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What Does Advance Directive Mean?

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At certain stages of life, whether due to aging, illness, debilitation, or accidents, the capacity to manage affairs may be lost. Understanding this reality and planning before a medical crisis strikes is essential.

You can begin estate planning and have critical documents in place, such as an advance health care directive. Proper planning ensures care and treatment follow your wishes.

What Happens Without an Advance Directive?

Kevin stands at the door of Winnie’s nursing home room, tears streaming down his face. The medical staff just finished inserted a feeding tube into Winnie – an act Kevin knew she didn’t want. Unfortunately, Winnie couldn’t express her wishes due to advanced dementia, and she had no legal documents that expressed her wishes not to be fed by artificial means. Kevin had no choice but to sit back and watch his wife go through a procedure that would unnecessarily prolong her suffering.

Kevin and Winnie could have avoided this situation with an advance directive, a collection of documents, including a:

  • Living will (decisions you make about end-of-life treatment and care)
  • Health care power of attorney (proxy or surrogate)
  • HIPAA release form (medical history)

The purpose of this set of documents is to give you control over what happens when you can’t speak for yourself. If certain criteria are met, your doctors must consult with your advance directive and health care power of attorney before making decisions about life-sustaining treatment.

Situations Triggering Your Advance Directive

Usually, two doctors agree on a diagnosis when a person is terminally ill, permanently unconscious, or at the end-stage of life. Once that happens, and the individual can’t express their preferences, doctors turn to the advance directive to figure out the best course of action.

Medical staff are required to prolong life at all costs, which often leads to artificial hydration, feeding, and breathing tubes regardless of your outlook for recovery. Discussions with family members may raise more questions than answers without a written plan. Your loved ones may agonize over difficult decisions, wondering what you truly wanted.

A Living Will

A living will determines what happens to you in a medical emergency, unlike a Last Will and Testament, which determines what happens to money and possessions after death. A living will describes what health care providers can and can’t do to prolong your life or ease your pain when you can’t express decisions yourself. For example:

  • Do you want to be placed on a ventilator if you can’t breathe on your own?
  • Do you want a feeding tube and IVs set up, and if so, for how long?
  • Do you want to be an organ or tissue donor?

A Health Care Power of Attorney

A health care power of attorney may also be called a health care proxy or surrogate. It lets you choose someone to make health care decisions for you. They must follow instructions in your living will, and can make decisions not explicitly stated by your living will, based on medical history (if they are listed on a HIPAA release) and facts of the situation. In most states, default surrogate consent laws may allow family members to make treatment decisions on your behalf, but who is chosen and what they decide may not follow your wishes.

Other documents you may include in your advance directive are Do Not Resuscitate (DNR) orders and Physician Orders for Life-Sustaining Treatment (POLST), among others. You might also consider decisions in a mental health crisis.

This is a difficult subject to discuss with loved ones. But nearly 70 percent of Americans don’t have plans in place for a worst-case scenario, leaving others to choose for them. It may not align with their thoughts or beliefs about end-of-life care.

If you or a loved one would like more information about advance directives, please don’t hesitate to reach out to our estate planning law firm today. We are dedicated to preparing individuals and families for life’s challenges.

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.

Elder Law Attorneys and End-of-Life Planning

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End-of-life planning can be a difficult topic to talk about and even harder to plan for. But it is an important part of estate planning and a gift to your family. No one wants their family to have to make emergency medical decisions for them without knowing what they want.

People who become incapacitated or die without proper end-of-life planning leave many loose ends for their family members to tie up. This often involves going through long, sometimes expensive, court proceedings to either become a guardian for an incapacitated loved one or move their estate through the probate process after death.

Planning well in advance for death and potential incapacity makes both situations easier for your family and gives you more peace of mind knowing that your wishes will be carried out. Everyone’s situation is unique, so it’s best to work with an estate planning attorney or elder law attorney who can help you tailor an estate plan to meet your specific needs. Below are some of the most common documents and parts of an estate plan.

