“For the 99.5% Act” and How It Affects Estate Planning

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A new bill, “For the 99.5% Act,” was recently introduced into Congress by Sen. Bernie Sanders and Rep. Jimmy Gomez. The bill’s current form is only 18 pages long, but its potential impact on federal estate and gift tax laws significantly affects estate planning. While it is impossible to determine if the bill will pass into law, some of the act’s key elements may inspire Congress to increase the estate tax using other mechanisms should this bill fail. They might also seek to remove well-known tools like trusts to bypass taxation upon your death to generate revenue for federal programs.

In a letter to Congress, 51 national organizations supporting Senator Sanders and Representative Gomez estate tax reform urge Congressional members to adopt the legislation. The letter cites that the richest one percent of Americans own nearly 32 percent of the nation’s wealth, and the bottom 50 percent own just 2 percent. This stark inequality creates constraints and financial growth limitations for the majority of Americans.

The Sanders-Gomez proposal wants to reverse this trend and increase the estate tax rate currently in place, topping out at 65 percent on estates over one billion dollars. In contrast, President Biden’s campaign estate tax plan would retain the 40 percent estate tax rate currently in place. Much is unknown, but one thing is clear; change is coming to the inheritable asset and gift tax classes.

The Joint Committee on Taxation (JCT) believes the Sanders bill can raise 430 billion dollars over ten years. Some of the bill’s main provisions that generate this revenue include:

  • Gift tax exemption reduction from 11.7 million dollars to 1 million dollars annually
  • Federal estate tax exemption reduction from 11.7 million dollars to 3.5 million dollars
  • Increase in gift and estate tax rates from 40 percent up to a top rate of 65 percent
  • Elimination of the short-term Grantor Retained Annuity Trust (GRAT) with no “grandfather” exemption for existing trusts
  • Grantor trust inclusion in a decedent’s estate. Many irrevocable trusts are grantor trusts for income tax purposes, although trust assets are excluded from the grantor’s estate for federal tax purposes. Enacting “For the 99.5% Act” into law will end the Grantor Trust type of estate planning. Additionally, without very careful planning, Irrevocable Life Insurance Trusts will no longer provide shelter for life insurance proceeds from estate taxation
  • Elimination of minority discounts on valuations for the transfers of non-business assets held in a business entity such as a partnership or limited liability company controlled by or majority-owned by members of the same family
  • Elimination of certain marketability discounts for passive assets not used in an active trade or business
  • The implementation of a federal 50-year rule against perpetuity will result in estate taxation at some point for Dynasty Trusts

The 99.5 Percent Act will provide beneficial valuation rules for small businesses and farms as well as land subject to qualified conservation easements. The Sanders-Gomez bill will give family farms extra protection by allowing lower assessed value on farmland up to three million dollars, exempting even more farms from tax.

There is overwhelming public support to raise taxes on Americas’ wealthiest. Still, some of these inheritance tax rate changes will affect the so-called “middle-class millionaires” who will need to restructure their current estate plans if the 99.5% Act is passed into law. The proposed tax rate of 45 percent on estates between 3.5 to 10 million dollars will affect family generational wealth more so than the top tax rates for mega multi-millionaires and billionaires.

If you have questions about this pending legislation and whether it could impact you, please don’t hesitate to reach out. We would be happy to discuss planning options with you to minimize your tax liability. Please contact our Ruston, LA office by calling us at (318) 255-1760 or schedule an appointment to discuss how we can help with your long-term care needs.

 

What Are the Effects of Stimulus Payments on Medicaid?

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The federal government has issued stimulus payments to most Americans as part of the coronavirus pandemic recovery effort. This money is paid to ease the pain of the Covid pandemic and to jump-start the economy.

The stimulus money should have arrived in the same way that Social Security payments or tax refunds are made, either direct-deposited into a bank account or mailed as a paper check. If the money has not arrived, or for guidance in general, consult the IRS website:

https://www.irs.gov/coronavirus/economic-impact-payment-information-center#more. Other options are to call 800-919-9835 or 800-829-1040, or you can visit your local Taxpayer Assistance Center.

Those who are receiving means-tied government assistance, like SSI, VA benefits, or Medicaid to pay for long-term care, need not worry that stimulus money will be counted against them for eligibility. As long as recipients spend the money within twelve months, the money will not push them over the maximum amount they are permitted before they are penalized.

