A Guide to Estate Planning for Young Families

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The importance of estate planning cannot be overstated. If you’re a young couple with minor children, estate planning can help protect your family in case of a medical emergency, such as incapacitation or death. While it’s difficult to think about what happens to your children if you die, ensuring enough money is available for their needs is necessary for them to flourish. Estate planning can protect your family, name your children’s guardians, and explain how you want your assets distributed.

A caring.com 2023 survey reports two out of three Americans have no estate planning documents. Post-pandemic economic conditions are increasing the need for financial planning, including end-of-life and estate planning. Combining financial goals with estate planning objectives provides for your loved ones and creates a foundation for multigeneration wealth.

Wills

Your will is where you can name a guardian for your minor children, called a Tutor in Louisiana. Waiting until a medical diagnosis or health concern to make a will is risky. If you are seriously injured or ill and can’t communicate, it’s too late. Health concerns may also raise issues about your decision-making abilities. Identifying a guardian for your children takes thought, time, and some negotiation with the person who will commit to raising your children should the need arise.

A will is the most common type of estate planning document and can address several other things, such as distributing money and property to loved ones and paying debts. For some people, a will may be all that is required to address what happens after their death.

However, some require additional estate planning documents, like a trust, for greater control and preservation of assets before and after death. Trusts and powers of attorney are especially important for families with children or adults with disabilities, as well as aging parents in need of long-term care. They are particularly important for families with significant estates or loved ones who are prone to miscommunication and disputes. The sooner you begin your estate planning, the better the outcome. Finally, trusts can be a big help in reducing quarrels in blended families.

The Estate Planning Process

Estate planning doesn’t have to be overwhelming, but it can be complex. There are some simple steps to get started, including:

Gathering financial and other relevant documents

Even if some of your paperwork is stored online, print a summary copy. Having the documents in front of you provides a bigger picture of what to address today and plan for tomorrow. You may notice gaps in your approach.

Making a will

This legal document outlines how you want your assets distributed after your death, names guardians for your children, specifies how to divide assets among heirs, and names a personal representative or executor.

Designating beneficiaries

Retirement accounts, life insurance policies, and other financial accounts have beneficiary options allowing you to pass assets directly to the named beneficiary. These designations will override any instructions in your will, so keeping them current is important.

Considering a trust

A trust can provide additional protection for your assets and help avoid probate. A trust may be a good option if you have significant assets or a complex family situation. Trusts are also a great way to minimize the stress and hassle of your loved ones after you pass away and reduce and often eliminate probate costs.

Creating advance directives

Also known as health care directives, a living will explains your end-of-life wishes for care and treatment, and a health care power of attorney names a trusted person to make medical decisions in the event of incapacitation.

Naming a durable power of financial attorney

This individual can manage your financial affairs if you can’t.

Reviewing and updating your plan

Your estate plan needs periodic review and regular updates to reflect changes in your family situation, assets, and laws.

Seeking professional help

Working with an experienced estate planning attorney can help ensure your plan is comprehensive and tailored to your needs.

Estate Planning Barriers

You might have plenty of time to implement your estate plan, or you might not. We never know when accidents or illnesses may strike. Putting off your estate planning leaves your partner and children at risk.

A 2023 caring.com survey found forty-two percent of people say procrastination is the main reason they don’t have a will or other estate planning documents.

A young family needs to work their way toward financial stability and find ways to protect it. Even if you don’t have significant assets, you can make valuable decisions, such as taking out a life insurance policy to benefit your spouse and children. Young, healthy parents can get term life insurance at reasonable rates.

An estate planning attorney can help you select the most effective life insurance policy. In some cases, they may recommend an irrevocable life insurance trust. A life insurance trust permits life insurance policy proceeds to pour directly into the trust, becoming immediately available to your beneficiary.

How Can an Estate Planning Attorney Help Young Families?

Estate planning attorneys help assess your family’s unique needs and circumstances, creating a customized estate plan addressing your specific goals and concerns. Their experience can help identify potential risks and provide recommendations to minimize them, ensuring all documents complement each other and are legally correct.

Accurately drafting important legal documents, such as your will, trusts, powers of attorney, guardianship, and advance healthcare directives is critical. An estate planning lawyer can ensure these documents are legally binding for the state where you live and accurately reflect your wishes.

For young families, it’s crucial to receive legal advice in areas such as tax planning, asset management, asset protection, and, if appropriate, business succession planning. An estate planning attorney can help you understand the legal implications of your decisions so that you make informed choices.

