Consider a Family Meeting about Estate Planning

October 21, 2021

Kiplinger’s recent article entitled “It’s Never Too Late for a Family Meeting – Here’s How to Do Them Well” emphasizes that no matter the amount of wealth that a family has, wealth education is crucial to overall financial education, preparing for the future and to becoming a good steward of an inheritance. Consider a family meeting about estate planning.

Family meetings are a great way of bringing members of a family together with a goal of facilitating communication and education. This allows for sharing family stories, communicating values, setting goals to help ensure transparency and helping members across generations understand their roles around stewardship and wealth.

Here are some ideas on how to have an effective family meeting about estate planning:

Prepare. The host of the meeting should spend time with each participating family member to help them understand the reason for the meeting and learn more about their expectations. There should be a desire and commitment from the participants to invest time and effort to make family meetings about estate planning a success.

Plan. Create a clear agenda that defines the purpose and goals of each family meeting about estate planning. Share this agenda with participants before the meeting. Select a neutral location that makes everyone comfortable and encourages participation.

Have time for learning. Include an educational component in the agenda, such as an introduction to investing, estate planning, budgeting and saving, or philanthropy.

Have a “parking lot.” Note any topics raised that might need to be addressed in a future estate planning meeting.

Use a facilitator. Perhaps have a trusted adviser facilitate the meeting. This can help with managing the agenda, offering a different perspective, calming emotions and making certain that everyone is heard and understood.

Follow up. Include some to-do’s and schedule the next meeting to set expectations about continuing to bring the family together.

Consider a family meeting about estate planning that will allow all family members to feel they are included in decisions, and foster a better understanding of what their inheritance will look like.

If you would like to learn more about difficult family conversations, please visit our previous posts.

Reference: Kiplinger (Sep. 1, 2021) “It’s Never Too Late for a Family Meeting – Here’s How to Do Them Well”

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Protect Loved Ones from Financial Elder Abuse

October 11, 2021

In 2021, more than 6.2 million people in America live with some form of Alzheimer’s disease and need some type of memory care. At the same time, financial abuse and scams, especially those targeting people 65 and older, are on the rise, says the Better Business Bureau. It is important to protect loved ones from financial elder abuse.

Individuals suffering from Alzheimer’s and other forms of dementia face unique challenges when it comes to financial elder abuse and scams, according to a recent report “Protecting you or a loved one from financial elder abuse and scams” from Idaho News 6. The increasing number of Alzheimer’s diagnoses increases chances of needing in-home, memory care or skilled nursing care at some point, making it increasingly important to plan ahead. When there is no advance planning, financial devastation and the potential for financial elder abuse occurs.

Planning starts with an experienced estate planning attorney who can help the family prepare these four basic documents:

Last Will and Testament
Financial Power of Attorney
Health Care Power of Attorney
Living Will/Advanced Directive

There are additional documents, depending upon the individual’s situation, including a Durable Power of Attorney, used to give another person the ability to make decisions for property, business and financial matters. In cases of future incapacity, this is extremely important.

Power of Attorney: This appoints an “agent” who can make financial decisions on behalf of the “principal.” The POA creates a fiduciary relationship between the agent and their principal, wherein the agent must act in the best interest of the principal, above their own interest. The selection of a POA is very important, since it is a big responsibility.

The Principal should also name a successor agent, in case the primary agent is not able or willing to take on their role. Understand the possibility of abuse of power by the agent before finalizing any documents. An agent who abuses their powers or reaches beyond their powers can be prosecuted. However, it is best to make a good choice from the start and try to avoid problems.

Most of us get all the right protection in place for our homes, cars and have health insurance in place. However, the chances of needing long-term care for a dementia are actually higher than having your house burn down.

Planning for incapacity and protecting loved ones from financial elder abuse can be accomplished with the help of an estate planning attorney. Have the conversations with your attorney and your family early and get going.

If you would like to learn more about elder abuse, please visit our previous posts.

Reference: Idaho News 6 (Sep. 14, 2021) “Protecting you or a loved one from financial elder abuse and scams”

Businesses should have a Buy-Sell Agreement

October 4, 2021

Businesses should have a buy-sell agreement to protect the owners, their families, employees and the company. Without a buy-sell agreement or succession plan, any company is at risk, notes a recent article titled “Why does your business need a buy-sell agreement?” from the Philadelphia Business Journal.