Recipients may use the money to buy new clothing, cell phones or televisions, toiletries, snacks, dental treatment, or improved quality of medical supplies. They may buy an irrevocable funeral trust, to avoid future expense to family members.  The money might pay for updating estate-planning documents, or for consulting a geriatric care manager. (Some commentators believe that you could give the money away to family or charities. While this may be OK under federal law, it’s probably best not to take chances with how the states may interpret it. Spend the money, don’t donate it.)

Provided that the money is not spent on what could be called an asset or an investment – like, for example, rare coins or stocks or bonds – the money will not be counted against the asset limit for Medicaid eligibility. And, again, the money must be spent within twelve months. It must not be forgotten-about or left unnoticed in a bank account.

It also must not be misappropriated by nursing homes or assisted-living facilities. If this has happened to you or your loved one, inform the facility manager that the money must be refunded to the resident. Cite the law that carves out the payment from being counted toward federally assisted programs like Medicaid: 26 U.S.C. § 6409.  Or, show them a handout downloadable from the Congressional Research Service.

If the facility will not refund the money, contact your state’s attorney general. Then lodge a complaint with the Federal Trade Commission.

Recipients of assistance, like anyone else, are free to spend their stimulus money. The money is theirs. It is tax-free. It is intended to be spent, and it should be spent, in any way the recipient would like (subject to the conditions above).

This is one time when spending is unquestionably a good thing – for buyers and sellers.

If you have questions or would like to discuss your situation in a confidential setting, please don’t hesitate to reach out. Please contact our Ruston, LA office by calling us at (318) 255-1760 or schedule an appointment to discuss how we can help with your long-term care needs.

 

How Coronavirus Affects Your Health Care Directives

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Coronavirus has left little untouched, especially when it comes to our values and priorities- most specifically our health. The little COVID-19 clinical information relating to treatment options and likely outcomes based on personal health history should lead all of us to the same conclusion; hope for the best, be prepared for the worst. If you have a medical directive, it is imperative to review it and make additions in light of the coronavirus pandemic. If you do not have one, it is past time to create it. An advance medical directive makes life decisions for you when you are no longer capable. There are four types of medical directives, but all pertain to your medical treatment preferences and a surrogate decision-maker on your behalf to address concerns not already identified in the directive. This legal document is crucial to have if you become incapacitated due to a serious illness, like COVID-19, or an injury.

The most common types of advance directives are the durable power of attorney for health care (also known as the medical power of attorney) and the living will. The two less common directives are Physician Orders for Scope of Treatment (La. POST) and Do Not Resuscitate orders (DNR). Advance directive requirements and forms vary from state to state, so if you have moved, be sure your directive reflects the state in which you live. Before you create your advance directive, it is important to talk with your loved ones, health care provider and identify at least one person to act as your proxy or agent, in essence, your substitute decision-maker. Proactively having these conversations removes the stress placed on families in the difficult position of making the best decisions for their loved ones in the moment of a crisis. Associate professor at USC Leonard Davis School of Gerontology Dr. Susan Enguídanos says, “an advance directive is the best gift that a parent can give their children.”

Forbes’s interview with Dr. Enguídanos further reveals she witnesses two common misconceptions that stop people from filling out their advance directives. The first is the fear of losing control over decision making once a healthcare proxy or healthcare power of attorney is named. The reality is you will continue to make independent decisions until such a time when you are unable to speak for yourself. Only then will these named individuals step in to make sure your wishes are honored. The second is the fear of the finality of composing an advance directive. An advance health care directive, like a will, can be changed or modified at any time. For instance, many people add a COVID-19 addendum relating to the disease’s specific treatment options and then plan on deleting the addition upon receiving the vaccine.

If you have trouble broaching the topic with your children or conversely feel your aging parents should start the conversation about end of life health care wishes, COVID-19 is the catalyst to begin. The Conversation Project, a public engagement initiative to “help everyone talk about their wishes for care through the end of life, so those wishes can be understood and respected,” is a good place to begin when you don’t know how to start. Senior director of The Conversation Project Kate DeBartolo states, “We can’t control how this pandemic will play out, but we can control who will speak for us if we can’t speak for ourselves.”