Your attorney can also plan to routinely review and update your documents with you to reflect changes in your family, finances, or laws. And, in the event of your death, an estate planning attorney can help your family navigate the probate or trust administration process and settle your estate according to your wishes.

It’s in the best interest of a young family to seek the valuable guidance and support of an estate planning attorney to help to navigate simple and complex estate planning needs. Speak to an estate planning attorney today and leave a lasting legacy for your loved ones.

This article offers a summary of aspects of estate planning and elder law. It is not legal advice and does not create an attorney-client relationship. For legal advice, contact our Ruston, LA office by calling us at (318) 255-1760.

The Simple Things You Can Do To Live Longer

The Simple Things You Can Do To Live Longer

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With advances in medicine, technology, and life science, we are now living longer, on average, than previous generations. But simply living a longer life should not be the goal. Maintaining a healthy quality of life should be. After all, who wants to live a long life filled with sickness and ailments?

The earlier you adopt a healthy lifestyle, the better your chance of living a long, healthy life. Here are some simple things you can do to improve your lifestyle.

Smoking

If you are not a smoker or tobacco user, that’s good. Make sure you don’t become one. Avoid breathing second-hand smoke whenever possible. If you are a smoker, find a way to quit. Try nicotine patches, gum, or hypnotherapy. Figure out what works for you and do it. Breath is life, and keeping your respiratory system healthy increases your lifespan.

Exercise

Exercising for 30 minutes each day is imperative for longevity. The best and easiest daily exercise is walking. If you are out of shape and 30 minutes of exercise every day seems unachievable, then start with 10 minutes. As your stamina improves, increase your exercise time to 20 minutes each day. As you build up to 30 minutes of daily exercise, make sure your pace is moderate to vigorous.

Try making a routine of walking every morning. Walking will help you lose weight and gain muscle. Adding other exercises to your routine, such as swimming and weightlifting, will help you create a well-rounded exercise regimen. Joining a class can be helpful since classes are at set times, which can help you establish a routine. Talk with your doctor before starting a new exercise regimen.

Healthy Diet

We all know that a healthy diet plays a significant role in living a long, healthy life. There are many books and articles about which diet is the best. The best diet for you, though, is a healthy diet you can achieve and maintain. Talking with your doctor will help you choose a healthy diet that works for you.

When shopping for food at your local supermarket, keep in mind that healthier foods are generally found around the outskirts of the store. You will find fresh fruits and vegetables, lean meats, and dairy products there. The inside aisles of supermarkets are stocked with food products, not real food. Most of these food products are so over-processed and full of chemicals that they are unhealthy.

Alcohol

Consuming alcohol in moderate amounts is not considered an unhealthy practice. Moderate amounts of alcohol are described as two drinks per day for men and one drink per day for women. If you habitually consume more than a moderate amount, you should work on reducing your alcohol consumption as soon as possible. If you have not caused too much damage to your liver, it will likely heal itself.

Social Interaction

Studies show that socially interacting with other people, as well as with animals, has health benefits. Being socially active can help stave off such health issues as depression, high blood pressure, cognitive decline, and dementia. Here are some ways to add social interaction into your life:

  • Join a club that is focused on your favorite hobby
  • Take academic, artistic, or exercise classes
  • Stay in regular contact with family and friends
  • Adopt a pet
  • Get involved with your neighborhood or community

Planning for a Longer Life

If you end up living into your 80s, 90s, or beyond, make sure your financial life is healthy too. Talk with a financial adviser and an attorney experienced in estate planning and elder law to ensure you have the necessary funds to live comfortably in your later years.

Our law firm is dedicated to keeping you informed of issues that affect seniors who may be experiencing declining health. We help you and your loved ones prepare for potential long-term medical expenses and the need to transition to in-home care, assisted living care, or nursing home care.

Contact our Ruston, LA office by calling us at (318) 255-1760 today and schedule an appointment to discuss how we can help you with your planning.

Understanding the Basics for Estate Taxes

Understanding the Basics for Estate Taxes

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The US imposes estate taxes on assets transferred from the estate of a deceased individual to heirs or beneficiaries. In understanding the basics for estate taxes, an estate tax is not the same as an inheritance tax. It’s a tax on the total value of a person’s assets at the date of death. The estate pays the tax before any assets are distributed to beneficiaries or heirs.

In contrast, inheritance tax is based on the value of assets that an individual beneficiary receives. The tax responsibility is on the beneficiary, not the estate, and tax rates can depend on the relationship between the decedent and the beneficiary.