Last Will and Testament

A last will and testament, or simply a will, is a key component of any estate plan. In your will, you can specify whom you want to receive what you own after you die. You can be as general or as specific as you want, but the clearer you are, the less confusion there will be.

You also use your will to name an executor, also known as a personal representative, to manage and dispose of your estate after you have passed away. If you have minor children, you can use your will to choose a guardian for them if you are unable to care for them.

Even though most people consider their pets family members, they are considered property under the law, and the courts treat them as property. In your will, you can name a caregiver for your pets and choose their next home.

Trusts

There are many types of trusts for many different purposes. One of the most common types is a revocable living trust. This type of trust can be changed while you are alive but becomes irrevocable and can’t be changed once you pass away.

With an irrevocable trust, once you put your assets into it, you relinquish ownership of those assets. This can be useful for qualifying for government benefits, such as Medicaid.

Some pet owners create pet trusts for pets with long lifespans or those that are expensive to care for. In a pet trust, you can name a trustee or a caregiver for the pet and fund the trust with money to help with their care.

Durable Financial Power of Attorney

A durable financial power of attorney (POA) is an important document used to name a trusted person to be your financial agent. They are authorized to handle your finances if you are alive but unable to make decisions. You may be injured, ill, or out of the country.

Health Care Power of Attorney

In a health care power of attorney (POA), you name a health care agent to make decisions on your behalf regarding your medical care. This can be the same person you choose as your financial agent or someone different. Make sure the person you name is willing and able to carry out your health care wishes regardless of their own views and beliefs.

Living Will

A living will expresses your wishes regarding the types of medical treatments you want and don’t want if you can’t communicate your wishes. This document is often combined with a health care POA. A living will guides your health care agent when making medical decisions for you.

Memorial Instructions

Memorial, or funeral, instructions are not legally binding documents, but they can be helpful for your family as they make arrangements after your passing. Some people give specific instructions, while others leave most of the decisions to their family members. You can appoint a person to be the primary decision maker.

In your memorial instructions, you can specify what type of service you want, whether you prefer to have your remains buried or cremated, and you can share your choice of resting place. You can write your own obituary or list some things you want in it.

Instructions for Digital Assets

Most people have a variety of digital accounts, including bank accounts, subscriptions, and email addresses. To make it easier for your executor, trustee, or agent to access your accounts, store your account information, including usernames and passwords, in a safe place. Tell them where you keep this information so they can find it.

Starting Your End-of-Life Planning

Working with an estate planning attorney for end-of-life planning ensures your documents meet your state’s current laws and will be followed by your agents and medical professionals. After you have completed your end-of-life planning, review your plan every few years to make sure it still reflects your wishes. Life circumstances may change and affect the decisions you made.

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.

Keeping Your Pet Safe with a Pet Trust

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A pet is probably considered a valuable member of your family if you own one. If you have a pet, you know how much joy and comfort it gives you. Since you love them, you give them the best life you can. But what if you were suddenly unable to care for them?

Who would care for your pet if you were to die or become incapacitated due to injury or illness? Would they know how to give your pet the same level of care you give them? A good way to ensure your pet is well cared for if something happens to you is to create a pet trust.

Pet trusts have become increasingly popular in recent years as pet owners become more concerned with the care and wellbeing of their companions. A pet trust is a legal document allowing pet owners to designate a trustee to care for their pets for the rest of their lives.

You can establish a pet trust for any type of pet. The trust can provide for their care in a variety of ways, including food, shelter, veterinary care, and any other needs your pet may have. The trust can also specify any special requests, such as daily walks, grooming, or other preferences.

Benefits of a Pet Trust

One of the main benefits of a pet trust is that it ensures your pet will be taken care of according to your wishes and by someone you trust. This is especially important for owners who have pets with special needs, such as those with medical conditions or behavioral issues. A pet trust can also provide financial support for your pet’s care, so the caregiver doesn’t have to bear the financial burden of caring for your pet.

Creating a Pet Trust

Creating a pet trust is a relatively simple process. First, you’ll choose a trustee responsible for managing the trust and ensuring your pet is cared for according to your instructions. The trustee can be a family member, friend, or even a professional trustee. After you choose a trustee and a successor (backup) trustee, you will choose a caregiver for your pet. The caregiver can be the same person as the trustee.