Other resources, including an End of Life Decision Guide Toolkit in English and Spanish, are available online here through Compassion and Choices, a non-profit organization with the mission to “empower everyone to chart their end-of-life journey.” The website outlines steps you need to take to create your plan and also provides additional resource links. There is also specific information that addresses dying in the age of a pandemic because, to be sure, you are not alone in this endeavor. Once you know your vision regarding your healthcare directive, get together with an estate planning or elder law attorney, ensuring the advance directive’s documenting is legally correct. Then have the document on file with your medical doctor and be sure your loved ones have a copy or know where you keep one; you can even put one in the glove box of your car. You can then get along with your life, knowing you have done all you can for yourself and those you love.

We can help you prepare a healthcare directive or review one you already have. We welcome the opportunity speak with you! Please contact our Ruston, LA office by calling us at (318) 255-1760 or schedule an appointment to discuss how we can help.

Why it is Essential to Have a Will

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When you die, it is important to leave your loved ones your last will and testament, as it is a set of legal instructions communicating your wishes regarding your dependents and how to distribute your properties post-mortem. If you have people who you love and care for, then creating a will for your peace of mind and their protection is the right thing to do. Though crafting your will can make you face some uncomfortable topics, like mortality, it does not compare to the difficulty your loved ones will face trying to handle the logistics problems in the absence of your will.

Curiously, while many people have experienced the death of their parent and the fallout that occurs if the parent had no will, the number of Americans making wills is dropping. Recently, a study by Caring.com identifies that in 2020, 25 percent fewer people have a will than in 2017. Surprisingly, older and middle-aged adults make up a substantial part of this group even though 30 percent of the people in the study believe you should have a will by the age of 35.

Many Americans feel they do not have enough assets to deem a will necessary, but unless you are destitute, you probably own a lot more than you think. Property ownership includes things like an individual as well as jointly owned bank accounts, stocks and bonds, retirement accounts, real estate, jewelry, vehicles, your online digital footprint, and even pets, are all part of your estate. You do not have to be wealthy, or even close to it, to benefit from having a will. Your will also protects your family and loved ones at a time when their focus should be on grieving your loss, not administering to legal issues because you did not have a will.

Wills are subject to state law. When you die without a will, it is known as dying intestate, and the determination of the distribution of your assets becomes the responsibility of a probate court. The probate court appoints an administrator who will act as your executor, identifying legal claims against your estate, paying off outstanding debts, and locating your legal heirs.

 

If you have an existing will we would be happy to review it to make sure it still reflects your wishes. If you don’t have a will we would be happy to help you create one that makes sense for your situation. Taking these steps now will bring you peace of mind, save your estate money, and protect your family and loved ones. Please contact our Ruston, LA office by calling us at (318) 255-1760 or schedule an appointment to discuss how we can help with your long-term care needs.

Opportunities for Wartime Veterans

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In the past, the Department of Veterans Affairs (VA) released eligibility rules for the VA pension program. VA pension, a tax-free monthly cash benefit, is available to wartime Veterans who served at least 90 days of active duty service with 1 day during a declared period of war. Surviving spouses of wartime Veterans may also qualify for a monthly cash payment. Veterans or surviving spouses who need care on a regular basis are eligible for a higher payment (often referred to as “Aid and Attendance,” payments of which can be over $2,000 per month, depending on marital status and care needs.

With any pension claim, there are financial and medical requirements. The medical requirements are straightforward – a Veteran or surviving spouse must be 65 or older or permanently disabled to receive the lowest pension amount. If the Veteran or surviving spouse is blind or nearly so, a patient in a nursing home, or requires assistance with activities of daily living on a regular basis as prescribed by a physician then it is possible to qualify for the highest amount – pension with an aid and attendance allowance. The money paid by the VA goes straight to the Veteran or surviving spouse to help pay for care. The VA doesn’t choose who provides the care – the Veteran or surviving spouse does. And often times, it’s a family member who can be paid.

The financial requirements are a little more complex. Prior to October 18, 2018, there was no clear rule about how much a wartime Veteran or surviving spouse could have before qualifying for VA pension. That is no longer the case! Now, a wartime Veteran or a surviving spouse can have about $130,000 (increased annually), a home, car, and other personal effects and still qualify for a monthly cash payment.  Even if you have more than that there are legal ways to reduce total assets in order to qualify. However, if you give money away after October 18, 2018, you may have to wait months or years to qualify, so make sure you have solid legal advice before doing so.

There are also income limitations, however income can be reduced by recurring out-of-pocket medical expenses. There are certain requirements that must be met before a medical expense can be deducted from income, but most expenses directly related to care will qualify.

