A Senior’s Guide to Estate Planning

Happy senior couple meets with an estate planning attorney.Most older adults acknowledge that estate planning is essential. Yet, nearly half of Americans age 55 or older do not have a will, and even fewer have designated powers of attorney, a living will, or health care directives.

These legal documents help guide your representatives to provide the end-of-life wishes you seek. Estate planning also reduces the burden your loved ones face and lessens the potential for conflict among your family members after you are gone.

Whether you own a little or a great deal, every senior should have an estate plan. Your estate comprises your home, real estate, vehicles, businesses, bank accounts, life insurance, personal possessions, and any debt you may owe. The goals of your estate plan include:

  • Establishing who will receive your assets upon your death
  • Setting up a durable power of attorney
  • Selecting a trusted representative to make health care decisions on your behalf if you become unable to manage your own affairs due to illness or injury
  • Creating a will and trust
  • Minimizing estate taxes
  • Appointing your estate executor or representative
  • Providing peace of mind to you and your loved ones

Four basic elements of an estate plan can help you achieve these goals.

Creating Your Will

This legal document, called a testamentary will, transfers your estate, after you die, to the individuals or charities you name. Naming your executor  is another function of your will. This individual will ensure your wishes are carried out. Many older adults choose their most responsible adult child for this role.

Advise the person you choose to manage their expectations and advise your family of what to expect in your will. This way, you can address questions they may have and stave off family confrontations after you are gone.

Your will needs to include the following:

  • your named executor,
  • a list of individuals or charities you wish to receive your assets, and
  • a list of significant assets to leave to heirs

Be aware that if you have substantial assets in probate court in a succession, the process can be costly and time consuming.  (Succession (sometimes called a probate proceeding in states outside Louisiana) is the legal proceeding where the court oversees the distribution of your assets.) This can add stress to your executor’s role, as well as increase the time it takes for your family members to receive their inheritance.

You may wish to establish a trust; you can do so by working with an elder law attorney or estate planning attorney. Creating a trust can minimize taxes, restrict asset distribution, and also bypass probate / succession proceedings. These trusts are usually a revocable or irrevocable living trust, or special needs trusts. Your attorney can identify the trust type that best meets your needs.

Your Living Will and Durable Health Care Power of Attorney

A living will (or Advanced Medical Directive) outlines your choices regarding end-of-life treatments and will come into play while you are still alive but unable to communicate health care decisions. Similarly, a health care power of attorney gives authority to another person to make medical decisions for you. The person you name in your  medical power of attorney is typically a caregiver or family member who inspires the utmost trust.

Here are some general issues to consider when creating a living will:

  • Medications you are willing or unwilling to have administered to you
  • Permission for a feeding tube if you are unable to eat
  • Permission to be on life support and, if so, for how long
  • Willingness to accept palliative care at the end of life
  • Having a do-not-resuscitate order or DNR
  • Your decision about being an organ donor

If you have both documents, a living will usually trumps your health care power of attorney. Many older adults prefer to forgo a living will. They instead opt to rely on their health care proxy to make medical decisions on their behalf in the event that they become unable to communicate their wishes for treatment and life-saving measures. Whatever you choose, it is important to inform your loved ones of your health care preferences.

Durable Financial Power of Attorney

Much like a health care power of attorney, a financial power of attorney becomes active when you can no longer make financial decisions. The person you designate will manage your finances on your behalf. To alleviate excessive burden, consider appointing a different individual than your health care power of attorney. However, note that it is legally permissible to name the same person.

Your financial power of attorney should be highly trustworthy and financially stable. When selecting an individual in your life to fulfill this role, you may consider someone who not only lives near you, but is also willing and capable of serving. The individual must be financially responsible, trustworthy, and able to act in your best interests. Finally, this person should be proactive and assertive in protecting your finances.

While these documents represent the basics of an estate plan, your situation may require far more detail and nuanced expertise that an elder law attorney can provide if they do not also offer estate planning. Begin with a checklist including:

  • A list of your assets and debts
  • Assemble important supporting documents
  • Choose candidates for the executor (personal representative) and powers of attorney
  • Draft an outline of estate planning documents as listed above
  • Talk with your family about your goals and wishes

Connect With an Estate Planning Attorney

When you accomplish these tasks, an experienced estate planning attorney or elder law attorney can review your efforts and put your plan into legal action. You will save time and money by being organized and having a basic understanding the estate planning process before meeting with an attorney.

