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Elder Law, Estate Planning

Medical Advance Directives: Understanding the Different Types

A trauma or illness could incapacitate anyone, and no one likes to think about it. People experience it every day, unfortunately. With this knowledge, many people like to prepare in advance for the kind of treatment they want in the event of cardiac arrest, respiratory failure, stroke, and brain death. Some people would allow doctors to perform “heroic measures,” and others would rather die without significant medical intervention. Medical advance directives are legal documents that outline the details of your advance healthcare planning.

There are a few types of medical advance directives. A durable power of attorney names a person to act as your healthcare proxy or surrogate who can make medical decisions and follow those outlined in your living will if you are incapacitated. A living will tells medical professionals when they should and should not use certain interventions, like intubation, CPR, and IV nutrition. A living will only pertain to saving a life, but a power of attorney can make any decision. For example, if a person is unconscious but not in peril of death, a power of attorney could consent to minor medical treatment that is not life-threatening.

What Happens without Medical Advance Directives

Of course, many people without advance directives get into car crashes or have other accidents and need someone to make medical decisions for them. Without an advance directive, the state relies on a legal hierarchy of next of kin. Legal guardians make decisions for minors and adults with a conservatorship. The state usually recognizes a spouse or domestic partner as the next of kin for most adults. Without a spouse, the responsibility often goes to an adult child, sibling, or parent. For many people, this system works well.

The legal hierarchy presents major problems for others. Sometimes people remain legally married to someone who no longer represents their best interests. At other times your next of kin does not share the same values and would not make the right choices for you. Sometimes, you feel more aligned with a person who is a friend instead. In all of these situations, having an advance directive helps ensure that the medical decisions made on your behalf are the same or similar to those you would make for yourself if you were able.

Items to include in a Living Will

Your power of attorney can express end-of-life wishes that address the use or withdrawal of specific treatments. Likewise, some people may want to plan certain end-of-life decisions while they are still healthy. You can specify the types of medical treatment desired, such as:

  • Pain relief (analgesia)
  • Antibiotics
  • Intravenous hydration
  • Artificial feeding (feeding tube)
  • Cardiopulmonary resuscitation
  • Ventilators
  • Do not resuscitate orders (DNR)

Of course, addressing every possible scenario is impossible, but try to be explicit about your instructions for common life and death scenarios.

Items to Discuss with your Healthcare Proxy or Surrogate

Your power of attorney for medical advance directives affords the same rights to request or refuse medical treatment to the surrogate as if the individual at risk were capable of making and communicating decisions. With this in mind, you want to choose someone you trust and who shares your values. You also want to make your desires clear to that person so they can carry out your wishes. For example, let them know if you strongly oppose donating organs, having a blood transfusion, or certain hospital visitors. Explain your decision-making process to them so they can use that reasoning to figure out what you would want.

Creating Advance Directives

As advance directives are legal documents, lawyers are most effective at writing and reviewing them to reflect your wishes and hold up in court. Something is always better than nothing, so start with the basics and add details as they arise. An estate planning or elder law attorney can help create and review your advance directives. As experts in this area, we know the right questions to ask. We will listen to your wishes and help guide you in making important decisions about your care. If you have questions or would like to discuss your personal situation, please don’t hesitate to contact our Reno office by calling us at (775) 853-5700.

Healthcare, Our Blog

In America, Elder Care Costs Are Staggering

There is a significant cost associated with aging well and securely in America. Long-term care facilities and retirement communities cost staggering amounts of money, as do the high costs of premiums to maintain a long-term care insurance policy. The long-term care system is both underfunded and not well matched to the expectations of the older adults trying to thrive within it. There exists a crisis in care within this country’s social safety net. The problem spells financial disaster for many Americans.

What Causes the High Cost of Elder Care?

Below are a few reasons that the cost of elder care is surging.

  • There are workforce shortages or limitations in healthcare or Long Term Services and Supports (LTSS) systems.
  • Baby boomers are aging, so the age distribution of people over 65 in the US has been steadily increasing. The US Census projects that percentage of Americans over 65 will continue rising.
  • Diabetes, dementia, and other chronic diseases requiring extensive medical interventions and constant care are becoming more prevalent.
  • Federal and state programs transfer responsibilities to home and community-based services and families.
  • Caregivers often have to stop or reduce their income-producing activities.
  • The insurance projections from decades ago underfunded the costs of long-term care.
  • As the US population ages, fewer workers pay into the social safety system.

