There are Burial Benefits Available to Veterans

March 28, 2023

There are burial benefits available to veterans through the VA. Only about one in five veterans who died last year were buried free of charge in department or state-run veteran cemeteries. Less than half of individuals eligible for some type of burial or gravesite financial assistance took advantage of the benefit, says Military Times’ recent article entitled, “VA officials work to raise awareness of cemetery, burial services.”

“I want even more veterans and family members to know about and take advantage of the final benefits a veteran earns for their service,” said Matthew Quinn, undersecretary for memorial affairs at the National Cemetery Administration.

“They have the option to choose VA for their final wishes. And we will take care of them and their loved ones in a manner that mirrors their own dedicated service and devotion to our nation, in perpetuity.”

NCA officials are trying to emphasize VA burial services as the U.S. nears the 50th anniversary of the agency assuming control of national veterans cemeteries. There are now 155 such resting places managed by VA and another 121 funded by the department. However, the use of the burial benefits lags behind other well-known VA support services.

Quinn said several factors cause the low usage rate for burial services, including “family wishes” that multiple individuals be interred in the same plot. Only spouses and certain other dependents can be buried with a headstone alongside a veteran in a national cemetery.

However, other assistance — such as free headstones for veterans being interred at private cemeteries and free medallions for existing headstones to denote the deceased individual’s veteran status — are often overlooked because family members and funeral homes aren’t familiar with the benefits.

VA provided about 350,000 headstones for veterans’ graves last year, and another 12,000 medallions.

Quinn said while vets don’t have to use the services, those interested should consider applying before any of the services are needed to ensure they have the options ready.

“Applying for eligibility prior to the veteran’s death ensures that necessary service records are in order, so grieving family members do not have to search for military discharge papers while they are already under great stress,” he said. There are burial benefits available to veterans and your estate planning attorney can help you get the most out of these benefits as a part of your overall planning. If you would like to learn more about burial and funeral planning, please visit our previous posts.

Reference: Military Times (Jan. 24, 2023) “VA officials work to raise awareness of cemetery, burial services”

Include your Memorabilia in your Estate Planning

March 20, 2023

Do you have a shoebox full of old baseball cards? Or perhaps an old collection of action figures from the many Star Wars movies? This memorabilia certainly has value to you, and you may want to pass it down to your family. The best solution is to include your memorabilia in your estate planning. Kiplinger’s recent article entitled “Estate Planning for Memorabilia Collectors: Don’t Leave Your Family in the Lurch” says the first step is to know what you have. Make a thorough and updated inventory to help your family understand the scale of the collection and where the items are located. Make sure the inventory is current and has detailed information about the items, like if a piece of memorabilia is signed or if it was game-used.

It’s also wise to log valuations along with the items’ description. You can try to stay on top of when comparable items sell at auction and follow industry publications to keep your valuations as current as possible. Every sector of collectible is different. Some items see their valuations fluctuate more than others. Even so, it’s helpful to have a ballpark idea of the total value of the collection. At some point, it might be worth hiring an appraiser to give you a formal valuation of the collection.

As far as authentication, many items need supporting paperwork to verify they’re legitimate. As you plan for your family to handle the sale of your items, they’ll need to know that those documents are an essential part of the collection and where they are.

When you’re walking them through your inventory, note where the items are identified as having separate certificates of authenticity and make sure they know where to find them. This can be as simple as using file folders.

When it comes time to sell, where does your family go Whether it’s sports memorabilia, coins, stamps, or just about anything else, there are dealers who are willing to purchase the collection. If you go into a collectibles shop that’s only buying items they plan to resell, you can expect to get about half of a collection’s actual value.

You can help your loved ones by making connections with auction houses that would be interested in bringing your collection up for sale. This can be a highly specialized area, so you’ll be saving your beneficiaries a big pain if you give them information about where they will get a fair price. Speak with your estate planning attorney about how to include your memorabilia in your estate planning. If you would like to learn more about managing personal property, please visit our previous posts.