The VA pension program can be a huge financial benefit to wartime Veterans or surviving spouses of wartime Veterans. We help families determine whether a claim is possible, and advise how a veteran can qualify. Give us a call today so we can start helping you or a loved one. Please contact our Ruston, LA office by calling us at (318) 255-1760 or schedule an appointment to discuss how we can help with your long-term care needs.

 

Know your Parents’ and In-Laws’ Aging Strategies Before a Medical Crisis Occurs

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Today, it is not uncommon for many adult children in the US live far away from their parents. Managing aging parents or in-law medical events can be a serious challenge without proper preparation and understanding of what your parents’ strategy may or may not be, no matter where you live. Do you know what legal documentation your parents have in place regarding their medical care? Do they have advance directives that can help guide your medical decision-making process? Do you and your spouse openly discuss the situations of each other’s parents?

Medical advancements facilitate aging Americans’ longevity even with comorbidities such as high blood pressure, diabetes, kidney disease, atrial fibrillation, and other health issues. Hospitals can typically fix non-life-threatening conditions easily enough, but what happens when a parent is released to return home? Are you prepared? Is there a plan? Many adult children tend to practice avoidance, denial, and wishful thinking when thinking about their aging parents’ behalf in a potential medical crisis. It is advisable to organize and prepare for the changes that inevitably come to your parents’ health.

More than ever, seniors are choosing to live independently and with autonomy about their life decisions. Even if your parents are in a well-run continuing care retirement community, there will come a day when their health will force a change in their lifestyle and living arrangements. Many parents will offer resistance to “help,” which they may consider more as interference. Whether they believe they are being a burden to you or decline a geriatric care manager’s services due to “cost” concerns, most older people do not want others interfering in their private affairs.

The goal is to find a way to help while still affording your parents the dignity and respect they want and deserve. To achieve a comprehensive plan on your parents’ behalf, travel to them for an honest discussion. If this is not possible due to COVID-19 restrictions, then virtual meetings are best, followed by phone calls, as hearing loss typically makes communicating useful information difficult. Even on a screen, a face-to-face connection allows a parent to read lips, which is a typical strategy for older people experiencing hearing loss.

Review what legal paperwork your parents have and make sure it is in order. Many documents have a signature from many years ago, and things may have changed. If there is no designation of a medical power of attorney, be sure there is a document naming a “personal representative” to address restrictions outlined in the Health Insurance Portability and Accountability Act of 1996 (HIPAA). This document allows the waiving of privacy concerns that permits access to a parent’s medical information while the parent is in the hospital.

Create an up-to-date list of all your parents’ doctors. The list should include medical contact information and all medicines (prescription or otherwise) that the parents take. If their general physician is not a geriatric specialist, it will help to find them one. Post-hospital fog and newly prescribed medications from an adverse health event can create confusion in an older parent. A geriatric doctor will know to look for and resolve these types of issues. Ask about the parameters for health care intervention, such as dialysis, post-hospital during the time of COVID-19?

Explain to your parents that being released from a hospital for a non-life-threatening, yet serious health episode is often followed by the need for a care manager, at-home nursing care, or at least companion care. This additional care should not fall to a spouse if the parents live together. A spouse has their unique role to fill as well as personal health challenges with which to contend. Heaping an increased responsibility for spousal health care upon them may be damaging to their health.

Before an unforeseen medical crisis can occur, identify several qualified agencies in your parents’ hometown. Review each agency and candidate carefully. It is easier to integrate a suitable candidate at the outset than having the chaos of retaining and releasing multiple workers. Remember that a candidate who works for one parent may not be another parent’s preference in the future. Maintain a strong relationship with the agency provider. They are an essential resource, and you will probably need them in the future.

Take the time to learn the specifics of your parents’ healthcare and living arrangements. Coordinating your plan of response is contingent upon whether your parents live independently, in assisted living, or a retirement community. Wherever it is your parents live, their first desire will be to go home after an unexpected hospitalization. The desire to return home is a universal truth. Knowing the agencies that can quickly provide the type of care your parent needs in their home setting will go a long way to a successful transition. The road to recovery may require a few weeks of nurse visits, physical or occupational therapists, or simply companionship. The faster you can meet the need, the easier it will be on your parent.

If a full recovery is not possible, what will be your plan to address the new status of their normal? How much more medical oversight and assistance will they require? Know that in these instances, a parent can quickly spend through Medicare allotments afforded for temporary care. If they do not have long-term care, and many aging Americans do not, you will have to find ways to help them receive the care that they require.