You will then specify the terms of the trust, including the amount of money set aside for your pet’s care and how that money will be distributed to the caregiver. The trust should also specify any special requests or instructions for the caregiver, as well as a backup plan in case the caregiver is no longer able to care for your pet.

Once the trust is established, you can fund the trust with a lump sum of money or set up regular contributions. The trustee will then manage the trust and ensure your pet is cared for according to your wishes.

Things to Consider about Pet Trusts

A pet trust is a legally binding document, and consulting with an attorney who is knowledgeable about estate planning and pet trusts is important. They can help ensure that the trust is set up properly and that all legal requirements are met.

In addition to the legal issues, there are also practical considerations to keep in mind when setting up a pet trust. For example, you should consider the age and health of your pet, as well as your financial situation. You should also think about the availability and willingness of potential caregivers.

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.

Why Charitable Trusts Are Beneficial

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You might be interested in preserving your assets for your children or other loved ones while minimizing taxes as well as making a positive contribution to charities. If so, a charitable trust could be a good tool for you to use.

Charitable trusts provide individuals with a way to support charitable causes while enjoying certain financial benefits. Two common types of charitable trusts are charitable lead trusts (CLTs) and charitable remainder trusts (CRTs). Although both trusts serve philanthropic purposes, they differ in structure, timing of charitable distributions, and tax benefits. In this article, we’ll look at their unique benefits.

Charitable Lead Trusts

Charitable lead trusts are structured to allow your favorite charity, or charities, to receive a specified portion of the trust’s income or assets for a designated period or until your death. After this period ends, the remaining trust assets are transferred to non-charitable beneficiaries, such as family members or other individuals. A CLT would be particularly useful if you wish to support a charitable cause during your lifetime while also preserving assets for your loved ones.

Benefits of CLTs

  • Immediate Philanthropic Impact: One of the key advantages of CLTs is that they enable you to witness the effects of your charitable contributions during your lifetime. This can be particularly rewarding if you have a strong desire to see the difference you make in your community.
  • Estate and Gift Tax Planning: You can reduce your taxable estate and potentially minimize your gift tax liability. The present value of the charitable interest in the trust may be deducted from your income taxes, providing an opportunity for tax savings.
  • Asset Preservation: You can preserve family wealth for future generations. By transferring assets to a CLT, the appreciation of those assets during the trust’s term can occur outside your estate, potentially reducing estate taxes.

Charitable Remainder Trusts

Charitable remainder trusts operate in the opposite manner of CLTs. They allow individuals to receive an income stream from the trust during their lifetime or for a specified period. Afterward, the remaining trust assets are then transferred to charitable organizations. A CRT would provide you with the benefit of financial security while also contributing to philanthropic causes.

Benefits of CRTs

  • Income Stream and Tax Benefits: Receive a regular income stream from the trust during your lifetime. This income can be structured as a fixed percentage of the trust’s value or a fixed dollar amount. Additionally, you can enjoy an immediate income tax deduction based on the present value of the charitable interest.
  • Capital Gains Tax Savings: When you contribute appreciated assets to a CRT, you can avoid or defer capital gains tax upon the sale of those assets by the trust. This can be particularly advantageous if you are holding highly appreciated assets, such as stocks or real estate, as it allows you to diversify your investments without incurring immediate tax consequences.
  • Charitable Giving and Legacy: Support your favorite charitable organizations, ensuring a meaningful legacy for the causes you care about. By leaving a charitable legacy, you can promote philanthropy and inspire future generations to engage in charitable giving.

Financial and Philanthropic Benefits

Both CLTs and CRTs can provide you with valuable tools to support philanthropic causes while enjoying personal financial benefits. A CLT will allow you to witness the immediate effects of your contributions while preserving assets for your heirs. On the other hand, a CRT will provide you with a steady income stream during your lifetime, along with tax advantages and the opportunity to leave a lasting charitable legacy.

