Aging in Place Planning: Groundbreaking Study- Take Charge of Your Cognitive Health with Simple Lifestyle Changes

As we age, the risk of stroke, dementia, and late-life depression threaten our independence, decision-making, and financial health. The consequences of these conditions threaten our families with burden, cost, and concern. These conditions change how we live, make decisions, and plan for the future. But here’s the good news: a groundbreaking new study from Mass General Brigham, widely covered by CNN, The New York Times, and Fox News, suggests that simple everyday steps can lower our risks.

By making small changes now, we can protect our brains, stay independent longer, and make life easier for ourselves and our loved ones. From the perspectives of estate planning, elder law, and aging in place planning, the findings offer critical insights into preventive health strategies that can enhance quality of life, reduce care giving burdens, and inform legal and financial preparations for aging. This article dives into what the study found, why it matters for planning your future, and how you can start today.

What the Study Says

The Mass General Brigham study, looked at tons of research to identify 17  modifiable risk factors shared by stroke, dementia, and late-life depression (LLD), things we can change to lower our chances of suffering from these conditions. These aren’t complicated medical fixes—they’re things like eating better, staying active, or even spending more time with friends. 

High blood pressure and kidney problems have the most profound impact, but staying active and keeping your brain engaged can make a significant difference in cutting your risk. The study found that improving just one of these areas—like going for regular walks—can help protect against all three conditions. They even created a tool called the Brain Care Score to help you track your progress. For example, boosting your score by 5 points could cut your risk by 27% over 13 years. That’s something to get excited about!

The reason that the study is groundbreaking is that these conditions, which contribute significantly to stroke, dementia and depression, share vascular and small vessel pathologies, making their overlapping risk factors critical. The 17 modifiable risk factors common to at least two of the three diseases are: blood pressure, kidney disease, fasting plasma glucose, total cholesterol, alcohol use, diet, hearing loss, pain, physical activity, purpose in life, sleep, smoking, social engagement, stress, body mass index (BMI), leisure time cognitive activity, and depressive symptoms. Among these, high blood pressure (hypertension ≥ 140/90 mm Hg) and severe kidney disease (estimated glomerular filtration rate < 30 mL/min/1.73 m²) had the greatest impact on disease incidence and burden, while physical activity and cognitive leisure activities were associated with the most significant risk reduction. The interconnected nature of these risk factors means that improving one—such as increasing physical activity—can positively impact others, like blood pressure, sleep, and social engagement.

Why This Matters for You and Your Family- Aging in Place, Estate Planning and Elderlaw Implications

As we get older, we want to stay in control of our lives—living in our own homes, making our own choices, and not leaning too heavily on our kids or loved ones. Stroke, dementia, and depression can make that harder, affecting everything from your health to your finances. This study gives us a roadmap to fight back, and it’s especially important if you’re thinking about aging in place, planning your estate, or  protecting your future.

Staying in Your Home (Aging in Place): Most of us want to stay in our own homes as we age,  surrounded by our friends, family, memories, and comfort. This study says you can make that more likely by moving your body, sleeping well, and managing stress. Here’s how to make your home work for you:

• Make It Health-Friendly: Add a place for stretching, a blood pressure cuff, or even smart lights to help you sleep better. These little changes support the habits the study recommends.  

• Fix Hearing Loss Early: Your home should not be a prison. Untreated hearing loss can make you feel isolated and raise your dementia risk. It makes you less likely to leave your home, and more likely to isolate. Get a check-up—it’s a small step with big payoffs.

• Get Family/Friends Involved: Ask your kids or grandkids to join you for walks or game nights. Invite friends over for a sports event or movie. It's fun, keeps you social, and lowers your risk of depression.  

• Use Tech: Set up reminders on your phone for meds or try a sleep-tracking or exercise app to stick with healthy habits.  Schedule Zoom or Facetime calls with families and friends to talk. Consider my article regarding the use of technology to reduce dementia risk and age in place.

Planning for Your Future (Estate Planning): Nobody wants to think about losing the ability to make decisions, but stroke or dementia can make that a reality. By taking steps like managing your blood pressure or quitting smoking, you can keep your mind sharp longer, which means you’re more likely to stay in charge of your money, your home, and your care. Here’s how you can plan smarter:

• Set Up a Routine Healthcare Plan: Work with a doctor, physicians assistant, personal trainer, deploy an online health app, and/or work with family and friends to improve your health, increase activity, and spend more active and engaging time with family and friends.  Design these around things you already enjoy or like.  Set goals, and work towards them to create a routine. 

• Advance Directives: Engage a lawyer to create a healthcare proxy and living will that says what you want if you become sick. Avoid simple minimalist forms, and actually state your intentions regarding long-term care (e.g., "if I need care I want it to be in my home," or "I do not want to burden my children financially, but hope they will provide time and support when needed").  Mention your current routines and plans (e.g., "monitor my blood pressure a few time a day," or "continue my selected supplements as they have demonstrated success" or I might qualify for Aid and Attendance because your father was a wartime vet, talk to the VA if I need help at home"). 