The Cost of Aging at Home

The majority of aging Americans want to do so in their own homes. According to the American Association of Retired Persons (AARP), seventy-five percent of people agree with the statement, “I’d really like to remain in my community for as long as possible.”

Studies show much of the caregiving provided is family-driven. Like paid caregivers, their work is often unnoticed, under-discussed, and unappreciated. Caregiving frequently has devastating consequences on retirement planning, affecting the next generations of their family and perpetuating this problem cycle. Vox reports the most recent data from AARP, which constitutes 41.8 million people or 16.8 percent of the US population, are caring for an adult 50 years or older. A full 28 percent of these care providers have stopped saving money, 23 percent are accumulating more debt, 22 percent have depleted their short-term savings, and 11 percent report being unable to fund basic needs, including food.

The Dilemmas of the Caregiver System in America

The significant belief that caregiving is a “family responsibility” permeates the US consciousness. Politicians and policymakers who promote this mindset remain unable to redress the shocking costs of eldercare, thus imposing the caregiver reality upon family systems. By extension, many family caregivers’ labor is characterized as something done out of instinct or love, devaluing the complex, primarily unpaid work.

This devaluation of caregiver labor exists for paid caregivers in institutional settings, leading to paychecks that do not constitute a living wage and shortages of caregivers, often women, particularly women of color. Low and stagnant wages continue even as demand skyrockets. Many quality workers seek positions with better pay and more appreciation.

People who qualify for Medicaid, about 80 million Americans, discover that waiting lists for home care assistance have an average wait time of more than three years. Their needs are often neglected, especially if they have no family to rely on during this waiting period.

As demand for care continues to rise for the increasingly older and infirmed population, the supply of private institutional care is prohibitively expensive. Existing social policies are not meeting the needs. Aging in the American landscape needs political reimagining to protect families and stop subverting grievances and social responsibilities to those caregiving workers (paid and unpaid) least likely to thrive providing this care. It is essential to preserve the dignity of our older generations and those providing this care. Hopefully, the US government quickly identifies ways to do so affordably. We hope you found this article helpful. If you have questions or would like to discuss your personal situation, please don’t hesitate to contact our Reno office by calling us at (775) 853-5700.

Estate Planning

If You Are Considering Creating an Estate Plan by Yourself, Think Twice

This question is asked all the time: “Wouldn’t it be easier to get a will off the internet, transfer my land when I die, and put my children on my bank account?” It’s just not a good idea. For the plan to work as you would want it to, it should account for plenty of complications. A good plan should protect your spouse and your children from the loss of valuable government benefits if anybody is or becomes disabled. The plan should avoid the delay and expense of probate court. The plan should protect money from children’s creditors or divorce or remarriage. It should be crafted to serve family harmony and to avoid disputes between children as joint owners.

Even a relatively simple situation is made up of many moving parts. Internet documents and joint-ownership devices just won’t do the job.

Also, assembling the moving parts so they work smoothly is just the first step. Your estate plan needs maintenance too, just like your car has a “check engine” light. Major family events like serious illness or death, marriage, birth, or financial reversals are alerts that you should tune up your plan to reflect those changes. Your plan shouldn’t be “one and done.”

It takes expertise to coordinate the various strategies available. Don’t risk a result that will cause your family problems and unnecessary expense. We hope you found this article helpful. If you have questions or would like to discuss your personal situation, please don’t hesitate to contact our Reno office by calling us at (775) 853-5700.

Estate Planning

The Trustee’s Role: A Brief Overview

Your estate planning process, whether it is in the middle or just getting underway, likely contains questions regarding how and to whom your assets should be distributed. A trust can be a great tool in your estate planning tool kit. A properly created trust can give you and your family more options and privacy than a will.

Unlike a will, a trust will help keep your estate from going through an expensive, time-consuming, and public probate process. If you set up a trust, you still create a will, but it becomes a pour-over will, which moves (pours) your assets into your trust. You can choose from different types of trusts, depending on how and when you want your assets dispersed.

Types of Trusts

There are many types of trusts, but they all establish a financial arrangement between three parties: the trustor(s), the trustee(s), and the beneficiary(ies). The person creating the trust is known as the trustor, grantor, or trustmaker. Trusts can be created by more than one person. The trustor chooses one or more persons or entities to serve as the trustee. The trust is for the benefit of one or more beneficiaries, which can be people or entities, such as charities. For some trusts, the trustor, trustee, and beneficiary are the same person.

