.  Unless a family member has professional experience in medicine or long-term care advocacy, most families simply don’t know the right questions to ask and find themselves totally dependent upon the system to guide them through the process.  They are forced to be reactive, rather than proactive.  And I think many of us would agree that the system is not client-centered, and is inadequate to address the quality of life and dignity issues facing an incapacitated client.

Enter the professional Care Coordinator. The Care Coordinator, hired by the family, will be the client-focused agent who will allow the protected resources to be appropriately used to enhance the quality of life for the client, while also allowing the family to give time to the client without sacrificing their own family, time or money.  The Care Coordinator assesses the client’s needs as well as the needs of family caregivers.  From those assessments, the Care Coordinator develops a care plan, and works with caregivers on a peer level.  Generally this removes any hostility an organization might feel toward attorney involvement.  The Care Coordinator understands the medical plan of care, and can easily assess the appropriateness of the plan.  If the family notices any lapses in care, the Care Coordinator can informally discuss these lapses with care providers or request a care conference.  This all prevents the need for the family to take an adversarial role with care providers; the Care Coordinator can deal with the care issues on a professional basis.

Couple the Care Coordinator with the elder law attorney in the Life Care Planning Law Firm and you get a powerful team.  What is more important to the incapacitated client—time spent by family members on researching Medicaid, nursing homes, and other care issues or time spent with the incapacitated person, sharing a meal or listening to the complaints of the incapacitated person where no one else will quite the same way as a family member?

An elder law attorney with the help of a Care Coordinator can remove the burdens of planning and financing for the proper care of an incapacitated client, thus allowing family members time to spend with the incapacitated client.  With the assistance of a Care Coordinator, an elder law attorney will be in a position to provide better advocacy for the client than without such assistance.

1. What will happen during an initial meeting with your office and how much will it cost?

When you begin to consider getting your legal and financial affairs in order, the first thing to do is call the offices of lawyers who you will meet with to handle your planning.

This is a great opportunity for a first level screening to find the right lawyer for you, your family and your business.  Pay attention to how the phones are answered (or not) by the office team.  You want to find a lawyer who has a live person answering the phones who can answer quick questions for you when you are a client.  And you may even want to look for a lawyer who has an emergency, after hours number just for clients.

When you do talk with someone on the phone, be sure to ask what will happen at the initial meeting and whether there will be a charge for the meeting.

Look for an educational first meeting.  Ideally, the purpose of the first meeting with your lawyer is not just to get to know him or her, but to provide you with specific guidance and information that will benefit you, your family and your business.

You want to leave this meeting with a clear action plan for what your next steps are to ensure your financial and legal affairs and business are set up the best possible way for your family.

Now, it may be that you have to pay for this guidance and don’t be afraid to do that because it can be a hugely valuable education.  They key is, you want to know what the cost is going to be upfront so there are no surprises.

Don’t expect to get valuable information that will help your family during a free initial consultation.  When a lawyer routinely gives away their time for a free initial consultation it’s not to give you an education, it’s so you can meet the lawyer and decide whether you want to work with him or her.  Don’t expect free legal guidance.

2. Does my planning fee include a regular review of my legal documents? What if I want to make changes later?

Far too often today, families put in place legal documents and think “great, that’s done, now I don’t have to think about that anymore”.  Then, the end of their life comes or a crisis pops up and their family finds out that the documents are out of date and the assets aren’t owned properly anyway.  Then, the plan fails. Or, business owners set up an entity to shield their personal assets from their business, but then fail to operate the business properly and keep their entity in compliance.  Then, the business plan fails.

I blame these failures on lawyers who don’t set the right expectations for their clients.

The truth of the matter is legal documents are not set it and forget it.  Your wills and trusts and your business documents are living documents that need to be reviewed and updated throughout your personal or business life.  And you want to find a lawyer who will keep everything up to date for you, review your documents regularly, and offer a program to provide you with continuing guidance on an ongoing basis without hourly fees.

Look for a lawyer who has a membership program or ongoing service program so you can reach out to your lawyer on an ongoing basis for legal, financial and business consultation without worrying about being nickled and dimed.  Oh, and be sure your lawyer isn’t going to charge you for photocopies and faxes!

3. Do you make sure my assets are titled in the right way and my business stays in compliance?

You can have the best business structure and the best legal plan set up for your family, but if your assets are not structured properly and if your business does not stay in compliance, it’s all a false sense of security because when push comes to shove and the crisis happens, those legal documents won’t work.

Make absolutely sure that the lawyer you are working with is not only going to put legal documents in place for you, but also is going to finish the job, by ensuring your assets are structured properly and your business stays in full compliance.

4. Can you help me make smart choices about things like buying insurance, saving for college, and retirement planning?

Your personal lawyer can and should help you make decisions not only about things like legal documents, but also about things like buying insurance, saving for college, planning for retirement and all the other challenging decisions that will come up along the way of your life and your business.  Your business lawyer should be keeping you informed about things like hiring and firing, trademarking and copyrighting, and growing your business.

Your lawyer stands in a fiduciary relationship to you and you should never sign another legal document again (even a loan document or simple agreement) without having your lawyer take a look and make sure it’s in your best interest.  If your lawyer says he or she can’t guide you on these things, look for one who can. This doesn’t mean your lawyer needs to be licensed to sell insurance or financial products or practice employment law or intellectual property, just that they have a big enough breadth of experience and knowledge that they can be a trusted advisor to you on these issues helping you avoid expensive mistakes.