When considering which trust is suitable for your philanthropic goals, it’s important to consult with a qualified estate planning attorney who can assess your unique circumstances and guide you through the process of setting up and managing a charitable trust. By carefully selecting the appropriate trust structure, you can maximize the effect of your charitable giving while enjoying the financial benefits that come with it. Contact our office to speak with an estate planning attorney and learn more about how a charitable trust can help you meet your financial and philanthropic goals.

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

Preparing a Living Will

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In the event that you are incapable of communicating or making decisions for yourself, a living will outlines your end-of-life care and medical treatment preferences. Everyone should have an advance directive, as end-of-life situations can happen at any age due to an accident or illness.

Living Will

This legal document identifies medical treatments you would or would not accept to keep you alive and may include other medical decisions, such as pain management and organ donation. Consider how important self-sufficiency and independence are to you and what circumstances may make you feel life is no longer worth living. Do you want to be alive at all costs in any situation, or would you only want treatment if a cure exists?

You can address several possible end-of-life care scenarios in your living will, including:

  • Cardiopulmonary resuscitation (CPR) – Restarts the heart when it has stopped beating and can be done manually (chest compressions) or mechanically (defibrillator).
  • Mechanical ventilation – Takes over the job of breathing if you can’t breathe on your own.
  • Tube feeding – Supplies the body with fluids and nutrients intravenously or through a tube in the stomach.
  • Dialysis – Manages fluid levels and removes waste from your blood if your kidneys do not function.
  • Antibiotics or antiviral medications – Treats many infections. Would you prefer the infection to run its course or aggressively use pharmacy treatments if you are near the end of your life?
  • Palliative or comfort care – Includes various ways to keep you comfortable, managing pain while abiding by other designated treatment choices. You may choose to die at home or receive strong pain medications, avoiding other invasive treatments or tests.
  • Organ and tissue donation – Permits temporary life-sustaining treatment until the organ removal procedure is complete.
  • Donating your body to science – Makes your body available for scientific study at a medical school or university program.

Durable Medical Power of Attorney

Naming a health care or medical power of attorney is a type of advance directive. They name a health care advocate to make medical decisions for you. Depending on where you live, a durable medical power of attorney may be called an agent, proxy, surrogate, or advocate.

State laws regarding living wills vary from one jurisdiction to another. Following state legal requirements and guidelines is imperative to ensure your living will is valid. Retaining the services of an elder law attorney or estate planning attorney can ensure your living will complies with laws in your state, such as witnessing and notarizing your documents.

Selecting the right individual to act as your medical power of attorney is important since it’s impossible to anticipate every situation, and your health care agent may have to make a judgment about your care wishes. Your attorney may encourage you to select one or more alternates in case your first choice can’t fulfill the role. Select a medical power of attorney that meets the following criteria:

  • They meet your state’s health care agent requirements
  • They are not your physician or a part of your medical team
  • They are willing and capable of discussing medical care and end-of-life issues with you
  • They have your trust to make decisions that adhere to your values and wishes
  • They are trusted to advocate on your behalf if there are disagreements about your care

Orders to Refuse Resuscitation or Intubation

A do not resuscitate (DNR) and do not intubate (DNI) order is not part of an advance directive or living will. To establish your preferences, speak to your doctor, who can make them as part of your medical record. Although you may have a living will preference that addresses DNR and DNI orders, have a physician create these individual documents each time you’re admitted to a new health care facility or hospital.

Physician Orders for Life-sustaining Treatment (POLST)

Some states include a provider order for life-sustaining treatment (POLST) or medical order for life-sustaining treatment (MOLST) document as part of an advance health care directive.

They address patients who are already diagnosed with a serious illness. While this form doesn’t replace your directives, it provides instructions for the doctor that reflect the treatment you prefer. Your doctor fills out the form based on conversations you’ve had about the likely course of your illness and advance directive treatment preferences.

Creating Advance Directives

After reflecting on your choices for a living will, meet with your doctor and attorney, who can help you create the written content for an advance directive. States have specific forms, and your lawyer can help to ensure the forms are correctly filled out, as some may require a witness or notary.

