Co-presented with Buckley Kuhn Fricker on 11/4/17. Discusses the importance of pre-planning vs. crisis planning, and focuses on 3 key goals of estate and long-term care planning, which lead to Peace Of Mind, Protecting and Preserving Wealth, and Family Harmony: 1) maintaining control and protecting assets during life, including incapacity; 2) efficient and orderly wealth transfer at death; and 3) protecting beneficiaries from others and themselves.

1. HIDDEN RISKS AND MISTAKES TO AVOID
IN ESTATE AND LONG-TERM CARE PLANNING
Melinda Merk, JD, LLM, CFP®
McLean, VA
Buckley Kuhn Fricker, JD, CMC
Reston, VA

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WHAT IS ESTATE PLANNING?
• Estate planning is no longer just about avoiding estate
taxes and what happens with your assets at death
• Other driving factors include…
ASSET PROTECTION
FAMILY HARMONY
INCOME TAX PLANNING
LEGACY PLANNING
INCAPACITY PLANNING

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THREE KEY GOALS OF ESTATE PLANNING
1. Maintaining control and protecting assets
during life, including incapacity
2. Efficient and orderly wealth transfer at death
3. Protecting beneficiaries from others and
themselves
= Peace Of Mind, Protecting and
Preserving Wealth, and Family Harmony

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COMMON OBJECTIONS TO ESTATE PLANNING
• “It’s too expensive”
• “I don’t have time”
• “I won’t be around to deal with it”
• “I do not want to think about it”
• “It won’t happen to me”
• “I don’t have enough money or assets to worry about it”
• “I don’t like attorneys”
• “I can do it myself” (Internet, Legal Zoom, etc.)

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Power of Attorney
Revocable Living Trust Guardian/Conservator
Pre‐Planning Crisis‐Planning
Incapacitating Event Death or Restored CapacityWellness
PRE-PLANNING VS. CRISIS PLANNING

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AGING POPULATION AND MODERN MEDICINE
• WE ARE ALL LIVING LONGER
– 75MM Baby Boomers (born 1946-1964), ages 53-71
– The fastest growing demographic segment of the
American population is those 85 years and older
– In 2010, there were 5.8MM people age 85+ - estimated
there will be 19MM people in that group by 2050
– Almost ½ of those age 85+ have some cognitive
impairment
– 90% of seniors have at least one chronic disease, and
77% have two or more chronic diseases, which can affect
cognitive ability
– The average age of diagnosis of Alzheimer’s is 73

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AGING POPULATION AND MODERN MEDICINE
• In the “olden days” there was no such thing as being kept
alive in a persistent vegetative state after a stroke for
instance, or all the way through late stage dementia, where
our brains can no longer send a clear signal to notice
hunger or to instruct us how to swallow.
• We have become masters of fixing many things that cause
organ failure. Even our skin is an organ and when it breaks
down we have wound-care and attentive nurses to turn us
over throughout the days and nights to prevent sores. But
eventually even our best methods cannot keep us ticking
forever.

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MAINTAINING CONTROL DURING LIFE/INCAPACITY
Mistake #1: Failing to Address Health
Care Decisions
• Who will “stand in your shoes” and make the
kind of decisions you would have made for
yourself?
• Do they know your detailed, personal wishes if
someday they have to take action for you?
• Terri Schiavo case

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SOLUTION: ADVANCE MEDICAL DIRECTIVE/
HEALTH CARE POWER OF ATTORNEY (HCPOA)
•Identify Decision-Makers (Agent)
•End of Life Directives
•Clear statements of intent to loved ones
–Consider the hard questions, such as do you want your
decision maker to be able to sign a DNR on your
behalf?
–Consider using “The Five Wishes” as a discussion tool

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WHAT IF YOU DON’T HAVE AN ADVANCE DIRECTIVE/
HEALTH CARE POWER OF ATTORNEY?
• If you have not set up a plan for your care and well-being to be
handled by someone you know and trust, or a professional appointee
with whom you have met to convey your wishes, you could be headed
for Guardianship Court.
• When someone becomes incapacitated, there must be a person who
can make decisions regarding care and well-being.
• If you have not appointed someone in advance, then a court will
choose that person for you.
• Courts like to choose family or friends if possible, but could you have
several of them fighting over the position, each thinking they know
what is best?
• Regardless of who it is, it is unlikely to be someone you have talked to
about your wishes. They will have to guess or insert their own ideas of
what you need.

