Kent Larsson writes about the proper use of wills, advance directives, trusts, and other estate planning tools, and how how they play a vital role in you receiving proper medical care and helping you to preserve and pass on your assets to your loved ones.
More than half of the states in the U.S. have laws requiring adult children to provide care and support for elderly parents.
Laws have been passed in 28 states that require adult children to provide financial support for their elderly parents, if the parents are unable to pay their own bills, according to the Wills, Trusts & Estates Prof Blog in "Filial-Responsibility Laws Could Cost You."
These laws were not used much in the past, because government programs for the elderly, such as Social Security, Medicare and Medicaid provide financial support for the elderly.
Today, with people saving less and living longer, many elderly people are not able to afford the costs of their own care, which is increasing.
Nursing homes in states with filial-responsibility laws are increasingly looking to enforce them against children with parents who do not pay their bills.
Reference: Wills, Trusts & Estates Prof Blog (May 3, 2017) "Filial-Responsibility Laws Could Cost You."
Suggested Key Words: Estate Planning, Elder Law, Social Security, Medicare, Medicaid
Many elder Americans prefer to just live together, rather than deal with some issues.
Today, rather than getting married, many elderly people are just moving in together and foregoing a marriage certificate, according to The New York Times in "More Older Couples Are 'Shacking Up'."
Getting remarried later in life has created many issues for estate planning and the families of the people who do get remarried. As a result, many people just move in together.
While this might solve some problems, such as getting around the laws of intestate and spousal election to make sure that any assets go to the children and remain in the family, it does not solve all of the problems. Instead, it creates a different set of problems that need to be worked through in an estate plan.
If two elderly people are living together, it becomes important to create estate plans that do not leave one of them in a bad position when the other passes away.
You do not want to create a situation where a partner is unable to afford the rent after you pass away or is kicked out of the property you own by your heirs.
An estate planning attorney can help guide you into creating an estate plan that meets your unique circumstances and prevents little problems from becoming big problems.
Reference: New York Times (May 8, 2017) "More Older Couples Are 'Shacking Up'."
The long-awaited tax plan of President Trump is released and, if approved, will have a huge impact.
The White House has released the Trump administration’s tax plan and it does include the elimination of the estate tax, according to The New York Times in "White House Proposes Slashing Tax Rates, Significantly Aiding Wealthy."
The President’s plan has a long way to go, but if passed it would be one of the biggest tax cuts in history. Most experts agree that it includes large tax breaks for wealthy people, including eliminating the estate tax and the alternative minimum tax.
Income tax rates on the highest earners would be cut dramatically, as would corporate tax rates.
The proposal does not just cut the taxes of the richest. Some middle class and lower income earners would see tax decreases come from a doubling of the standard deduction.
The President's tax plan has a long way to go before it is passed.
What was released was a one-page list of bullet points without any accompanying details. It will be up to Congress to determine the details of how to implement the plan.
Reference: New York Times (April 26, 2017) "White House Proposes Slashing Tax Rates, Significantly Aiding Wealthy."
This TV doctor is brilliant, but also kills people in the off hours through physician-assisted suicide.
In a TV show that is imported from Canada, a brilliant doctor is killing people by performing physician-assisted suicide, according to The New York Times review "Review: 'Mary Kills People,' but It's for a Good Reason."
While the Times review is somewhat mixed, the fact that this show exists at all, highlights the changing attitudes about euthanasia.
It was only a couple of decades ago when Dr. Kevorkian was seen as the evil "Doctor Death." Now, many people are taking the idea of physician-assisted suicide seriously.
A few states have recently legalized the practice and many more are considering it as part of the dying with dignity movement, which seeks to allow terminally ill people the choice of when they want to pass away and under what circumstances.
The concept, however, is still controversial since not everyone agrees it is a good idea.
But as a television show, it is likely to draw some interest as well as controversy.
Reference: New York Times (April 21, 2017) "Review: 'Mary Kills People,' but It's for a Good Reason."
Daughter sues her mother for wasting $13 million of inheritance.
A trust set up for a young girl was originally overseen by Citibank. However, in 2003 the mother took over the trust creating a battle in the future, according to the Daily Mail in "Daughter sues her 'self-involved' mother for 'frittering away more than $13m of her inheritance - so she could buy cars and a $6m mansion next to Gwyneth Paltrow in the Hamptons'."
It all begins with a couple meeting through a singles ad and then getting married. They had one daughter and divorced after a few years. The father died when their young daughter, Elizabeth Marcus, was nine.
According to court records filed by the daughter, her father did not want his ex-wife to receive any of his assets. Instead he left half of his estate in trust to Elizabeth Marcus, with a child from a previous marriage receiving the other half.
Elizabeth Marcus is suing her mother now, claiming that her mother has stolen her inheritance to buy expensive items for herself, including a mansion and fancy cars. Most of the original inheritance is now alleged to be gone.
The mother denies the accusations.
A question remaining is how was the mother able to gain control of the trust, if the father did not wish her to have it?
Reference: Daily Mail (April 23, 2017) "Daughter sues her 'self-involved' mother for 'frittering away more than $13m of her inheritance - so she could buy cars and a $6m mansion next to Gwyneth Paltrow in the Hamptons'."
There are some basic estate planning mistakes. Some of them are revealed in a podcast.