US Estate Taxes Overview

US estate taxes apply only to high-value estates. The amount adjusts annually for inflation, and for 2023 is $12.92 million per individual—higher estate tax exemptions will sunset on December 31, 2025. Projections vary slightly but align with a 2026 estate tax exemption cut in half to about $6.8 million per individual. Any value exceeding the current year’s exclusion limit is subject to tax.

The Internal Revenue Service requires any estate with prior taxable gifts and combined gross assets exceeding the threshold to file a federal estate tax return and pay estate tax. Therefore, any estate valuation in 2023 over $12.92 million per individual will pay tax on the overage amount. Executors, or personal representatives, are responsible for filing the estate’s return and paying any taxes owed by the estate, from the estate, over that year’s exclusion amount.

Unlimited Marital Deduction

A provision in the US Federal Estate and Gift Tax Law allows an individual to transfer an unrestricted amount of assets at any time to their spouse free from tax. This transfer includes the date of death of the transferor.

However, this unlimited deduction from estate and gift tax only postpones the taxes on the property inherited from each other until the second spouse dies. After the surviving spouse’s death, all estate assets over the exclusion amount are subject to the survivor’s taxable estate.

Assets Subject to Estate Tax

The estate tax applies to the fair market value of assets such as cash, real estate, stocks, bonds, and personal property, including art, jewelry, and other collections. Life insurance proceeds paid to a beneficiary are generally not subject to estate tax but may be included in the estate if the deceased owns the policy.

Exemptions and Deductions

Certain deductions and exemptions can help reduce the amount of estate taxes owed. For example, a married couple can pass on their estate to their spouse without incurring estate tax at that time. Additionally, charitable donations made from the estate can qualify as a deduction from the taxable amount.

Reducing Estate Taxes

Estate tax law can be complex, and an estate planning attorney can provide valuable guidance and assistance when minimizing the impact of estate taxes. Here are some ways an estate planning lawyer can help:

  • Creating an estate plan minimizes the impact of estate taxes. An estate planning attorney can help you explore various strategies, such as gifting, trusts, and other tax-efficient structures, to reduce the size of your taxable estate.
  • Reviewing and updating your estate plan and making revisions every year or so ensures it’s optimized to minimize estate taxes.
  • Estate planning strategies can reduce the impact of estate taxes, such as gifting, trusts, and life insurance. These strategies are complex and are customized to each individual’s unique circumstances.
  • Ensuring compliance with tax laws and regulations that govern estate taxes ensures you are taking advantage of all available deductions and exemptions.
  • Helping to file estate tax returns to ensure all necessary information is included and the return is filed accurately and on time.
  • Providing guidance to executors and trustees with a fiduciary responsibility to manage the estate in a way that minimizes taxes and maximizes the value of the assets for heirs and beneficiaries.

An estate planning attorney is a valuable resource for individuals concerned about estate taxes and minimizing their impact.

Estate Taxes by State

In addition to federal estate taxes, some states have their own estate or inheritance taxes. Currently, twelve states levy an estate tax upon your death. Like federal estate tax law, state-level estate taxes can change. There may be additional requirements for exemptions that apply depending on the year. If you are concerned about estate taxes in your state, it’s a good idea to consult with an estate planning attorney for guidance and advice specific to your situation.

Spending Down Your Estate

Reducing the size of your estate can minimize or avoid federal estate tax. Enjoy your wealth if you aren’t afraid of running out of money before you die. Travel, live lavishly, and give your assets to loved ones that may improve their lives while you can enjoy the experience. You can give away your assets to a qualifying charity and deduct them from your estate. Also, you can use an irrevocable trust to shield assets that legally shelter them from federal or state estate taxes. You can even relocate to a more favorable tax environment if you live in a state that levies estate taxes.

Creating a Plan

Your estate planning goals define the steps you take. Establish a clear idea of what you want to happen, to whom you want to give, who will handle your estate, and how estate taxes can be avoided to protect the legacy you leave to your loved ones.

An estate planning attorney can help you gather and organize your financial data to determine your net worth and establish estate tax avoidance strategies, review all existing beneficiary selections, and make updates where appropriate. They help you understand the importance of how you hold title to your property.

Create your estate plan today, knowing you can modify much of it as your family situation changes. Estate taxes may be an important consideration if you have a large estate. By understanding the basics of estate taxes and working with an estate planning attorney, you can ensure your assets transfer to your loved ones in the most tax-efficient manner possible.

This article offers a summary of aspects of estate planning and elder law. It is not legal advice and does not create an attorney-client relationship. For legal advice, contact our Ruston, LA office by calling us at (318) 255-1760.