• Pick Someone You Trust: Choose a family member or friend to handle your finances and/or health decisions if you can’t. Make sure they know your goals, like staying healthy to avoid nursing homes and direct them to take advantage of your existing plan (e.g., if my Medicare benefit runs out, use my MA plan's "hospital at home" benefit, or pay for home care using my long-term insurance policy/short- term disability policy).   

• Deploy Trusts: Consider establishing trusts to fund healthcare needs, including home modifications or caregiver support, to facilitate aging in place, and/or to protect assets from long-term care spend down in the worst case.

• Save for Care: Set up a trust or savings to cover things like home modifications (think grab bars, ramps, a hospital bed at home, or a simple blood pressure monitor) so you can live independently longer.

• Financial and Insurance Planning: Consider aging in place planning when making other financial, insurance, or investment decisions. Consider, for example a Medicare Advantage Plan with home health care benefits, or a life insurance policy that is convertible to lifetime long-term care benefits.

Protecting Your Rights (Elder Law):  Elder law is fundamentally about making sure you’re taken care of as you age, whether that’s qualifying for Medicaid or finding community support. This study shows that simple changes—like joining a book club or getting your hearing checked—can keep you healthier, which means less stress on your wallet and your family. Here’s what you can do:  

• Stay Social: Loneliness can lead to depression, so find a local senior center or volunteer opportunity to stay connected. It’s good for your brain and your mood.  More, it protects your decision-making by providing interactions with people who know you and can alert you or your family if there are changes and/or help you if a predator or scammer attempts to take advantage of you.

• Plan for Medicaid: If you’re worried about long-term care costs, talk to an elder law attorney about protecting your savings while staying healthy to delay those costs.  

• Guardianship Protection: Implement a plan to protect you and your assets from guardianship.  Even a simple revocable trust can, in many states, be crafted to remove or frustrate guardianship control of the trust assets.

Easy Steps to Start Today

The study calls these 17 factors a “menu of options,” meaning you don’t have to do everything—just pick what works for you. Here are some ideas to get going: 

1. Check Your Blood Pressure: Get a home monitor and aim for under 120/80. Cut back on salty snacks, eat more fruits, and talk to your doctor if you think you need meds.  
2. Move More: Walk around the block, try chair exercises, or join a local tai chi class. It helps your heart, brain, and even your mood.  
3. Quit Smoking: If you smoke, call a quitline or ask your doctor for help. It’s one of the best things you can do for your brain.  
4. Stay Connected: Call a friend, join a hobby group, or volunteer. Feeling connected keeps depression at bay, and keeps you active.  
5. Challenge Your Brain: Do crosswords, read a new book, or learn a skill like painting or a new technology or device. It’s fun and keeps your mind sharp. 
6. Sleep and De-Stress: Try a bedtime routine or a quick meditation app to relax. Good sleep and less stress are brain boosters.

The Brain Care Score is a great way to see how you’re doing—just answer questions about your habits, and it’ll show you where to focus. The study says they’re working on more ways to use this tool, so keep an eye out!

How They Did the Study (And Why It’s Solid)

The researchers looked at 182 big studies from 2000 to 2023, narrowing it down to 59 that really dug into what causes these conditions. They focused on things you can actually change, like how much you exercise or how you manage stress, and figured out which ones matter most. They then employed a statistical analysis to compare how much each factor affects your risk, so you know where to put your energy.

This approach is strong because it pulls together lots of research, not just one small study. But it’s not perfect—they might’ve missed some things specific to depression, for example, and they can’t say for sure that changing these habits causes less disease (it’s more like a strong hint). Still, it’s a reliable guide for making smart choices.

What Else We Learned (And Why People Are Talking)

This study’s a big deal because it shows you don’t need a magic pill to protect your brain—just small, doable changes. People are excited about it—CNN called it a “hopeful message,” and experts say it’s empowering to know we can take control. It’s also a wake-up call: with dementia cases expected to skyrocket and strokes hitting even younger folks, starting now is key. Plus, things like finding purpose or staying social remind us that aging well isn’t just about your body—it’s about your heart and soul too.

One cool takeaway? The study’s Brain Care Score is like a personal coach for your brain. It’s already helping people, and researchers want to test it more to make it even better. For now, it’s a simple way to see what you’re doing right and where you can improve.

Wrapping It Up

Growing older doesn’t have to mean losing your independence or worrying your family. The Mass General Brigham study shows that by making small changes you can lower your chances of stroke, dementia, and depression. That means more years in your own home, more control over your future, and less stress for everyone. Whether you’re planning your estate, talking to a lawyer, or just want to age on your terms, these steps are a powerful way to take charge and implement a plan. So grab a friend, take a walk, and start building a healthier, happier future today.

Violence as a Consequence of an Estate Plan- Can Planning/Drafting Help? A Simple Provision in a Deceased Mother's Will Sparks a Son's Shotgun Rampage Causing the Death of Four

You can press play on the video, but if you would rather watch the video in a separate tab/window (recommended) click the link below:

https://youtu.be/2N0uuRFPngw

In this video I discuss violence, threats of violence, and retaliation as a consequence of estate planning choices, and whether planning and drafting can avoid or protect a family from such a tragic consequence.

