Show Some Heart: Show Mom Some Love This Sunday (….And Beyond!)!

Motherhood is hard work: moms love, protect, nurture, support, kiss boo-boos, give hugs, wipe noses…you get the idea.  Moms do it all.  Don’t forget to show your gratitude for the women in your life that are there for you and love you through it all.

Maternal instincts don’t have an off button.  It means spending time and energy to care for others, often not taking time for themselves.  Sometimes a shower and a clean shirt are luxuries to mothers out there.  Motherhood means worrying about your children, whether they are 2 or 62.  Sometimes motherhood is realizing what your own parents sacrificed and returning the favor and helping them in their senior years.  So celebrate all the women in your life that give love and support, even if they don’t fit the conventional “mom” mold: sisters, friends, grandmothers, mentors, even fathers and brothers often step in to mother when needed.

Still don’t have a gift?  This year, say thank you by simply giving a little pampered R&R or the gift of quality time.  Here’s some ideas for the last-minute planner:

  • Surprise mom by cleaning the house, or doing the dishes
  • Do brunch!
  • Give a hug and a chat – in person or, if distance separates you, by phone
  • Gift card your style? – Spa, hair salon, coffee shop, and fav restaurant are good picks
  • Just say Thank You!
  • Get Active – go bowling or take a walk as a family
  • Not sure what to do – provide the essentials and quiet time for a good old nap
  • Get your family planning done and offer mom (or wife, sister, daughter or son) peace of mind

Legacy Law Firm was founded by two hard working women and mothers, and we understand the importance of family and the desire to protect and to plan for your family, whether it be soccer practice, making supper or doing your legal life planning.  We are inspired by the families we meet every day and it’s our honor to help them plan for the future.  What can legal planning do for you and your family?

  • Name a guardian for your minor children in a Last Will and Testament;
  • Protect family assets through a Trust;
  • Protect grown children from creditors or divorces through inheritance protection;
  • Worried about the cost of nursing home care? Plan in advance to protect your assets in the event you or a loved one requires long-term care
  • Is mom receiving care in-home or at a nursing home? Set up a Care Agreement for you or siblings
  • Encourage a mother or a child to follow their entrepreneurial dreams through business planning
  • And more!

Do Mother’s Day right by encouraging the special ladies in your life to get their planning in order to live their dreams and plan for the future.  Look beyond this one day in May, and let a legal plan express your love for years to come.  Legacy Law Firm wants to wish all the moms out there a very special and happy Mother’s Day.  We understand the hard work you do and we salute you.  Thank you for all you do!

Special Note from Legacy Law Firm, P.C. Founder and Attorney, Bobbi Thury:

As a mother of four children ages five and under, time has never been so precious.  Late nights and early mornings blur together but when I get a flash of my baby smiling at me, even if he is sound asleep and has no idea what he is doing, that smile penetrates my heart and is sunshine for my soul.  I never realized the depth of love until having children.  As an estate planning attorney, if there is one thing I’m very cognizant of, it’s that time is our most precious commodity.  Whether you are a new mom or a great grandma, your love, wisdom and presence make the world a better place.  But just like any other passion or moment, you need to seize opportunities.  Be purposeful with your time and enjoy the laughter, the sunlight and even the tears.  Life is precious. 

The other thing I have learned is that there is truth to that mother grizzly bear saying.  Protecting our children and helping them chase after their own dreams and live their own life is innate.  As mothers, we also should take the step to protect our children and family even if we can’t be here.  When we meet with families and discuss their estate planning, every single person on our team knows that this isn’t just an estate plan that we are working on – we are helping protect and safeguard a family.

If you are interested in learning how we can assist you and your family with estate planning, elder law or business planning, please contact Legacy Law Firm, P.C. at (605) 275-5665 to schedule a free consultation today

Figuring Out A Parent’s Financial Life, When They Cannot

Imagine that your perfectly fine, aging-well parent has had a minor stroke and is no longer able to manage their financial or legal affairs. Your parent has been living independently, waiving off offers of help or even having someone come in to clean for years. It seemed as if it would go on that way forever. What happens, asks the Daily Times, when you are confronted with this scenario in the aptly-titled article “Senior Life: What a nightmare! Untangling a loved one’s finances”?