Preparing Your Family for the Unexpected

Preparing Your Family for the Unexpected

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Making sure your affairs are in order in case of unforeseen circumstances, such as an accident, incapacitation, or death, is what planning for the unexpected involves. If the COVID-19 pandemic taught us anything, it’s that life is uncertain and that caring for you and those you love is imperative, including legal preparedness. An elder law attorney and estate planning attorney can address your concerns and help prepare your family for the unexpected.

Elder and Estate Law

Elder law focuses on legal issues affecting elderly individuals, including health care planning, long-term care planning, Medicaid planning, and guardianship (in Louisiana callee interdictions). They help clients plan for their future needs and ensure protection in cases of incapacity or disability.

Estate law focuses on legal issues relating to the transfer of assets after an individual’s death. They help clients plan for the distribution of their assets, minimize taxes, and meet goals by creating wills, trusts, and other legal documents.

Both elder and estate law overlap significantly, particularly in end-of-life planning and long-term care. For example, an elder law attorney or an estate planning attorney can assist clients in creating a living will or power of attorney for health care decisions. A significant difference between the two legal practices is one focuses primarily on the needs of individuals while living, and the other plans the distribution of assets after an individual’s death.

Why Planning is Important

Many things can happen over your lifetime, and much of it is unexpected. But we can be aware of potential problems and prepare for uncertainty.

 

·       Healthcare Planning

Put a health care plan in place in the form of advance directives, such as a living will or durable health care power of attorney, ensuring your wishes are followed if you become incapacitated and unable to make decisions. Your loved ones won’t have to struggle with decisions during a difficult time.

·       Financial Planning

Financial hardships happen due to emergencies, requiring additional financial resources, insurance, and more to successfully manage unexpected events.

·       Digital Planning

Ensure your legal documents have digital copies on secure networks, making important documents and information accessible online to those who have your login credentials. Keep a list of credentials in a safe place and let a person you trust know the location.

·       Estate Planning

Many individuals not only create an estate plan, but regularly update their wills, trusts, and other legal documents to ensure their wishes are carried out, and their assets receive protection in case of illness or death. Your estate planning also protects the future of your loved ones.

Legal Planning for the Unexpected

Legal planning means having your affairs in order in case of unforeseen circumstances. These are six steps to increase preparedness:

1.     Create a Will

Not enough people in America have a will. This legal document outlines your asset distribution after your death. If you already have a will, review and revise its contents to address changes.

2.     Designate Beneficiaries

You can designate beneficiaries on your bank accounts, retirement accounts, life insurance policies, and other assets. Revise your beneficiary status in the event of a death, divorce, marriage, or other major life changes so you’re your asset distribution will reflect your intended beneficiaries.

3.     Create a Power of Attorney

A power of attorney allows someone you trust to make legal, financial, and medical decisions on your behalf if you become incapacitated.

4.     Create a Living Will

A living will outlines your end-of-life wishes. It includes whether you want to be kept alive through artificial means.

5.     Consider Setting up a Trust

A trust can manage and distribute your assets during your lifetime and after your death. It can minimize probate costs and protect privacy of your loved ones at your death. Furthermore, it often is a less expensive in the long run and more stress free for your heirs.

6.     Review and Update Your Plan Regularly

It’s important to review and update your plan regularly to ensure it reflects your current wishes and circumstances.

Consulting with an elder law attorney or estate planning attorney can help create and ensure your legal documents are thorough and complete. Preparing for an unexpected crisis will reduce the stress on yourself and your family members. A comprehensive legal plan that can address your desires during times of uncertainty can bring you and your loved ones peace of mind.

This article offers a summary of aspects of estate planning and elder law. It is not legal advice and does not create an attorney-client relationship. For legal advice, contact our Ruston, LA office by calling us at (318) 255-1760.

A Guide to Wealth Transfer

A Guide to Wealth Transfer

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When one person or entity transfers wealth or assets to another, it is called wealth transfer. The transfer can happen either during one’s lifetime or after one’s death. Wealth transfer strategies refer to the methods used to transfer wealth in the most tax-efficient and effective ways. Below are some popular wealth transfer strategies to consider.

Gifts

Gift giving is a commonly used wealth transfer strategy. It involves giving a gift to someone, which can be in the form of cash, securities, real estate, or personal property. The annual gift tax exclusion allows an individual to give up to a certain amount, tax-free, to any number of recipients. In 2023, the annual exclusion is $17,000. This means that an individual can give up to $17,000 per person per year to as many different people as they wish without incurring any gift tax liability. The annual exclusion amount is subject to change, so check with the IRS before making gifts. (It is important to note that this exclusion applies to federal taxes only– it does NOT apply to transfers made for the intention of qualifying for Medicaid Long-term care benefits.)

