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.
Special needs trust may be answer to new tax reforms.
Some of the people who were concerned about the new tax reform law were people with disabilities, according to The Hill in "Restructured tax code would unduly burden people with disabilities."
However, the concerns raised in that article did not materialize. Not only will they see benefits from the doubling of the standard deduction in the plan, but their taxes might actually decrease due to another provision. The plan includes a provision to make the itemized deduction for health care expenses even better for them for tax years 2017 and 2018. The new tax law lowers the deductibility threshold from 10% to 7.5% of adjusted gross income.
Only in 2019 will the deductibility threshold revert to the former 10% of 2016.
There is something parents and grandparents of the disabled, as well as the disabled themselves, can do and that is create a special needs trust. These trusts do not ease anyone's tax burden but do allow people with special needs to have more income to help cover any increased taxes.
If you would like to learn more about special needs trusts, then talk to an estate planning attorney for the details about setting one up.
Reference: The Hill (Nov. 24, 2017) "Restructured tax code would unduly burden people with disabilities."
Doctors pondered the legal strength of a "Do Not Resuscitate" tattoo.
Doctors had to figure out whether to follow the directions of a “Do Not Resuscitate" tattoo, according to CNN in "A man's tattoo left doctors debating whether to save his life."
An unconscious 70-year-old man was brought into a hospital. He had a high blood alcohol level and a tattoo that read "Do Not Resuscitate."
The doctors determined at first that they should ignore the tattoo and try to save the man's life.
Then they discussed the matter with an ethics consultant and reached the opposite conclusion.
The man's written do not resuscitate directive was later found and the problem was cleared up. The man passed away.
This is an interesting case for medical ethicists.
It is also interesting in the sense that doctors will follow the advanced directives of their patients.
An estate planning attorney may be the best place to get a directive, rather than a tattoo parlor.
Reference: CNN (Dec. 12, 2017) "A man's tattoo left doctors debating whether to save his life."
Shares in Family Business Can Be Challenging
Value of shares in a private company can more easily be lost because of the time factor.
Shares in most public companies can be sold quickly and easily. However, if you leave your heirs shares in a family business, it can be more difficult because money can more easily be lost, according to the Wills, Trusts & Estates Prof Blog in "The Family-Shareholder Wealth Roadmap."
If heirs receive shares in publicly traded companies it is easy enough for them to turn those shares into cash anytime they wish.
If you leave your family shares in a private or family business, it is much more difficult to turn those shares into cash. There are often restrictions on who can own the shares and there is not an easily and quickly accessible market to sell the shares.
One of the biggest mistakes that family businesses make, is not adequately considering the time value of money when it comes to making cash distributions to shareholders.
Companies often wait too long to make the distributions and thus the shareholders lose value. Another common mistake is using equity to finance operations, when debt financing would be better under the circumstances.
These problems can be overcome with the right assistance.
An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances and may include assets in the form of a family business.
Reference: Wills, Trusts & Estates Prof Blog (Nov. 24, 2017) "The Family-Shareholder Wealth Roadmap."
If you are planning on retirement, you might consider possible upcoming challenges.
Some fundamental legal documents need to be drafted as you look toward retirement and the golden years, according to Gambit in "The legal needs of aging parents."
Among the key challenges for people planning on retirement is the need to save money, learn about Social Security and Medicare and plan on where they want to live.
However, planning for retirement is not quite done until an estate planning attorney is consulted.
Parents need to think about the legal ability of their children to take over for them, when necessary.
For example, the children need to be able to handle the parents' finances and make medical decisions for the parents, if necessary.
Preparing for that goes beyond just making sure a child has the knowledge to do those things. The child also needs the legal authority.
That is where a visit to an estate planning attorney comes in with a general durable power of attorney and a health care power of attorney to give your children the legal authority to handle your finances and make medical decisions.
Reference: Gambit (Oct. 30, 2017) "The legal needs of aging parents."
Family members may have grievances with each other, but an executor can’t just even things out.
An executor does not have the authority to make things even between family members, unless it is strictly within the law, according to the Napa Valley Register in "Can mom make son pay debt?"
The article was about an executor who was the child of the deceased and charged with distributing equal shares.
However, one of the siblings had borrowed money from the deceased over the years and never paid any of it back. Unless there is documentation of the loans, there is little chance the executor can take that information into consideration.