Trigger warning: the subject matter considers heartbreaking examples of violence including death. This video reports a recent tragedy in which a simple provision in a deceased mother's will sparked a son's shotgun rampage, causing the death of four, and discusses estate planning and administration considerations to prevent similar violence and harm.

The case example discussed is from a report in the Daily Mail, "Simple request in Long Island woman's will sparked her son's devastating shotgun rampage on siblings." (last retrieved 10/10/2024). The Daily Mail article was brought to my attention by Professor Gerry W. Beyer's article, similarly titled.

The video discusses, among others, the following considerations and strategies in an effort to reduce or eliminate the threat of tragic outcomes:

• Drafting Considerations;

• Considerations Regarding Communications with Family;

• Securing Documents;

• Physical Security;

• Identifying/Reporting Threats/Troubling Behaviors, Mental Illness & Grief;

• Logistics of the After-death Family Meeting including Timing and Location.

The video highlights the importance of worst-case scenario planning, and keeping a continuing relationship with a trusted advisor with whom such topics can be discussed and considered openly and thoroughly.

Additional Resources:

• Estate Planning for the “Troubled” Adult Child, Walecka Law, P.C (last accessed 10/3/2024).
• Estate Planning for families of individuals with mental illness (neurobiological disorders), DJ Jaffe (last accessed 10/3/2024.
• Planning for Beneficiaries With Mental Illness or Addiction, Amanda Koplin, Amy Effman, Martin M. Shenkman (9/15/2020, last accessed 10/3/2024).
• How to Avoid Family Conflict with the Right Estate Planning, Hermance Law (last accessed 10/3/2024).
• Top Estate Planning Tips for the Dysfunctional Family; Doug Luftman (last accessed 10/3/2024).

Looking Ahead to 2026- Estate Tax Exemption Sunset and Current Planning Opportunities

The estate and gift tax exemption amounts will decrease at the end of 2025. Decreasing the exemption amounts is tantamount to an increase in the tax because more people are impacted by the existing tax. Currently, an individual can make transfers by gift during life, and bequests at death, up to an aggregate of $12.92 million, with that amount increasing to $13.44 million in 2024, without incurring gift or federal estate tax. Similarly, the federal Generation Skipping Tax (GST) exemption is currently $12.92 million, increasing to $13.44 million in 2024. 

On January 1, 2026, these amounts are scheduled to “sunset” and revert back to the 2017 amount of $5 million, adjusted for inflation. Although the time frame for sunsetting may be extended depending on political and economic factors, it would be prudent for people with larger estates to take advantage of the opportunities available now by utilizing the exemption amounts in excess of the projected 2026 exemption amounts, in case the exemptions are reduced as scheduled in 2026 (or possibly changed before then).

In light of the looming reduction of estate and gift tax exemption amounts, consider some of the following opportunities:

• Complete gifts now to use available exemptions, particularly GST tax exemption for gifts into a long-term dynasty trust. In light of the pending decrease of the estate, gift and GST tax exemption amounts and taking into consideration the proposed effective dates, it may make sense for those individuals who have exemptions available to make gifts prior to year-end 2023, and before the uncertainties inherent in election year 2024.
• In connection with making gifts in 2023, giving a fractional interest in the property (such as an interest in an LLC or real estate) may prove beneficial as the value for gift tax purposes may be reduced by certain discounts, such as a discount for lack of control and/or lack of marketability.
• Consider a spousal lifetime access trust (SLAT) to take advantage of the current high gift and GST exemptions, while retaining some access to the trust assets at the spousal level.
• Consider giving to an irrevocable “grantor trust” that includes a power to reimburse the grantor for income taxes paid. A “grantor trust” means the grantor, not the trust, is treated as the owner for income tax purposes. The grantor pays all income taxes attributable to the trust income, which allows the trust assets to grow without reduction for income taxes. Grantor trusts can be drafted to permit a trustee to reimburse the grantor for income taxes paid; however, until recently it was an open question whether such a power in a California grantor trust would cause negative estate tax consequences to the grantor. This is because prior announcements from the IRS stated that a power to reimburse a grantor for income taxes paid does not cause inclusion of the trust in the grantor’s estate if certain requirements are met, including that applicable state law must not subject the trust assets to the claims of a settlor’s creditors. Effective January 1, 2023, the California Probate Code clarifies that a trustee’s power to reimburse the grantor for income taxes paid does not create a beneficial interest that would allow the settlor’s creditors to reach trust assets.
• For those who are charitably inclined, consider charitable planning such as charitable remainder unitrusts (CRUTs) and charitable lead annuity trusts (CLATs).
• For individuals and families who do not have a significant amount of estate and gift tax exemption available but wish to reduce their overall estate, consider a sale to a trust in exchange for a promissory note. If structured properly, since the transaction is a sale, it will not be treated as a taxable gift, and the assets sold to the trust will be excluded from the estate of the grantor/contributor. The note becomes the replacement asset of grantor/contributor, effectively transferring the appreciation on the asset to the trust.
• If you own Qualified Small Business Stock (QSBS), consider gifts to one or more irrevocable trusts to take advantage of substantial exclusions from federal income tax on capital gains. Gifts of QSBS continue to be eligible for the exclusion on gain, and the transferor’s five-year holding period “tacks” to the transferee. The gifted shares to irrevocable trusts that are appropriately structured will be eligible for a separate exclusion (up to the limitation amount) in addition to the exclusion that continues to be available for eligible shares retained by the transferor.
• For individuals who have used their lifetime gift exemption but still have unused GST exemption, consider a late allocation of your remaining GST exemption amount to an existing GST non-exempt trust you have previously created. Alternatively, consider setting up a new two-year grantor retained annuity trust (GRAT) before the end of 2023 so you can apply your unused GST exemption to the GRAT remainder interest prior to January 1, 2026.