Many business owners are reluctant to recognize the possibility of their becoming disabled or dying, so they put off creating a buy sell agreement. However, as we all know, unexpected events happen and it’s always better to be prepared.

A buy-sell agreement offers protection first by establishing what type of triggering events could happen and defining the terms and conditions for how shareholders will enter and exit their ownership of the business.

Companies often have a buy-sell agreement stuck in a file drawer from ten or twenty years ago. Chances are that big changes have taken place in the business and the old agreement is no longer relevant. The day-to-day operations of a business are pressing, and there’s never enough time to get around to it. However, when the unexpected occurs, shareholders are left to negotiate among themselves during the worst possible time.

A well-drafted buy-sell agreement for a business should address the most common events: death, disability, divorce, personal bankruptcy, voluntary termination, retirement and involuntary separation. The agreement should clearly state the percentage and type of ownership, how shares are valued and how any insurance proceeds are to be handled. Without knowledge of the value and terms of payment, there’s no way to provide protection for a triggering event.

Once the value of the company and its shareholders is defined, it may become clear that a business needs to close a valuation gap.

The intentions for the future of the business can also be clarified through this process. Some provisions to consider are:

How to notify other shareholders, in the event of a voluntary termination.
Trailer provisions to protect exiting shareholders, in the event of a subsequent liquidity event.
Discounts on value or extended payment terms for non-compliance of notification provisions.
Insurance portability provisions to allow existing shareholders to reassign beneficiary designations (once payments owed to the exiting shareholder have been made).

Businesses should have a buy-sell agreement. They are dynamic entities with frequent changes, so buy-sell agreements should be reviewed and updated in the same way that an estate plan needs to be updated—every three or four years. If you would like to read more about buy-sell agreements, and other succession planning topics, please visit our previous posts.

Reference: Philadelphia Business Journal (Sep. 1, 2021) “Why does your business need a buy-sell agreement?”

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What’s an Enhanced Life Estate?

September 30, 2021

What’s an enhanced life estate? This topic comes up from time to time with older couples of retirement age. First Coast News’ recent article entitled “Deed named for former first lady could be key to planning your estate” explains that a strategy that’s available in Florida and a few other states is called an enhanced life estate or a “Lady Bird” deed, named after former First Lady, Lady Bird Johnson.

This deed states that when I die, you get the property, but until then, I reserve all rights to do whatever I want with it. That contrasts with a traditional life estate where a property owner can plan for one or more others to inherit their house.

Typically, the person with a life estate has a lot less control over what happens in the future, including potentially being thwarted by the very person you’re tapping to receive your property at your death, in case you decide you no longer want the house while you’re still alive.

The problem is, now you want to sell the property, but since they are a co-owner, they can refuse. And there’s nothing you can do about it.

Enhanced life estates are also about protecting property and its eventual recipient from creditors after the death of the owner. That’s the benefit of avoiding probate. Medicaid or any other creditor may become a creditor in probate.

A Lady Bird deed supersedes a will.

But there are downsides to the Lady Bird deed. A big drawback is if you change your mind. You have to now record another deed in the public record to remove that, and every deed that you record creates one thing that could go wrong.

However, this can be true of any change made in hope of overriding an earlier estate decision, and Lady Bird deeds are fairly straightforward. Understanding what an enhanced life estate does will help avoid any pitfalls. Ask an experienced estate planning attorney if this type of arrangement is available in your state.

If you would like to read more about enhanced life estates, or other types of deeds for property, please visit our previous posts.

Reference: First Coast News (July 19, 2021) “Deed named for former first lady could be key to planning your estate”

The Estate of The Union Episode 9 out now!

September 24, 2021

The Estate of The Union Episode 9 out now! In the latest installment, Brad Wiewel of Texas Trust Law chats with Grace Cook of Harrell Funeral Home about a subject that is often overlooked – pre-planning your funeral.

Planning a funeral can be a daunting task for loved ones still grieving. It can also be an overwhelming financial burden on the family. Pre-arranging your own service will help to ease the burden of your loved ones. It will also alleviate any questions, problems or differences, which can occur among family members. The arrangements you make will reflect your exact wishes and desires. You can give this gift of love by providing meaningful final instructions.

Brad and Grace share a lively discussion of the common problems she sees with funeral planning, as well as some of the more unique and special ways families have arranged memorials for the deceased. It can seem like a heavy subject, but pre-planning your funeral might be the last, best plan you ever make!