If there are multiple adult children, is there an expectation that all siblings share information and work on the problems at hand, or is one in charge? Is this designation formally documented? Managing sibling relationships is key to avoiding family conflict. Also, understand what the parents’ financial arrangements. Most parents will ask about the cost of any new healthcare service being arranged and decline using it. It is hard for a parent to spend down the money they worked their entire life to amass.

Knowing your parents’ aging strategies will not address every issue you might encounter because they may not have all the necessary decisions and documents in order. You can only work within the authority they choose to provide. If possible, speak to an elder law attorney specialist about the gaps in their planning so you might better guide your parents. Having an honest and sincere dialogue about your aging parents’ choices regarding an unforeseen hospitalization and its subsequent healthcare fallout can help you make solid, informed decisions on their behalf.

Please contact our Ruston, LA office by calling us at (318) 255-1760 or schedule an appointment to discuss how we can help. We welcome the opportunity to speak to you about your estate planning and long-term care planning needs.

 

Understanding the Succession (Probate) Process

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In Louisiana a succession (sometimes called “probate”) is the legal process for authenticating a deceased person’s will, reviewing their assets, paying their outstanding debts and taxes, and distributing what remains to their inheritors. After an asset-holder dies, the court will appoint a valid will’s executor to administer the probate process. In the absence of a will, the court may appoint an estate administrator to handle probate. Probate or succession law varies by state, but there are steps in the process that are common.

First, an executor is appointed and is normally the person named in the will. It is the executor’s responsibility to initiate the probate process. An executor can be a family member, a financial advisor, or any person the testator deemed capable of administering their estate. The executor files the will with the probate court, which initiates the probate process. A court officially appoints the executor as named in the will, giving the executor legal authority to act on the testator’s behalf.

The executor’s function is to locate and oversee all of the estate’s assets and to determine each asset’s value. The majority of the deceased’s assets are subject to the probate court, where the deceased lived at the time of their death. Real estate is an exception, and probate may extend to any county where the real estate is located.

The executor will pay any taxes and debts owed by the deceased from the estate. Creditors are given a limited time to make claims against the estate for any money owed to them. If the executor rejects the claim, the creditor may take them to court, where a probate judge will determine the debt’s validity. The executor is responsible for filing the deceased’s final, personal income tax returns. The executor’s last task, via court authorization, is to distribute what remains of the estate to the beneficiaries.

Some form of a succession is generally required to transfer title any asset or account. However, if there is no will, depending on the size of the estate, a court proceeding may be unnecessary and allow the heirs to transfer the title using a specially worded affidavit.

If a person dies without a will, they are said to have died intestate. An estate can also be deemed intestate if the will presented to the court is found to be invalid. The decedent’s assets of an intestate estate follow a similar probate process, beginning with the appointment of an administrator  if necessary. An administrator functions like an executor, receiving all legal claims against the estate, paying outstanding debts, and the decedent’s taxes.

Administrators must also seek out legal heirs, including surviving spouses, parents, and children. The probate court will determine the distribution of the estate among its legal heirs. In the absence of any family or other heirs, remaining assets go to the state.

The more complex or contested an estate is, the longer the succession can take to finalize. The longer the process, the higher the cost.  Although there are exceptions that can be made, the list of the estate’s assets is generally a matter of public record, so if you want to keep your estate private, it is best to pursue other estate planning options such as a trust.

As estate planning attorneys, we can help you determine what planning tools are best for you. Contact us to schedule time for a private conversation to further determine how we can help. Please contact our Ruston, LA office by calling us at (318) 255-1760 or schedule an appointment to discuss how we can help.

 

Many Memories Are Tied To Personal Property: Do You Have a Plan?

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Let’s suppose that your estate plan is all set. It will be taking care of your home, savings, and investments, making sure that your family will get those valuable estate items fairly and efficiently. Your plan will also protect your legacy from your children’s potential divorces or bankruptcies. What could go wrong?

Plenty, unfortunately, when it comes to personal possessions. Personal items are often not specified in your will or trust. So, who gets those after you pass may not end up with the person you want. Spend some time thinking about how you want your possessions to be shared with your family when you’re gone. It will be time well spent.