Once your documents are complete, take the following steps:

  • Keep the originals in an easily accessible but safe location.
  • Provide a copy to your doctor.
  • Provide a copy to your health care agent and any alternate agents.
  • Keep a list of the people who have your advance directives.
  • Talk to your family and other loved ones about your health care wishes to provide clarity to family members to prevent conflict or guilt during difficult times.
  • Carry a wallet-sized card indicating you have advance directives, your health care agent, and the state(s) location where your directives are.
  • Travel with a copy of your advance directive.

Regular Review and Changes to Advance Directives

You can change your directives whenever you wish if you are of sound mind. You must create a new advance directive form, distribute the new copies to the appropriate individuals, and destroy all old copies. Some states have specific requirements for changing directives, so consult your attorney about relevant laws.

Discuss any directive changes with your primary care physician. Add these new medical directives to hospital or nursing home charts and make sure your health care agent, family, and friends know of the changes.

Review and make changes to your directives in case of a new diagnosis, a marital status change, or about every five years. Regular review of your living will ensures it still reflects your wishes and is up to date.

This article offers a summary of aspects of estate planning. 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.

Revocable versus Irrevocable Trusts

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In estate planning, two types of trusts are commonly used: irrevocable trusts and revocable trusts. In each case, there are advantages and disadvantages. However, both trusts are legal arrangements to manage and distribute your property during your lifetime or afterward. The creator of a trust is a grantor who funds it by transferring their assets into the trust and naming beneficiaries.

Key Differences Between Revocable and Irrevocable Trusts

The key differences between these two trust types include:

·       Control

A revocable trust allows the grantor (in Louisiana called the Settlor) to maintain control of the assets during their lifetime and make changes to the trust as needed as long as the grantor is mentally competent. This is done by naming the settlor / grantor as the trustee.  In contrast, an irrevocable trust typically transfers control of the assets to the trustee who is not the same person as the settlor / grantor. This prevents the grantor / settlor from making any changes to the trust once it is written and funded, with few exceptions.

·       Tax Implications

A revocable trust is generally treated as part of the grantor’s estate for income tax purposes but does not reduce estate taxes. However, an irrevocable trust can be structured to reduce estate taxes by removing assets from the grantor’s estate.

·       Creditor Protection

Assets in a revocable trust are generally not protected from the grantor’s creditors. In contrast, assets in an irrevocable trust can receive protection from creditors depending on the trust’s terms.

·       Probate

A revocable trust can help avoid probate, the legal process after someone dies to transfer assets to their heirs. Assets held in a revocable trust are generally not subject to probate. An irrevocable trust can also help avoid probate; however, because the grantor / settlor gives up control of the trust’s assets, it may be more difficult to change the trust to accommodate changing circumstances.

·       Privacy

Both trusts can provide more privacy than a will since the terms of the trust don’t become part of the public record. (Usually only the transfer of real estate (immovable property) would be a part of the public record, just like it would when transferring property to any other entity.)

Each trust type offers benefits and some drawbacks, and the choice between them will depend on the grantor’s specific estate planning circumstances and goals. An estate planning attorney can help determine which trust type is the most appropriate for a particular individual or family.

When to use a Revocable Trust

In some situations, a revocable trust may be the best option. There are eight circumstances when a revocable trust may be a good choice.

1.     Avoiding Probate (and the Associated Legal Fees and Costs)

One of the primary benefits of a revocable trust is that it can help you avoid probate. Assets in the trust can pass directly to your beneficiaries without the need to involve the court. Particularly with married couples, the establishment of a revocable trust generally saves money and costs in the long run over each spouse having his or her own probate proceeding.

2.     Incapacity Planning

If you become incapacitated and unable to manage your affairs, the trustee of your revocable trust can step in and manage the assets on your behalf. The trustee can properly manage your financial affairs and carry out your wishes.

3.     Privacy

A revocable trust can provide more privacy than a will since the terms of the trust don’t become part of the public record. If you have concerns about your financial affairs becoming public knowledge, create a revocable trust.

4.     Flexibility

Modifications or even fully revoking this trust type may occur during your lifetime. If circumstances change, you can make changes to your trust.