In each episode of The Estate of The Union podcast, host and lawyer Brad Wiewel will give valuable insight into estate planning, making an often daunting subject easier to understand.

It is Estate Planning Made Simple!

Harrell Funeral Home is the largest family-owned funeral home in Austin and the surrounding areas. You may reach them at harrellfuneralhomes.com.

The Estate of The Union can be found on Spotify, Apple podcasts, or anywhere you get your podcasts. Please click on the link below to listen to the new installment of The Estate of The Union podcast. The Estate of The Union Episode 9 out now. We hope you enjoy it.

Texas Trust Law/The Wiewel Law Firm focuses its practice exclusively in the area of wills, probate, estate planning, asset protection, and special needs planning. Brad Wiewel is Board Certified in Estate Planning and Probate Law by the Texas Board of Legal Specialization.

Estate Planning for Same-Sex Couples

September 15, 2021

Proper estate planning can help ensure that your wishes are carried out exactly as intended in the event of a death or a serious illness, says Insurance Net News’ recent article entitled “What Same-Sex Partners Need to Know About Estate Planning.” Having a clearly stated plan in place can give clear instructions and potentially avoid any fights that otherwise might occur. With estate planning for same-sex couples, this may be even more crucial.

Your estate plan should include a will or trust, beneficiary forms, powers of attorney, a living will and a letter of intent. It’s also smart to include a secure document with a list of your accounts, debts, assets and contact info for any key people involved in those accounts. This list should contain passwords for locked accounts and any other relevant information.

A will is a central component of an estate plan which ensures that your wishes are followed after you pass away. This alleviates your family from the responsibility of determining how to divide your property and takes the guessing and stress out of how to pass along belongings. A will or trust might also state the way in which to transfer your financial assets to your children. You should also make sure your beneficiary forms are up to date with your spouse for life insurance policies, bank accounts and retirement accounts.

For same-sex couples, it is particularly important to create a clear medical power of attorney and create a living will that states your medical directives, if you aren’t able to make those decisions on your own. If you aren’t married, this will give your partner the legal protection he or she needs to make those decisions. It is important for you to take time to have those conversations with your partner, so the plans and directives are clear. You can also draft a letter of intent, which is a written, personal note that can be included to help detail your wishes and provide reasoning for the decisions.

Protecting Your Minor Children. Name a legal guardian for them in your will, in the event both parents die. Same-sex couples must make sure that both parents have equal rights, especially in a case where one parent is the biological parent. If the surviving spouse or partner isn’t the biological parent and hasn’t legally adopted the children, don’t assume they’ll automatically be named guardian. These laws vary from state to state.

Dissolve Old Unions. There could be challenges, if you entered into a civil union or domestic partnership before your marriage was legalized. Prior to the 2015 marriage equality ruling, some same-sex couples married in states where it was legal but resided in states where the marriage wasn’t recognized. If you and your partner broke up, but didn’t legally dissolve the union, it may still be legally binding. Moreover, some states converted civil unions and domestic partnerships to legal marriages, so you and a former partner could be legally married without knowing it. If a former union wasn’t with your current partner, make certain that you legally unbind yourself to avoid any future disputes on your estate.

Review Your Real Estate Documents. Check your real estate documents to confirm that both partners are listed and have equal rights to home ownership, especially if the home was purchased prior to the legalization of same-sex marriage or if you aren’t married. There are a few ways to split ownership of their property. This includes tenants in common, where both partners share ownership of the property, but allows each individual to leave their shares to another person in their will. There’s also joint tenants with rights to survivorship. This is when both partners are property owners but if one dies, the remaining partner retains sole ownership.

Estate planning for same-sex couples can be a complex process, and they may have more stress to make certain that they have a legally binding plan. Talk to an experienced estate planning attorney about the estate planning process to put a solid plan to help provide peace of mind knowing your family is protected.

If you would like to read more about planning for same sex couples, please visit our previous posts.

Reference: Insurance Net News (June 30, 2021) “What Same-Sex Partners Need to Know About Estate Planning”

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The Purpose of a Credit Shelter Trust

September 13, 2021

The purpose of a credit shelter trust is for protecting assets from creditors, moving assets out of the estate to avoid probate and adding another layer of protection to a deceased spouse’s wishes. Only married couples can use credit shelter trusts, according to a recent article explaining it all: “How Does a Credit Shelter Trust Work?” from Yahoo! Finance.

