Jason Parker interviews Richard Tizzano who is an attorney that specializes in estate planning and elder law. You can learn more about Richard at legalpeaceofmind.com
Below is the full transcript:
Announcer: Welcome back America to Sound Retirement Radio, where we bring you concepts, ideas and strategies designed to help you achieve clarity, confidence and freedom as you prepare for in transition through retirement and now here is your host Jason Parker.
Jason: Seattle, Tacoma, Olympia, Gig Harbor, all of the good people right here in Kitsap County. For those of you tuning in around America, thank you so much for making Sound Retirement Radio one of the top places to be iTunes when you do a search for retirement. It’s been fun to see this little program grow over the past four years and I can’t tell you how good it makes me feel to know that we’re really having a significant meaningful impact in people’s lives out there as they prepare for this journey into retirement and transition through retirement.
We’ve been starting the last several months of with a joke and just to liven up all of your mornings, here I’ve got one for you this morning. Why do bees have sticky hair? Because it is a honeycomb. You got to love these jokes, share them with your family and tell me what their response is if they give you the same odd weird looks that I get when I share those at the dinner table at night. Hopefully you don’t botch the punchline like I just did, honeycomb.
Anyhow, it’s my good fortune today. We have a guest on the program who’s a real expert in this field and he’s agreed to be on the program to share with us some of the things that our listeners need to be thinking about as they’re preparing for and transitioning through retirement. I have Richard Tizzano on the program with us. I’m really grateful for Richard because when I was writing my book he agreed to allow me to interview him so that I could have an entire chapter on estate planning.
Thanks to Richard, we hope it answer a lot of these questions about estate planning in my book. You can read more about the work that we do at SoundRetirementPlanning.com. Richard Tizzano, welcome back to another round of Sound Retirement Radio.
Richard: Thank you very much, Jason, for allowing me to be on your program again.
Jason: Absolutely. This is such an important component, Richard. It’s one of those pieces where I find sometimes people really have a tendency to procrastinate and put this whole topic of estate planning off. Why do you suppose that is?
Richard: It’s funny you say that because I often feel I’m people’s conscience, I’ll see them and they say, “Oh yeah, I’m going to give you a all,” or, “I meant to give you a call.” Then I won’t see them for weeks or months and then the next time they see me, “Oh yeah, that’s right I was going to…” I feel bad I make these people feel guilty but I think a estate planning is one of those things that you think you can get out of this life without having to do it.
For those people who do, you think then they did it, I guess but when think about the responsibility that’s connected to it. The position that leads your family and loved ones in, there’s a guilt factor there. That kinds what draws people in and it’s interesting I get probably more people who come into my office because they’re planning to go on a trip than people who come into my office because they’ve gotten a bad diagnosis from their doctor or a friend of theirs has died. They’re getting ready to go on a trip and they’re feeling guilty, they’re going to go out have a good time. They may not return from this trip and they probably should take care of this issue and they come and see me.
Jason: You need to be contacting all of the travel agents and the area or maybe form a strategic alliance with Trip Advisor or one of these big companies out there.
Richard: I’m not that big. I’m not a national. I wouldn’t pay to advertise on Orbitz but I have thought that too bad the business or the travel industry has changed so much because I could have had that alliance with a local travel agent.
Jason: That crazy thing is for travel and for most of us is probably one of safer things that we do anymore.
Richard: That’s true.
Jason: Help our listeners understand when we’re talking about estate planning and specifically on Sound Retirement Radio we’re always trying to bring guest on that can add value to people’s lives who are preparing for or transitioning through retirement. People’s financial lives, their lives are changing at this point. What is a estate planning and what should people be thinking about?
Richard: There is the traditional estate planning and the documents that go along with it. The way I look at it is there’s really a three phases to traditional estate planning. If you could visualize maybe an arch or a line that’s crescent, half moon with one, or like a rainbow and you start out, you’re born and you need help with all the basic issues of life. You need somebody to hold you and to bathe you and to feed you and change your diaper. Then as you move along that rainbow and get along, there’s some point in that rainbow there’s a line that you cross where you’re able to take care of yourself and for some people that’s 6 or 8 or 10 years old and for some people it’s 30 or 40 years old. To some point you cross …
Jason: My wife would argue, I’m not quite there yet.
Richard: That’s why I said that but you get to the place where you can care for yourself and maybe you have a family at that point. That’s maybe the initial point of estate planning where some families, young families get the urge to cover the children. They wanted a estate plan that’s going to allow for the guardians to be named for the children in case something were to happen to the parents. Then as you go pass the crest or the top of that rainbow and you’re heading down.