Your family’s memories of you can be connected, through your things, in deeply emotional ways that may have nothing to do with the actual cash value of the items. A bowl in which you served breakfast to a now grown-up child may have irreplaceable sentimental meaning. Likewise, a favorite piece of costume jewelry. A well-remembered sweater.

Or you may have items that are really valuable. If you don’t plan to allocate that value fairly amongst family members, these might turn into flashpoints that create lasting disputes. Wrangles can be avoided about “promises” that you may or may not have made. You should also protect your things from going missing toward the end of your life or after you pass.

Take care to document clearly where you want your items to go, and if they’re important, update or amend your will so that your desires are enforceable. Here are some suggestions to make that more possible.

Assess which of your possessions have actual cash value. If you own items like an Impressionist painting or a vintage diamond ring, get them appraised. Then consider how you might apportion the value so family members will be treated equally. It might make sense to sell such items and divide the proceeds. Or, a family member might wish to buy the item from your estate.

Group your possessions into clusters to make the gift process more efficient. Items that match should be kept together. The dining room furniture. The good china. The bedroom set.

Communicate with your family. Take photos of your possessions and think about how to offer them to your family. You can circulate the photos to one person at a time and give them the opportunity to choose what they would like. Then keep a list, and the photos with the agreed designations to update or amend your will.

Your estate-planning papers are only a piece of the puzzle. How you leave tangible pieces of family history really matters too. It’s for the same reason that we might treasure a faded rose from a wedding bouquet. Take care in passing along your personal things to your family and friends. Your family and friends will be more likely to remember you with warmth and respect.

If you need help with your planning needs, we would be happy to help. Please contact our Ruston, LA office by calling us at (318) 255-1760 or schedule an appointment to discuss how we can help.

 

How to Write a Letter of Instruction for Your Louisiana Estate Plan

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Whether you are starting from scratch or have an estate plan in place a letter of instruction (LOI) is an important part of any comprehensive plan. A letter of instruction can help your loved ones manage important information about you. A LOI conveys your desires, includes practical information about where to find various items referenced in your plan, and it can provide advice to help those you designate in managing your affairs.

Even with a new or updated estate plan, there exists a lot of information that your heirs need to know that doesn’t necessarily fit into the format of a will, trust, or other estate plan components. In the absence of this information, it is easy for those in charge to miss important items and alternatively become overwhelmed, sifting through all of the documents you left behind. All LOI’s are as different as the persons who wrote them; however, there are some standard data that every LOI should include:

  • A current list of people and their contact information to inform of your death
  • A list of beneficiaries of your estate plan
  • The locations of important documents like your will, trust, financial statements, insurance policies, deeds, and birth certificate
  • A comprehensive list of assets such as bank accounts, investment accounts, real estate holdings, insurance policies, and military benefits if applicable
  • PINs, usernames, and passwords for debit cards and online accounts
  • Usernames and passwords for social media accounts, music or information accounts
  • Keys and combinations to digital safes, strong boxes, and safety deposit boxes and their locations
  • A list of credit card accounts and any other debts
  • A list of organizations in which you belong or are a paying member such as professional organizations, boards, country or golf clubs, social or political clubs, and more
  • A current list of contact information for lawyers, brokers, tax preparers, financial planners, and insurance agents
  • Instructions for the distribution of personal items with sentimental value
  • Instructions for a memorial or funeral service
  • A personal message to family members

A note about your digital footprint: your digital world often includes music libraries, storefronts, YouTube channels, influencer social media accounts, etc. When most of us create these accounts, we blithely accepted the End User License Agreement (EULA) without much thought about when we are no longer around to manage its content and activity. A EULA designates the rights and restrictions that apply when using the software known as terms of service (TOS). Naming someone capable of managing your digital-assets and their activity is important. Most of your online accounts are not subject to typical estates planning devices like trusts and wills because they are not technically your property. Since most TOS are non-transferable, you will be unable to transfer your online accounts’ ownership legally. However, you can still make a plan for how they are handled when you die.

Once you write your letter, put it somewhere easily accessible and tell your family about it. If you do not want anyone to read the LOI until your death, seal it in an envelope. You should review your letter once a year to be sure it reflects your most current wishes and information. Because your heirs read your letter of intent upon your death, it can be difficult for you to write and have any degree of satisfaction. Final words and conveyances are sobering.

