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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.

Reevaluating Your Retirement Investments: 5 Compelling Reasons

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To ensure a comfortable retirement, it’s essential to reconsider your financial retirement portfolio. While you might have accumulated a substantial nest egg in a 401(k) plan, withdrawing money from it comes with significant tax planning considerations. In the early stages of a 401(k), employers match your contribution to the plan. Contributions come out of your paycheck before calculating taxes and compound every year. When you retire, however, the tax impact of a 401(k), 403(b), or traditional IRA can become significant.

Retiring at a Higher Tax Bracket

You have probably been told you’ll be in a lower tax bracket at retirement. However, many people experience the opposite. Your tax rate is expected to increase if you maintain the same standard of living, requiring the same amount of income and tax rate. With your children grown and the house paid off, substantial tax deductions are gone, which may push you into a higher tax bracket. You will pay taxes on withdrawals from your contribution plan(s) annually, whether the money comes from dividends, capital gains, or your contributions. That money will be taxed at your income tax rate at the time of withdrawal. Currently, the top marginal income tax rate is 37 percent, and considering the US deficit, that tax rate could increase in time.

Double Taxation

Unless you have a Roth IRA, distributions from your retirement plans count against you when calculating what percentage of your Social Security is subject to tax. The result is paying more taxes on your retirement plan distributions and Social Security income. You also pay more taxes from capital gains, dividends, and interest from your investments.

Required Minimum Distributions (RMDs)

It can be frustrating and expensive if you neglect to make your minimum required distributions. You must withdraw funds from your retirement fund accounts when the IRS deems it necessary. Even if you want to leave the money in the account, as of 2023, the IRS will schedule your withdrawals when you reach age 73. There are stiff penalties for not taking out the required minimum distribution. You may pay an additional 25 percent tax. If you correct the shortfall during a two-year window, it could reduce to 10 percent.

Leaving a 401(k) or IRA to a Spouse

If you’re married, a 401(k) or IRA is the worst account to leave to your surviving spouse. No one wants to die without leaving their spouse financially secure, but these two financial vehicles are fully taxable accounts. Upon your passing, your spouse changes their tax filing status from married filing jointly to single. That takes their tax obligation from the lowest to the highest bracket — probably not exactly what you had in mind.

Both your 401(k) and IRA plans are subject to tax law changes. Every time Congress convenes a session, there is the possibility that increases in taxes on your retirement plans can occur. It’s highly unlikely that your taxes won’t increase. The US debt continues to grow at an alarming rate, and tax increases are used to gain some level of financial control.

Get together with a tax planner to identify ways to move your retirement funds into better financial retirement vehicles. Sometimes conversion can cost a bit of money upfront, but in the long run, you’ll be far better off with regard to your retirement tax obligations.

Contact an Estate Planning or Elder Law Attorney

Connect your tax planner with your estate planning attorney. Retirement and tax planning are heavily tied to money and property being managed, preserved, and eventually distributed to your heirs. Our estate planning and elder law attorneys look at changing tax laws and retirement goals to maximize your family legacy. We also discuss preparing for potential long-term care expenses and how they could affect your retirement income. Costs for health care services continue to rise, and you don’t want to lose significant income to medical emergencies.

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.

The Importance of Trusts as Estate Planning Tools

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Estate planning is a crucial process that entails the distribution of assets and property after the passing of a loved one. Though many people are familiar with wills as a means of distributing assets, trusts can be even more effective.

A trust is a legal arrangement where a person, known as the grantor, settlor, or trustmaker, transfers their assets to a trustee who manages and distributes those assets to the beneficiaries according to the terms specified in the trust agreement. Some people shy away from trusts due to the extra cost, but they can save time and money in the long run. Trusts offer several significant benefits that make them essential components of any comprehensive estate plan.