Then there’s typically in a larger percentage of people begin a estate planning at that point and that’s when they’re incorporating the children into the estate plan. The children or maybe the alternate executors in their will or the alternate trustees in the trust and the alternates in the powers of attorney. A lot of folks do a estate planning at that point and then they figure that’s going to take them all the way to the end. There really is a third phrase and that phase is as you are approaching that …
The line you cross as you’re becoming responsible and mature you tend to approach that line on the other side and if all live long enough we’ll all cross that line where we’ll find ourselves needing somebody to hold us and to feed us and to change our diaper and to take care of those issues. Because we get unable or incapacitated and we can’t take care of those our self and there is a unique kind of estate planning that needs to be address as you age or come to those beyond the golden years.
Jason: Obviously there’s some different phases of people’s lives. When it comes to people’s estate documents and having them prepared and updated. How often should people be reviewing those documents?
Richard: Typically you want to always look at them after some significant event in your family. Maybe a marriage, children or grandchildren being born or a death in the family but you might just as a matter of course dust them off and blow off them at least every five years or so. That’s not to say I’ve had people come in and had to do that taken the old will out of the envelope and blew the dust off and I ask them, “Well, you’ve named, you know, your oldest son is the executor, you did that 30 years ago and would you still want him to be the executor?” “Oh yeah,” “And you’ve named all of your kids as equal beneficiary, do you still want that?” “Yeah.” In 30 years nothing has changed but that’s certainly not always the case. If something changes in the family or just maybe as a matter of course review it every five years or so.
Jason: What are the consequences of not doing this at all?
Richard: Some people have the fear that, “Well, if I don’t do anything, all my money or all the assets I have will go to the state when I die,” and that’s not case. The state does have statutes though which outline the procedure or the line of inheritance of your assets. If you die without a will, you’re in Washington state and if you’re married, all of your community property would go to your spouse if you died without a will, that’s intestate.
If you have separate property and you die intestate then half of your separate property would go to your spouse and half would go to your children. Now, some people don’t want that to happen and they would do a will which would say otherwise. If when you die you don’t have a spouse or children it might end up going to some aunt or uncle or nephew or grandniece or nephew that you may not want it to go to. That’s the benefit of living intentionally and taking care of those issues.
Jason: I find when I’m sitting down with people, Richard, most people they want to have all their eyes dotted and T’s crossed because they want to try to maintain their independence as long as possible without ever having to become a burden to anybody. What if somebody wants to, maybe they’ve had a falling out with their kids and they’re just angry at the world. If somebody wanted to really make their estate as difficult as possible, on the flip of this equation.
What would they do to make their … Obviously most people are trying to simplify this but let’s say they come to you and that’s not what they’re looking to accomplish or maybe they don’t come to you at all because they don’t want to accomplish anything. They just want to leave a great big mess for people to untangle. What would you advise those people?
Richard: I haven’t really given them a whole lot of thought to how to advise someone to really screw up their spouse. That’s a tough question. As you were thinking though, I think if you have a lot of relatives and you have no estate plan, that’s really sowing the seeds for disaster.
Jason: Folks, if you just have a lot of money and you really want to mess it up, just don’t do anything. Funny, no, it was actually not very funny but my grandmother she refused to do a will because she believed that if she did a will, she would die. She was on her deathbed with my dad and my uncles all standing around her before she finally did her last will and testament. In some way she was right, she did her will and she died.
Richard: She died.
Jason: She did get it done fortunately. She had that time at the end and some people they don’t make preparations and some something comes along pretty quick and they don’t have that flexibility or luxury to get everything put together at the last minute.
Richard: That’s true and you have to watch out for those urban legends. My daughter told me the other day that 100% of people who drink water die. I don’t quite know what she’s driving at but I’ve haven’t stop drinking water.
Jason: Hard to argue that logic. Your daughter is a smart girl. I want to get into some of the specifics here about estate planning and ultimately folks, if you’re tuned into this program we’ve got Richard Tizzano on the program. He is an estate planning attorney. He also does some elder law, works in elder law. We really want to give you some real value that you can take away from this program and know that you’ve done all of the things necessary so that you have …
Your wishes are followed at the time that you decide to or maybe don’t decide but when you leave this beautiful planet they way to go on. Richard, with that we need to take our first commercial break and we’ll be right back. All right folks, welcome back to another round of Sound Retirement Radio. I’m your host Jason Parker. I have Richard Tizzano in the studio with me this morning. We are talking about that fun subject that everybody likes to talk about which is in some ways related to death and dying.