Once all of your estate planning documents are complete, you’ll have a sense of peace knowing you have a solid plan that best protects you and your loved ones. To get your estate plan going, contact Estate Planning and Elder Law Attorney Add Goff today at 318-255-1760 or info@GoffandGoffAttorneys.com. 

Having a Will vs. Not Having a Will

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.

Will Writing for Blended Families

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.

The Different Types of Trusts

The Different Types of Trusts

It may seem that trusts only belong to wealthy people, but they are common and useful tools for estate planning of all sizes. They are used to manage and protect assets, control the distribution to beneficiaries, and continue family legacies. There are different types of trusts.

Types of Trusts

There are many types of trusts, but they all establish a financial arrangement between three parties: the settlor(s), the trustee(s), and the beneficiary(ies). The person creating the trust is known as the settlor. (In other states, the creator of the trust can be referred to as the trustor, grantor, or trustmaker.) Trusts can be created by more than one person or entity. The trustee manages the trust and disperses income or principal from the trust according to specific terms. The trust is for the benefit of one or more beneficiaries, which can be people or entities, such as charities.

Benefits of Trusts

Trusts provide many benefits. One of the key benefits is transferring assets from the owner to the trust fund, so assets do not have to go through a probate court before reaching the beneficiary. This allows the beneficiary to receive the assets faster and generally privately. Probate proceedings can last for months, unnecessarily delaying the dispersal of assets. Since court records can be viewed by the public, in many circumstances assets become public knowledge.

A person can establish a trust that they benefit from during their lifetime. Trusts can also be used to hold and disperse assets to beneficiaries who are minors, disabled, or otherwise unable to manage the assets. Some trusts are used to remove countable assets from a person who is planning to apply for Medicaid benefits. Assets intended for heirs may prevent them from qualifying for Medicaid coverage. Trusts created for this purpose are usually established at least five years before the settlor plans to apply for Medicaid.

Since estate taxes and gift taxes can eat into the number of assets a beneficiary receives, trusts provide a way to avoid or lessen these taxes. Trusts can protect assets from creditors, legal claims, and family disputes regarding how your assets should be dispersed. You may have additional reasons to create a trust for your assets.

Types of Trusts

There are two types of trusts:  living and testamentary. Trusts may be revocable or irrevocable. They can be funded during or after the settlor’s life, depending on the purpose of the trust. These common trusts are described as follows:

Living Trust

A living trust  or inter vivos trust  is set up while the settlor is still alive. The assets that are held in the living trust are typically available to the settlor during his or her lifetime. This type of trust is helpful if the settlor wants to have access to the assets but wants to give clear direction on how they will be distributed after death.

Testamentary Trust

A testamentary trust is a trust that is contained within an individual’s last will and testament. It is generally set up to benefit the settlor’ descendants. It goes into effect when the will is probated by a probate court judge.

Revocable Trust

A revocable trust is created while the settlor is still alive and wishes to continue to benefit from the assets that the trust will hold. Often the settlor, trustee, and beneficiary are the same person while that person is still alive. After the settlor dies, a successor trustee assumes management of the trust for the benefit of the beneficiaries designated in the trust. The settlor can change or terminate a revocable trust while her or she is still alive.

Irrevocable Trust

An irrevocable trust cannot be changed or terminated during the settlor’s lifetime. Because the assets held in an irrevocable trust are off limits to the settlor, this type of trust helps protect assets from creditors and taxes. It is often used when planning for Medicaid or government benefits. It may also be used to limit access to minors and adults with special needs to distribute funds at specific times or over their lifespan.

Trusts help individuals and businesses protect and direct their assets to beneficiaries while keeping those assets out of probate court. An experienced estate planning attorney can help you create the trust, or trusts, that will best suit your family’s needs and financial goals.

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

Important Facts About Living Wills

Important Facts About Living Wills

If you became seriously ill or injured and were unable to make decisions with important facts about living wills for your healthcare, what would happen? You don’t have to be old to become incapacitated. A living will, a component of an advance health care directive can outline your wishes so that your loved ones can make informed decisions about your care in an emergency.

Your living will doesn’t passes assets and property to beneficiaries like a standard will. Instead, it advises your doctors and family about how you want to receive medical care and may limit certain treatments. Your living will can bring your family comfort in times of uncertainty, knowing they understand your healthcare wishes. Creating your living will can bring peace of mind knowing there is a plan for medical emergencies. There are ten important facts about living wills.