The foregoing is solely for illustration purposes. You should reach out to your legal advisor before undertaking any tax or estate planning to determine if it is appropriate for your situation.

New Tax Credit Planning Opportunities for Individuals and Families

Beyond the general planning opportunities previously discussed, individuals and families should be aware of certain new tax planning opportunities. In June, the Department of the Treasury and IRS released guidance on Internal Revenue Code (IRC) Section 6418, which provides taxpayers a new way to monetize certain energy tax credits. The guidance included proposed regulations relating to the transferability of tax credits under IRC Section 6418. Specifically, Section 6418 allows for the sale of tax credits solely for cash to unrelated taxpayers, and such payment does not constitute taxable income to the transferor (and is not deductible by the transferee). Prior to the enactment of Section 6418, investors typically accessed renewable energy tax credits by investing in so-called “tax equity” partnerships—which were only workable for more sophisticated investors due to the costs and qualifications under such partnership arrangements. Now, with the new rules, monetization of renewable energy tax credits has been made more accessible to a broader range of investors, including partners of a partnership and individuals. Unfortunately, limitations exist. For one, the “passive activity” limitations, applying to individuals, trusts and estates (but not corporations), make such transferees subject to IRC Section 469, only allowing them to utilize purchased tax credits against tax liabilities associated with passive income generated from other sources.  Additional information can be found here.

IRS Targets on Wealthy Taxpayers

In September, the IRS announced it is focusing on high-income earners to “identify sophisticated schemes to avoid taxes.” Bolstered by its funding from the Inflation Reduction Act (IRA) of 2022 (P.L. 117-169) and equipped with artificial intelligence and machine-learning technologies, the IRS employed three key initiatives. The first “High Wealth, High Balance Due Taxpayer Field Initiative,” committed dozens of revenue officers to focus on taxpayers with total positive income above $1 million and more than $250,000 in recognized tax debt. The second bolstered IRS compliance efforts related to ongoing discrepancies on the balance sheets of partnerships with over $10 million in assets. The third program focuses on monitoring returns for partnerships with greater than $10 billion in assets.

Summary

The IRS is committed to increasing collection of tax revenue, and federal and state governments are more likely to to increase rather than decrease taxes. Advanced planning to avoid taxation makes sense.  It is best to plan now than discover that you have lost planning opportunities, and incurred unnecessary and avoidable tax liability.  

Liberal Magazine Fires Shot Across the Bow of Cruise Ship Roth IRA

A Roth IRA is an individual retirement account (IRA) that allows qualified withdrawals on a tax-free basis provided certain conditions are satisfied. Established in 1997, it was named after William Roth, a former Delaware Senator.  Roth IRA's are popular investment choices for Americans.

Roth IRAs are similar to traditional IRAs, the biggest distinction between the two being how they are taxed. Roth IRAs are funded with after-tax dollars; the contributions are not tax-deductible. Once you start withdrawing funds, the money is tax-free. Conversely, traditional IRA deposits are generally made with pretax dollars; you usually get a tax deduction on your contribution and pay income tax when you withdraw the money from the account during retirement.

Many people use Roths because account holders don't have to start taking distributions at age 70½ as they do with traditional IRAs. The money can sit untouched and grow tax-free throughout the owner's lifetime—a big plus for those who don't need the assets to live on. And while those who inherit any type of IRA must start taking distributions immediately, they are permitted to stretch out those payments, allowing the bulk of a Roth account to continue growing tax-free.

This and other key differences make Roth IRAs a better choice than traditional IRAs for some retirement savers. They are, at the same time, increasingly unpopular among those who champion government intervention to alleviate wealth disparity.  I have warned investors to consider seriously possible future changes to the laws governing Roth IRA's before investing, and particularly before implementing IRA conversions, i.e., liquidating a traditional IRA, and paying the taxes on the investment, in order to convert the investment to a Roth IRA that permits future tax-free withdrawals of both principal and income. See, "Roth IRAs Dim as Inheritance Vehicles- Beware the Rush to Covert."

Mother Jones Magazine (MJ) recently published an article critical of the government continuing to "support" wealthy individuals in an effort to avoid taxation using Roth IRA's. The article may be the first in a coming onslaught of attacks against the investment option, and may be a bell weather indicating reform. 