The reality is it could just be becoming incapacitated, having a stroke or getting dementia or any of those things that require us to start leaning on the plans and the preparations that we’ve made. Richard is an estate planning attorney and we’re going to be talking more specifics today about the types of things that you should be thinking about is you are either preparing for a retirement or transitioning through retirement. Richard, a moment ago you mentioned the basic estate documents that everybody should be thinking about. Let’s recap those for our listeners and also make sure that they understand what those different documents are and why you have them.
Richard: Sure. The basic documents in a estate plan are powers of attorney and there should be powers of attorney that address the financial issues and also address the medical issues. You don’t have to have them as separate documents but these days there is with the Health Privacy Act and many other issues medically. I think it makes sense to have a document that’s or a separate document from the financial power of attorney.
You may have a, who knows a brother-in-law who is the CPA in the family and you’re comfortable having be your agent on your power of attorney for financial matters but he’s a little bit too cold hearted to having … Or on your power of attorney for health care. You might want someone else to be named as your agent on your power of attorney for healthcare. Those are two documents that you should absolutely have in place.
Having those in place will most likely eliminate the need to have a guardianship imposed on you should you become incapacitated and unable to make decisions or manage your finances or manage your own healthcare. If you have a document like a power of attorney that has name someone who can step in and assist you then that person does just that and you’re not left hanging out there. If you have no one, if you’ve named no one and you’re unable to make decisions on your own and say the neighbor notices your trash isn’t going out and your mails not being collected.
They go knock on the door and they found that you’ve become unable to manage your life and you don’t have a power of attorney. Then somebody is going to petition the court to have the court decide who should be making those decision, who has the authority to access your bank account and pay your bills for you and start to do those kinds of things. A simple power of attorney would eliminate the need for having that whole guardianship process.
Jason: I’ve got two questions along the lines if the power of attorney. The first one is I remember meeting with some folks where their power of attorney was worded in such way that it did not come into effect until somebody was declared incompetent or unable to act on their own, for themselves based on medical reasons. The challenge or the problem they had, Richard, was the husband had had a stroke and they didn’t want to declare him as being incapacitated.
His legal documents, his power of attorney said that it couldn’t be … It wasn’t in effect until he was declared incapacitated. That was a real frustration for his wife, they ended up actually have redoing their documents in order to fix that, after the fact they would have preferred not to have been through that. What do you do for folks in that scenario? What do you advice?
Richard: I typically suggest that people consider having their powers of attorney effective immediately when they sign them. Most of the time people are comfortable with that, the people they are naming they trust, they are either married to them or their children or somebody who they have confidence in. I’m agreeing with you that I think it makes a lot of sense to have a document that’s effective immediately so that the person can step in, in this issue. My wife called me a few months ago and wanted me to call the phone company because they wouldn’t talk to her because the phone was in my name.
I could have easily said, “Well, just fax them a copy of the power of attorney and then they’ll talk to you.” I didn’t do that because she wanted me to handle it but that was wisdom. I could have done that or if I was out of town and something needed to be handled, she could have done or she could handle that situation by presenting the power of attorney and it’s effective immediately and she doesn’t need this other document. I agree with you, a lot of people don’t want to have to create that bright line in the sand that says, “Well, on that date the doctor said I was not competent.”
Even if you comeback and you’re feeling better and you overcome whatever that situation was, you have that stigma that someone maybe who wanted to make trouble in the family could point to in and say, “Well, he went and change his will two years after the doctor say he was incompetent.” You have the issue of, “Well, did you regain full competency.” If the power of attorney whether it’s for finances or for health care, I think in health care you have just as strong an argument.
You want someone you love and trust to be able to call the doctor, follow up with a phone call, have that conversation or have your records sent somewhere if you want a second opinion. If I’m very sick I don’t maybe have the strength or desire to follow through on those kinds of things and I don’t think I’ve seen another medical power of attorney that’s effective immediately, they’re all same to say that they’re effective upon incapacity.
Jason: That’s the word I was looking for, incapacity. The other thing along those lines those to the question of I’ve met a lot of people that they never had children. Who can you name for this really important … And the other thing that’s sad sometimes or truth that I’ve seen is sometimes when people really get up there and aged they lose a lot of their friends too.
They don’t have a real strong support group around them anymore. What do people do when they never had children, they don’t have any children that they can name and they’re up in their 80’s, late 80’s and 90’s where they don’t have a lot of close friends anymore. Who do people typically name to take on that responsibility of power of attorney for financial matters or healthcare matters?