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MAINTAINING CONTROL DURING LIFE/INCAPACITY
Mistake #2: Access to Medical Records –
Failing to Plan for HIPAA
• HIPAA – restricts access to patient health care
information to authorized representatives
• Medical providers face stiff penalties for
unauthorized disclosure
• HIPAA Authorization ensures that your Health
Care Agent has access to your medical
information - should be included in HCPOA

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MAINTAINING CONTROL DURING LIFE/INCAPACITY
Mistake #3: Failing to Plan for Control of
Financial Matters During Incapacity
• Who will pay your bills, taxes, etc.?
• Who will manage your investments?
• Who will monitor insurance plans such as
Medicare and long-term care insurance?
• Who will sell your home, or arrange for home
health care to allow you to remain at home?

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FAILING TO PLAN = GUARDIAN/CONSERVATORSHIP
•Court-supervised
•Time-Consuming
•Expensive
•Emotionally Trying
•Public Record

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SOLUTION #1: DURABLE GENERAL POWER OF ATTORNEY
• Appoints Agent to handle financial matters if you are incapacitated or
otherwise unavailable
• Usually effective upon execution (vs. springing power)
• Be specific and include “hot powers” (or Agent cannot act)
– Power to make gifts
– Power to create or change rights of survivorship
– Power to create or change a beneficiary designation
– Power to create, amend, revoke, or terminate an inter vivos trust
– Power to access digital assets
• POA should be notarized, witnessed and recorded for Agent to
sell real estate on your behalf
• Be sure to check with your financial institution as well to see if
they have their own POA form

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SOLUTION #2: REVOCABLE (LIVING) TRUST
• Better tool for incapacity vs. durable power of attorney alone
– More acceptable by financial institutions than a power of attorney
– Provides more specific guidance re: long-term care and management of assets in
the event of incapacity
• Avoids probate and court supervision if properly funded before
death, including ancillary probate of out-of-state real property
• Contains all dispositive provisions that would otherwise be in Will
• Ensures privacy for estate and beneficiaries (not public record)
• Completely revocable and amendable during your lifetime
• You are trustee (or co-trustee) and sole beneficiary during your
lifetime
– Successor Trustee takes over in the event of incapacity

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EFFICIENT WEALTH TRANSFER
Mistake #4: Failing to Fully Utilize Estate, Gift
or Generation-Skipping Transfer (GST)
Exemption and/or Annual Gift Tax Exclusion
• Federal estate, gift and generation-skipping transfer (GST) tax
exemption = $5.49MM ($5.6MM for 2018)
– Amount of taxable gifts/transfers you can make during your lifetime or at your death
without incurring any gift, GST or estate tax
– Once you exceed this amount, gift/estate is taxed at 40%
– Unlimited marital and charitable gift/estate tax deductions for qualifying gifts to US
citizen spouse (or QPRT for non-US citizen spouse) and charity
• No separate VA estate (or gift) tax
• Annual gift tax exclusion = $14K per donee/year ($15K for 2018)
• Unlimited gift/GST tax exclusion for direct gifts/payments to
educational and medical institutions

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EFFICIENT WEALTH TRANSFER
Mistake #5: Failing to Organize and
Consolidate
• Can cause delays and increased costs in
administering your estate
– Lack of communication with family members and appointed
fiduciaries
– Redundant/too many accounts
– Inability to identify or locate assets
• Solutions
– Consolidate accounts
– Organize documents in one place (fireproof box, online vault)
 Safe deposit box can be cumbersome to access when needed
– Discuss and share wishes with family members and fiduciaries

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EFFICIENT WEALTH TRANSFER
Mistake #6: Putting Children’s Names on
Your Accounts
• Often done as substitute for durable power of attorney
and/or avoiding probate
• Exposes asset to child’s creditors
• May result in unintended and/or unequal distributions
of assets/estate among children/intended beneficiaries
• May create unintended gift tax consequences; property
generally remains includible in your taxable estate