Probate Avoidance

One of the primary advantages of trusts is their ability to avoid probate. Probate is the legal process through which a deceased person’s will is validated before distributing assets. It can be a lengthy and costly process, subject to court supervision and public scrutiny.

By using a trust, your estate can bypass probate entirely, ensuring a faster, more efficient transfer of assets to your intended beneficiaries. This not only saves time and money but also maintains privacy, as trust documents are not public records like probated wills.

Flexibility

Another important aspect of trusts is their flexibility and customization options. Trusts can be tailored to meet the specific needs and goals of the grantor. For example, if the grantor has minor children or beneficiaries who are not yet responsible enough to handle their inheritances, a trust can be created to provide for their financial wellbeing until they reach a certain age or milestone. This allows the grantor to exercise control over how and when the assets are distributed, ensuring their loved ones are taken care of in the best possible way.

Asset Protection

Trusts are also valuable tools for protecting assets from creditors and lawsuits. By transferring assets to an irrevocable trust, the grantor effectively removes them from their personal ownership, making them less susceptible to potential legal claims or judgments. This can be particularly advantageous for people in high-risk professions or with substantial wealth. Additionally, trusts can safeguard assets in situations where the grantor becomes incapacitated, ensuring that a designated trustee manages their affairs and finances according to their wishes.

Philanthropic Legacy

Charitable giving is another area where trusts are especially helpful. If philanthropy is an essential aspect of your estate planning, you can establish a charitable trust to support your chosen causes. Through a charitable trust, you can donate assets while retaining income from those assets during your lifetime. This allows you to support charitable organizations and potentially receive certain tax benefits, all while ensuring that your philanthropic legacy endures.

Estate Taxes

Trusts can also be instrumental in minimizing estate taxes. Through various types of trusts, such as irrevocable life insurance trusts or generation-skipping trusts, you can reduce your overall estate tax liability. By leveraging the tax advantages provided by trusts, it becomes possible to preserve more wealth for future generations and secure a more meaningful legacy.

Adding a Trust to Your Estate Plan

By incorporating a trust, or trusts, into your estate plan, you can expedite the distribution of assets, maintain privacy, and provide greater control and flexibility over how your assets are managed. A trust can also offer asset protection, facilitate charitable giving, and help minimize estate taxes.

An experienced estate planning attorney or elder law attorney can help you navigate the intricacies of trusts and ensure that your estate plan aligns with your goals and aspirations. Contact our estate planning and elder law firm today to learn how we can help you establish a trust to meet your estate planning needs.

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.

Tax-Efficient Wealth Transfer to Heirs

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Employing tax avoidance principles in wealth transfer is a smart approach to safeguarding your legacy and beneficiaries from burdensome taxation. Still, it requires careful planning and oversight to ensure techniques don’t cross the line to tax evasion.

Assessing tax options can determine the best way to conduct business or personal transactions and inheritance to reduce or eliminate tax liability. Tax avoidance differs from tax evasion, which reduces tax liability through concealment or deceit. Tax evasion is a crime, but tax avoidance can lower your tax bill by structuring transactions to save the most money.

Minimizing Your Heirs’ Tax Burden

Inherited assets often come with tax burdens, and planning ahead can simplify some of the processes and lower taxes for your heirs. Depending on the state of the deceased’s estate, inheritance taxes will differ. As laws and regulations change regarding inheritable assets, your estate planning attorney can conduct a routine review of your plan to ensure transferring wealth is tax-efficient.

Gifting Your Money And Assets

The most direct way to minimize inheritance tax is to start gifting your heirs money each year while you’re still alive. Taking advantage of the gift tax exclusion of $17,000 per year per person is a quick way to transfer non-taxable cash or assets to heirs. A married couple can gift $34,000 yearly to each child or other inheritor without tax consequences to the gifter or the recipient.

Life Insurance

A solid insurance plan can also set up future inheritors without tax consequences. Choosing between whole life and term life insurance will determine how long the policy will last. A term or whole life insurance policy generally provides the beneficiary a death benefit not subject to income taxes unless they receive payouts in installments.