Richard: That’s a good question. George Burns said that, “If you can only reach a hundred that your chances for longevity after that are just outstanding.” Because he ask the question, “How many people do you know over a hundred that die? You probably don’t know very many.” If you get to be a hundred you’re going to live.
Jason: When you lay an egg you just got to sit it on it sometimes.
Richard: I get occasionally folks who are in that situation where they don’t have close people they trust, people that are close to them or they don’t have obvious beneficiaries. They don’t know, “Well, who should I name as my executor?” “I don’t know.” I follow that with the question of, “Where do you want your assets to go when you die?” Rarely do I come across somebody who has no idea what the answer is to that question. They usually have somebody, it maybe a sure tell relative or it maybe a charity or a charitable organization that they are thinking of.
I first suggest, “Well, you probably want to go ahead and name that person or a representative from that organization as the executor in your will.” Because the will is the document that determines how your assets are distributed among other things. If there’s a person or an organization that’s going to benefit when you die, it’s reasonable to ask that person or that organization to step up and then handle the administration of your state by being named as the executor. That’s a way to address that.
I think maybe the more difficult question to ask along those lines is, “Who would you name as the person on your power of attorney?” Because here you’re still alive and you’re asking somebody to step in and this might be a situation where you would wanted to upon incapacity. You’re asking somebody to step in and begin to pay your bills or help make medical decisions and maybe they’re just not really that close to you. That’s maybe more difficult question I think to ask her and there’s no obvious answer to that question.
Jason: Yeah, yeah. Keep young friends.
Richard: Yeah, that’s one. There are some professional groups, there’s a professional guardian group and they can step up perhaps. There are paid person and they’re licensed and they’re bonded and they can certainly step up in the financial part. Again, you maybe coming up short trying to find somebody who you can depend on a medical side.
Jason: Yeah, that’s a tough spot and I know … You’d be surprise Richard, that there’s a lot of people out there that I’ve talked to and met with over the years that have this dilemma. Is it ever a case where a … Do people ever ask attorneys to be their powers of attorney or executors on their estates?
Richard: It happens occasionally, I’ll have somebody say, “Well, how about you?” I’ll tell the person, “Well, I have done rarely and it’s going to cost you more money and are you still interested?” Then I’ll ask them to think about it and come back and visit with me again about that if they still think that I’m the person. There have been, probably can name them on one hand or at most two hands, people where I have agreed to and I have come to know them, they’ve been my clients over the years where I have ultimately agreed to be on their power of attorney and stepped in.
I can think of one dear old lady where I was called to the nursing home and she was … She had had a slight stroke, she’d been in assisted living and now is in the nursing home. The nurse told me, “Well, we don’t think she can swallow anymore and so we don’t know how long she’ll last.” I went in and was visiting with her and I told her that it didn’t look good and she smiled and held my hand and she said, “Well, let’s just play it one note at a time.”
I said, “Well, I have to go out of town,” and I was going out of town for a few days and I said, “I’m not sure what your condition will be when I come back,” and that’s what she said that, “Let’s play one note at a time.” I came back into town and she was drinking ice cream sundaes and eating mashed potatoes and counting the steps there for rehab. She walked herself right out of that place right back to assisted living and she was probably in her late 80’s at the time.
Jason: Wow. There are some great people that you meet along the way and I was thankful to be able to help her out. These are hard decisions that you do want the right person in place to be able to make those decisions for you. I tell you, we can talk about it here over the radio show when we’re not in crisis management mode as though, it’s a no big deal, let’s go get the stuff done. When you talk to people they’re going through these life and death decisions in some instances.
When you have a health care power of attorney and you’re trying to make sure that the people that have named you to a responsible position that you’re following their wishes. Man, that is not the right time to be trying to figure out if you have the right documents in order and are you doing it the way that they wanted it done. Richard, we need to take another quick commercial break but when we come back I want to ask you some more questions.
About this question specifically of how you go about structuring things in a way where people really know what it is that you’re having things done the way that you want them done. With that folks we’ll be right back after this. All right folks, welcome back to another round of Sound Retirement Radio. I’m your host Jason Parker. As always I sure appreciate you tuning into this little program. It’s been a humbling journey for me, when I started out on the radio it was very unnerving.
Just the other day I decided to listen to one of these past programs as I was driving the street and I realized how many times I say, “Uhm,” in an interview with somebody. I know that these professional radio guys out there just don’t that and I’m working on it and I’m going to get better. It’s really been a lot of fun. There’s an uhm for you Richard, but I do have Richard Tizzano on the program with me today. Richard is an estate planning attorney.