Reference: Kiplinger (Feb. 26, 2023) “Estate Planning for Memorabilia Collectors: Don’t Leave Your Family in the Lurch”

Divorce requires a Review of Estate Planning

March 14, 2023

Even the most amicable divorce requires a review and update of your estate planning, as explained in a recent article from yahoo! finance, “I’m Divorcing. Will That Impact My Estate Planning?” This includes your will, power of attorney and other documents. Not getting this part of divorce right can have long-term repercussions, even after your death.

Last will and testament. If you don’t have a will, you should get this started. Why? If anything unexpected occurs, like dying while your divorce is in process, the people you want to receive your worldly goods will actually receive them, and the people you don’t want to receive your property won’t. If you do have a will and an estate plan and if your will leaves all of your property to your soon-to-be ex-spouse, then you may want to change it. Just a suggestion.

State laws handle assets in a will differently. Therefore, talk with your estate planning attorney and be sure your will is updated to reflect your new status, even before your divorce is finalized.

Trusts. The first change is to remove your someday-to-be ex-spouse as a trustee, if this is how you set up the trust. If you don’t have a trust and have children or others you would want to inherit assets, now might be the time to create a trust.

A Domestic Asset Protection Trust (DAPT) could be used to transfer assets to a trustee on behalf of minor children. The assets would not be considered marital property, so your spouse would not be entitled to them. However, a DAPT is an irrevocable trust, so once it’s created and funded, you would not be able to access these assets.

Review insurance policies. You’ll want to remove your spouse from insurance policies, especially life insurance. If you have young children with your spouse and you are sharing custody, you may want to keep your ex as a beneficiary, especially if that was ordered by the court. If you received your health insurance through your spouse’s plan, you’ll need to look into getting your own coverage after the divorce.

Power of Attorney. If your spouse is listed as your financial power of attorney and your healthcare power of attorney, there are steps you’ll need to take to make this change. First, you have to notify the person in writing to tell them a change is being made. This is especially urgent if you are reducing or eliminating their authority over your financial and legal affairs. You may only change or revoke a power of attorney in writing. Most states have specific language required to do this, and a local estate planning attorney can help do this properly.

You also have to notify all interested parties. This includes anyone who might regularly work with your power of attorney, or who should know this change is being made.

Divide Retirement Accounts. How these assets are divided depends on what kind of accounts they are and when the earnings were received. The court must issue a Qualified Domestic Relations Order (QDRO) before defined contribution plans can be split. The judge must sign this document, which allows plan administrators to enforce it. This applies to 401(k) plans, 403(b) plans and any plans governed under ERISA (Employment Retirement Income Security Act of 1974).

Divorce is stressful enough, and it may feel overwhelming to add estate planning into the mix. However, divorce really requires a complete review of your estate planning. Doing so will prevent many future problems and unwanted surprises. If you would like to learn more about the effects of divorce on your planning, please visit our previous posts.

Reference: yahoo! finance (Feb. 3, 2023) “I’m Divorcing. Will That Impact My Estate Planning?”

Consider placing your Home in a Property Trust

March 7, 2023

Property trusts allow you to place your personal residence or any property you own into a trust to be given to a beneficiary, explains a recent article, “When Should I Put My Home in a Trust,” from yahoo!life.com. Consider placing your home in a property trust. A property trust makes it far more likely your home will go to its intended beneficiary.

The property trust can be a revocable or irrevocable trust. Which one you use depends on your unique circumstances. If it’s a revocable trust, you can change the terms of the trust up until your death. However, because you maintain control of the asset in a revocable trust, it’s not protected from creditors.

If the main reason you’ve put the house into a trust is to protect it from creditors, a court could reclaim the asset if it were determined the sole reason for the transfer into the trust was to elude creditors.

Generally speaking, people have three basic reasons to place their homes into property trusts—to avoid probate, to keep their transaction private and to keep the transfer simple.

Avoiding probate. People who put their homes in a property trust often do so to avoid having their home going through the probate process. When the owner dies, their estate goes through this court process and any debts or taxes owed on the property are paid. If there is no will giving direction to how the property should be distributed, then it is distributed according to the state’s laws.

If the home is not in a trust and not mentioned in a will, the property will usually go to a spouse or child, although there’s no guarantee this will happen. If there is no spouse and no offspring, the property will go to the next closest living relative, such as a parent, sibling, niece, or nephew. If no living relative can be found, the state inherits the property.