After the health crisis is over, it’s time to get busy. Open the door to the home and start looking. Where’s the will, where are the bank statements and where’s the information about Social Security benefits? When you start making calls or going online, you run into a bigger problem than figuring out where the papers are kept, no one will talk with you. You are not legally authorized, even though you are a direct descendant.

This happens all the time.

Statistically speaking, it is extremely likely that your parent will end up, at some point, in a nursing home or a rehabilitation center for an extended period of time. Most people have no idea what their parent’s financial situation is, where and how they keep their financial and legal records and what they would need to do in an emergency.

It’s not that difficult to fix, but you and your hopefully healthy parent or parents need to start by planning for the future. That means sitting down with an estate planning attorney and making sure to have some key documents, most importantly, a Power of Attorney.

A Power of Attorney (POA) is a legal document that gives you permission to act on another person’s behalf as their agent, if they are unable to do so. It must be properly prepared for your state’s laws.  It allows you to pay bills and make decisions on behalf of a loved one, while they are alive. Without it, you’ll need to go to court to be appointed as legal guardian. That takes time and is more expensive, than having a POA created and properly executed.

If you have downloaded a Power of Attorney and are hoping it works, be warned: chances are good it won’t. Many financial institutions insist that the only POA they will accept, are the ones that they issue.

Once you have a POA in place, assuming that your parent is able to sign it, then it’s time to get organized. You’ll need to go through all the important papers, setting up a system so you can see what bills need to be paid, how many bank accounts or investment accounts exist and review her financial status.

Next, it’s time to consolidate. If your parent was a child of the Depression, chances are they have money in many different places. This gave them a sense of security and gives you a headache. Consolidate four different checking accounts into one. The same should be done for any CDs, investment accounts and credit cards. Have her Social Security and any pension checks deposited into one account.

If you need help, and you might, don’t hesitate to ask for it. The stress of organizing decades of a loved one’s home, plus caring for them and managing the winding down of a home can be overwhelming. Your estate planning attorney will be able to connect you with a number of resources in your area.

Reference: Daily Times (April 9, 2019) “Senior Life: What a nightmare! Untangling a loved one’s finances”

How Do I Make a Seamless Transition of a Family Business?

The North Bay Business Journal’s article, “How to plan for a smooth transition of your family business,” explains that in wine families, usually one or two children go to work in the business. There’s often some kind of preferential treatment for them with economics or voting and control. A business owner needs to plan carefully in transferring her business to the next generation.

A crucial step in handling family dynamics is calling a meeting with everyone to discuss what’s going on with their business. A family meeting is an opportunity to discuss decisions with family members with reduced conflict and confusion.

To have a successful business succession plan, start with a business plan for the business. Next move to both financial planning and estate planning, especially estate planning for the current owner. You should then do tax planning around all of that.

Addressing the tax exposure is a challenge faced by those transferring assets. There are some tax issues with estate planning and asset transfer, unless it’s done during life. Transferring a business, or other assets when the owner is still alive, can be beneficial in the long run. Lifetime gifts can be a way to reduce estate taxes, because making a gift today before there’s been substantial appreciation is a way to leverage your gift and estate tax exemption.

A parent who transfers assets while still alive, would have to be willing to say goodbye to the income from an asset.

However, that doesn’t necessarily mean giving up control of the business. The process of transferring control of a business can benefit from a gradual approach. If you want to transfer the business to one or more of your children, but you want them to succeed on their own, you could bring them into the business as a manager and give them a little bit of ownership.

As a business owner selling out of a business, you need an experienced attorney to help you understand the impact of the amount of significant wealth that you may have, after the sale of the business. He or she will create a plan that will respect your values, goals and commitments, while making sure you have flexibility.