The Role of a Trustee

The role of a trustee can vary widely, depending on the nature of the trust, wishes of the trustor, and needs of the beneficiaries. Generally speaking, a trustee manages the trust and the assets it holds and disperses income or principal from the trust in accordance with the terms of the trust. A trustor may grant the trustee broad latitude in distributing assets to the beneficiaries or may impose strict guidelines. For example, a trustee may be allowed to make funds available for the general wellbeing and happiness of the beneficiaries or may only be able to disperse funds for educational purposes.

If the trustor has a beneficiary who has special needs and is receiving benefits from Medicaid, Medicare, or another government program, then the trustee needs to make sure they are dispersing assets without disqualifying the beneficiary from the government program. Some trusts have a special or supplemental needs provision in them, and some are wholly for the person with special needs.

In addition to dispersing the funds of a trust, the trustee also pays any taxes that are owed, records expenses and income, and oversees the physical assets owned by the trust, such as real estate. The trustee may be required to report taxes, expenses, and income to the beneficiaries on a scheduled basis. All these duties will be dictated by the language in the trust.

Choosing a Trustee

In most cases, the trustee of a trust can also be a beneficiary of the trust. One notable example of when a beneficiary cannot be the trustee of their trust is with a special needs trust. For the beneficiary of a special needs trust to qualify for government assistance, they cannot have any control over the assets of their trust or how they are managed and dispersed.

When considering who will be the trustee of your trust, choose a person you can rely on to follow the instructions you lay out in the trust. This person can be a reliable family member or friend, or an entity, such as a bank or trust company. For some trusts, such as a living trust, you can be the initial trustee and select someone else to be the trustee if you become incapacitated or when you die.

More than One Trustee

More than one person can serve as trustee at a time. This can be a good option for when beneficiaries are young. For example, a trustor can allow a young beneficiary to serve as a co-trustee of their trust along with an older trustee until a certain age when the beneficiary can serve as sole trustee.

Choosing the trustee of a trust is an important decision. When you are making this decision, consider the purpose of the trust now and in the future. Consider who will be able to best manage the trust’s assets and the beneficiaries’ needs. An experienced estate planning attorney can help you create the trust, or trusts, that will best suit your needs and select the right trustees.

This article offers a summary of aspects of estate planning law. It is not legal advice, and it does not create an attorney-client relationship. For legal advice, you should contact an attorney. If you have questions or would like to discuss your personal situation, please don’t hesitate to contact our Reno office by calling us at (775) 853-5700.

Elder Law

Taking Care of a Loved One’s Finances

Banking and payment of bills can become more difficult with age, but incapacity by accident or illness can strike anyone at any age, posing the same challenges. Incapacity is not just about mental cognition, accident, or illness. You may have a loved one who cannot drive themselves to the bank or has a distinct visual or hearing impairment. Without a plan, incapacity will jeopardize your loved one’s daily financial activity and preservation of wealth. Some possible solutions for financial oversight include:

  • Having a caregiver provide help
  • Selecting a power of attorney
  • Implementing trusts
  • Retaining a professional fiduciary
  • Combining some of these options

Creating a Financial Plan

Whatever you choose, careful thought and thorough planning are needed for the best outcome. To minimize family conflict, it helps to make plans together before experiencing an illness or accident that makes it impossible to handle financial transactions or decisions. Discussions among siblings, in particular, are important before assigning responsibilities. Openly discuss issues of health and financial oversight with trusted family members to minimize misunderstandings, reduce distrust, and prevent potential legal disputes. If a particular conflict seems unresolvable, a neutral third party, such as trusted clergy, a family therapist, or a mediator, can provide impartial counsel.

Protecting Loved Ones from Creditors and Fraud

A joint checking account may seem like a straightforward solution for a caregiver to write checks, make ATM cash withdrawals, track expenses, and perform other financial duties on behalf of their ward, but there are risks. The second party on the account may use their banking privileges to steal from your loved one. Creditors can seek payment from either individual on this account, so if your secondary party carries debt, your loved one may wind up paying for it. Finally, when either party dies, money in this account will belong to the surviving account holder, which may create conflict among siblings and heirs.