Chances are you don’t want the state getting your family home. Having a will, even if you don’t put your property into a trust, is a better alternative.

The cost and time of probate is another reason why people put their homes in trusts. Probate costs are borne by the estate and thus the beneficiaries. Probate also takes time and while probate is in process, homes need maintenance, taxes need to be paid and costs add up. If the house is sitting empty, it can become a target for thieves and property scammers.

Another benefit of a property trust is to keep the transfer of the home private. If it goes through probate, the transfer of property becomes part of the court record, and anyone will be able to see who inherited the home. When family dynamics are complicated, this can create long-lasting family battles.

A property trust is also far simpler for your executor, especially if the home is in another state. If you have a vacation home in Arizona but live in Michigan, your executor will have to navigate probate in both states.

Speak with an estate planning attorney if you want to consider placing your home in a property trust. They will create a property trust and transfer the property into the trust. This is a straightforward process. However, without the guidance of an experienced professional, mistakes can easily be made. If you are interested in reading more about managing property in your estate plan, please visit our previous posts.

Reference: yahoo!life.com (Jan. 31, 2023) “When Should I Put My Home in a Trust”

Steps to Take for End-of-Life Planning

February 23, 2023

Most people don’t consider anything about planning for incapacity or death to be joyful. However, if you consider estate planning documents as a way to share your wishes and make your departure easier for those you love, as well as a means to express your thoughts and feelings, it could make these tasks a little cheerier. A recent article from The Washington Post, “6 joyful steps for end-of-life planning,” could help reframe how you think of estate planning. There are some concrete steps to take for end-of-life planning.

From a practical standpoint, death and incapacity are complicated for loved ones. They will appreciate your preparing an advance health directive, which should be created when a person is healthy, and not when they are in a hospital bed. The same goes for funeral arrangements, which are costly. There are so many choices and decisions to make—do your loved ones even know what you want? Leaving instructions and paying in advance will remove the burden for adult children trying to know what you wanted and dealing with the expense of paying for a funeral.

Digging through a loved one’s credit card bills, cellphone accounts, bank accounts and internet passwords is a big challenge in today’s digital world. It was far easier when there were stacks of paper for every account. Today’s executors need to have all of this information to avoid lost assets, avoid identity theft and prevent roadblocks to wrapping up your estate.

Here’s a checklist to help get your estate plan moving forward.

1 Create a crisis notebook. One binder with all estate planning documents will make it easier for loved ones. You should make additional copies but keep originals in one place—and tell your executor where the binder can be found. Create a worksheet of your many documents, so loved ones will know what they are looking for.

2 Have an advance directive created while you are having your estate plan made. This tells your loved ones what you want in case of incapacity and end-of-life decisions.

3 Have a will created with an experienced estate planning attorney. Without a will, the laws of your state determine how your property is distributed and who raises your minor children. Wills are state-specific, so a local estate planning attorney is your best resource. Be wary of online documents—if they are deemed invalid, it will be as if you didn’t have a will.

4 Make a digital estate plan. No doubt you have more than one email account, shopping accounts with more than a few retailers, credit cards, car leases or loans, home mortgage payments, social media, cloud storage, gaming accounts and more. Without a complete and comprehensive list of all accounts, your executor won’t know what needs to be closed, where your personal documents or photos live or how to retrieve them.

5 Plan your funeral. Yes, it is a little morbid, but do you want your loved ones to have to incur the cost and the emotional burden of planning, when you can do it for them? You’ll feel better knowing your wishes will be followed, whether it’s for a “green” funeral or a cremation, with a long period of mourning following your faith’s tradition or a short memorial service.

6 Write a letter of intent and any final farewells. This is an opportunity to share your thoughts with those you love, with healthcare providers and anyone else who matters to you, about healthcare decisions at end of life, or to convey your values, hopes and dreams for those you love.

When you take these steps for end-of-life planning, you’ll be surprised at the sense of relief you feel. If you would like to learn more about end-of-life planning, please visit our previous posts.