Although the article often reads more like a partisan platform or political screed (the article is openly published under the MJ "Politics" section), language choice, narrative, and hyperbole aside, the article explores the uses and misuses of the Roth IRA, particularly as a tool of the ultra-wealthy: 

"For many working Americans, a Roth IRA is a useful, if not particularly interesting, way to save money for retirement. For tech billionaire Peter Thiel, it was a way to accumulate more than $5 billion. The nonprofit journalism shop ProPublica ran an exposé in June revealing how a small number of extremely wealthy folks had ended up with Roths—federally subsidized retirement accounts meant for middle-class savers—worth tens to hundreds of millions of dollars and up. Thiel did so, the article noted, by “stuffing” his Roth IRA with wildly undervalued “founders shares” of pre-IPO startups—potentially an illegal tactic—and then watching as their values rose exponentially, and completely tax-free.

The story prompted congressional leaders to request data from the nonpartisan Joint Committee on Taxation, which reported that, as of 2019, more than 28,000 Americans held combined (Roth and traditional) IRA balances of $5 million or more, and 497 taxpayers had balances of at least $25 million. The latter group had socked away a combined $77 billion in their IRAs—on average, more than $150 million each. 'IRAs were designed to provide retirement security to middle-class families, not allow the super wealthy to avoid paying taxes,' Sen. Ron Wyden (D-Ore.) lamented in a press release.  

But it turns out IRAs are only the tip of the iceberg. The bigger problem, according to Steve Rosenthal, a tax attorney and senior fellow at Urban-Brookings Tax Policy Center, is that, thanks to a series of bipartisan bills Congress has passed over the past quarter-century, the government spends a fortune subsidizing a whole range of retirement plans whose benefits flow overwhelmingly to America’s most affluent. 'It’s unbelievable the amounts of dollars at stake, and how tilted they are to the high end,' Rosenthal told me. 'It’s just staggering.'"

The author acknowledges that reform of the Roth IRA is not likely or particularly popular, right now:

“'The wealth defense industry—the lawyers, accountants, and wealth managers to the super-rich—are paid millions to sequester trillions, stretching the limits of the law and sometimes writing the law themselves,' says Chuck Collins, director of the Program on Inequality and the Common Good at the Institute for Policy Studies and author, most recently, of a book titled The Wealth Hoarders. 'They have fracked every corner of the tax code, especially tax-advantaged retirement programs, to extract benefits for their wealthy clients.'"

The article concludes with a contributing source explaining possible reforms and illustrating the lack of receptiveness there is for reform in Congress: 

"'To prevent stuffing and other kinds of self-dealing, [Steve Rosenthal, a tax attorney and senior fellow at Urban-Brookings Tax Policy Center] continues, Congress should just forbid people from holding non–publicly traded assets—like shares of a pre-IPO startup—in an IRA. Lawmakers also could enact a combined asset limit that covers all types of tax-advantaged retirement plans—as first proposed by the Obama administration. They also could strengthen nondiscrimination rules or consider shoring up Social Security—which appears to be in trouble—instead of further enriching the families who need the least help in their old age. “Congress will struggle to solve the problem they created,' Rosenthal told me in an email. 'But the longer they wait, the harder it will be.'

He’s not holding his breath. In July, when the Senate Finance Committee held a hearing titled 'Building on Bipartisan Retirement Legislation: How Can Congress Help?,' Rosenthal and University of Chicago professor Daniel Hemel submitted a statement for the record, but most of the professionals present at the hearing were part of what he calls the retirement-industrial complex: 'The benefits community, the practitioners, the retirement service industry—they testified. Nobody was invited to testify who says the emperor has no clothes.'"

MJ, despite is controversies, and mis-fires, has often been at or near the forefront of a once controversial position moving mainstream.  MJ was, for example, among the first to overtly connect Former President Trump to the alt-Right, although it's effort was roundly criticized, from the Left because its article portrayed a neo-nazi in a "positive" light.   

More importantly, the past few years have demonstrated just how quickly change is possible.  Roth IRA's, like all investment options, should be considered carefully. 

Coordinating Business and Estate Planning Documents: The Not-so-happy Lesson from TV Painter Bob Ross

Celebrity estates often serve as object lessons of how, and how not to, design estate and business plans.  The estate of Bing Crosby is widely hailed as instructive in the use of trusts to avoid probate and protect privacy.  Unfortunately, the estate of TV painter Bob Ross, serves as a cautionary tale regarding the failure to coordinate estate and business planning documents.  

Bob Ross rose to fame in the 1980s as the host and instructor of the wildly popular Joy of Painting TV show. Viewers were drawn to his artistic techniques, mesmerizing voice, and congenial manner. The result of his death was less than congenial as  nasty legal war erupted between his business partners and family. 

Bob Ross Inc. was formed by Ross, his wife Jane, and their friends Walter and Annette Kowalski. Although the four were equal partners, Ross was its widely recognized public face. From 1986 through 1994 the company registered several trademarks using Bob Ross’ name and likeness, with Bob’s written consent, and also signed several licensing agreements with third parties, also with Ross’ consent.

In 1992, Bob’s wife Jane passed away. The business structure required that any shares of a deceased partner were to be distributed equally among the surviving partners. And that is how Ross, despite being the public face of the Bob Ross juggernaut, found himself with only a one-third interest in the company.