5. Do you have a process for helping me capture and pass on my intangible wealth, such as my intellectual, spiritual and human assets or who I am and what’s important to me or do you primarily focus on financial assets?

There’s a movement happening in the world in which we are finally beginning to realize that our wealth is far greater than the sum total of the dollars in our bank, brokerage and retirement accounts.  In fact, many of us are becoming aware that our intangible assets are much more valuable.
When you are working with a personal lawyer, be sure to find a lawyer who will help you to capture, document and pass on not just your financial assets, but ALL of your assets, including the most often overlooked intangible assets, like who you are and what’s important to you.

Your lawyer should have in place an actual process so that when your planning is complete, you have created either written or recorded messages to your loved ones that pass on your values, stories, insights and experience.

6. What sorts of things can you put in place to ensure my kids are always taken care of by people I want, in the way I want and won’t lose their inheritance to predators or creditors?

Today, there are new technologies in legal planning that allow you to have the maximum assurance that your children will never be left in the care of anyone you wouldn’t want, even in the short term while the authorities are figuring out what to do.  Be sure that your lawyer provides a comprehensive Kids Protection Plan® for the care of minor children, including ID cards for your wallet and instructions for your caregivers, listing out the names and numbers of local people who have legal authority to care for your kids if you can’t.

In addition, be sure your lawyer talks with you about cutting edge technologies that allow you to pass on your assets to your children in such a way that when they do get control over their inheritance, it cannot be lost to a divorce or even a lawsuit filed against your child.  They get to control it, without risking it. Not all lawyers know how to put these strategies into place the right way, so be sure to ask before you move forward with planning not only if your lawyer does, but how often he or she has in the past.  These strategies have many traps for the unwary, so you don’t want a lawyer who isn’t well-versed in these strategies testing them out on you.

7. Do you guarantee your service?

Have you ever met a lawyer who guaranteed their service?  If not, you are missing out.  Many lawyers will guarantee your satisfaction (not necessarily the outcome), so be sure to ask.  It’s difficult for a lawyer who bills time on an hourly basis to do this, but a lawyer who is billing on a package or flat-fee basis should offer a guarantee.  If you aren’t happy with the service, they’ll refund your money.  As long as they have a client-focused, service-based business and intend to do whatever is necessary to keep you happy, the lawyer won’t worry about offering a guarantee.  Look for one who does.  Caveat: Any lawyer who represents you in a litigated manner will not guarantee their service because there’s one guarantee with litigation – whether you win or lose, you very likely won’t be happy.

Don’t be afraid to ask these questions before you hire a lawyer to work with your family on personal and business legal planning.  When you find a lawyer who says yes to these questions, hire him or her quickly before the practice fills up and he or she stops taking on any new clients.  Asking these questions and hearing the right answers before you engage a lawyer to work on your wills, trusts, estate or business will ensure you put in place legal planning for your family and your business that will work when you need it.

The Caregiver Homes Adult Foster Care program provides an alternative to nursing home care for frail older or disabled adults and is accepting both referrals for new clients and applications for caregivers. This MassHealth program pays family (or non-family) caregivers - with the exception of a spouse or legally responsible representative - to provide care at home.

Under this MassHealth program, family (or non-family) caregivers can be paid up to $18,000 annually for caring for an elder or adult (over 16 years old) disabled family member at home. The income is not taxable and is non-reportable to the IRS, and participation in the program does not preclude receipt of other state or federal programs and services.
Eligibility Guidelines:

• Financial eligibility for MassHealth, or private payment for MassHealth spend-down.
• Assistance with three activities of daily living (ADL) such as bathing, dressing and eating, or, assistance with two ADL’s and management of behaviors such as wandering, resistance to care, verbal abuse.
• Caregiver will provide 24-hour supervision, assistance with daily activities, and other personal care services.

The process begins with a client and family meeting with a Caregiver Homes registered nurse who will complete an assessment of needs. Once accepted into the program, the client and family caregiver receive ongoing support from a team of professionals, including a Registered Nurse and a Care Manager, who provide caregiver training, establish a formal Plan of Care, and conduct regular home visits.

If you would like more information about Caregiver Homes, call Mary Gill, Worcester Program Manager at (508) 717-9149 or Natasha Heimrath, Metro West Program Manager at (508) 259-9712 or visit www.caregiverhomes.com.

Oobleck is actually a non-Newtonian fluid.  That’s a fancy way of saying that it doesn’t obey the laws of physics.  From a parental standpoint, though, it’s a way to create a learning moment with your kids, and have some fun along the way.

If you’ve never made Oobleck before, you might be surprised at the recipe: 1 c. water and 1 1/2 c. corn starch.  Slowly add the cornstarch to the water, mixing with each addition, until you get the desired consistency.  Then add a couple drops of food coloring for added dazzle.

Sound an awful lot like what Grandma used to mix to add to the turkey drippings to make gravy? Minus the food coloring of course.  Well, you’re right.  You can also use this mixture for that purpose, just maybe not so much of it.  I bet you never knew that playing in the kitchen with the kids could lead to learning how to cook.

To really get into learning mode, try these suggestions from Instructables:

• Grab a handful, squeeze it, and let it ooze out your fingers.
• Make a puddle and quickly drag your fingers through it.
• Put it into a plastic container and shake it or quickly bump it against a table.
• Jab at the Oobleck and then slowly let your finger sink in.
• Put it on top of a subwoofer and play some low frequencies at high volume (tough to set up, but worth it)

Have fun with your kids this National Kids Day.  Play with some Oobleck, and watch what they learn when they don’t even realize it!