We’re talking about some of the documents you should have and we were just talking about the health care power of attorney and the durable power of attorney for financial matters. Richard, our listeners want to know, how they can make sure that their last wishes are followed? If they don’t want to be on life support for an extended period of time, how can they make sure that doesn’t happen?
Richard: Not get sick, die suddenly. Unfortunately we don’t have the control of how that works and if you do find yourself in that situation, it is a little bit too late to begin to figure out, “What should this document have said?” It’s important that you have a power of attorney for medical and that the power of attorney names the person you trust who can make those kinds of hard decisions on your behalf.
In conjunction with the power of attorney for a financial matter there should be a directive to physicians. In other states it’s called the living will. Washington we call the directive to physicians and that should outline the types of life support you do or do not want under certain circumstances. If you are unable to communicate your wishes and it can outline it very specifically. My partner had a woman who wanted the advance directive to physicians to include the Hawaiian pizza test.
Jason: Okay, what’s the Hawaiian pizza test?
Richard: She said if she was comatose and they waived a slice of warm Hawaiian pizza under her nose three or four times and there was no reaction to, go ahead and pull the plug life. It wasn’t worth living.
Jason: I’m glad you’re able to have some fun when doing these …
Richard: I actually had a lady who wanted me to put in her directive that when she died that she would be buried with a cellphone, a candy bar and a flashlight. I must have stuttered there and she saw and must have seen the shock in my face then she smiled and she said, “I’m only kidding.” Then she said, “Only half kidding.”
Jason: She really want the flashlight.
Richard: Right. My partner is telling one of his other clients about that and he wanted Scotch on the Rocks test. He said, “If you jingle the ice in front of me under my nose there’s no reaction, go ahead and pull the plug.” I say that [00:28:10] but the directive to physicians is there to help address phobias you might have about dying and certain requirements you might have. I think that’s the Jehovah Witness folks that do not want any blood products and that would be an appropriate thing to put on a directive to physicians whether or not you would want a feeding tube.
The directive to physicians goes into effect or should be asserted by your attorney in fact that you name in your power of attorney for healthcare when you are unable to communicate your wishes. This really give some direction and some comfort to the person who’s having to make those decisions for you because in a non-stressful time you’ve had the opportunity to go through this issues on the directive.
Then you sat down with your attorney in fact and you’ve said, “Listen, if something does happen, I have a stroke or an accident or whatever and in the opinion of the physician and you there’s no hope then I do not want life support or I do not want a feeding tube or I do not want CPR. I don’t want to be on a respirator.” Those kinds of things should be addressed specifically in a directive to physician.
Jason: I thought it was interesting. Is that a directive to physician something that you keep on file with your doctor’s office or how do you make sure that the people that are making those decisions, your medical team have access to that information?
Richard: That’s a good point. I think it’s appropriate for your medical team to have a power of attorney for healthcare so they know who to contact. A directive to physicians it’s an end of life document but it’s not an emergency document. There’s a different form. It’s called a POLST form in Washington. It’s lime green, if you’ve seen it.
Jason: How do you spell that?
Richard: P-O-L-S-T and it stands for Physician Orders for Life-Sustaining Treatment, a POLST form. That’s the kind of form you would fill out with your doctor. Your doctor signs it so it’s a physician’s order. You would fill that form out and you would want all of your health people who are connected with your healthcare to have one of those documents and you would want to keep that original on your refrigerator or maybe stapled to your chest or something where it’s going to be obvious.
Because you would sign that and have one of those if you are in a situation where you were diagnosed with something that was really horrible. Your prayer would be, “Lord, take me quickly so that I don’t live long enough to have to go through this whole ordeal of whatever this really bad sickness is.” If that’s the case and you have that and something happens and you’re unable or you’re not responding. Somebody calls the ENTs and they show up and they tear your shirt open, getting ready to give you CPR and they see that lime green form stapled there. It’s physician’s order so then they won’t proceed. They are allowed to just allow you to die under that situation because you have this physician’s orders.
Jason: You’re going to spur a whole new generation of people running out to get tattoos. I can already see it, Richard. They are just going to get that POLST form tattooed.
Richard: I thought you’re going to say staplers …
Jason: All right, we’ve covered so far the healthcare power of attorney. The durable power of attorney for financial matters. The directive to physicians sometimes called the living will in other states and then the POLST form, P-O-L-S-T form that you actually complete with your doctors. What else? What’s the next thing people should know about?