Reference: The Washington Post (Jan. 5, 2023) “6 joyful steps for end-of-life planning”

You Need a Digital Estate Plan

February 21, 2023

You are interested in creating an estate plan to manage your tangible assets. That is great, but you also need a digital estate plan. Laws about intangible assets used to be a legal niche practice area. However, today’s estate planning attorney addresses digital assets as much as tangible assets, according to the article “How to Start Digital Estate Planning in 2023” from yahoo! Social media, emails, websites, photos and even the contents of a hard drive contain a vast amount of digital assets. Managing these assets is known as digital estate planning.

Digital estate planning is the process of including online and digital assets, a simple concept but one which is quite complicated. Assets in your digital estate include (but are by no means limited to):

Social media accounts
Websites and domain names
Online stores and businesses
Software and code
Pictures, video, and other media
Financial records or financial assets owned digitally
Contents of hard drives, phones, tablets and other devices
Contents of cloud storage

Today, your digital assets can be some of the most important assets left behind. Photos are the photo books of today, and websites are often the family’s business. Neglecting to plan for digital assets is the equivalent of putting family heirlooms, photos, stock certificates and cash into a storage unit and neglecting to tell anyone of the existence of the storage unit, or how to access it.

Passwords and logins. The sheer volume of passwords, combined with the increase in two-factor authentication, makes it difficult to keep track of information for users. Imagine what your executor will face when trying to locate digital assets. You need to have a secure record of accounts, including the platform, your user name, login and password information. Keeping an old-school logbook of important user names and passwords is an option, since online password storage sites themselves are occasionally hacked.

Legal authority for access. There are a surprising number of laws about who is allowed to access your digital access. Your last will needs to be clear in directing your executor as to what you want to happen to specific digital assets. Make it clear who is to inherit the account and what you want them to do with it.

Distribution and rights. One of the growing problems with digital assets is that often companies are selling indefinite licenses disguised as purchases. You may think you own something, only to find you simply rented it. On Amazon Prime, the button may say “Buy,” but you are actually downloading a licensed product and the company retains the right to end your access at its discretion. Such licenses typically expire upon the death of the buyer, with no ability to transfer the data or product to anyone else.

Your estate planning attorney will be able to explain why you need a digital estate plan and how to prepare it, so it is as protected as your traditional assets. While making a complete inventory of digital assets may be overwhelming, consider the value of such assets as family photos and videos. Chances are, they’re worth passing down to your descendants. If you would like to read more about managing digital assets, please visit our previous posts.

Reference: yahoo! (Jan. 28, 2023) “How to Start Digital Estate Planning in 2023”

The Estate of The Union Season 2|Episode 6 is out now!

February 15, 2023

The Estate of The Union Season 2|Episode 6 is out now!

In the latest episode of Estate of the Union, Brad Wiewel is joined by guest, and his youngest son, Zach Wiewel to talk about the fascinating, and often chaotic estate planning mistakes of celebrities. Join them as they take a dive into the wills of the famous, such as Chief Justice Warren Burger, Princess Diana, Michael Jackson, Leona Helmsley and more. Brad and Zach break down how well these celebrity Wills were written and what kind of mistakes they made that YOU can avoid. It is a lively and entertaining episode.

In each episode of The Estate of The Union podcast, host and lawyer Brad Wiewel will give valuable insights into the confusing world of estate planning, making an often daunting subject easier to understand. It is Estate Planning Made Simple! The Estate of The Union Season 2|Episode 6 is out now! The episode can be found on Spotify, Apple podcasts, or anywhere you get your podcasts. If you would prefer to watch the video version, please visit our YouTube page. Please click on the links below to listen to or watch the new installment of The Estate of The Union podcast. We hope you enjoy it.

Texas Trust Law 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. We provide estate planning services, asset protection planning, business planning, and retirement exit strategies.

Benefits of Creating a Life Estate

February 14, 2023

Today’s post discusses the significant benefits of creating a life estate. Quicken Loans’ recent article entitled “What Is A Life Estate And What Property Rights Does It Confer?” says by understanding the features of a life estate and creating one at the right time, you can enjoy several benefits, including the following:

Property Avoids Probate. Property in a life estate doesn’t go through probate. Instead, it just transfers ownership to the remainderman. This saves time and stress. It also eliminates the complications that arise when trying to spell out your intentions for your property in a will.