Trusts

Trusts are legal entities that can hold and manage assets for the benefit of designated beneficiaries. There are many different types of trusts, including revocable and irrevocable trusts. Revocable trusts allow the creator to retain control of the assets during their lifetime and can be changed or revoked at any time.

Irrevocable trusts, on the other hand, cannot be changed or revoked once they are established. They are often used to protect assets from creditors, reduce estate taxes, and provide for beneficiaries. Irrevocable trusts can be a good option for people who want to qualify for Medicaid benefits and not spend all their assets on long-term care.

Family Limited Partnerships

A Family Limited Partnership (FLP) is a type of partnership that is often used to transfer assets within a family while retaining control over them. An FLP is created by transferring assets, such as real estate, stocks, or businesses, into the partnership. The partnership then issues shares to family members, who become limited partners. The general partner, typically the person who created the partnership, retains control over the assets and manages the partnership.

Charitable Giving

Charitable giving is a popular way to transfer wealth and reduce tax liability. By donating assets to a qualified charitable organization, an individual can receive a tax deduction for the value of the donation. Charitable giving can also be structured through a Charitable Remainder Trust (CRT). This allows an individual to donate assets to a trust and receive an income stream for a specified period. After the trust term ends, the remaining assets are transferred to the designated charitable organization.

Life Insurance

Educating yourself on life insurance can be a useful tool for transferring wealth to future generations. Life insurance policies can provide tax-free benefits to beneficiaries. In addition, it can be used to pay estate taxes or other expenses. Life insurance policies can be set up in a way that allow the policy owner to transfer ownership of the policy to a trust or another individual.

Finding the Right Strategy

There are many different wealth transfer strategies available, each with their own advantages and disadvantages. These strategies can have complex tax implications and legal requirements. So, it is important to work with a professional to ensure that the transfer is done in the most efficient way. Consult with a financial advisor and an estate planning attorney before using any wealth transfer strategy.

This article offers a summary of aspects of estate planning and elder law. It is not legal advice and does not create an attorney-client relationship. For legal advice, contact our Ruston, LA office by calling us at (318) 255-1760.

Having a Will vs. Not Having a Will

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Having a Will vs. Not Having a Will

People are afraid of death, especially their own. Add to that the question of what will happen to their assets after they die, and it’s no wonder so few people have estate plans.

According to a 2021 Gallup poll, only 46% of US adults have a will. This is a slight increase from 2016 when 44% had a will. Still, less than half of US adults have taken the time to create this important document. The poll also showed that older adults are more likely to have a will than younger adults. Of those polled who were over the age of 65, 76% said they have a will. It’s important to know your options on having a will vs. not having a will.

Dying Without a Will

If you were to die without creating a will, depending on the type of and amount of property involved, a state probate court may have to choose an administrator to manage the probate process for your estate and choose a guardian for any minor children you have, provided the children’s other biological parent is deceased or unable to care for them. The downside to this process is that the decisions the probate court and the administrator would make may not align with what you would want.

Dying without a will is known as dying intestate.  It  can sometimes create problems as to what happens to your assets and children. When your intentions aren’t known before you die, you set the stage for potential conflict among your family members and heirs. Although the law will divide values up equally among the legal heirs, without the will to use as a guide, the administrator has to guess what you would want and have the probate court approve it.  This places an undue burden on the administrator, who is often a family member.

The administrator’s duties generally include the following:

  • Locating all your living heirs and notifying them of your death
  • Compiling a list of your assets
  • Paying off any debts and taxes that are owed
  • Collecting any money owed to your estate
  • Distributing any remaining assets to beneficiaries deemed valid by the probate judge

To avoid creating conflict that could cause rifts in your family, draft and execute a valid will spelling out how you want your estate distributed, who should become the guardian for any minor children, address funeral arrangements, and what should be done with your remains.

Dying With a Will

When you have a valid will, it often makes life for your survivors much easier. In a will, you can appoint a person you trust to manage your estate after your death. The person you appoint is known as the executor for your estate. A will acts as their guide.

Even if you have a will, your estate still has to go through the probate process. The first step in the process is for the named executor to file your will with the probate court. The court then determines the authenticity of your will. Upon confirming that your will is valid, the probate court officially appoints the executor, most likely the person named in your will, to carry out the administrator duties. Generally speaking, as long as you don’t leave out forced heirs and your wishes in your will are not contrary to law, the executor the court will divide things out the way you have spelled out in your will. (Forced heirs are children under 24 years old or disabled. Disabled grandchildren can also be forced heirs. Forced heirs are generally entitled to a portion of your estate regardless of what your will says. There are several exceptions.)