5.     Blended Families

If you have a blended family, a revocable trust can be a good way to provide for your spouse and children from previous marriages. You can specify how you want your assets distributed and ensure you fulfill your wishes.

6.     Special Needs Planning

If you have a child or other beneficiary with special needs, using a revocable trust can provide for their ongoing care and support after your death.

7.     Real Estate Ownership in Multiple States

You can avoid ancillary probate in a state other than where you live.

8.     Estate Value

This trust is a great choice if your estate is less than that federal estate tax exemption.

When to Use an Irrevocable Trust

In some situations, irrevocable trusts are the better option. There are seven specific circumstances when an irrevocable trust may be a good choice.

1.     Estate Tax Planning

You can remove assets from your estate using an irrevocable trust, helping reduce or eliminate estate taxes. Once the assets transfer to the trust, they are no longer legally part of your estate for tax purposes.

2.     Creditor Protection

Assets in an irrevocable trust may be more difficult for creditors to seize.  This can be particularly important if you are in a profession or business that exposes you to liability.

3.     Medicaid Planning

If you are concerned about the cost of long-term care and its impact on your estate, an irrevocable trust can transfer assets out of your name and into the trust. Doing so can help you qualify for Medicaid benefits if you need them.

4.     Charitable Giving

An irrevocable trust can be a vehicle for charitable giving, allowing you to leave a legacy and support causes that are important to you.

5.     Business Succession Planning

If you own a business, an irrevocable trust can transfer ownership to your heirs or to a trustee who can manage the business on behalf of your beneficiaries.

6.     Comfort with Permanence

You must be comfortable giving up control of your asset after establishing the trust.

7.     Estate Value

This trust is a great choice if your estate value is higher than the federal estate tax exemption, and you want to avoid estate taxes.

It’s important to note that an irrevocable trust isn’t as flexible as a revocable one since you can’t make changes after establishing and funding except in very limited circumstances. However, they can be a powerful tool for achieving specific estate planning goals.

How an Estate Planning Attorney can Help

An estate planning attorney can guide and assist you with revocable and irrevocable trusts to determine which will meet your goals, assets, and other factors. They may provide tax planning advice since trusts have complex tax implications and assets must be transferred efficiently.

Your estate planning attorney can draft the trust documents and ensure proper execution. If you already have a trust, they can review the documents, ensuring they still meet your needs and comply with changes in the law.

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.

Creating an Estate Plan on Your Own Can Lead to Disaster

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The idea that you’ll save money by creating an estate plan on your own may seem appealing. However, it can be costly in the end, both financially and in terms of family well-being. Estate planning involves important decisions about how your assets will be distributed after you die and who will manage your affairs. Online do-it-yourself resources don’t always tailor to your specific needs and may not consider important legal requirements in your state, particularly if you live in Louisiana. Louisiana law is different from every other state, and online-prepared documents very often are not legal in Louisiana, regardless of what the website may tell you. (Just look at the site’s “fine print” and disclaimers.) The same is true for having non-lawyers (e.g., financial advisors and notaries) draft your estate planning documents. Even if legal, the document could have very expensive tax implications.

Basic Parts of an Estate Plan

A basic estate plan typically includes the following documents:

  • A Will – This document outlines who gets your property, names an executor to oversee your affairs, and designates guardians for your minor children. If you die without a will (intestate), the distribution of your assets will follow state intestacy laws and may not reflect your wishes.
  • Living Trusts – A living trust generally lets you keep your property out of probate, the court process of distributing your property after death. Probate can be time-consuming and expensive and becomes part of the public record. For these three reasons, estates with significant property often use a trust. Whether a trust is necessary for your situation can be determined with the help of an estate planning attorney. Trusts, particularly when set up by married couples, usually save money in the long run, and certainly can reduce time and hassle for your heirs.
  • Durable Financial Power of Attorney – A durable financial power of attorney names an individual to manage your finances if you are unavailable or become incapacitated.
  • Health Care Directives (Living Will and Health Care Power of Attorney) – A health care directive can name a representative to make health care decisions on your behalf when you can’t and state your preferences for health care, end-of-life care, organ donations, and final arrangements. The living will allows you to make the decision regarding life support should you be in a comatose state and in a terminal condition.
  • Beneficiary Designations – Accounts such as IRAs, 401(k)s, bank accounts, mutual funds, annuities, and life insurance policies can transfer directly to heirs outside of probate by naming beneficiaries.