Setting Up a Convenience Account

About half of all US states now permit a “convenience account” where the second account holder only has permission to transact for the benefit of the original account holder. The account type is handy when the only need is to address paying bills and providing nominal amounts of cash. The secondary party will have no permission to use the money for self-interest or inherit the account upon the principal’s death. Financial stewardship on behalf of a loved one in a convenience account should include:

  • Written records of expenses paid from the account
  • Notes with the reason for all checks in the memo field
  • Money in the account is protected against being borrowed or claimed as an asset
  • Purchases can’t be made by the steward or a third party
  • A trusted family member acting as the second party to the account is preferred over a paid primary caregiver 

When financial oversight for your loved one needs to be more comprehensive, other fiduciary categories can address financial stewardship for aging or incapacitated loved ones.

Power of Attorney (POA)

This legal document sometimes referred to as a durable financial power of attorney, designates an individual to make financial decisions on behalf of the principal (the assignor of the POA) if they become incapacitated. The principal must be of sound mind to grant a power of attorney.

Naming a financial POA, also called an agent or attorney-in-fact, will prevent the risk of a family going to court to file for guardianship if their loved one becomes incapacitated. Establishing guardianship can be a lengthy, expensive, and potentially divisive process for family members.

Trusts and Trustees

Your loved one may have their elder law attorney create and transfer assets to a revocable living trust with a named trustee. In the future, if the trust grantor loses their ability to make sound financial decisions, the trustee becomes the responsible party for the management of the trust’s assets. 

A trustee’s functions may include:

  • Maintaining an insurance policy
  • Paying taxes
  • Making investment decisions
  • Putting valuables in a safe deposit box

However, as long as the grantor is capable, they may change or revoke the trust.

Professional Fiduciary

If your loved one’s financial situation is complex, they may prefer to hire a professional money manager to oversee financial decisions. Not every family has a potential candidate that can manage extensive or complicated assets, or even if they can, they may not live close enough for proper oversight.

This professional may be a certified public accountant (CPA), a trust company officer (bank or investment firm) in the business of managing trusts, or your attorney. A professional fiduciary will charge a fee for service yet still permit family members a provision to relieve the fiduciary of their duties if there is dissatisfaction with performance.

Government Fiduciary

These are special fiduciaries appointed by a government agency to manage benefit payments or refunds issued by the agency, generally the Social Security Administration (SSA), the Department of Veterans Affairs (VA), and the Internal Revenue Service (IRS). These agents can be spouses, family members, court-appointed or professional fiduciaries, or another interested party as long as they receive government agency approval. 

A Social Security appointee is a representative payee and can assist with all types of agency benefits, a VA appointee is a VA fiduciary, and an IRS appointee is an IRS fiduciary. These government fiduciaries only have the authority to manage the corresponding agency’s benefits or refund checks. They have no other legal power to manage a loved one’s property, medical matters, or financial affairs.

Court-appointed Guardian

If your loved one took no action to implement a financial oversight strategy while competent and then becomes incapacitated, the court will conduct a hearing to appoint a guardian. A guardianship implies a profound loss of freedom, even dignity, so much so that less restrictive alternatives should be tried and proven ineffective before establishing a guardian. There are instances when guardianship needs implementation, but the court process can be lengthy and expensive when immediate decisions for your loved one are needed.

These wide-ranging options all require the appointed person to act with the utmost fiscal responsibility to properly manage their loved one’s financial well-being and protect them from elder financial abuse. Family conversations and an elder law attorney’s input will help define which options are best for your loved one to implement while they are capable. We hope you found this article helpful. If you have questions or would like to discuss your personal situation, please don’t hesitate to contact our Reno office by calling us at (775) 853-5700.

Elder Law

What You Need to Know About Qualifying for SSDI and SSI

If you are unable to work due to a serious health condition, there is a good chance you can qualify for free health insurance and monthly benefits from the United States government. About twenty million disabled Americans currently receive assistance from the Social Security Administration (SSA) for disability through SSI and SSDI. Although the medical eligibility requirements are the same, the two programs are different. Your medical condition must extend for a minimum of one year or result in death; however, you can also meet non-medical requirements to receive benefits. Before applying, understanding the qualification process for both SSI and SSDI will increase your initial chance of success and get you benefits quicker.

Supplemental Security Income (SSI)

The Supplemental Security Income (SSI) program pays monthly benefits to adults and children with blindness or disability whose resources and income are below a specific financial threshold. SSI also makes payments to those individuals aged 65 or more without disabilities who meet the financial qualifications. SSI disability benefits become available for the first full month after the date of filing your claim. Even if you are receiving SSDI or retirement benefits, you may still be eligible to receive SSI.