Avoiding Probate

Regardless of whether a person dies with a will or not, the probate process exists to help ensure the decedent’s bills and taxes are paid and that their assets are distributed fairly. Though this sounds good in principle, the probate process can be a long and expensive process. And since the process takes place in the court system, it’s open to the public and the will can be contested. For these reasons, some people create trusts for their assets before they die. Their estates can settle outside of probate court and there is less of a chance that family members can successfully contest the will. Furthermore, trust-based estate planning, particularly with married couples, may be a money saver in the long run.

Consult with an estate planning attorney about your options. You may be able to keep your estate out of probate and leave a better legacy for your heirs.

This article offers a summary of aspects of estate planning and elder law. It is not legal advice and does not create an attorney-client relationship. For legal advice, contact our Ruston, LA office by calling us at (318) 255-1760.

What is a Power of Attorney?

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An integral part of estate planning is implementing Power of Attorney (POA) documents. All states recognize powers of attorney, but rules and requirements will differ from state to state. The document gives one or more individuals the legal authority to act as your agent or proxy on your behalf. Depending on which POA you choose, the agent’s power may be limited to a particular activity, such as a real estate sale, or cover broader applications.

Permanent and Temporary Powers

A Power of Attorney may give permanent or temporary authority and be invoked immediately or be activated by a future event, such as mental or physical disability. The latter is known as a “springing” Power of Attorney. Powers of Attorney may be rescinded, but most states will require written notice of revocation to the named individual or entity.

Durable, General, and Non-Durable Powers

Some Powers of Attorney are nondurable for the sake of convenience, especially in the case of a single transaction, such as a property sale. Your agent may conduct the sale of a boat or a home described in the POA document. If you are traveling abroad or know you can’t transact this business, a nondurable power of attorney can be greatly beneficial. Once the time period or transaction is complete, the nondurable power of attorney terminates.

A general power of attorney permits the agent to deal with any matters on your behalf that state law allows. Under such an agreement, the proxy may sign checks, handle bank accounts, sell property, manage assets, and file taxes when you are unable. This POA has a wide latitude of authority. Therefore, there needs to be coordination between you and your agent to ensure your best interests are always represented.

The better-known Powers of Attorney are durable and take effect upon incapacitation. The word “durable” means the powers will remain intact even when you can no longer manage your affairs. There are two types of Durable Powers of Attorney. One handles financial matters, and the other manages medical affairs, often called a healthcare directive.

Avoiding Guardianship and Conservatorship

Without these Powers of Attorney in place, a court may need to appoint individuals to act on your behalf upon your incapacitation. Depending on your state laws, these individuals are known as conservators, guardians, or committees. This type of court intervention can be expensive, time-consuming, and is a public proceeding. Most people prefer to keep their matters private by implementing powers of attorney documents in their estate plans to avoid conservatorships.

Financial Power of Attorney

This durable power of attorney permits an agent to manage your financial and business affairs, similar to a general power of attorney. When you become incapable of managing your affairs, the agent’s responsibility is to carry out your wishes to the best of their ability. If the financial power of attorney is also a beneficiary of your estate, they must act with great care to avoid misinterpretation of intent. This document is not just for seniors. An unforeseen illness or unfortunate accident can render a healthy, younger individual incapacitated and in need of financial assistance.

Healthcare Power of Attorney (HCPA)

An HCPA is also known as a healthcare proxy and permits a designated person or agent to make healthcare and medical decisions according to your specific instructions or their best understanding of your wishes. Again, consenting to an HCPA agent for medical care decisions is not only relevant to seniors. An unforeseen illness or accident can render a healthy, younger individual incapacitated, which is why an HCPA is a crucial estate planning document.

The best way to establish powers of attorney is to locate a qualified estate planning attorney. They can help you assess which power of attorney is necessary for your unique situation. They also understand the criteria for identifying the individuals or agents to represent your interests. Delegating general and limited powers to agents can create family strain during the planning stages. An estate planning attorney is familiar with the nuances of these family issues should they arise and how to move forward for all concerned. The biggest benefit of having these matters settled before incapacitation or death is allowing a family to care or grieve for their loved one instead of being bogged down in logistics.

This article offers a summary of aspects of estate planning and elder law. It is not legal advice and does not create an attorney-client relationship. For legal advice, contact our Ruston, LA office by calling us at (318) 255-1760.