Shortly after Jane passed, Ross developed lymphoma. The prognosis was sadly grim. In 1994, while battling the disease that would take his life one year later, the Kowalskis approached Ross. They presented him with a contract giving the Kowalskis all commercial rights to Ross’ name, image, voice, biographical material, and creative works. In return, the Kowalskis would pay Ross or his surviving heirs ten percent (10%) of Bob Ross Inc, profits,  but only for the next ten years.  After ten years the Kowalskis, and not the Ross family, would own and receive all income from Bob Ross, Inc. 

Ross was reportedly infuriated and refused to sign the agreement. Instead, he modified his estate plan in an attempt to keep intellectual rights to everything Bob Ross in his own family. He created the Bob Ross Trust in 1994, assigning 51% of the interest in all intellectual property to his brother, Jimmie Cox, and 49% to his son, Steve Ross.

Ross died July 4, 1995 at age 52, leaving an estate valued at $1.3 million, half of which was his interest in Bob Ross Inc. The Kowalskis, unsuccessful at gaining control of the business while Ross was alive,  sued the estate. In addition to asking for all intellectual rights, the Kowalskis wanted all of Ross’ finished paintings and tools.

Unable to finance a prolonged legal battle, Cox, the estate executor, settled with the Kowalskis. The Estate and the Trust also signed separate Mutual Releases with Bob Ross Inc. stating that the parties and their heirs, assigns, successors in interest, etc., “do, now and forever, absolutely and irrevocably, hereby release each other in and from any and all claims, suits, liabilities, complaints, losses, damages, and charges of every kind and character arising prior to the date of execution hereof.”

Two decades after the lawsuit settled, Steve Ross, the son, realized there was a clause in his father’s trust that bequeathed to him all rights to his father’s name, likeness, and publicity. By then, Bob Ross had become an even bigger and more lucrative business, with the sale of Bob Ross bobbleheads, chia pets, mugs, and even action figures. The streaming services Twitch and Netflix had since picked up The Joy of Painting shows. Calm, the meditation app, even offered a Bob Ross sleep app.  The Kowalskis had deftly managed and grown the Bob Ross business enterprise.

Armed with this newfound knowledge about his father’s trust, Steve sued Bob Ross Inc. He alleged that all the Bob Ross Inc. business deals and products that used his father’s likeness were unauthorized. He demanded compensation. Unfortunately for Steve, the federal judge didn’t agree. The court ruled that Ross’ trust could not have given away the rights to Steve, because the trust did not own those rights to begin with. The ruling stated: “Plaintiff would not own the intellectual property at issue because the Trust never owned it. Similarly, because Bob Ross gave BRI his right to publicity during his lifetime, it could not have transferred to his son on his death.”

Bob Ross’ trust said Steve was to inherit the intellectual rights, but the trust was never funded with the rights, and could not, therefore, direct them.  The business agreement prevailed. Steve received nothing from the business empire built on his father’s likeness, reputation, or artistic techniques.

Source: "TV Painter Bob Ross’ Son Loses Lawsuit In Battle Between Father’s Trust And Business Agreement," (June 13, 2021) (last accessed 6/17/2021). 

Inflation Indexed Annuities in Aging in Place Planning

Illustration 217469610 © Adonis1969 | Dreamstime.com

Rarely do articles on this blog deal with specific investment options.  Recently, however, while speaking with a client, she shared a feeling of helplessness following a meeting with her financial advisor.  A few phone calls sorted her options and planning.  This article is designed to educate readers regarding a planning option with which, apparently, some advisors and agents are unfamiliar.

Many who plan financially for aging in place focus on guaranteed income, rather than relying on large liquid amounts invested for further growth through investment risk. Aside from other arguments against risking principal, there is the simple fact that alternatives to institutional care (nursing homes and assisted living facilities) involve periodic costs, usually paid monthly or weekly.  In other words, if you have a healthy guaranteed income, within which you can easily meet additional expenses, the prospect of alternative care cost is not as disruptive as it might be otherwise. 

The issue that is increasingly on everyone's lips, however, is inflation.  Whether inflation is already built in to our economy, soon to arrive and/or well-in-hand by our Federal Reserve Bank, this article will leave to others to debate. A college economics professor once characterized inflation as not unlike water- a little bit is necessary and good, but a lot can kill you.  Regardless, even the long-term care industry is concerned.    

Sometimes called an inflation-protected annuity, an inflation-indexed immediate annuity is similar to a fixed annuity. You receive a guaranteed stream of income from the insurance company for the rest of your life. With an inflation-indexed annuity, however, payments increase (or sometimes decrease) each year, keeping pace with the rate of inflation.

An inflation-indexed annuity tracks standard measures of inflation, typically, the consumer price index (CPI)(one measure of the rate of change of the cost of a selected basket of goods, reflecting the rate of inflation). The monthly income from this form of annuity gradually changes with the CPI. Since money loses purchasing power with inflation, inflation index-tracking annuities theoretically allows your money to retain that power as inflation fluctuates.

Inflation-adjusted annuities have one obvious drawback: they initially begin with smaller payments than a traditional fixed payment plan. The effect of this is that it might take decades for the inflation-adjusted income to catch up to the fixed payment, which means there is a distinct possibility of reduced payouts for life if you die before they catch up.

Talk to you investment advisor, financial planner, or insurance agent.  This article doe not constitute financial advice, and is merely educational.  Your advisor can make specific recommendations after considering your circumstances, needs, goals, and objectives.    