1.    Rules for Living Wills Vary by State

Depending on your residential state, this document may be referred to as an advance directive. Each state has different requirements and procedures for a living will’s creation and execution.

If you spend significant amounts of time in another state, ensure your living will is valid in the second state. Most states (but not all) will accept a living will from another state if it is valid in the state where it was created. Check with your attorney about your state’s rules. If you spend significant time out of the country, you want to know the country’s laws to create a valid living will while there.

2.    Your Living Will is a Binding Legal Document

Do not rely on an informally written document or verbal consent as your living will. Before you become incapacitated, you must document your healthcare wishes in compliance with state law and legally address instances of incapacitation, permanent unconsciousness, or a terminally ill diagnosis.

3.    Medical Doctors Determine the Incidence of Incapacitation

Whether terminally ill, permanently unconscious, unable to communicate, or incapable of making rational decisions due to injury, a medical doctor’s assessment, and usually a second opinion, is the determining factor putting your living will into effect. If you see your doctor regularly, discuss your wishes and living will ahead of time to see if they will comply with your instructions or if there is something to talk through.

4.    You Can Change Your Living Will

You can revoke, revise, or create a new living will at any time. However, simply destroying the old copy complicates the connection it may have to other estate planning documents or files. Your attorney can help you fully and formally revoke or modify your living will correctly.

5.    There is a Difference Between an Advance Directive and a Living Will

There are numerous advance directive document types as it is a broad category of legal instructions regarding your healthcare. The more familiar include a medical power of attorney, living will, and do not resuscitate order (DNR). A living will is a subset of the advance directive specifically expressing medical treatment preferences in the case of terminal illness or incapacitation.

6.    Younger People Need a Living Will

Adults of all ages can benefit from implementing this legal document. Seemingly healthy young individuals can become unexpectedly ill or injured. Procrastinating about creating your living will until you get “old” could leave you in an unfortunate situation after an accident or serious illness.

A living will does more than convey your desire to remove yourself from life support under certain conditions. It can specify treatment and care preferences, including medical techniques and devices you accept (or do not), pain management, and clergy visitation.

7.    You May Appoint a Healthcare Agent

You may choose a healthcare agent. The agent may not be your doctor or medical team to avoid conflict of interest. Nor can they own, manage, or work for the facility where you receive treatment. Often, a family member who you trust with the significant responsibility of handling stressful emergencies will accept this role — review your emergency, critical, and end-of-life care preferences with them.

8.    Have a Healthcare Power of Attorney

This power provides an individual the right to make medical decisions on your behalf if you cannot do so. Appointing a healthcare power of attorney is not the same as your living will, but it is part of the estate planning process.

9.    Will the Medical Staff and My Family Comply with My Living Will?

Ultimately your medical doctor is responsible for your course of treatment. They technically do not have to follow your living will, yet most will. However, in an emergency, your doctor’s choice may override your living will if they feel an ethical obligation to the Hippocratic oath. Talking to your doctor about your choices in advance and sharing access to your medical history with family members using a HIPAA form are your best courses of action to feel secure that everyone will comply with your wishes.

Having a living will is essential to a complete estate plan. Creating this document with your estate planning attorney can bring you and your family peace of mind.

For assistance, please contact our Ruston, LA office by calling us at (318) 255-1760.

Preventing and Ending Estate Battles Between Siblings

Preventing Estate Battles Between Siblings

There is no getting around preventing and ending estate battles between siblings in most families. With the passing of a parent, old rivalries can become more pronounced depending on how your family members interact. Adult children who are emotionally upset and in the unfamiliar territory of an inheritance process can invent new problems or magnify existing ones.

Protecting Family Relationships

Rivalry issues often present in heartbreaking ways, damaging family relationships and altering the parent’s original intent for estate distribution. It can potentially cost family members significant time and money in litigation. The death of a parent is a difficult test for siblings, particularly in cases where assets are shared unequally.

It is possible to avoid many inheritance disputes with some forethought if a parent implements a few key steps before and after death with sound estate planning. Comprehensive estate planning includes a will and trust with a non-sibling trustee or executor and the chance for equitable gift-giving during the parent’s lifetime, providing the opportunity to elaborate on or defend their decisions. Non-family fiduciaries who can act in the estate distribution include an attorney, CPA, or other financial institution that provides this service. Professional services may be well worth implementing as a strategy to diffuse issues between contentious family members.