Richard: Let me tie those two together. The POLST form, you would want your health people to have and you would want to fill out if death was imminent or you had some really bad diagnosis. The directive to physicians that the attorney does is a form that you want to keep and you want your attorney in fact in your power of attorney to assert that on your behalf when needed. You don’t want to turn that in and have the health professional mistakenly look at page two where it says, “I do not want to be respirated.”
Mistakenly think that that’s your first choice, that’s your choice in the directive only if these other things are met. If you’re unable to communicate your wishes, if your attorney in fact agrees with the doctor that death is imminent. When you check in to the hospital and they say, “Do you have a power of attorney? Do you have a directive?” The answer should typically be, “Yes, I have a power of attorney. Here it is. I do have a directive which my power of attorney person my attorney in fact would be able to provide if needed.”
Jason: Okay, that’s good. That’s good to know. I just wanted to ask you, I want to ask you this before it subs my brain if you’ve been through this with a lot of families, a lot of people that you’ve helped with their estate planning. If there’s just one thing that you would hope everybody would take away from our interview this afternoon, what’s the most important thing that people need to know?
Richard: I would encourage people to ask the question. I had never been to an attorney before I became one and I became one later in life. There’s this fear of going to attorneys I think the basis of the fear is this is going to cost me a whole lot of money but I don’t think that necessarily needs to be. I think you should have the opportunity to talk to the car salesman and find out how much the car cost before you buy it without spending any money. I think that should be true in the law office.
You should find out basically what you might need and then what that might cost. I would encourage people to ask the questions if you’ve heard something and you think, “Does that apply to me? Is that going to apply if I get sick or if my spouse has to go to the nursing home? How does that work?” Ask the question because I can think about what really pushed me into doing elder law that’s the primary part of my practice and it was when my dad had to go into the nursing home himself and I didn’t have a clue how that all worked.
Jason: You know, Richard I’m so glad that you compared attorneys with car salesman because that’s what most of our listeners were thinking before … I heard a joke recently. The gentleman was laying on his death bed. Doctor told him he didn’t have much time to live and so the gentleman said, “Call my attorney and get him down here right away.” The attorney shows up and the doctor standing on one side and the attorney standing on the other and the gentleman is laying there just being absolutely quiet. Then doctor said, “There’s a reason that we’re standing here,” and the gentleman said, “Jesus died with a thief on either side of him so I wanted too as well.” That’s a joke. I know you attorneys have a hard time hearing these attorney jokes.
Richard: The guy’s doctor says to him, “I’ve got some bad news and some worst news. Which would you rather hear first?” The guy says, “Bad news and worst news. Just give me the worst news.” He says, “The worst news is that you only have two days to live.” “What’s the bad news?” He says, “The bad news is I found out yesterday.”
Jason: When you retire from being an attorney is that the stand up comedy that we could be …
Richard: I hope not.
Jason: All right, let’s get serious here, Richard. You really didn’t learn about a lot of the stuff until your dad was going through this experience. Tell us a little bit more about what happened there. What happened with your dad?
Richard: As a child, my mother had a stroke when I was just about 12 years old and that introduced the whole world of incapacity to me and she was in a wheel chair for the rest of her life. It really changed my perspective. I saw there was pain in the world and I wanted to not be part of the problem. I wanted to be part of the answer. I’ve tried to do things through my life to address those issues and pay it back or pay it forward. That we always appreciated when somebody would come to the house to provide some service.
About 15 years ago, my dad went from independent living to nursing home care and my mom had passed away and I didn’t know how the system works. Here, I was an attorney practicing estate planning and I really didn’t address this final phase of people’s life and how to do that estate planning which is what I do primarily now almost. It was a real forced learning experience like earlier you gave the example of people waiting till the last minute and trying to do it all at once.
It’s a fire drill. It’s an emergency. There’s certainly an easier way to do it, a better way and it goes back to what I said about ask the questions. What are the options here? It’s hard for people to address some of those issues because it’s easy to be in denial and people would rather die and be dependent and they just don’t want to address what are the issues here and wow do I avoid all the issues that come with being dependent.
Jason: That’s awesome. Folks, we will be right back after this to speak with Richard Tizzano some more about estate planning and what you need to be thinking about. All right, folks. Welcome back. I’m Jason Parker. I am the host of Sound Retirement Radio. Richard, we were just talking about … For those of you just tuning in we’ve got Richard Tizzano on the program. Richard is an estate planning attorney and one of his specialties is elder law. Richard, you just talked about the fact that a lot of the work you do today is specifically tailored and geared towards folks that need that level of assistance or planning. Talk us some more about elder law. What does that entail? What are people thinking about when they talk to you about elder law?