We can help you compose such a letter (as well as other estate planning documents), making sure that it compliments and does not contradict your estate plan. Remember that your LOI can bring real peace and be a source of comfort to your grieving family members. It allows them time to contemplate and connect with others to celebrate you rather than sort through documents searching for important papers. Your LOI can also alleviate potential family conflicts and stress because you specifically address personal items’ distribution. Your goal should be to ease the burden for those in charge and gain a sense of peace that you have done all you can to allow your loved ones to focus on reflecting on your life.

When you are ready to take the next step, we will be here to help. Please contact our Ruston, LA office by calling us at (318) 255-1760 or schedule an appointment to discuss how we can help with your estate planning needs.

How to Discuss Finances and Estate Planning with Your Aging Loved Ones

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It is essential that as your parents’ age, you have conversations with them about their finances. To broach the topic, you might bring up current events like the coronavirus pandemic, its effect on economic conditions, and how it relates to the security of their financial future. The conversation should come from a calming place of love and concern. Speak to them respectfully about how the coronavirus pandemic has you thinking about the importance of their planning and preparedness.

Once you begin the conversation, move away from the pandemic as your introductory technique as you do not want to create a sense of panic or fear.  Instead, delve into legal and financial reviews, processes, and parameters. US News reports that your parents’ financial analysis should include essential legal documents, financial accounts, and associated vital contacts, long-term care decisions, and claims. If you live apart, lay the groundwork to help them with their finances remotely.

It is generally most comfortable to begin your conversation with legal documents that hopefully your parents already have in place like a will, trust, living will, and a health care proxy. If your parents do not have these documents, they must retain an attorney and create the ones that best suit their needs. If you need to help your parents manage their finances, you must have a durable power of attorney. A durable power of attorney allows you to make financial decisions for your parents in the event they become incapacitated. This is an essential estate planning document. In the absence of a durable power of attorney, the courts become involved, and solving health or financial issues becomes a lengthy, expensive process over which you have little control. If your parents already have their legal documents drawn up, find out where they keep them and review them carefully. If any documents need to be amended, suggest that your parents meet with an attorney to make the relevant changes. Be sure their documents reflect the state law in which they reside.

Once you have assessed your parents’ legal documents, it is time for some financial discovery. Even if your parents do not currently need help, having an overview of their finances and a durable power of attorney to help them in the future is crucial to their aging success. Begin by listing all of their accounts, account numbers, usernames, and passwords as well as employee contact names. Include insurance policies, the agent’s name, and where the policy is, as well as how they pay their premiums. Include any online medical accounts or list their doctors’ names and office numbers. The idea is to create a comprehensive list of all of these accounts. Gather your parents’ Medicare and Social Security numbers and their drivers’ license numbers. Know where they keep this information so that in the future you will know where to look. Also, learn about any online bill paying or automated, re-occurring activity. These usually include monthly bills like electricity, natural gas, water, etc. but may also include quarterly payments or annual subscriptions.

If your parents still live in their long-time home, discuss if it is viable that they live out their days there, or if downsizing to a retirement community or moving closer to where you live appeals to them. Help them come to a decision that is best for their set of circumstances.  If they do not have long-term care insurance or some other mechanism to aid them in times of need, talk about the topic, and try to come up with a solution. If they do have long-term care, be sure you have a copy of the policy, contact information, and the name of the insurer and agent. Review the requirements for receiving benefits so you can help them when they need to file a claim as most policies have a waiting period of 30 to 90 days before benefits begin. Know what to expect.

Digital technology has made oversight of parents and their finances easier than ever as long as you have a durable power of attorney and access to their account information. If they do not yet pay their bills online, or use auto payment, help them set up this option for their monthly bills. Remind them you will provide oversight to ensure proper billing. Offer to help them with their annual tax filings. Your help relieves some pressure on them and provides you with information about the goings-on in your parents’ accounts. For your parents’ peace of mind, you can establish a monthly video chat to let them know their bill payments are progressing normally. Your involvement will allow you to identify any abnormalities in account activity, which may indicate scam attempts.

Having these financial and planning conversations with your parents today can help them live more securely and with less stress as they age. Most parents will try to avoid these discussions with their children because they may not be adequately prepared for what can lie ahead. Conversations that focus on proper legal documents and gathering financial account information will give you the data you need to help protect your parents.

We would be happy to help you and your parents with critical planning documents. We are open and taking new clients, and we hope to talk with you soon about your particular needs. Please contact our Ruston, LA office by calling us at (318) 255-1760 or schedule an appointment to discuss how we can help with your estate planning goals.