Property is No Longer Part of The Estate. Once your state’s Medicaid look-back period has passed, a property transferred through a life estate won’t count against your eligibility for the program.

Allows Seniors to Stay in Their Homes. Even though a life estate transfers property ownership to the remainderman, the life tenant has guaranteed residency, if desired, for the rest of the owner’s life.

While life estates are helpful, they have some drawbacks:

Property is Vulnerable to Debts Of Heirs. Because the life estate transfers property rights to a designated heir, his or her creditors may have the right to seize inherited assets to cover lingering debts, if there are any.

The Heirs’ Rights to The Property Vest at Creation. Once you create a life estate, the property rights vest in the heirs. You can’t take back those rights without the heir’s consent. As a result, some seniors use a living trust, in which its creator can always change the terms or cancel it entirely.

Property Can’t Be Sold or Mortgaged. If you want to significantly change the property, convert it into a rental, or even decide to sell, you must have the remainderman’s permission.

In sum, life estates help elderly homeowners create a straightforward, legal directive for an heir to inherit property without getting mired in probate.

Life estates also permit the owner to control the property in all respects, except they can’t sell or mortgage the property without the consent of their heirs. If created in a “timely” manner, a life estate can even help its creator qualify for Medicaid assistance.

However, life estates do have a few disadvantages.

As the life tenant, you’ll forfeit the ability to sell or mortgage your home without your heir’s permission. Since you can’t reverse a life estate without the consent of both the life tenant and remainderman, you should know all about the contract before committing to it. Discuss the potential benefits of creating a life estate with your estate planning attorney. He or she will have the experience to advise you if this strategy is best for your circumstances. If you would like to learn more about life estates, please visit our previous posts.

Reference: Quicken Loans (Aug. 9, 2022) “What Is A Life Estate And What Property Rights Does It Confer?”

Ideas to improve Business Succession Planning

February 9, 2023

Winter is a slower season for farmers and ranchers. It offers family business leaders time to plan for the future. A recent article from Progressive Farmer, “Family Business Matters: Eight Practical Succession Ideas,” lists ideas to improve business succession and estate planning efforts.

Update balance sheets. Families who own land passed through generations don’t always like to show the land at its current fair market value. Even if you intend to never sell the land, creating an estate plan requires an accurate valuation of all assets to minimize the consequences of estate and income taxes.

Chart ownership for the future. Family members often have no understanding of how they will achieve ownership of the business and its assets. Will it be a gift? Will there be taxes to pay? Or will it be a sale? Will they need to buy out non-farming family members? Without clear answers to these and related questions, people may find themselves operating on assumptions, which almost always leads to conflict or family fractures.

Start handing off management tasks sooner, not later. Plan for the transition by starting with discrete business functions. This could be as straightforward as making decisions about equipment, purchasing crop insurance, or enrolling in a Farm Service Agency. This gives the senior generation the ability to delegate and observe, while empowering and more fully engaging the next generation.

Refresh estate planning documents. People often neglect to update estate documents. Review wills, trusts, trustees, beneficiary designations, advance medical directives and power of attorney documents. Are the people named in various roles still appropriate? Does your estate still work, in light of changing tax laws? This should happen at least every three to five years.

Assess tax consequences of exiting the business. Part of retirement funding is the tax liability of leaving the family business. Deferred income, prepaid expenses and fully depreciated equipment can lead to significant tax exposure. Three to five years ahead of your departure, start mapping out a plan with your accountant, estate planning attorney and financial advisor.

Create a relationship between family members and landowners. If you rent property from an absentee landowner, those relationships will be vital to continuing the business. You may not be able to influence the landowner at the time of transition to the next generation. However, establishing relationships with family members who will take over for you can reduce friction.

Communicate the benefits family members will get from working together to maintain the business. Passing land from one generation to the next often means siblings or cousins become business partners, with undivided interests in the land or as shareholders or members of some legal entity. Family members who may not get along will benefit from having a “buy-sell agreement” in place. This spells out how partners can buy out each other’s interest if one or more family members want to sell. Talk with your estate planning attorney to establish an agreement in advance of anyone leaving the business to reduce the potential of family conflict.