There are several problems with what the executor might want to do.
Among them is that loans to children are often more gifts than they are loans. The mother may have “loaned” the money to the sibling, knowing that it would never be paid back. That makes it a gift.
If the loans are undocumented, there is no way to prove they happened short of a court battle. If they were considered loans and not gifts, they could be well outside the statute of limitations.
It can be tempting for executors to want to redress past wrongs. However, they should be careful before doing so.
An estate planning attorney can advise an executor on their powers.
Reference: Napa Valley Register (Oct. 26, 2017) "Can mom make son pay debt?"
The status of a will that is written prior to life changing events varies across the nation.
Significant life events, such as having more children, should be included in an update of a will, but if not the impact varies from state to state.
In Georgia the will gets revoked, according to the Wills, Trusts & Estates Prof Blog in "State Law on After-born Children Leads to Revocation of a Will."
In a recent court case, a Georgia man created a will in 1989. He later had three children out-of-wedlock, but he never updated his will to include the children.
The Georgia court decided that the will was, therefore, invalid and revoked it.
The man's estate would thus be distributed according to the state's laws of intestacy, as if the will never existed at all.
Every state treats these after-born children (who are not mentioned in wills) differently.
An estate planning attorney can advise you on creating a will that fits your unique circumstances, according to the laws of your state of residence, as well as updating your will as needed.
Reference: Wills, Trusts & Estates Prof Blog (Oct. 17, 2017) "State Law on After-born Children Leads to Revocation of a Will."
If you think a will is just for the rich, you are mistaken.
Everyone who has any property at all needs a will, according to CNBC in "Think you're not rich enough to need a will? Think Again."
Some people believe that if they only have only a little bit of money or property, then everything they have will simply pass wherever their family decides.
However, that is not what happens.
For example, if a person has a car when he or she passes away, then someone has to decide who gets that car. A related person cannot just show up at the appropriate government office and have the title changed into his or her name.
It does not work that way.
A court must decide who will get that car.
In the absence of a will, a deceased person's property will be distributed according to the state's laws of intestate succession. Those laws determine which relations have priority to receive the estate and the court distributes everything accordingly.
Bottom line: the deceased has absolutely no say in who gets his or her property.
Instead of relying on a court to divide your property, get a will.
It does not have to be complicated.
An estate planning attorney can guide you in creating an estate plan that fits your unique circumstances including many, many assets or just a few.
Reference: CNBC (Oct. 24, 2017) "Think you're not rich enough to need a will? Think Again."
When a spouse passes away, some elderly women need help with handling finances.
Many women defer family finances to their husbands. This is especially true for older women, which can leave the women ill-prepared to handle things after their husbands pass away, according to The New York Times in "Helping Women Over 50 Face Their Financial Fears."
The biggest thing for most women, is that they need to know how to manage the day-to-day finances. They need to learn how much money there is, what bills need to be paid and how any money should be invested.
Some widows also have problems in that their husbands own a business that they inherit and do not know how to run.
The best way to deal with these problems is to avoid them, if at all possible.
Husbands and wives should discuss things to make sure the wife is prepared, in case the husband passes away.
Other widows have legal problems, since their stepchildren might seek to challenge the widows' inheritances in court.
An estate planning attorney can help advise on challenges a spouse faces after the death of their partner.
Reference: New York Times (Sep. 1, 2017) "Helping Women Over 50 Face Their Financial Fears."
Anywhere, Even in Estate Planning
Clients might not know they are being defrauded.
Estate planning attorneys must act with integrity at all times but, unfortunately, that does not always happen, according to the Federal Bureau of Investigation in "Lengthy Prison Term for Estate Planner Who Betrayed Clients."
Estate planning attorneys are often employed to handle large sums of money on behalf of their clients. They need to have the honesty and integrity to handle that money properly and not take any of it for themselves.
This is more important for attorneys than for many other types of people who handle money.
An estate planning attorney in Florida was investigated by the FBI. She was found guilty of defrauding her clients out of $2.7 million. She was sentenced to 10 years in prison.
Some details of her case can be found in the article the FBI posted.
What this shows, is that you always need to be careful about who you hire to handle your estate matters.
Fraud can be difficult for the victims to recognize, until it is too late to prevent.
Reference: Federal Bureau of Investigation (August 15, 2017) "Lengthy Prison Term for Estate Planner Who Betrayed Clients."