Irrevocable Life Insurance Trusts

An irrevocable life insurance trust (ILIT) can control whole or term life insurance policies while the owner is alive. Transferring your policy to the trust or using the trust for purchase means you own your insurance policy as the trust grantor. You can determine who administers assets, designate beneficiaries, and the terms of receiving benefits. Your estate planning attorney helps you set up the trust and properly fund it.

An ILIT removes the life insurance policy from your gross estate, which minimizes or eliminates estate tax liabilities on assets not qualified as marital or charitable deductions. The policy provides immediate liquidity to the decedent’s estate and beneficiaries upon the insured’s death.

Death Benefit Annuities

An annuity with a death benefit pays a lump sum to a beneficiary. There are also joint-and-survivor annuities that provide a guaranteed income stream to the beneficiary for life. While annuities are subject to tax, they can be structured to minimize the tax burden to the beneficiary.

Retirement Accounts Converted to Roth Accounts

Heirs will pay tax on any inherited retirement benefits if they are in a 401(k) or Individual Retirement Account (IRA). However, taxes on a Roth 401(k) or Roth IRA are already settled upon conversion, so there is no additional tax on distributions. While this is great for inheritors, when the owner converts a standard 401(k) or IRA to Roth, there will be regular income tax consequences for the conversion to occur.

Real Estate

Real estate is one of the most significant non-liquid assets to pass on to heirs. Capital gains tax will apply to real estate, and the recent IRS Revenue Ruling 2023-02 removes the step up in basis even if the real estate is in an irrevocable grantor trust.

However, this new ruling doesn’t apply if the irrevocable trust is in the grantor’s gross estate. The rules and applications are complex and will require the review of an estate planning attorney to decipher.

If the property is not in an irrevocable trust, there are three other options to pursue:

  1. Sell it – If you plan on downsizing or putting your home’s equity to use elsewhere, selling the home to an heir might be a good option. It removes the property from your taxable estate, establishing a new cost basis. The property’s future sale has a cost basis tied to the home’s value on the date of transfer, lowering capital gains tax. Do not, however, sell the property below fair market value, or the difference may be subject to gift tax.
  2. Gift it – While a generous gift, providing a home to an heir during your lifetime might have negative tax consequences. This gift will count toward your lifetime gift tax exemption which may not be a problem now, but in 2026, the exemption will be cut in half as adjusted for inflation. Depending on your estate’s size, it may result in up to 40 percent federal estate tax. State-level gift, estate, and inheritance taxes may also be a factor depending on where you live.
  3. Pass it Down – Depending on how many heirs you have and their ability to maintain a property, you can leave your home in your will, a living trust, or in some states, a transfer-on-death deed. Again, these methods may no longer receive a step-up in cost basis and should be discussed at length with your estate planning attorney before making a decision.

Stock Investment Accounts

Unlike other gifted securities, inherited stocks don’t maintain their original cost basis. Upon inheriting a stock, the inheritor receives a step-up in cost basis determined by the stock’s value at the date of death. If you have held dividend-producing stocks for a significant time, the cost basis may make selling financially unproductive. However, an inheritor with a step-up in cost basis can immediately sell the stock to create cash flow without tax consequences.

Capital gain tax methods are a highly-contentious topic in the ongoing debate of inheritance and taxes. Often regulations may change without Congress enacting a law, as in the case of IRS Revenue Ruling 2023-02. To ensure your strategy is in tax compliance and advantageous to inheritors, review your estate plan routinely to account for any legal changes.

Estate Planning Attorneys and Tax Planning

Your estate planning attorney can help you legally minimize tax liabilities to your heirs by gifting assets during your lifetime, establishing trusts, and leveraging exemptions. Tax-advantaged accounts, capital gains tax planning, and other tax-efficient investments like life insurance can minimize taxes to your heirs.