Will Writing for Blended Families

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Many American families have stepchildren today, and it is not uncommon for them to receive the same treatment as full biological children when it comes to inheritance. This is particularly true where stepchildren are part of a blended family from an early age. Biological siblings may have different feelings about a stepchild inheriting what they perceive as theirs as a natural heir. A surviving spouse may have the same feelings about their children’s inheritance.

Transferring an Inheritance

Estate planning for blended families is key to a smooth inheritance process, especially since probate rules and intestate succession law do not treat step and biological children the same when it comes to inheriting. Open communication about your estate plan is also helpful in managing heirs’ expectations.

Trying to be equitable among your heirs can be tricky, and relying on your spouse and children to work things out after you are gone is not a good plan. To create a solid plan, carve out some quiet time and identify your most important estate planning goals, including distributions of all assets.

These assets include your house, car, jewelry, other personal items, investments, retirement plans, brokerage accounts, and insurance. If you opt to gift items before your death, be certain you no longer include the asset or property in your estate plan. Even items of little financial value may be an expected inheritance from a child. The goal is to reduce tensions among family members.

Creating a Trust

Share your ideas with your spouse and agree on a basic approach, including scenarios for who might pass away first. Leaving property outright to a surviving spouse may not be the best approach as it does not ensure the children, step or otherwise, ultimately benefit. Many blended family systems use a trust to provide for a spouse while leaving their property to their children.

Will Contests

Stepchildren can contest a will to be treated as a full biological child if they are named in a prior will. A will that was written before a remarriage creates an opportunity to contest. Note that your stepchildren have very little chance of inheritance without a will. Dying without a will or intestate prevents your stepchildren from inheriting in all but a very few states. In states where they are eligible, stepchildren will be considered last in line to inherit because of the laws of intestate succession.

A stepchild named in a previous will can challenge on the grounds of undue influence, lack of capacity, mistake, fraud, or coercion. If the will being contested is thrown out of probate, estate inheritance reverts to the next most recent will. A stepchild must be named in at least one prior will to have “standing” to challenge the will. If all wills are invalidated, the state will treat stepchildren as intestate heirs.

Separate Wills

Even if a biological parent, in concert with a stepparent, makes their wills simultaneously and identically to leave the estate to one another, a surviving spouse can change their will upon the death of the other. It’s possible they may then exclude the stepchildren. But, if the original will left equal shares to biological and stepchildren, a stepchild could contest to have the most recent will invalidated.

Reciprocal or Mutual Wills

Most states do not recognize reciprocal or mutual wills as a binding contract. A mutual will can only be enforced if it specifically constitutes a binding contract that can’t be changed. It’s far more reliable to create a trust to care for a surviving spouse and your children’s inheritance than depend on mutual wills and goodwill after you’re gone.

While contesting a will is permissible under certain circumstances, there is no guarantee it will be successful. To ensure your legacy wishes are met, consult with a qualified estate planning attorney who understands the intricacies and nuances of estate planning for blended families.

This article offers a summary of aspects of estate planning and elder law. It is not legal advice and does not create an attorney-client relationship. For legal advice, contact our Ruston, LA office by calling us at (318) 255-1760.

Costs Associated with Second Marriages

Costs Associated with Second Marriages

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Most people wouldn’t think of losing their assets to pay for their new spouse’s serious illness when they get married for a second time (or more). But that could happen. Costs for long-term care have been rising significantly for years and continue to grow. Studies show that 70% of Americans will need some form of long-term care. Which can last for three years or longer. It is important to be aware of the costs associated with second marriages.

Paying for Long-Term Care While Protecting Assets

If one spouse becomes ill, the assets of both spouses are, by and large, required to be spent on the ill spouse’s care before Medicaid benefits become available. This could be a big problem. Especially if the money that the healthy spouse had saved for their children’s inheritances goes to pay for the ill spouse’s care instead.

With careful planning, this need not happen. Making financial arrangements in advance can protect the estates of both spouses to ensure they can retain the assets they brought with them to the marriage.

Medicaid Community Spouse Resource Allowance

Medicaid rules allow the healthy spouse to keep an allowance of a certain amount for their benefit. This is known as the Medicaid Community Spouse Resource Allowance (CSRA). But many find that the CSRA is too small to permit the healthy spouse to maintain their standard of living, pay for their retirement, and still have something for their children to inherit.

Any planning or shifting of assets must be done very carefully and only after consulting with an attorney experienced with Medicaid planning. Medicaid heavily penalizes transfers of assets made as gifts.

Medicaid Planning

Assets can be protected, though, by using strategies that are permitted by the Medicaid rules. Some, or all, of the healthy spouse’s assets could buy a Medicaid-compliant annuity. This would provide an income stream for the healthy spouse that will not be deemed available to pay for the ill spouse’s care.