Reference: North Bay Business Journal (April 9, 2019) “How to plan for a smooth transition of your family business”

How Do I Estate Plan for a Child with Special Needs?

Estate planning is important for everyone, but it’s even more crucial for a family with a child who has special needs. It’s difficult to create an estate plan for children with special needs, because you don’t know what type of care he will need, or the type of government benefits for which she’ll be eligible, when she turns 18. People frequently become overwhelmed about special needs planning, because they don’t have a clear picture of what their children will need in the future.

A recent Forbes article, “Special Needs Kids Require Specialized Estate Planning,” says that if you have a child with special needs, it’s critical that you look at your planning options with your estate planning attorney and discuss your child’s health, capabilities and prognosis. You can then customize a plan that works for your child, with as much flexibility as possible.

Those with enough assets often would rather not to have their child get any government benefits and will set aside an amount to cover all the child’s living expenses in trust. Since the parents aren’t concerned with government benefits, the trust can be a discretionary trust that will distribute income and principal at the trustee’s discretion for the benefit of the child throughout the child’s life.

If there is a good chance the child will get government benefits, many parents create special needs trust to supplement (not replace) the government benefits that the child will receive. The trust must be drafted, so the child doesn’t become ineligible for the government benefits. These benefits provide for the child’s basic needs like a place to live, so the special needs trust will defray the cost of extras such as trips and entertainment.

If the parents can’t determine if their child will be eligible for government benefits, another option is for the parents to give their current trustees the authority to create a separate special needs trust at the time of the surviving parent’s death. Therefore, if the child is receiving benefits, the trustee can create the trust at that time, with the goal of preserving the child’s benefits.

All these trusts can be funded now. The parents can establish the trust and transfer cash or other assets to it, or the trust can be created now and left empty until a parent passes away. At that point, money can move into the trust from the parent’s estate, another trust or from a life insurance policy.

Some parents elect not to create a trust for their child and to disinherit him completely. The thinking is that the child can be supported solely by government benefits. Others go with a combination approach. They disinherit the special needs child and leave more assets to their other children, with the understanding that the other children will care for the special needs child. However, this isn’t a great idea. The siblings have no legal obligation to care for his or her sibling with special needs, just a moral one. If the child who inherited the bulk of the estate gets divorced, the assets are also susceptible to division upon divorce. Finally, the assets are liable to a creditor’s claim, if the child is sued.

Estate planning for a child with special needs can be hard, so get a flexible plan in place that will provide peace of mind.

Reference: Forbes (March 27, 2019) “Special Needs Kids Require Specialized Estate Planning”

What are Some Common Mistakes in Titling Real Property?

Title to real property must be transferred, when the asset is sold and must be cleared (free of liens or encumbrances) for the transfer to occur. Unlike other real property assets, real estate ownership can take several forms. Each of these forms has implications on how ownership can be transferred and can affect how they can be financed, improved or used as collateral.

Investopedia’s article, “5 Common Methods of Holding Titles on Real Property,” looks at the ways in which to hold title to real estate property.

Joint Tenancy. This is when two or more people hold title to real estate jointly, with equal rights to enjoy the property during their lives. When one dies, their rights of ownership pass to the surviving tenant(s). The parties in the ownership need not be married or related, but any financing or use of the property for financial gain must be approved by all parties and cannot be transferred by will after one passes. Another disadvantage is that a creditor with a legal judgment to collect a debt from one of the owners, can also petition the court to divide the property and force a sale in order to collect on the judgment.

Tenancy In Common. In this situation, two or more persons hold title to real estate jointly with equal rights to enjoy the property during their lives. However, unlike joint tenancy, tenants in common hold title individually for their respective part of the property and can dispose of or encumber as they chose. Ownership can be willed to other parties, and in the event of death, ownership will transfer to that owner’s heirs undivided. An owner can use the wealth created by their portion of the property, as collateral for financial transactions, and creditors can place liens only against one owner’s specific portion of the property. Any liens must be cleared for a total transfer of ownership to take place.