Social Security Disability Income (SSDI)

The Social Security Disability Insurance (SSDI) program pays benefits to you and specific family members if you qualify as “insured.” Insured means you have worked recently and long enough to pay Social Security taxes on your earnings. Benefits through SSDI have a five-month waiting period. Therefore your benefit payments do not begin before the sixth full month of disability. This waiting period begins on the first full month after the date the SSA decides your disability began.

Disability Attorneys

Statistical outcomes to receive SSI and SSDI benefits are greatly enhanced if you hire a disability lawyer. Your lawyer will develop a case as to why you meet eligibility criteria under the Social Security disability law.

lawyers.com

Physical conditions will have to meet either one or more of Social Security’s disability listings:

  • Residual Functional Capacity (RFC) precludes you from participating in jobs due to exertion levels
  • Non-Exertional limitations such as difficulty with concentration or memory prevent you from working.
  • Combinations of exertional and non-exertional limitations

Because of the complexity of disability law, rules and regulations, evidence points strongly to better outcomes with a disability attorney handling your application and claim.

Proving You Qualify for Benefits

Even if you have insufficient medical records, your attorney can help you arrange to have medical testing procedures before you apply for benefits to increase your chances of approval during your initial application. Suppose you have poor breathing due to Chronic Obstructive Pulmonary Disease (COPD) with conditions such as emphysema or chronic bronchitis. Your lawyer can arrange for an ejection fraction measurement test to gauge the heart’s blood flow. Your test data helps evaluate whether you meet Social Security’s COPD or the CHF listing criteria.

Filling out your disability application and supporting documentation must clarify to a claims examiner that your conditions meet these medical listings or that limitations preclude you from working. A properly filed application at the outset of your claim for disability benefits greatly enhances your chance of success.

A Disability Case has Minimal Upfront Costs

A disability attorney typically receives payment on contingency. Legally this means payment is due only if you win your case. Your representing disability lawyer is keen on presenting important medical records, test results, doctor evaluations, and proper paperwork to ensure they will be successful for you and thus receive payment. The federal government oversees the fee structures a disability attorney can charge. Federal law typically limits a Social Security disability attorney’s fee to twenty-five percent of your back pay or $6,000, whichever is less. SSDI back pay refers to benefits you would have received from the time of your application to when your claim receives approval, minus a five-month waiting period.

A survey of readers of lawyers.com finds the average fee Social Security lawyers collected was $2,900 for SSI and $3,750 in the case of SSDI. Overall this money is well spent because statistics show the claimant may not have received SSA approval or may have been approved but with a reduced monthly benefit.

Hiring a disability attorney to help you become qualified to receive SSI and SSDI benefits is a smart move. While it is not unheard of that self-representation can meet with success, the intricacies of the qualification process and the information required to become eligible are daunting. There are many great reasons to retain a disability lawyer to protect your disability application claim for SSI and SSDI benefits. We hope you found this article helpful. If you have questions or would like to discuss your personal situation, please don’t hesitate to contact our Reno office by calling us at (775) 853-5700.

Estate Planning

To Avoid These Common Estate Planning Mistakes, Review Your Plan Regularly

Estate planning is viewed by many Americans as something they can do once and then file away until they die. However, without being aware of the potential impact, people will make gifts during their lifetime or change listed beneficiaries on accounts which can have enormous unintended consequences on their will or trust. Review your estate plan regularly to help to prevent these common mistakes.

Gifting money during your lifetime without changing your will

It is a common practice for people to include cash gifts in their will. Whether money for a favorite nephew or niece, childhood friend, or household worker, there can be significant sums of cash for distribution to inheritors listed in your will. Often, family members learn these gifts were already satisfied during your lifetime because they hear the story about the joy it brings to the recipient.

Without modifying your will after gifting cash during your lifetime, the named individual will still get the gift when the will enters probate. Smaller gift amounts may not create issues in an estate but don’t match your intentions. More considerable sums of money can create situations that financially break an estate plan. A court will not know that a gift was satisfied during your lifetime either, and there is no one left to speak to the intention of the will, resulting in a second gifting of cash.

The cash gift is paid again if the inheritor chooses not to be forthcoming. While many in the family will view a lifetime gift as an advance on an inheritance, if the recipient does not agree, you may have to litigate, which can be costly. If you give lifetime gifts of cash and do not intend to give a secondary gift upon your death, change your will after the gift.

