Co-Signing a Loan: Unintended Estate Planning Consequences

Every year thousands of students take out loans to fund their education. Since most students have very little credit history, they often will have a parent (or sometimes grandparent) co-sign their loan. Students and parents often sign for such loans without full understanding of potential consequences.

Within these loan agreements are often a provision that can cause a family considerable harm: if the co-signer dies or files for bankruptcy, the loan holder can demand complete repayment. Thus, if a grandparent c0-signs a loan with a student and passes away, the student may be compelled to make complete and immediate repayment. If the student fails to do so, then the loan will go into default and negatively impact the student’s credit record. This is a serious concern especially when student and relative have co-signed for a loan of tens, if not hundreds, of thousands of dollars.

The converse of this situation can be equally as problematic: if the student dies, the co-signer may be obligated for the full amount of the loan and compelled to make immediate repayment. In 2010, the Wall Street Journal published an article, “When Student Loans Live On After Death” which highlights how this problem can devastate a family.

Either of these scenarios can have disastrous effects on a co-signers, estate plan either by transferring an immediate amount of debt to a student or creating a large debt that can derail retirement plans.

One solution is that students can protect themselves and co-signers by releasing the co-signer from the loan after the student has obtained several years of earning and built up positive credit history. The main point is to THINK BEFORE YOU CO-SIGN.

I wish you all the best,

Josh Robbins

Of Counsel

Scafidi, Juliano & Hurd, LLP

310 Washington Street, Suite 201

Wellesley, Massachusetts 02481

(T): 781-210-4710

(F): 781-210-4711

(E): jrobbins@sjh-law.com

Disclaimer:

This Blog/Website is made available for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice (or any legal advice).  This blog is for general informational purposes only. Joshua N. Robbins, Esq. does not offer or dispense legal advise through this blog or by emails to or from this site. By using this Blog / Website you understand that there is no attorney-client relationship between you and the Blog/Website publisher.  The Blog/Website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state or jurisdiction. This blog is not published for advertising or solicitation purposes. Regardless, the hiring of a lawyer is an important decision that should not be based solely upon a Blog / Website. The information on the blog may be changed without notice and is not guaranteed to be complete, correct or up-to-date. While the blog is revised on a regular basis, it may not reflect the most current legal developments. The opinions expressed at or through the blog are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.

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Estate Planning and Elder Law: Home Health Care with Minute Women Inc.

Hello World,

To help our readers understand more about related business in our field of elder law and estate planning, we are having a special quest blog written by Ryan McEniff the owner of Minute Women Inc., a non-medical home care company located in Lexington, Ma.  With over 43 years of experience in the field, Minute Women Inc., is an expert in the home care industry.

When we receive a call for home care it is usually from a concerned family member that already has a lot on their plate.  For example, a woman called about her mother-in-law that has early-to-mid staged dementia, she is living with her and her husband, and they have just moved a few weeks ago from the mid-west to a suburb of Boston.  She said that until her mother-in-law was living with her, she did not realize how bad her dementia had gotten, and that she did not know how she lived on her own until she moved in with them.   This is a perfect example of someone who feels overwhelmed, and is in over their head when they call for help.  Many times when someone needs assistance for a loved one, whether is being elder care, estate planning, or elder law, it is usually a last minute, ‘oh no what do we do?’ situation.  Many people do not know the system, how to get help, what questions to ask, or who to call.  There are many different questions a home care company, as well as different levels of service to go over.

Non-medical vs. Medical Home Care

This is somewhat self-explanatory, but there are some misconceptions.  Non-medical care is for people who need a home health aide, and not a nurse or CNA.  The cost is lower, because medical expertise is not needed, but a home health aide cannot perform all of the procedures a medical home health care company can.  Non-medical care can assist with, medication reminders, personal services (showering, toileting, dressing), and diabetes needs.  We cannot help with IVs, injections, or actually giving a person any type of medication.  Areas where people can use non-medical home care are:

• Personal Services
• Home Helper (meal prep, chores, light housekeeping, linens, laundry, bills)
• Companionship Services
• Supervision Services
• Transportation
• Alzheimer’s, Dementia, or Stroke Care
• Respite or Short Term Care
• Post Rehab or Surgery Care

What Credentials/Questions to Ask or Find Out About

How long has the company been in business?  This may sound biased because we are the oldest home care company, but you need to remember this, as baby boomers age, there are more and more home care companies starting to emerge.  A business that has been around longer has dealt with many different circumstances, problems, and successes.   The longer someone has been in business is almost always a good credential.  This does not mean that someone new to the industry does not have the ability to be a good home care company, but you should take it into consideration

How does a company screen their caregivers?  What we do is require a background check (this should be standard) and 6 written references which we follow up with a call to each one, and have them come into an interview.  This allows our staff to see if this person is going to be the right fit, as well as making sure they have previous work experience in the field.  The more in-depth a company goes the better.

What is the communication process? Communication is very important in all aspects of home care.  You need to make sure a home care company offers 24/7 on call service, so in an emergency you can reach someone.  Also you need to be able to contact the elder care manager, as well as your caregivers whenever you like, as well as talk to your loved one to make sure everything is ok on their end as well.  Many times the adult children of parents we take care of do not live nearby, so it is crucial to have open communication.

Reliability. This is another very important area to look into.  How reliable is the caregiver?  How long have they been with the company, and how many cases have the completed?

Emergencies. Ask them what the procedure is if there is a non-life threatening emergency, for example, what if a caregiver cannot make it to a client that day, what happens?

Finally, you need to meet with the people who are running the business, or the home care manager, and interview the caregivers directly, or over the phone.  With our experience, our manager knows the right home health aide to put into each situation, but you want to check, and interview the caregivers yourself as well.  Talking and asking questions is the best way to know if this home care company is going to be right for your family, and for your loved ones.

Payment. Many people don’t mention this, but it is one of the most important parts of finding the right care for a loved one.  Many home care companies just take private pay.  For those who need to find a company that take Medicaid, of Medicare, it may be best to call a local Council on Aging, to see the different options they have.  As long term care insurance becomes more and more popular, you might find that home care companies do take long term care insurance (which Minute Women does).  The more options you have the better, but for the most part you will find that home care is the least expensive when compared to assisted living, or nursing homes.  Many times seniors only need a few hours a day of care, verses someone paying for 24 hour assistance.

For more information, you can always contact us at 781-862-3300, or you can download our free ultimate home care guide that goes into much more detail and has more information about home care.  About the author: Ryan McEniff owns, and operated Minute Women Inc., which is a non-medical home care company that is based in Lexington, MA, and services the suburbs west of Boston, MA.