Tenants by Entirety. This can only be used, when the owners are legally married. This is ownership in real estate under the assumption that the couple is one person for legal purposes. The title transfers to the other in entirety, if one of the couple dies. The advantage is that no legal action is required at the death of a spouse. There’s no need for a will, and probate or other legal action isn’t necessary. Conveyance of the property must be done in total, and the property can’t be subdivided. In the case of divorce, the property converts to a tenancy in common, and one owner can transfer ownership of their respective part of the property to whomever they want.

Sole Ownership. This is ownership by an individual or entity legally capable of holding title. The main advantage to holding title as a sole owner, is the ease with which transactions can be accomplished, since no other party needs to authorize the transaction. The disadvantage is the potential for legal issues regarding the transfer of ownership, if the sole owner dies or become incapacitated. Unless there’s a will, the transfer of ownership upon death can be an issue.

Community Property. This form of ownership is by husband and wife during their marriage for property they intend to own together. Under community property, either spouse has the right to dispose of one half of the property or will it to another party. Anyone who’s lived with another person as a common-law spouse and doesn’t specifically change title to the property as sole ownership (which is legally transacted with approval by the significant other) takes the risk of having to share ownership of the property, in the absence of a legal marriage.

Community Property With the Right of Survivorship. This is a way for married couples to hold title to property. However, it is only available in Arizona, California, Nevada, Texas, and Wisconsin. It lets one spouse’s interest in community-property assets pass probate-free to the surviving spouse, in the event of death.

Entities other than individuals can hold title to real estate in its entirety. Ownership in real estate can be done as a corporation. The legal entity is a company owned by shareholders but regarded under the law as having an existence separate from those shareholders. Real estate can also be owned as a partnership, which is an association of two or more people to carry on business for profit as co-owners. Real estate also can be owned by a trust. These legal entities own the properties and are managed by a trustee on behalf of the beneficiaries. There are many benefits, such as managerial influence, financial and legal liability and tax considerations.

Reference: Investopedia (April 10, 2018) “5 Common Methods of Holding Titles on Real Property”

What Are the Minimum Legal Documents a Farmer or Family Business Owner Must Have?

There are five fundamental estate planning documents that every farmer, family business owner, or every adult, should have prepared and properly executed. They are clearly outlined in the article “Five documents every farmer should have” from Ag Week. However, as reported as recently as January 2019 from AARP, six of 10 seniors don’t have a will. The number of farmers who lack an estate plan is fewer, and probably even less have advance care directives. This is not good for them or their families.

Farm and ranch families often find themselves facing complicated issues about how the land should be divided among the next generation, and whether the next generation will continue to maintain the ranch or farm. This is something that estate planning addresses.

Many people think of the will as the estate plan. However, it is only part of the plan. The will says who will inherit property, including assets and debts, and who will be responsible for carrying out your directions. That person is the executor, who acts as your agent when you have died.

While there are online wills available, it is recommended that farm and ranch families work with an estate planning attorney. They are encouraged to meet with a few, until they find one who they are comfortable with and they believe has the experience that suits the family’s situation. The attorney will help with how property is titled and how to handle the tax implications. These are both important parts of an estate plan.

Every adult needs an advance health care directive, the legal document that specifies the medical procedures that they want to maintain life, if there is a health crisis. An advance directive usually involves a living will, and names a person as health care power of attorney to make health care decisions, when you are unable to do so for yourself.

The living will is used to specify the types of medical procedures you do or do not wish to have performed to keep you alive. Medical professionals or first responders often do not have access to this document and must follow their legal and ethical requirement to maintain life, in any way possible. Make sure this document is readily available and that other family members know where it is located.

Provide a copy of the living will and durable power of attorney to your doctors and the institutions that usually provide your care. The power of attorney should specify who has primary responsibility to make these decisions and at least one alternate.

Talk with your physicians about your feelings and wishes for these documents. They may also benefit from having the person you have named as your power of attorney with you at the time of the conversation. That way everyone is clear about what your wishes are.