Richard: Occasionally I get folks who are conscientious enough to find out about what the options are as they grow older but too often it’s panic planning or somebody coming in where their spouses are already in the nursing home or they’ve had a diagnosis of Parkinson’s or something like that. That’s a progressive disease and things are likely going to get worse over time and how do we address that.
That’s a lot of what elder law is about and those issues. They basically revolve around financial issues or health issues, housing issues and legal issues. I help people try to identify what their priorities are in each of those areas how do they see that playing out, what are their preferences, and then are the preferences that they have sustainable financially. The way you would like to see this played out, can you afford to have that happen?
Jason: Give me an example what do you mean by that. What’s sustainable?
Richard: Maybe somebody wants to stay at home and they have a progressive disease so they know that they are going to be at home now and then at some point they are going to start to have to have some in home care. What does that look like? What does it cost? Is there other resources available to help set some of those cost? Are they veteran? Is there veteran’s benefits available? Do they have long term care insurance that they have paid for? When does that kick in?
If that’s not available what kind of savings or investments do they have? What kind of income is kicked off from their retirements? I help them try to analyze how long or how sustainable would staying at home be, what does it cost? These days 24 hour care at home can run about $10,000 a month and so if we look at all your resources and how long is that sustainable at that rate. If it’s going to run out at some point in the future, how many years do you have?
Then what would be the plan if it runs out? Are there other resources available maybe a reverse mortgage or if not, then Medicaid? What would it take to apply for Medicaid? Is that person eligible? What resources would they have to be left with? What point to make them eligible for Medicaid? Those are the kinds of issues that can be discussed ahead of time so people have an idea.
A big issue in qualifying for Medicaid is assets available and sometimes the person who is going into care is the person who has the IRA. It’s not easy to transfer the assets to the well spouse. You’re allowed to do that. You would ordinarily be allowed to do that but you can’t do it if the spouse who needs the care has the IRA you can’t do that without triggering a payout of all of those tax, net income.
Jason: For our listeners, a lot of people they get confused because Medicare and Medicaid sound so much alike that they are not quite sure which one is which. When you’re talking about Medicaid, that’s where people for the most part I mean it is designed as this social safety net. Once you spend all of your money and your health has gotten to a certain point that’s when the state and federal, a funded welfare kicks in to pay for people. Richard, tell our listeners a bit more about Medicaid. What are your thoughts about it?
Richard: It’s a program there that’s a federal program. It’s administered by the states individually so the federal government allows those states to monitor, manage the program within the federal guidelines so it would be different in each state. How they do it in Washington is always going to be a little bit different than how they do it in other states but in Washington state a couple is allowed to have a house and a car and prepaid funerals and approximately $50,000.
The system is set up so that the well spouse is allowed to shelter some assets above the $50,000 so that the well spouse doesn’t become destitute in providing that care. There are some transfer of assets between husband and wife that’s allowed that’s not subject to the five year look back period. A couple ordinarily wouldn’t be able to transfer money to their kids so that they are financially eligible.
Jason: Within the five year period. I think that’s an important … The other thing that we run into, Richard, you and I we can sit here and have this conversation and I know what you’re talking about and you sometimes know what I’m talking about except for when I’m talking about my jokes. You don’t seem to get those very well. In fact, you know, nobody seems to get those jokes. I guess I’m the only one that really enjoys them but one of the things we run into …
One of the challenges we run into is having a discussion with people that aren’t spending all of their time, all their days, all their life studying this and try to have a radio show or an educational piece that can really break it down for people. Are there any really good resources out there that you know of where if somebody wants to read out more about qualifying for Medicaid? Maybe they have a loved one right now that they are running out of money and they just don’t know what’s next. What’s a good resource for people?
Richard: There’s in Washington, Columbia Legal Services. You can go on their website. They have a lot of specific pamphlets that address issues of Medicaid and a nursing home or a COPES program which is the name of the program that provide some assistance at home or in assisted living facilities. It has the information about how the state recovers from the Medicaid benefits that they pay.
Jason: That’s a good resource.
Richard: That’s a good resource. There’s just so many issues that are specific though to individuals and to families that you’re almost in a situation where you really need to speak to somebody who can address all the different balls that are in the air.
Jason: You do that, you will do that for people if they call in from the radio show you’ll over them a complimentary consultation?
Richard: It’s hard to do on the phone. I guess I could do that but typically people come to my office in Poulsbo and we’ll sit down and go over those issues.