Gifting to Children Before Death

One technique for a parent to quell potential issues is to legally gift up to $16,000 annually to each child without owing taxes on those gifts and spending down the estate’s cash assets, so there is less to argue over. You can’t argue about assets that have already been gifted. Every parent has the right to do whatever they choose with their money during their lifetime.

Using Neutral Parties to Distribute Assets after Death

After a parent dies, a mediator is particularly useful if one of the family’s adult children is the executor or trustee of the estate. The mediator remains neutral and can counsel all siblings about the estate’s distribution process while helping to keep emotions on an even keel. A mediator can also help executors or trustees formulate a plan to liquidate estate assets and split the proceeds among heirs, sometimes using the services of an independent fiduciary for assistance.

Income Disparity Among Siblings

Sometimes sibling economic disparity creates different perspectives about what is fair. Suppose a financially stable adult child prefers to hold onto an inheritable asset for a long-term payout. While another heir in greater need requires an immediate return. A mediator may aid in negotiating the sale of that interest to the more financially stable heir while cashing out the other sibling, keeping the deal within the family.

Situations that Can Lead to Contesting the Will

New spouses and step-children, disabled and dependent siblings who require care, and estranged children are very likely to mount challenges to the status quo of inheritance. If they feel they are being unfairly compensated. Legal actions citing undue influence for personal gain are not uncommon but can be difficult and expensive to prove. It is legally permissible for a parent to leave a child out of their will. To avoid legal challenges by the disinherited (and likely disgruntled) child, the parent should discuss their reasons with the child upfront or explain the decisions they made in their will.

Letters of Intent

A handwritten letter of instruction for gifting family keepsakes can outline who gets what. And, although it is not legally binding, can be helpful in most circumstances. Without written guidance, how siblings choose to distribute heirlooms among themselves is left to chance. Try to establish an agreeable framework among siblings in advance. Once someone digs their heels in about a certain keepsake, they can quickly lose objectivity. While it doesn’t make sense, there are instances where sibling litigants spend more money trying to win a family heirloom in court than the object itself is worth. A systematic approach agreed to upfront can circumvent these emotional responses to family keepsakes.

There are as many potential problems to resolve in estate distribution as there are personalities. However, parents usually know which children are likely to fight over their inheritance. Action that prevents conflicts among heirs while a parent is alive is the most direct way to solve the problem. A parent can also make changes to their plans as financial circumstances and feelings among siblings change.

Reviewing and revising your estate plan to account for marriages, deaths, divorces, and births shows that heirs receive due consideration. Decreasing the potential for conflict. An estate planning attorney can advise you about gift-giving while you are alive. Additionally, create an estate plan that reduces the chances of sibling rivalry and infighting after your death. Proactive planning and honest discussions with your lawyer can help craft a plan that provides the best opportunity for peaceful outcomes among siblings.

For assistance, please contact our Ruston, LA office by calling us at (318) 255-1760.

The Great Transfer of Generational Wealth

The Great Transfer of Generational Wealth

Transfer of Generational Wealth

This financial time is unprecedented in human history. Baby boomers preparing to pass on their legacies through estate plans put America at the brink of the largest ever transfer of wealth. Over the next 25 years, projections estimate 68.4 trillion dollars will be in motion to create an unprecedented transfer of generational wealth.

The post-WWII economic environment allowed the growth of assets during decades of economic prosperity. Rising real estate values, stock markets, and favorable tax policies contributed to the baby boomers’ ability to aggregate significant wealth. These 45 million households will see their generational wealth pass to Generation X and millennial inheritors, dramatically shifting the landscape of American wealth management.

Different Financial Experiences

Baby boomers collectively hold thirty to forty trillion in assets, controlling roughly seventy percent of all disposable income. While families of already established generational wealth may have plans in place, much of the upcoming wealth transfer hails from self-made men and women who have avoided discussing estate plans and family fortunes with their heirs. Predictions are that Gen X will inherit about 57 percent of these assets, with millennials inheriting the rest. Yet the mechanisms for inheritance through sound estate planning are missing in many of these family systems.

Wealth management groups and estate planning attorneys posit that inheritors will needlessly lose much of their wealth due to parents who failed to develop comprehensive end-of-life plans. On the other side of the equation, younger generation inheritors must ramp up their knowledge about asset management to grow their inheritance for future generations.