A power of attorney is given to an individual, your agent, who can make financial decisions on your behalf, if you are incapacitated. They can write checks, make deposits and have access to your safe deposit box. There will be forms to fill out, so don’t delay having them created and properly executed.

While it is not legally enforceable, write a letter of intention to accompany your will. Give a copy of your letter to your executor, and possibly to a trusted family member. This way, you can make sure they know:

  • Where important documents, including life insurance policies, savings accounts, loans, leases, titles to property and other legal documents are located.
  • Instructions for the care of minor children. Your will should name a guardian, but any information you can share about your children will be helpful.
  • Instructions of what you want to happen to the family land.

The more information you can prepare and provide for your survivors, the more likely your wishes will be carried out. It can also be psychologically soothing to know that you have communicated and legally documented your wishes for those who live after you.

Reference: Ag Week (April 5, 2019) “Five documents every farmer should have”

What Will Happen If I’m In An Accident?

Expensive and rising healthcare costs can’t be a surprise to those nearing or in retirement. However, something that’s not often discussed, is how unexpected medical and related expenses from accidents can have a devastating impact on investment accounts, particularly for younger adults.

It’s estimated that 3.14 million Americans were involved in an auto accident in 2016, according to the National Highway Safety Administration. This shows how common they are.

Think Advisor’s recent article, “How Car Accidents Can Wreck Retirement Accounts,” looks at the case of a 35-year-old single professional with more than $600,000 in her investment account.

This woman, Sue, was driving home from work, when an uninsured motorist ran a traffic light and ran into her new convertible. The car was totaled, and she was severely injured. Sue was rushed to the hospital, required surgery for several broken bones and then went to a rehab facility for physical therapy upon her release.

Fortunately, Sue’s medical coverage from work covered her hospitalization, rehab stay and at-home visits during her recovery. Sue’s own auto insurance policy paid for a new car. However, Sue was unable to work for a year. Her employer-paid short-term disability insurance that covered about 65% of her lost income for three months, but she had no long-term coverage and had to pay some health-related expenses out of pocket. In total, Sue lost $120,000 in income, had to pay $10,000 in medical expenses not covered by her plan, and spent $65,000 for at-home assistance during her recuperation.

Luckily, she had savings outside her investment accounts that covered those expenses. However, there are many other accident victims who aren’t as fortunate as Sue. They must use investments that may have been intended for their children’s education and their retirement. The result is paying penalties for tapping into qualified accounts.

Sue didn’t tap into her investments. However, she did have to stop making contributions to her qualified accounts and adding to her other investments. Because the accident occurred during her prime earning years, the compounded effect on her nest egg will be significant.

In addition, Sue could’ve avoided the loss of income and the out-of-pocket expenses, if she’d been covered by a more comprehensive auto insurance policy and purchased additional disability insurance.

Review your coverages and your entire estate plan with a knowledgeable attorney to be certain you have the best protection.

Reference: Think Advisor (March 26, 2019) “How Car Accidents Can Wreck Retirement Accounts”

Do My Debts Die with Me?

When you die, your debts do not. Your executor will be required to pay them using your assets. That means that any unpaid debt can reduce the wealth you’ve left behind for your heirs. In some cases, your family members could even need to pay your debt.

Reader’s Digest’s recent article, “This Is What Happens to Your Debt When You Die,” explains that not all debt is created equal. With secured debt, like a mortgage or car loans, your estate can either pay off your debts in full or continue making installment payments. Another option is to sell the property or turn it over to the lender to satisfy the debt.

However, any unsecured debt, such as credit cards, bills, or personal loans, is typically just paid from the estate. The estate is everything you own, such as assets, bank accounts, real estate and other property.

Note that student loans are the exception, but there are some caveats. Most federal student loans, along with private loans without a cosigner, are discharged with proof of death. Thus, your heirs won’t be responsible for those loans. However, if your private student loan was cosigned, that person will be required to pay it off. There are also some loans, like PLUS loans, that while technically forgiven, could leave the parent who took it out with higher taxes.