These are just a few ideas to improve business succession planning. Discuss your goals with your family and your estate planning attorney so a solid plan is in place. If you are interested in reading more about succession planning, please visit our previous posts.

Reference: Progressive Farmer (Jan. 1, 2023) “Family Business Matters: Eight Practical Succession Ideas”

Photo by Ketut Subiyanto

Which Bills are Paid by Estate and which by Beneficiaries?

January 24, 2023

Settling an estate can be complex and time-consuming—it all depends on how much “estate planning” was done. According to a recent article from yahoo! Finance titled “What Expenses Are Paid by the Estate vs. Beneficiary?,” the executor is the person who creates an inventory of assets, determines which expenses need to be paid and distributes the remainder of the estate to the deceased’s beneficiaries. How does the executor know which bills are paid by the estate and which by the beneficiaries?

First, let’s establish what kind of expenses an estate pays. The main expenses of an estate include:

Outstanding debts. The executor has to notify creditors of the decedent’s death and the creditors then may make a claim against the estate. Because a person dies doesn’t mean their debts disappear—they become the debts of the estate.

Taxes. There are many different taxes to be paid when a person dies, including estate, inheritance and income tax. The federal estate tax is not an issue, unless the estate value exceed the exemption limit of $12.92 million for 2023. Not all states have inheritance taxes, so check with a local estate planning attorney to learn if the beneficiaries will need to pay this tax. If the decedent has an outstanding property tax bill for real estate property, the estate will need to pay it to avoid a lien being placed on the property.

Fees. There are court fees to file documents including a will to start the probate process, to serve notice to creditors or record transfer of property with the local register of deeds. The executor is also entitled to collect a fee for their services.

Maintaining real estate property. If the estate includes real estate, it is likely there will be expenses for maintenance and upkeep until the property is either distributed to heirs or sold. There may also be costs involved in transporting property to heirs.

Final expenses. Unless the person has pre-paid for all of their funeral, burial, cremation, or internment costs, these are considered part of estate expenses. They are often paid out of the death benefit associated with the deceased person’s life insurance policy.

What expenses does the estate pay?

The estate pays outstanding debts, including credit cards, medical bills, or liens.

Appraisals needed to establish values of estate assets
Repairs or maintenance for real estate
Fees paid to professionals associated with settling the estate, including executor, estate planning attorney, accountant, or real estate agent
Taxes, including income tax, estate tax and property tax
Fees to obtain copies of death certificates

The executor must keep detailed records of any expenses paid out of estate assets. The executor is the only person entitled by law to see the decedent’s financial records. However, beneficiaries have the right to review financial estate account records.

What does the beneficiary pay?

This depends on how the estate was structured and if any special provisions are included in the person’s will or trust. Generally, expect to pay:

Final expenses not covered by the estate
Personal travel expenses
Legal expenses, if you decide to contest the will
Property maintenance or transportation costs not covered by the estate

Some of the expenses are deductible, and the executor must use IRS Form 1041 on any estate earning more than $600 in income or which has a nonresident alien as a beneficiary.

An estate planning attorney is needed to create a comprehensive estate plan addressing these and other issues in advance. If little or no planning was done before the decedent’s death, an estate planning attorney will also be an important resource in navigating through the estate’s settlement. He or she will be able to address which bills are paid by the estate and which by the beneficiaries. If you would like to learn more about the role of the executor, please visit our previous posts.

Reference: yahoo! finance (Dec. 29, 2022) “What Expenses Are Paid by the Estate vs. Beneficiary?”

Category: Wills

There are Burial Benefits Available to Veterans

Include your Memorabilia in your Estate Planning

Divorce requires a Review of Estate Planning

Consider placing your Home in a Property Trust

Steps to Take for End-of-Life Planning

You Need a Digital Estate Plan

The Estate of The Union Season 2|Episode 6 is out now!

Benefits of Creating a Life Estate

Ideas to improve Business Succession Planning

Which Bills are Paid by Estate and which by Beneficiaries?

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