Generation X and millennials have vastly different financial experiences and attitudes towards money than their parents. On average, while millennials are the highest-earning generation, they have significantly less money, controlling just 4.6 percent of US wealth in 2021. They have lower levels of financial literacy, are less likely to own a home, and have less interest in investing in the stock market. They also tend to have higher debt after experiencing two recessions before the age of 40, cost of living increases that outpaced wages, and increasing college tuition and vehicle loans.

Changing the Landscape of Financial Planning

These younger generations will also change the landscape of financial planning and management. Financial firms will have to bridge the gap of immediate expectation. With a generation raised in an era of enormous technological transformation. Smart technology can provide an incrementally higher return on investment through transaction speed alone. Digital financial tools and apps will be the norm, including robot-advisors as a convenience for investing.

Are these younger generations ready to be stewards of generational wealth? Will they see the need to protect this wealth through comprehensive estate planning? To better protect their inheritors’ interests, baby boomer parents can include their children in estate planning goals. The older generation can implement or update an existing plan and guide their inheritors to protect from squandering assets.

Protecting Your Assets

Some family systems may find the surest and safest way to protect generational wealth is via trusts. Both revocable and irrevocable trusts can create structure and limit new inheritors’ access to assets. A trust can grow wealth and also save on taxes. The objectives and conditions of a family trust are wide-ranging and easily tailored to a family’s specific needs.

Charitable trusts and charitable remainder trusts can generate income for heirs while protecting assets and favorable tax consequences. There are also asset-protection trusts, testamentary trusts, and special needs trusts. A qualified estate planning attorney will assess the best trust type(s) for you and your family based on your unique set of parameters. With trillions of inheritable dollars in motion over the next twenty-five years in America, proactive estate planning is key. To securing generational wealth for your family. If you would like to discuss your personal situation, please contact our Ruston, LA office by calling us at (318) 255-1760.

 

 

When Equal Distributions Are Not Equitable

When it comes to deciding how to leave property to your children, the common choice is to divide assets into equal shares. That is the straightforward choice when all your children are doing equally well.

But if not – if, for example, your son is a starving artist with mouths to feed and your childless daughter has made millions on Wall Street – the temptation is to leave more to him than to her.

That decision, however, can have consequences. There’s a good chance that your daughter might feel hurt. Favoring one child over another has symbolic meaning. You don’t want to leave behind disappointment and resentment.

Also, estate planning is about considering the long term. Even if your daughter has no children of her own now, she may have them in the future. If you leave her nothing, both she and her children will have nothing to keep your memory alive.

Moreover, these days anyone’s financial situation can take a sudden turn for the worse.  Illness, injury, or natural disaster can strike. Marriages can split. Investment decisions might fail. Assets can be lost or stolen. Credit may dry up. While hopefully none of these gloomy misfortunes will befall your daughter, it’s wiser to provide your daughter with some cushion.

If you still want to leave your son more than your daughter, sit down with your children and explain why you’re doing that. Even if your daughter might be unhappy to hear it, at least she would have less reason to blame your son later. And you never know. We have seen people in your daughter’s position freely agree. That love and generosity, on the more-advantaged child’s part, can make everybody happy. For assistance with your estate planning needs, contact our Ruston, LA office at (318) 255-1760.

 

 

The Mechanics of a Will

A complete estate plan should include a will, which is a legal document that disperses your property upon death. If you die without one (intestate), the state will distribute your assets and property via state law and quite possibly at odds with your wishes.  Having a will allows you to appoint a legal representative or executor to carry out your bequests and name a guardian for your children. There is no doubting the importance of having a will; however, there are some limitations you should be aware of.

Although a will can be the primary mechanism to transfer property on death, it does not cover all property situations. Some classes of property you are unable to distribute through a will are:

  • Property held in trust – A trust will have named beneficiaries who will receive the trust’s property according to the trust terms and not based on what is in your will (unless specifically stated in the trust).
  • Pay on death accounts – Informally known as PODs, the original account owner names a beneficiary(s) to whom the assets in the account pass automatically upon the owner’s death.
  • Life Insurance – Life insurance benefits pass to your named beneficiary(s) in the life insurance policy and are not affected by your will.
  • Retirement plans – In a similar manner to life insurance, money in an IRA or 401(k) passes to the named beneficiary(s). According to federal law, a surviving spouse is generally the automatic beneficiary of a 401(k); however, there are some exceptions. An IRA permits you to name a beneficiary(s).
  • Investments in transfer on death accounts – Some accounts holding stocks and bonds will transfer on death to the named beneficiary(s). Like POD accounts, transfer on death accounts bypass probate and go directly to the beneficiary(s).