Larry King's 2019 "Hand-written" Will Omits Wife and Splits His $50M Estate Among His Children

Celebrity estates create interest in estate planning, and are often object lessons in either poor or exceptional estate planning. The estate of late broadcasting legend Larry King, is no exception. 

King died of sepsis on January 23rd at the age of 87. King reportedly left behind a hand-written Will "advising for an even split of his fortune to his five children in the event of his death." Larry King was reportedly worth around $50 million at the time of his death. 

The Will was reportedly written on October 17, 2019, coming just two months after he filed for divorce. His seventh wife (whom he intended on divorcing), Shawn Southwick, was entirely omitted from the handwritten Will. 

The document reads, "[t]his is my Last Will & Testament. It should replace all previous writings." The Will stated that King wanted "100 percent of his funds to be divided equally among my children Andy, Chaia, Larry Jr., Chance, and Cannon." King's son Andy passed away of a heart attack in July 2020 and his daughter Chaia, died in August after being diagnosed with lung cancer. 

There was no clear reporting whether the Will was admitted to probate, and of course, at this early date, whether King's wife (intended ex-wife) will contest the Will or exercise what may be her spousal rights under state law.  

Source: Tracy Wright, "Larry King left a 'hand-written will' in 2019 seeking equal split of his $50M fortune to his five children... and leaves out ex-wife Shawn," Daily Mail (U.K.), February 11, 2021. 

Rising Gray Divorce Rate Complicating Planning

The rise in “gray divorce,” or split-ups among couples over the age of 50, is causing an increase in family conflicts and complicating financial and estate planning, according to a survey conducted by TD Wealth, the private wealth unit of TD Bank, found that gray divorce is adding another layer of complexity to an estate planning process that now often includes blended families and ever-changing domestic structures. The results were based on responses from attorneys, trust officers, accountants, charitable giving professionals, insurance advisers, elder law specialists and wealth management professionals.

“As a result of the growing divorce rate, it’s more important than ever to proactively review and discuss estate plans with clients and their families on an ongoing basis,” said Ray Radigan, head of private trust at TD Wealth.

The rate of gray divorce which has doubled since 1990, is posing a strain on retirement finances and having an impact on a variety of issues affecting older adults. The survey found that it is affecting decisions about powers of attorney (7%), determining appropriate Social Security benefits (6%) and drafting wills (5%).

Irrevocable Trust Fails to Protect Assets from Availability for Medicaid

"Comfort clauses" in an irrevocable trust are dangerous, and can undermine the objectives of the trust.  A New York appeals court provides another object lesson in the dangers of such planning, ruling that a Medicaid applicant's irrevocable trust is an available asset because the trust instrument gave the trustee too much discretion in the distribution of the trust principal after the trustee had used a home equity line secured by a trust asset to pay for the applicant's expenses. In the Matter of Pugliese v. Zucker (N.Y. Sup. Ct., App. Div., 4th Dept., No. 784 TP 19-00440, Oct. 4, 2019).

Anthony Pugliese was the beneficiary of a trust for which his son was the trustee. His son used a home equity line secured by a trust asset to pay Mr. Pugliese's living and caregiving expenses, which depleted much of the trust's value. Mr. Pugliese applied for Medicaid, but the state found that the trust was an available asset and denied him benefits.

Mr. Pugliese appealed, arguing that his son no longer wished to use his discretion as trustee to make distributions to Mr. Pugliese. The state affirmed the decision, and Mr. Pugliese appealed to court.

The New York Supreme Court, Appellate Division, affirmed, holding that the trust was an available asset because "the trust instrument gave the trustees broad discretion in the distribution of the trust principal, including for [Mr. Pugliese's] benefit."

An irrevocable trust for the purpose of Medicaid planning MUST provide all of the following in order to ensure that its assets are, subject to the applicable look-back, unavailable for determining Medicaid eligibility:

• You cannot own the assets;
• You cannot control the assets;
• The assets may not be used for your needs, and in particularly, your health needs. 

These trusts can be fashioned as "income-only trusts," where you have no ownership, control, or privilege to the principal of the trust, but the income from the principal is distributed to you.  This way, the funds in the trust are protected and you can use the income for your living expenses. For Medicaid purposes, the principal in such trusts is not counted as a resource, provided the trustee cannot pay it to you or your spouse for either of your benefits. If you do move to a nursing home, however, the trust income is countable, and will have to go to the nursing home.

Even if the trust is crafted properly, the conduct of the parties may undermine the trust.  This may, in fact, have been part of the problem in the Zucker case.   Even a wholly discretionary trust, like that in Zucker,  can be subject to a determination that you have a right  the conduct of the parties show the beneficiary has been able to freely access trust funds by simply asking.  In the Massachusetts case of Caruso v. Caruso,  which considered a trust for the purpose of property division in a divorce, the court found the beneficiary’s accountant, acting as trustee, amounted to a “yes man” for the beneficiary and was, therefore, in too close a relationship to exercise independent judgment. The court held that even though a trust is purely discretionary, when the beneficiary appears to hold de facto control of the trust, its property becomes subject to invasion. 