The main reason to use a credit shelter trust is to minimize federal estate taxes on assets in the estate. Also known as “wealth transfer taxes,” the federal estate tax has been around since 1916. Estate tax rates are very high. Wealth more than $1 million over the exemption rate is taxed at 40%. While today’s federal estate tax exemption is very high—$11.7 million for individuals and $23.4 million for couples—it is generally understood that these numbers are not likely to remain at these historic levels. The current estate tax exemption expires in 2025, unless Congress acts to reduce it earlier.

Estate tax law changes often both at the federal and the state level, so estate planning attorneys continually track these changes to protect their clients.

The credit shelter trust, also known as a bypass trust, B trust, exemption trust or a family trust, is an irrevocable trust. As with all trusts, it is a contract between the trustor—the person who creates and funds the trust—and the trustee—the person in charge of the trust. The trust may contain any type of property, from cash, stocks, bonds and real estate to collectibles and artwork.

The credit shelter trust becomes effective upon the death of one of the spouses. Assets in the trust are not included in the estate of the surviving spouse. Depending upon the terms of the trust, these assets may pass to beneficiaries after the first spouse passes without incurring any tax liabilities. Alternatively, as long as the surviving spouse lives, they may receive income from assets in the trust.

Another purpose of a credit shelter trust is to protect the wishes of the decedent spouse. The trust document can be used to direct that some or all of the assets of the first spouse to die shall pass to the children of a first marriage or other specific beneficiaries.

Credit shelter trusts are one of many tools that can be used for estate planning. They have the added benefit of protecting assets from creditors and maintaining the family’s privacy, since assets in trust do not go through probate. Your estate planning attorney will know which kind of trust is best for your unique situation.

If you would like to read more about various types of trusts, please visit our previous posts.

Reference: Yahoo! Finance (Aug. 16, 2021) “How Does a Credit Shelter Trust Work?”

Keep the Vacation Home in the Family

September 10, 2021

There are several ways to keep the vacation home in the family and is not overly burdensome to any one member or couple in the family, according to the article “Estate planning for vacation property” from Pauls Valley Daily Democrat.

To begin, families have the option of creating a legal entity to own the asset. This can be a Family LLC, a partnership or a trust. The best choice depends upon each family’s unique situation. For an LLC, there needs to be an operating agreement, which details management and administration, conflict resolution, property maintenance and financial matters. The agreement needs to include:

Named management—ideally, two or three people who are directly responsible for managing the LLC. This typically includes the parents or grandparents who set up the LLC or Trust. However, it should also include representatives from different branches in the family.

Property and ownership rules must be clarified and documented. The property’s use and rules for transferring property are a key part of the agreement. Does a buy-sell agreement work to give owners the right to opt out of owning the property? What would that look like: how can the family member sell, who can she sell to and how is the value established? Should there be a first-right-of refusal put into place? In these situations, a transfer to anyone who is not a blood descendent may require a vote with a unanimous tally.

There are families where transferring ownership is only permitted to lineal descendants and not to the families of spouses who marry into the family.

Finances need to be spelled out as well. A special endowment can be included as part of the LLC or as a separate trust, so that money or investments are set aside to pay taxes, upkeep, insurance and future capital requirements. Anyone who has ever owned a house knows there are always capital requirements, from replacing an ancient heating system to fixing a roof after decades of a heavy snow load.

If the endowment is not enough to cover costs, create an agreement for annual contribut6ions by family members. Each family will need to determine who should contribute what. Some set this by earnings, others by how much the property is used. What happens if someone fails to pay their share?

Managing use of the property when there is a legal entity in place is more than a casual “Who calls Mom and Dad first.” The parents who establish the LLC or Trust may reserve lifetime use for themselves. The managers should establish rules for scheduling.

For parents or grandparents who create an LLC or Trust, be sure it works with your estate plan. If they intend to keep the vacation home in the family and wish to leave a bequest for its maintenance, for instance, the estate planning attorney will be able to incorporate that into the LLC or Trust.

If you would like to learn more about protecting property in estate planning, please visit our previous posts.

Reference: Pauls Valley Democrat (July 29, 2021) “Estate planning for vacation property”

New Installment of The Estate of The Union Podcast

September 2, 2021

In this new installment of The Estate of The Union Podcast, Brad Wiewel is joined by Ann Lumley, JD, the Director of After Life Services and Trust Administration for Texas Trust Law to discuss celebrity estate planning screw ups.