A will does not allow you to avoid probate. Under most circumstances, a will must go through the probate process in order to allow beneficiaries to inherit property. It can take months to get through probate, and it involves expenses like an attorney, executor, and court fees. Also, under most circumstances, your will and everything associated with it (property you own, who your beneficiaries are, etc.) become part of the public record that anyone can access.

Keep funeral instructions outside of your will. The reality is your funeral may have already taken place before someone finds and reads your will, which can take days, even weeks. If your funeral or memorial service is important to you, the best way to help your family is to pre-plan, making arrangements with a funeral home. You can leave written instructions with the family as to your plans.

Your pets cannot inherit through your will. An animal is legally unable to inherit money or property from you. If you want your pets to be cared for after you die, leave money to a person willing to take care of your animals. The person you select can inherit your pets since a pet is considered property. You can also set up a pet trust or a pet protection agreement, either of which provides for your pet’s care.

Provisions for a child on government benefits are best in a trust. It is best to create a special needs trust to provide for a child with special needs or a child who is receiving government benefits. The trust can hold money for your child’s care without affecting those benefits.

There are ways to circumvent the limitations of a will by creating trusts, setting up pay-on-death accounts, and ensuring a beneficiary is named on all accounts that permit them. Your will is an important component of a comprehensive estate plan, but it can’t do everything.

We would be happy to discuss the pros and cons of having a will and other options available to you as part of your overall estate plan. 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.

Your Estate Plan Need to Include These 5 Components

The need for estate planning becomes more and more critical as we age. Many people avoid estate planning because they do not want to think about the end of life, failing health, or disability. Others believe that an estate plan is only for rich people. However, an estate plan is helpful for the senior adult and their families regardless of overall wealth.

The estate is all the property owned both individually and jointly, including bank accounts, real estate, jewelry, etc., and what is owed. Without an estate plan, it is very difficult to carry out a person’s wishes and can bring on a long, drawn-out probate that can be very expensive for the family. If an estate plan is in place, it can provide peace of mind for the senior adult and their family, as well as protection for the wishes of the senior.

Below are some basic guidelines for what should be included in an estate plan.

  1. Will. A will provides for an executor of the estate, who will take care of managing the estate, paying debts, and distributing property as specified. The distribution of assets can be outlined in the will. This can be as broad or detailed as a person wishes. In a will, beneficiaries and guardians for minor children should be assigned. It may not seem necessary to discuss minor children when discussing seniors and estate planning, but with the rise of grandparents raising grandchildren, this may indeed be an important part of the will. A senior adult can spell out, in the will, how they want their funeral and burial to be carried out as well.
  1. Living Will. A living will outlines a senior’s wishes for end-of-life medical care. It can include, in as much detail as the senior wishes, what medical treatments the senior would or would not like to have in specific situations. A living will takes the stress of making those decisions off of family members and helps to keep peace in families during times that can be difficult and emotional.
  1. Healthcare Power of Attorney. A healthcare power of attorney is also a key part of an estate plan. This legal document provides for someone to legally make healthcare decisions for a senior adult. A durable power of attorney will remain in effect for the senior if the senior becomes unable to make decisions.
  1. Financial Power of Attorney. A financial power of attorney names an agent who has the power to act in the place of the senior adult for matters relating to finances. The durable financial power of attorney stays in effect if the senior adult becomes unable to handle their affairs. By having a financial power of attorney in place, the stress and expense of a guardianship can be avoided, and the senior has the final say in who will make decisions relating to finances.
  1. Trust. Setting up a trust can be beneficial for the distribution of specific assets or pieces of property. The benefit of a trust is that it does not go through probate, as compared to a will. Property is still distributed at the death of the trustmaker, but it is done without the need of a court. This also allows for privacy of the trustmaker, where with a will and a probate, all of the deceased person’s assets and the terms of their will is made public.

Having an estate plan is necessary if you or your senior loved one wishes to have a say in what happens at the end of life and with assets after death. Consulting and planning with an elder law attorney will help to ensure that all options are explored and the best possible solution is utilized. The elder law attorney can walk you through all of the necessary parts of the estate plan, provide an explanation, and prepare the paperwork. Elder law attorneys will help take the guesswork out of estate planning.

If you have any questions about something you have read or would like additional information, please feel free to contact us. 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.