The way to protect both yourself and your family, is to speak with an experienced estate planning attorney to get your affairs in order.

Creating an action plan for your outstanding debt is a critical component of the estate planning process. You also need to ask about other end-of-life plans, like medical directives, wills and trusts to manage your assets, when you pass away.

You should also review your life insurance policy to make certain that it’s up-to-date, and don’t forget to review your named beneficiaries.

If your beneficiaries are assigned correctly, some of your assets may bypass probate and be protected from creditors. Therefore, anyone who’s listed on your policy won’t be forced to hand over their money to satisfy your debt.

Reference: Reader’s Digest “This Is What Happens to Your Debt When You Die”

How Do I Plan for a Blended Family?

A blended family (or stepfamily) can be thought of as the result of two or more people forming a life together (married or not) that includes children from one or both of their previous relationships, says The Pittsburgh Post-Gazette in a recent article, “You’re in love again, but consider the legal and financial issues before it’s too late.”

Research from the Pew Research Center study reveals a high remarriage rate for those 55 and older—67% between the ages 55 and 64 remarry. Some of the high remarriage percentage may be due to increasing life expectancies or the death of a spouse. In addition, divorces are increasing for older people who may have decided that, with the children grown, they want to go their separate ways.

It’s important to note that although 50% of first marriages end in divorce, that number jumps to 67% of second marriages and 80% of third marriages end in divorce.

So if you’re remarrying, you should think about starting out with a prenuptial agreement. This type of agreement is made between two people prior to marriage. It sets out rights to property and support, in case there’s a divorce or death. Both parties must reveal their finances. This is really helpful, when each may have different income sources, assets and expenses.

You should discuss whose name will be on the deed to your home, which is often the asset with the most value, as well as the beneficiary designations of your life insurance policies, 401(k)s and individual retirement accounts.

It is also important to review the agents under your health care directives and financial powers of attorney. Ask yourself if you truly want your stepchildren in any of these agent roles, which may include “pulling the plug” or ending life support.

Talk to an experienced estate planning attorney about these important documents that you’ll need, when you say “I do” for the second (or third) time.

Reference: Pittsburgh Post-Gazette (February 24, 2019) “You’re in love again, but consider the legal and financial issues before it’s too late”

How Do I Incorporate Charitable Giving into My Estate Plan?

When looking into charitable giving, it can easily become overwhelming with all of the references to tax codes, regulations and forms. Talk to an experienced estate planning attorney to make this a simple part of your estate planning.

The Press & Guide’s recent article, “Estate planning and charitable giving,” explains that there are a number of ways to incorporate charitable giving into an estate plan.  It is something that almost anyone can do. Let’s look at some common ways to give:

Giving in your will. When hearing about charitable giving and estate planning, many people may get intimidated by estate taxes. They think their heirs will not get as much of their money, as they wanted. However, including a charitable contribution in your estate plan will reduce your estate tax liabilities—helping to maximize the final value of your estate for your heirs. Talk to your estate attorney and ensure that your donation is detailed properly in your will.

Donating your retirement account. You can name a charity as the beneficiary on your retirement account. Charities are exempt from both income and estate taxes, so going this route means the charity will receive 100% of the account’s value, when it’s liquidated.

Creating a charitable trust. A charitable trust is another way to give back through estate planning. You can ask your attorney about a split-interest trust that allows a person to donate their assets to a charity but keep some of the benefits of holding those assets. A split-interest trust funds a trust in the charity’s name. Those who open one, get a tax deduction any time money is transferred into the trust. However, the donors still control the assets in the trust, which is passed to the charity at the time of their deaths.

Charitable giving is an important component of many people’s estate plan. There are several options for charitable trusts, so speak to an experienced estate planning attorney to help you select the best one for you, your family and the charities you want to support.

Reference: (Southgate MI) Press & Guide (January 27, 2019) “Estate planning and charitable giving”