Jason: Is it pretty common for you to give people the first 20 or 30 minutes as a complimentary to see if you can even help them at all? Am I putting you out on a …
Richard: No, I always give a free consultation as it relates to estate planning issues because that’s where I said you don’t know what you need. It’s like having to pay to get the price of the car but where Medicaid is concern we know what the need is. We know. My consultation in that area I charge for that because I’m giving you specific solutions. I’m explaining the law to you specifically and how it applies to your specific situation.
Jason: Okay, good. What about in our community we serve a lot of veterans? A lot of times people will say, “You know, Jason I don’t have any long term care insurance but I was a veteran so the VA will take care of me.”
Richard: The VA will take care of you if you have a 70% disability, 70% or more then you are covered by their benefits and you could stay at a veteran’s home, Washington state veterans home in Port Orchard. Retsil would be one of those but if you don’t have that percentage of disability and you’re a veteran and something happens later in life now. The same Medicaid requirements would be imposed on you if you are staying at a regular nursing home or at a VA nursing home.
You would have to meet those financial requirements or you would pay yourself for that. If you are a veteran and you think you might be eligible for some benefits either in a facility or through this aid and attendance benefit that pays for some exactly that aid and attendance you could call the local VFW Hall or even Retsil. There’s a benefits analyst there who can walk you through what benefits you might be eligible for.
Jason: Bottom line is unless you have a 70% disability you shouldn’t plan on the VA taking care of you if that doesn’t apply.
Jason: All right. What else should our listeners know about elder law?
Richard: I talked a little bit about the legal part of it but as I said there’s the healthcare part of it and the financial and the housing part. I think you probably help people address the financial part so if I’m sitting down with them and trying to help them figure out if their plan is sustainable. If they say, “I went to Jason ten years ago and he put this plan in place and this is what the numbers are,” they may have set up a plan with you at that time that’s going to maximize income or growth or whatever but we may need to reevaluate that plan.
Like I said, maybe we have to address the IRAs that are out there and move those into Roth or whatever. The financial part of it is going to be addressed as well and maybe you and I are going to have a conversation with a client. See how we’re going to restructure that so that they are positioned to be able to be eligible for some additional benefits or that their additional needs because of the illness can be addressed.
Jason: We’re working with some folks right now Richard who fall right into that same situation. You know that it’s really important for them from … They are trying to protect assets for the well spouse and they’ve got a long term care issue going on right now but a lot of that money resides in a retirement account or retirement accounts. You’re right, at this point to start moving money around, big tax bill and that is a really a bummer deal for people. It certainly an option for people.
I have to tell you, my experience has been when people need long term care if they have a plan in place beforehand and they know exactly how that’s going to happen or what should happen next that is just … It’s so much easier to go through a crisis with a plan than it is to go through a crisis trying to put out fires. Especially when there’s adult children involve because the adult children all have different feelings about what should happen and when it should happen and who’s responsible for this, it can really get sticky, really get sticky. Have you run into any situations with families where it’s just really been difficult?
Richard: I have and the issue there is that you’re dealing with the reversal of the parent and child roles. All of a sudden the child thinks that they know what’s best for the parent and if the parent would just follow their ideas then life would be grand as a parent. They have thought this through. They want to be at home or they don’t want to be at home. Whatever it is they have thought it through and if it’s not what the child who considers themselves to be the up and coming caregiver wants there really is a battle.
Jason: Richard, I really do appreciate all the work you do. I really appreciate that we have you as a resource especially right here in our community to help with these issues. If people want to learn more about the work you’re doing, what’s the best way to find you?
Richard: I’m on the website LegalPeaceOfMind.com or they can call my office in Poulsbo, 360-779-5551. LegalPeaceOfMind.com or 360-779-5551.
Jason: There you have it folks. I’m Jason Parker, the host of Sound Retirement Radio and we’ve been enjoying our time. I’ve been enjoying my time with Richard Tizzano on the program. Really, a critical component of having a good retirement plan is to make sure that you have all of these important documents in place. It’s even more important when folks have, they’ve done well. They’ve accumulated a lot of assets.
The last thing you want to do is let 50 to 75% of your money go to the federal government because you did well and you made a lot of money and you didn’t have the proper plans in place. It’s not quite as bad as it used to be. The federal government has been raising the limits but the bottom line is how’s the old saying, an ounce of prevention to pound of cure, right?
Richard: Right. My experience is that who does the least pays the most.
Jason: There you go. There you have it. Folks, thank you so much for tuning in to Sound Retirement Radio. I sure appreciate you being here. As always, if you enjoy this program and you wouldn’t mind giving us a rating on iTunes that would mean the world to me. Just go to iTunes and give us the old five star rating there if you think this program is of value. Until next week. This is Jason Parker signing out.
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