In turn, the assets of the ill spouse could be transferred to people they trust, such as a trustee, an agent for financial affairs, a family member, or a beneficiary. That kind of transfer may be subject to a penalty, depending on when the transfer is made and when long-term care benefits are received. Planning well in advance, at least five years, helps mitigate Medicaid penalties.

There are also long-term care insurance products available to cover the costs of long-term care services. Which everyone should consider when newly married and while they are still reasonably young and healthy.

The best strategy of all, though, is to consult an attorney experienced with Medicaid as soon as possible. The sooner you start planning, the more options you have and the more money you can save. Contact us today to schedule a consultation to learn how we can help you prepare for your future.

Our law firm is dedicated to informing you of issues affecting seniors who may be experiencing declining health. We help you and your loved ones prepare for potential long-term medical expenses. Also, the need to transition to in-home care, assisted living care, or nursing home care.

This article offers a summary of aspects of estate planning and elder law. It is not legal advice and does not create an attorney-client relationship. For legal advice, contact our Ruston, LA office by calling us at (318) 255-1760.

Caregiving Stress Among the Sandwich Generation

Caregiving Stress Among the Sandwich Generation

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The sandwich generation is people who are caring for their aging parents along with their own children. You probably feel sandwiched between the older generation and the younger one. It is more likely that you feel pulled in multiple directions while trying to meet the needs of the two generations of family members. According to the Pew Research Center, about a quarter of US adults in 2022 are part of this sandwich generation. It is important to be aware of caregiving stress among the sandwich generation.

Though multi-generational care has existed for millennia, we are seeing an increase of the middle generation simultaneously caring for the older generation and the younger generation. This is due to people living longer and needing more help later in life and the middle generation waiting longer to have children. The result is instead of the older generation providing help with the youngest generation, they are needing help while the youngest generation is too young to care for themselves. This situation puts extra burdens and pressures on the middle generation.

Financial Cost to the Sandwich Generation

Caring for two generations of family members comes with costs, including financial costs. Even if your parents have enough money to meet their needs, you may have to forfeit work time to give unpaid time to caring for their needs and your children’s needs. Most appointments, for seniors and minor children alike, are during business hours, which means you have to take time away from work to shuttle family members to and from appointments as well as other activities.

Some members of the sandwich generation have had to put their careers on hold so they can simultaneously care for older and younger relatives. Some have had to give up full-time jobs and take part-time jobs. Reducing your income early or midway through a career can have long-lasting negative effects. You will have less money saved for retirement, large purchases, and emergencies. This is also true for having enough money to cover short-term expenses.

Emotional Cost to the Sandwich Generation

Raising children is a big commitment and can add enough stress to your life as it is. Add to that the responsibility for an elderly parent and possibly a job and you quickly run out of time for anything else, including you. This can mean that you give up taking proper care of yourself. You may end up forfeiting your social life, hobbies, exercise, or even much-needed sleep. These sacrifices can erode your ability to effectively deal with the stressful situation you are in.

Solutions for the Sandwich Generation

Juggling the time, energy, and economics of caring for two generations of relatives can seriously deplete your reserves. Finding ways to meet each person’s needs, including your own, is crucial to making the situation work. Though each family’s situation is unique and will likely require a unique solution, here are some things to consider trying that could help.

  • Don’t be afraid to ask for help, whether it is from another relative or a family friend.
  • Look into places you can leave your elderly relative for a few hours or a whole day, such as adult daycare, a community center, a public library, or a community recreation center.
  • The same holds true for your children. Look for daycare options and after-school activities for them.
  • Plan as far in advance as possible for scheduling conflicts and financial expenses.
  • Get your elderly relative to do their estate planning and elder law planning at least five years before they may need long-term care. Doing this can allow them to qualify for Medicaid or other government benefits when they will need them the most. Such benefits could help pay for long-term care needs, thus freeing up your time for other things.

Even though you may see taking care of your family members as your highest priority, keep in mind that you need to take care of yourself as well. In the same way flight attendants tell passengers to put their oxygen masks on before helping others with their masks, you can’t take care of others if you are unable to take care of yourself.

Our law firm is dedicated to keeping you informed of issues that affect seniors who may be experiencing declining health. We help you and your loved ones prepare for potential long-term medical expenses. Also, the need to transition to in-home care, assisted living care, or nursing home care.

This article offers a summary of aspects of estate planning and elder law. It is not legal advice and does not create an attorney-client relationship. For legal advice, contact our Ruston, LA office by calling us at (318) 255-1760.