Further, you can use family and charitable trusts or philanthropic foundations to receive tax benefits. There are many creative ways that your estate planning attorney can legally help to minimize taxes to your heirs. Estate planning guidance is key in creating wealth transfer management and tax strategies. Your attorney can provide personalized advice based on current tax laws and regulations and work with your tax advisor to create the best outcome for your heirs.

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.

Providing Financial Guidance to Graduates

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Whether your child is graduating high school or college, you should help them prepare for the future financially. You want to set a strong foundation for long-term financial stability by broadening their scope of financial literacy. Sharing the following tips can help prepare them.

Budgeting Expectations and Boundaries

Nearly one-third of young adults don’t have a budget because they believe they are too poor to budget or don’t make enough money to need one. Without a budget, they create a huge stumbling block for financial success. A budget can helps control where money goes instead of wondering where it went.

Before creating a budget, talk through short- and long-term goals like home ownership or starting a business or a family, writing down the three or four most significant accomplishments to achieve in the next five to ten years.

Next, narrow the focus to two things to accomplish regarding finances within the next year such as:

  • Pay off debt to improve your credit score
  • Start a new career
  • Secure a credit card in your name
  • Build an emergency fund

Then further narrow the focus on what to accomplish next month. It might be saving a certain amount of cash or not using credit cards for thirty days.

Set Up a Budget

Setting up a budget requires gathering paperwork like bank statements, pay stubs, and investment accounts. From this data, calculate expected monthly income and typical monthly expenses. The hope is that monthly income exceeds monthly expenditures, including rent, utilities, food, and entertainment. If not, it’s time to cut costs. Some expenses are variable. Find a way to normalize increases in monthly expenditures with extra savings throughout the year.

Track the Budget

This step is where many people attempting to budget tend to fail because they don’t follow the budget they created. Track your daily transactions and subtract them from the proper budget category. Monitor expenditures using apps, spreadsheets, or pen and paper. Discuss what will work best to stay disciplined, as living within a budget is the first step to building financial security.

Financial Literacy

Parents can help their young adult children by teaching them to set goals, create a budget, and manage their finances. It’s tempting but essential not to routinely bail them out financially if they aren’t following their budget. If you must provide financial assistance, make it temporary. Learning to save and live within or beneath their means in these early adult years is crucial to success and teaches financial responsibility.

Encourage children not to take the summer off after college. In a competitive world, losing time in the business world equates to lost opportunities. There’s no such thing as a perfect job to wait for, and the sooner they begin building a resume, the better the chances of finding that dream position.

Estate Planning Attorneys

An estate planning attorney can play a valuable role in assisting parents of graduates in planning for their financial future. They can help your adult child understand long-term financial goals like starting a business, saving for retirement, or buying property. They can help set attainable goals and develop a plan to achieve them.

Start Investing Early

Long-term financial growth typically begins with a modest initial investment when young. Time is on your graduate’s side to allow compound interest and savvy investing to accumulate wealth. Encourage them to take advantage of employer-sponsored retirement plans, such as 401(k) or 403(b), especially if the employer offers matching contributions. Additionally, explore individual retirement accounts (IRAs) or other investment vehicles suited to their goals and risk tolerance.

Consider Insurance Coverage

Evaluate insurance needs, such as health insurance, renters or homeowners insurance, and vehicle insurance. Even though they’re young, look into disability and life insurance to protect themselves and their loved ones from unexpected life events. Typically, the healthier and younger you are, the lower the premium cost. Many policies are flexible to regain premium payments in the future if you no longer require the policy.

Create an Estate Plan Early

Your child may think estate planning is unnecessary. However, if they start a family, creating a will is critical to distribute assets and personal property to loved ones and can appoint guardians for minor children.

A living will is critical since accidents and incapacitation can happen at any age. It outlines your preferences for medical treatment if you can’t communicate your wishes and how long you want to persist in a vegetative state.