John B. made some basic estate planning mistakes in a podcast, according to a Wills, Trusts & Estates Prof Blog discussion in "Estate Planning Lessons from John B."
Millions of people tuned in to hear the story in Serial of a murder and its aftermath. It was one of the first podcasts to receive mainstream critical attention. Its creators are back with a successor show, called S-Town.
This new podcast features the story of John B., the resident of a small town in Alabama. He lives on a 128-acre estate and is believed to be wealthy by the community. He was living with his octogenarian mother with dementia.
John B. apparently told his friend Tyler that he did not have any bank accounts and that Tyler could have $20,000 from his estate. The next day, John B. committed suicide. He did not have a will, but instead left a series of instructions about what to do with his estate.
The drama of the story, is in people trying to find out what happened to his money, if he had any at all.
Among John B.’s mistakes are that he did not have a will. While leaving some written instructions is better than nothing, it is not worth very much legally. If any money can be found, then under Alabama law it will all go to his mother.
His friend Tyler would get nothing.
A simple will could have solved that problem.
Care for his mother is set to go to another relative who has been appointed as guardian. Of course, no one should go completely without a bank account.
An estate planning attorney can guide you in creating a will and an estate plan that meet your unique circumstances.
Reference: Wills, Trusts & Estates Prof Blog (April 21, 2017) "Estate Planning Lessons from John B."
Estate planning remains important, even if the estate tax goes away.
The elimination of the estate tax is included in the Trump administration’s tax plan proposal. However, the path forward is not simple, according to Financial Advisor in "Estate Planning: It's Not Over."
Even though a big part of modern estate planning is planning around the estate tax, there is still a demand for complex estate planning.
It still is not clear when, if and how the estate tax might be repealed.
Congress could choose to phase it out over a few years or scrap the idea entirely, if they cannot agree on offsetting spending cuts or where to raise revenues from elsewhere. Senate Democrats could also mount a filibuster over any tax plan that Republicans propose, which they are expected to do.
No elimination of the estate tax is permanent, of course. Even if it passed now, it could always be reinstated when Democrats control government again.
Reference: Financial Advisor (April 3, 2017) "Estate Planning: It's Not Over."
Cash for expenses should be included in an estate plan.
Some advice on how to plan for your family to access cash while your estate is being settled comes from South Africa by way of Personal Finance in "Will your family avoid a cash-flow crisis on your death?" The advice is applicable in the U.S.
Getting an estate through probate can take a lot of time, depending on the size of the estate and the probate laws in the state.
Your family will not receive the cash from your will for a while, in most circumstances.
If you do anticipate that your family will need cash after you pass away, the most effective way to provide it is normally to take out a life insurance policy. These policies pay out almost immediately upon learning of death.
Another idea is to open a joint bank account with a trusted family member and to put some money in the account that will only be used in the event of your passing.
Reference: Personal Finance (April 22, 2017) "Will your family avoid a cash-flow crisis on your death?"
You can create your own will. However, mistakes can turn out to be costly.
There are hidden dangers in creating your own will, according to The New York Times in "Wills Can Avert Family Warfare, but Have Their Own Hidden Traps."
Most Americans do not have a will but a greater percentage of Americans have them than ever before. One of the reasons for the increase is it is easy and cheap to get wills today. You can purchase downloadable forms from several different services.
However, there are some hidden dangers.
The biggest issue is that the probate process is different in every state.
Submitting a will to probate for administration, in some states, is very expensive and can take a long time. That suggests that probate avoidance strategies should be used, which could lead some people to utilize a trust instead of a will as their primary estate planning vehicle.
Trusts, however, are more expensive to get than wills and in some states probate is relatively quick and inexpensive. Consequently, trusts may only be needed for people with larger estates.
There are other probate avoidance strategies that can be used, but they have their drawbacks. For example, retitling an asset as joint property with a child, which is a common tactic, can make the asset vulnerable to the child's creditors.
An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances, achieve your strategic goals and conform to your state laws.
Reference: New York Times (April 21, 2017) "Wills Can Avert Family Warfare, but Have Their Own Hidden Traps
In order for your will and other estate planning documents to be useful, it is important they get into the hands of your executor.
Many people believe that a safe and secure place for their estate plan is in a safety deposit box at a bank. However, it turns out that isn’t true, according to Noozhawk in "12 Things to Keep in a Safe at a Home, Not at a Bank."
If no one knows where your will is and can’t locate it, then it cannot be used by the courts.
It is, therefore, important to make sure your will can be found and accessed quickly by those who need it after you pass away. Many people believe that a good storage place is a safety box.
The biggest drawback to safety deposit boxes is that they are secure because access to them is extremely restricted. The bank is not going to let someone show up and access your box, even if that person has your key and your death certificate.
Access normally requires a court order, which can be time-consuming to get. Courts are often reluctant to give them to anyone other than the executor of the estate. However, without seeing the will, it would not be known who the executor of your estate is supposed to be.
An estate planning attorney can advise you on creating an estate plan that meets your unique circumstances and keep a copy on file.
You can take a copy home and put it in a secure place. Your estate planning attorney can also keep a copy on file.
Reference: Noozhawk (April 23, 2017) "12 Things to Keep in a Safe at a Home, Not at a Bank."