Too few assets to fund a trust

If your trust is years old and its overall assets have decreased in value, reviewing the gift provisions outlined in your trust is crucial. You may not have enough assets to pay for all of the gifts. It is not unusual that in flush financial times, people create grand estate plans leaving cash to family and friends and creating trusts for others’ benefit. These good intentions can fall far short of reality in leaner times, leaving some people to receive less than hoped or nothing at all.

In a trust, cash gifts pay out first. For example, if you leave $1,000,000 to your sibling and the rest in trust for your children, but at the time of death, your trust is only worth $1,150,000, the trust will then only contain $150,000 for your children after the payout. This is probably not your intention. Another possibility is your trust provisions don’t get funded because there is no cash to cover them. 

Sadly, it will be the lawyer or trustee’s responsibility to advise these recipients of what they were supposed to receive from the trust, but unfortunately, they will not. Regular review of your trust and its goals can avoid this situation. Crafting a trust with realistic goals or making amendments to those goals during less abundant times will keep the trust’s intentions valid and achievable.

Thinking all assets pass through your will

Some people leave a lot of money that they believe satisfies all the gifts listed in their will. They total all their assets, which seems large enough to address all beneficiaries. However, all assets will not pass under the will, which is the difference between probate and non-probate assets.

Probate assets will pass through the decedent’s name into their estate and be distributed according to the will. In contrast, non-probate assets pass outside the will, usually by joint ownership or beneficiary designation. Knowing the difference between the asset classes provides the true value in the estate and receives distribution according to your will. Also, be clear your estate will need to deduct any outstanding debts, expenses, and taxes, which will reduce the probate asset number again.

Joint ownership additions

It is very easy to add an individual as a joint owner with rights of survivorship of an asset such as a bank account or piece of real estate. Yet if your will relies on that asset being part of your estate to pay others (or debts, expenses, and taxes), there may be a problem. Joint ownership can often lead to will contests and lengthy court battles. Before succumbing to the temptation of joint ownership, speak with your estate planning attorney and proceed cautiously so as not to upset the existing estate plan.

Changes to beneficiary designations

Beneficiary designation changes can have unintended consequences on your estate plan. The most common problems occur with changes to beneficiaries in life insurance policies. The policy may be payable to your trust to cover the cost of bequests, pay estate taxes, or shelter monies from estate taxes. Similarly, a retirement account due to an individual but changed to another may result in adverse income tax consequences. You may upend the intention of your estate plan by casually changing a beneficiary designation.

These are some of the more common mistakes people make that can negatively affect your estate planning goals. Regularly review your intentions and legal documents with your estate planning attorney to clarify changes in assets and asset types, lifetime gifts, beneficiary designations, and joint ownership additions. Doing so will keep your legacy as you intend it to be. We hope you found this article helpful. If you have questions or would like to discuss your personal situation, please don’t hesitate to contact our Reno office by calling us at (775) 853-5700.

Estate Planning

Sibling Estate Disputes: How to Avoid Them or Resolve Them

In most families, there can be no getting around sibling rivalry. Depending on your particular family members and the dynamic between them, old rivalries from the past can become more significant when a parent passes. Adult children who are emotionally upset and in the unfamiliar territory of an inheritance process can invent new problems or magnify existing ones.

Protecting Family Relationships

Rivalry issues often present in heartbreaking ways, damaging family relationships and altering the parent’s original intent for estate distribution. It can potentially cost family members significant time and money in litigation. The death of a parent is a difficult test for siblings, particularly in cases where assets are shared unequally.

It is possible to avoid many inheritance disputes with some forethought if a parent implements a few key steps before and after death with sound estate planning. Comprehensive estate planning includes a will and trust with a non-sibling trustee or executor and the chance for equitable gift-giving during the parent’s lifetime, providing the opportunity to elaborate on or defend their decisions. Non-family fiduciaries who can act in the estate distribution include an attorney, CPA, or other financial institution that provides this service. Professional services may be well worth implementing as a strategy to diffuse issues between contentious family members.

Gifting to Children Before Death

One technique for a parent to quell potential issues is to legally gift up to $16,000 annually to each child without owing taxes on those gifts and spending down the estate’s cash assets, so there is less to argue over. You can’t argue about assets that have already been gifted. Every parent has the right to do whatever they choose with their money during their lifetime.