They can modify or completely rewrite their wills as they age and circumstances change.

Parental Input

For your child to receive financial messages without sounding like another money lecture, stick to the basics, such as:

  • Basic budget and goal-setting
  • Now versus later thinking
  • Delayed gratification and tradeoff requirements necessary to attain goals
  • Establishing and maintaining good credit
  • Saving versus investing and the importance of starting early
  • Big picture planning in financial life management

Once they understand the importance of legal and financial planning, they’re ready for the next steps in financial responsibility and setting realistic expectations around money.

Fostering Financial Independence

Some adult children will be more willing than others to heed parental advice on financial planning. You may want to provide some modest capital for early investment purposes. If you worry they might squander the money rather than watch it grow, your estate planning attorney can put guardrails on the gift via a trust or other legal mechanisms that limit their ability to withdraw funds.

All parents want to see their children do well in life, and a large part of their success is contingent upon achieving financial independence. Educating them early about building wealth can give them the clarity, control, and confidence they need to create a strong financial foundation that will serve them throughout their lives.

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.

How Do Estate Planning and Elder Law Differ?

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Although elder law and estate planning are both concerned with aging issues, elder law focuses mainly on issues that seniors face as they grow older.

How Estate Planning and Elder Law are Similar

No matter what stage of life we’re in, we face challenges. Hope for the best, but plan for the worst. We can get into accidents, especially when we’re young and under the impression that we’ll live forever. If you were incapacitated, who would you want to speak for you? Who would you trust to pay the bills or make medical decisions?

Both estate planning and elder law attorneys help you choose the right people to stand in your shoes when you can’t speak for yourself.

As adults, we start families, buy property, and accumulate valuable and sentimental items. If we’re thinking realistically, we want to ensure our families are taken care of and receive our property should something happen to us.

Both estate planning and elder law attorneys help you answer tough questions. Both attorneys also know how to protect your estate from tax burdens and avoid the expense and delay of court proceedings, such as probate and guardianship.

Elder Law Becomes Crucial in Later Stages of Life

Elder law expertise becomes crucial when we get older. We’re living longer, healthier lives – but nobody knows when we, or those we love, will get too sick to make decisions or live independently.

You may want to postpone thinking about these things, but delay or denial about incapacitation or declining health can mean that your entire savings gets wiped out paying for nursing home care. Misconceptions about government benefits, like Medicaid, can prevent you from seeking benefits, cause disqualification, or delays that leave you paying thousands of dollars a month for care out of pocket.

Senior business owners who are retiring need a succession plan for a smooth and profitable transition from their business. Older adults and their families have a quality of life to protect. Many want to stay in their homes as long as possible but must prepare for a time when skilled nursing facility care becomes necessary. Elder law attorneys help seniors allocate financial resources to protect against as many potential problems as possible. That includes preserving your home and savings for a spouse or future generations.

Reasons to Find an Elder Law Attorney

Elder law attorneys create custom estate plans with senior issues in mind. They can help you answer difficult questions and find the right solutions for your family by keeping their best interests at heart. Preparing for the future reduces stress and anxiety in an emergency. Your family will know your wishes and can make decisions for you when you need their help. Part of your plan to pay for long-term care includes how to use Medicaid, Medicare, Social Security, or retirement benefits.

Evaluating financial resources and determining eligibility for government benefits is complex and requires knowledge and experience to navigate the process successfully. Elder law attorneys use legal strategies to maximize your resources and will work with your financial advisor to align estate planning strategies with overall financial goals.

Our elder law attorneys want you to enjoy your life and independence for as long possible. And when life becomes harder with age, you’ll have something left over for your legacy. We are dedicated to keeping you informed of issues that affect seniors who may be experiencing declining health. We help you and your loved ones prepare for potential long-term medical expenses and the need to transition to in-home, assisted living, or nursing home care.

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