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EFFICIENT WEALTH TRANSFER
Mistake #7: Failing to Properly Name and
Update Beneficiaries of Retirement Plans and
Life Insurance Policies
• Life insurance ownership and beneficiary designations should be
reviewed to confirm they accurately reflect estate planning goals
upon divorce, remarriage, birth of child, etc.
• If no beneficiary is named, proceeds may be payable to your
estate and subject to probate and creditors of your estate
• Naming a trust as a beneficiary for retirement plans and IRAs
(e.g., for spouse or minor children) may require lump sum
distribution of benefits subject to immediate income tax (vs. tax-
deferred RMDs over beneficiary’s lifetime), if the trust is not
designed properly

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PROTECTING BENEFICIARIES
Mistake #8: Failing to Protect Inheritance
of Children from a Prior Marriage
• Potential problems
– Surviving spouse leaves your money to his/her children, disinheriting your
children from a prior marriage
– Surviving spouse remarries and leaves your money to new spouse
• Solutions
–Trust for your spouse
 Provides income and principal to your spouse for life, while protecting
remaining assets for your children and other intended beneficiaries
– Pre/post-marital agreement

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PROTECTING BENEFICIARIES
Mistake #9: Failing to Protect Beneficiaries
from Themselves
What if your child or grandchild…
– Receives a large inheritance before they are financially mature and responsible
– Commingles inheritance with spouse and then gets divorced
– Gets sued and has judgment creditors
– Has special needs
• Solution: Trust for Children/Descendants
– Broad access to trust funds for health, education, maintenance and support
– Child can become co-trustee or sole trustee upon attaining certain age
– Protects inheritance from divorce and judgment creditors
– Protects spendthrift beneficiary against out of control spending
– Preserves family legacy for future generations

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MISTAKE #10: DOING NOTHING, OR DOING IT
YOURSELF
• You don’t know what you don’t know…
– Using online forms inevitably leads to mistakes or omissions that can no longer be
corrected once an individual becomes incapacitated or deceased
– Can lead to unnecessary legal fees, taxes and/or litigation, and otherwise defeat your
intentions and prevent orderly distribution and management of your assets
• Important to review and update your estate plan at least every 5
years and upon significant life events
– Marriage, divorce
– Birth/adoption of child, grandchild
– Death or disability of spouse, child or other beneficiary
– Children attain age of majority and are no longer minors
– Move to another state
– Significant change in assets (sell business, buy investment property, inherit wealth)
– Desire to change appointed fiduciary (Agent, Executor, Trustee)
– Changes in tax and non-tax laws
• PROPER PLANNING = PEACE OF MIND!!

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QUESTIONS?
THANK YOU!!
?

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MELINDA MERK, JD, LLM, CFP® BIO
Melinda has over two decades of experience providing holistic multi-generational income
and wealth transfer tax planning advice and estate and trust services to individuals, families,
and business owners.
Melinda started her career at a boutique estates and trusts firm in Montgomery County,
Maryland, where she developed a strong foundation in estate planning and estate
administration matters. After completing her LL.M. in Taxation at Georgetown, she joined
Ernst & Young’s National Tax Department in Washington, DC, where she consulted with clients
on a nationwide and global basis in the areas of income and wealth transfer tax planning.
Melinda then returned to the practice of law as a Senior Counsel at Holland & Knight LLP in
Northern Virginia, with a primary focus on pre-sale planning for business owners, income and
estate tax planning for international clients, and asset protection planning. She later joined
PwC as a Tax Director, working closely with business owners and private equity firm
partners on their individual income tax and estate planning.
Most recently, Melinda was a Trust Advisor at SunTrust Private Wealth Management for the
Greater Washington Region, where she served as a resource to clients on trust and estate
planning, and managed the administration and risk management of trust accounts over $5
million.
Melinda is a frequent speaker and writer on estate and trust planning. She is also active in the
estate planning community on a local and national level, and a strong supporter of Lab
Rescue and local philanthropy and the arts in Northern Virginia. Melinda is originally from
Pittsburgh, and is an avid Steelers fan. She currently resides in Reston, Virginia.

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BUCKLEY KUHN FRICKER, JD, CMC BIO
Buckley’s For Seniors, LLC
Reston, VA
703-390-0535
Info@buckleys4seniors.com
www.buckleys4seniors.com