The size and scope of the mistakes made by celebrities may be enormous, but many of the mistakes are common for, well, us common people. Ann and Brad discuss the havoc created by celebrities when they died with no planning or inadequate planning. It’s a fun, fast moving discussion on What-Not-To-Do. Learning lessons from celebrity estate planning mistakes is a good way to prevent yourself from making those same errors. If you don’t have an estate plan, get it started. If you haven’t looked at your estate plan in a while, have it reviewed.

In each episode of The Estate of The Union podcast, host and lawyer Brad Wiewel will give valuable insight into estate planning, making an often daunting subject easier to understand.

It is Estate Planning Made Simple!

The Wiewel Law Firm focuses its practice exclusively in the area of wills, probate, estate planning, asset protection, and special needs planning. Brad Wiewel is Board Certified in Estate Planning and Probate Law by the Texas Board of Legal Specialization.

Solutions to help Seniors live Well

September 1, 2021

With our aging population, we need more solutions to help seniors live well. That’s where universal design comes in: it’s a concept that tries to make products and structures usable by everyone, regardless of age, ability, or other factors.

Money Talks News’s article entitled “8 Essential Home Features for Aging in Place” says that aging in place requires homes that accommodate our needs as we age. The article sets out a list of eight design features buyers focused on accessibility are looking for based on survey data from the National Association of Home Builders’ 2021 “What Home Buyers Really Want” report.

Lower countertops. The kitchen is the center of most homes, and it’s an important part of universal design. Countertops that are three inches lower than the standard height of 36 inches lets seniors and those with limited mobility to fully participate in meal prep. You can round all countertop edges and corners because fewer 90-degree angles may reduce bumping and bruising and minimize injury in the event of a fall.
Lower kitchen cabinets. According to Aging in Place, upper kitchen cabinets that are three inches lower than standard height lessens the tendency to overreach and potentially lose balance. Lower cabinets that feature pull-out shelves, “lazy Susan” corner cabinets and easy-pull handles offer additional convenience for seniors and those who rely on a wheelchair or mobility scooter.
Bathroom aids. For seniors, using the bathroom safely can a challenge. Aging-in-place design recommends these features to make bathrooms more practical and convenient:

A walk-in tub or a shower with non-slip seating
An adjustable or hand-held showerhead
A comfort-height toilet
Ground-fault interrupter (GFI) outlets that reduce the risk of shock; and
Grab bars near the toilet and shower.

A Stepless entrance. To age in place safely, AgingCare recommends that a home’s main entrance not have steps and should have a threshold height of no more than a half an inch. Here are a couple of ways that an entryway without steps can make life better for seniors:

It facilitates smooth entrance/exit by wheelchair, scooters, or walker
It decreases the risk of falls, particularly in snowy or icy conditions; and
It makes it easier to get deliveries and enter the home carrying groceries.

Non slip floors. According to the CDC, more than 35 million older adults fell at least once in 2018, and 32,000 died from fall-related injuries. To help, non-slip surfaces like low-pile carpet, cork and slip-resistant vinyl can minimize the risk.
Wide hallways. Wide hallways (defined as at least four feet wide) let seniors access every space in their home with a walker, wheelchair, or scooter, or with the assistance of a home health aide.
Wide doorways. A standard doorway can be as narrow as 24 inches, which is a tight fit for seniors who rely on wheelchairs, scooters, or walkers. Seniors like wide doorways, defined as at least three feet wide. According to the ADA, doorways should have at least 32 inches of clear width. To help with an easy transition from room to room, thresholds should be as flush to the floor as possible.
Full bath on main level. Not just convenient, it’s a critical safety feature for seniors. Besides eliminating the need to go up and down stairs several times a day, main floor bathrooms also allow the elderly to (i) respond to incontinence issues more quickly; (ii) practice regular self-care; and (iii) access a private space when required.

Elder care can be a complicated. These, and many more solutions help seniors live well and comfortably. If you would like to learn more about elder care, please visit our previous posts.

Reference: Money Talks News (Aug. 5, 2021) “8 Essential Home Features for Aging in Place”

Category: Family

Consider a Family Meeting about Estate Planning

Protect Loved Ones from Financial Elder Abuse

Businesses should have a Buy-Sell Agreement

What’s an Enhanced Life Estate?

The Estate of The Union Episode 9 out now!

Estate Planning for Same-Sex Couples

The Purpose of a Credit Shelter Trust

Keep the Vacation Home in the Family

New Installment of The Estate of The Union Podcast

Solutions to help Seniors live Well

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