Many legal strategies are considered if your estate or family circumstances are complex.

What Can Go Wrong If I Do It Myself?

Creating your estate plan may be appropriate in limited circumstances. However, many things can go wrong. The money you believe you save upfront can create financial and emotional stress for your family after your death. People pay for professional expertise to prevent problems they aren’t aware of or haven’t considered. This advice leads to more successful outcomes.

The Simple Plan

If a surviving spouse’s assets consist of the value of their home and bank accounts that are nearly equal in value, a simple will may give the home to one adult child and the bank accounts to the other. At the time the will is created, it may seem like a simple way to divide assets.

If the will is tucked away without further review or update, circumstances may change. Upon the parent’s death, the two inheritors could find one has a home that has grown in value. The other heir finds the deceased parent had to spend down cash assets to cover increasing medical bills and living expenses and inherits far less. This type of situation often leads to litigation and ruined relationships.

Beyond the financial inequity of the inheritance, a rift exists between the two siblings, which can divide the family, extending to younger generations. Over time, the parent’s simple plan did not reflect their intentions for their children.

The Legal Details

Your will, trusts, and other estate planning documents must comply with ever-changing state law. For example, drafting your will without legal oversight creates a significant risk of error. Wills must clearly state your intent. In legal terms, failing to use words such as “testamentary intention” may void the will. Similarly, using vague terms such as “I would like” may render your intentions unenforceable. Variations of legal terms are in all estate planning documents, not just a will.

Coordinating Probate and Non-Probate Assets

A will governs the distribution of assets held solely in your name. Assets owned jointly through a beneficiary designation, contract, or similar arrangements are non-probate assets. They may include 401(k)s, IRAs, joint bank accounts, insurance, real estate, and family homes. Structuring the ownership of assets to meet specific goals, like asset protection and avoiding probate, is best guided by an estate planning attorney familiar with the process.

Marriages, Divorce, Births, Incapacity, and Death

Many events can profoundly alter a person’s life — divorce, disability, death, substance abuse addictions, and the like. They also may change how you distribute assets in your estate. These types of issues can be particularly bothersome with blended families.

An estate lawyer can regularly review your documents with you to ensure they reflect your current family situation. They can also draft documents for power of attorney so that if you become incapacitated, a plan is in place for your estate’s management and health care wishes. A routine review of your estate plan is essential to handle significant life events and account for any changes in estate planning laws.

Other Challenging Arrangements

Every person’s life and estate are unique. A template can’t accommodate all eventualities.

  • Same-sex and unmarried couples face different challenges as the law tries to catch up to less traditional marriage and living arrangements when making an estate plan. A partner could be left without an inheritance if estate documents aren’t carefully executed to comply with state laws.
  • Special needs planning for loved ones who are disabled requires targeted planning so they continue to receive financial assistance and maintain eligibility for government benefits.
  • Some estates require complex arrangements to reduce state and federal taxes or multi-state and international issues.

The challenges are so varied that you risk creating an unenforceable estate plan without the guidance of an estate planning attorney.

Take Your DIY Will to an Estate Planning Attorney

An estate planning lawyer provides more than technical expertise in drafting complex documents. They can provide guidance and counseling for important decisions, helping you identify the best representatives to manage decisions and actions required in your estate plan. A do-it-yourself estate plan is often incomplete or incorrect. Any mistakes or oversights can lead to legal complications or disputes among heirs. The following old adage usually proves to be true:  Don’t be penny-wise but pound foolish.

For most people, working with an experienced estate planning lawyer is essential to ensure documents meet your needs, goals, and legal requirements. While saving money using a do-it-yourself approach may seem tempting, the risks can far outweigh any potential cost savings.

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 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.

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.