You should also be aware of the drawbacks to such an arrangement. An irrevocable trust cannot be changed, at least by you.  Changes in circumstances and changes to the law may impact your plan so adversely that you may regret the plan.

These trusts are also very rigid, so you cannot gain access to the trust funds even if you need them for some other purpose. For this reason, you should always leave an ample cushion of ready funds outside the trust.

These trusts may also increase the risk of institutional care.  When your Medicare hospital benefit runs out (often within a few days of your hospitalization, and very frequently before you are able to medically return home), you are left only the option of institutional care paid for by Medicaid.  This is, after all, the purpose of such planning, to make you eligible for Medicaid earlier.  If you want to age in place, you need to consider whether an irrevocable trust wholly frustrates your plan.  You may not direct payments from the trust for alternatives to institutional care, such as private nurses, home health care aids, or, in most cases, out -patient rehabilitation.  

Family Conflict is Biggest Threat to Your Estate Plan

For the second consecutive year, family conflict is considered by professionals as the leading threat to estate planning. The three greatest threats to estate planning are family conflict, market volatility, and tax reform.  These conclusions represent the consensus of estate planning experts, at least according to a recent survey conducted by TD Wealth.

The survey included 105 respondents who attended the 53rd Annual Heckerling Institute on Estate Planning in January, including attorneys, trust officers, accountants, charitable giving professionals, insurance advisers, elder law specialists, wealth management professionals, educators and nonprofit advisers.  Nearly half of these estate planning experts identified family conflict as the biggest threat to estate planning in 2019. 

The survey explored the various causes of family conflict when engaging in estate planning, citing the designation of beneficiaries as the most common cause of conflict. Other leading factors included not communicating the plan with family members and working with blended families.

“Family dynamics have always played a critical role in estate planning. As we start to see more blended families, we expect these conversations to become even more prevalent and challenging,” said Ray Radigan, head of private trust at TD Wealth . “Estate planning comes with the responsibility of motivating families to communicate through difficult times, which requires regular dialogue and complete transparency. To minimize risk, we encourage families to invite everyone to the table to participate in open and honest conversation about their shared goals and objectives.”

Fortunately for Ohio residents, recent law changes make arbitration clauses in trusts more powerful, discouraging expensive and protracted contests.  Moreover, when combined with in terrorem ("no contest") clauses, a trust can be a powerful tool to eliminate the cost and expense of what may be unavoidable family conflict and disagreement.     

Market volatility was also identified  as a threat by respondents in 2019, with nearly a quarter of respondents identifying volatile markets as the biggest threat to estate planning this year. This was up from 12% in 2018.  According to Radigan, this is not surprising because many clients view lifetime gifting as an important component to their estate plan.

“These gifts, however, should only be made if enough assets are retained to provide support during retirement years,” Radigan said in a statement. “While market fluctuations are certainly worth watching and can cause concern for potential gift givers, we encourage our clients to keep a long-term view when investing and remember that short-term market movements are no match for a robust estate plan and a well-balanced portfolio.”

The sweeping tax overhaul enacted in 2017 is making a broad impact on estate planning, according to the survey.  Following the increase in the federal gift and estate tax exemption, estate planners are introducing various strategies to allow clients to take advantage of the exemption. About one-third of respondents propose clients consider creating trusts to protect assets, while 26% suggest clients plan to minimize future capital gains tax consequences and 21% agree to gift now while the exemption is high.

“Estate planners are now emphasizing the importance of creating trusts for the benefit of their loved ones so that assets can be protected from future claims,” Radigan said in a statement. “For example, rather than provide a child with an outright gift or bequest, many parents are creating trusts as a means of protecting assets from future divorce claims. Additionally, these trusts can be used to ultimately protect loved ones from themselves or other loved ones.”

Additionally, 40 percent of planners believe clients will continue to give the same amount to charities as they did in 2018, and 21 percent expect clients to donate more.  That is good news for charities, and welcome news to those who might be considering charitable giving since it means a consensus of planners agree that charitable giving can accomplish at least one objective in  an estate plan.  

Guardianship Reform Helps, but Planning Shouldn't Wait

Pennsylvania has implemented a Guardianship Tracking System (GTS), a new web-based system for guardians, court staff, Orphans’ Court clerks and judges to file, manage, track and submit reports. The system integrates statewide guardian information, thereby helping to protect Pennsylvania’s most vulnerable citizens while streamlining and improving the guardianship filing process.  Every little bit helps. One of the unstated benefits of making guardianship reporting easier, is that ease encourages filial and social caregivers to act as guardians. 

Of course, a better plan is to adopt an estate plan incorporating "Aging in Place" strategies, appointing and empowering trusted caregivers (not corporate trustees -banks, financial advisers, or attorneys) and preventing court-appointed guardian control of assets. In addition to making it even easier for filial and social caregivers to act on your behalf, such planning makes court-appointed guardianship more difficult and less lucrative for those who might be interested primarily in financial gain. The National Association to Stop Guardianship Abuse (NASGA) says it best; abusive guardianships have a distinctive pattern: Isolate- Medicate- Liquidate- Drain the Estate.

Guardianship reform helps, and should be encouraged and applauded. Planning, however, shouldn't wait. 

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