Using Neutral Parties to Distribute Assets after Death

After a parent dies, a mediator is particularly useful if one of the family’s adult children is the executor or trustee of the estate. The mediator remains neutral and can counsel all siblings about the estate’s distribution process while helping to keep emotions on an even keel. A mediator can also help executors or trustees formulate a plan to liquidate estate assets and split the proceeds among heirs, sometimes using the services of an independent fiduciary for assistance.

Income Disparity Among Siblings

Sometimes sibling economic disparity creates different perspectives about what is fair. Suppose a financially stable adult child prefers to hold onto an inheritable asset for a long-term payout while another heir in greater need requires an immediate return. A mediator may aid in negotiating the sale of that interest to the more financially stable heir while cashing out the other sibling, keeping the deal within the family.

Situations that Can Lead to Contesting the Will

New spouses and step-children, disabled and dependent siblings who require care, and estranged children are very likely to mount challenges to the status quo of inheritance if they feel they are being unfairly compensated. Legal actions citing undue influence for personal gain are not uncommon but can be difficult and expensive to prove. It is legally permissible for a parent to leave a child out of their will. To avoid legal challenges by the disinherited (and likely disgruntled) child, the parent should discuss their reasons with the child upfront or explain the decisions they made in their will.

Letters of Intent

A handwritten letter of instruction for gifting family keepsakes can outline who gets what and, although it is not legally binding, can be helpful in most circumstances. Without written guidance, how siblings choose to distribute heirlooms among themselves is left to chance. Try to establish an agreeable framework among siblings in advance. Once someone digs their heels in about a certain keepsake, they can quickly lose objectivity. While it doesn’t make sense, there are instances where sibling litigants spend more money trying to win a family heirloom in court than the object itself is worth. A systematic approach agreed to upfront can circumvent these emotional responses to family keepsakes.

There are as many potential problems to resolve in estate distribution as there are personalities. However, parents usually know which children are likely to fight over their inheritance. Action that prevents conflicts among heirs while a parent is alive is the most direct way to solve the problem. A parent can also make changes to their plans as financial circumstances and feelings among siblings change.

Reviewing and revising your estate plan to account for marriages, deaths, divorces, and births shows that heirs receive due consideration, decreasing the potential for conflict. An estate planning attorney can advise you about gift-giving while you are alive and create an estate plan that reduces the chances of sibling rivalry and infighting after your death. Proactive planning and honest discussions with your lawyer can help craft a plan that provides the best opportunity for peaceful outcomes among siblings. We hope you found this article helpful. If you have questions or would like to discuss your personal situation, please don’t hesitate to contact our Reno office by calling us at (775) 853-5700.

Estate Planning

An Overview of Probate

ABA explains that probate is a legal process that gives legal recognition to a will, and appoints the executor, also known as the personal representative, to administer the estate and distribute property. Therefore, it is good to contact a probate lawyer to determine if the estate is small enough to bypass formal probate, whether the fiduciary must be bonded (this requirement is often waived in the will), and what reports are necessary to prepare.

The Uniform Probate Code

In more recent years, states have tried to simplify their probate procedures. The Uniform Probate Code (UPC) consists of laws written by a group of national experts to help standardize and streamline probate, and most states have adopted these standards. Across state lines, the probate process is finally beginning to work more effectively.

Probate Attorneys Help Navigate or Avoid Probate

However, this does not mean you shouldn’t meet with a probate attorney. Individual states still have different monetary thresholds for what constitutes a lower value estate that can bypass part or all of the probate process. Administering complex estates with an attorney’s guidance will be beneficial even if most estate assets already take advantage of estate planning tools designed to bypass probate. The attorney can support the executor or personal representative when providing the local courts with basic information like death certificates, form submissions, and communication with beneficiaries while administering the estate. The goal is to keep the probate process as simple as possible.

The essence of probate involves the following:

  • Determining and proving the decedent’s will
  • Submitting an estate inventory and appraisal of the decedent’s property
  • Ensuring the estate’s taxes and debts are paid in full
  • Making sure every estate asset is distributed in accordance with the decedent’s will or the state’s intestacy laws.

Probate Attorneys Help Executors Through Estate Administration

The estate’s personal representative is responsible for initiating court procedures and distributing the assets to named beneficiaries. If the personal representative fails to initiate probate proceedings, any party interested in the estate may initiate probate. Typically, these parties include those who will gain assets from the will, like a beneficiary or a creditor. In the absence of a named personal representative or if they are unwilling or unavailable to administer the estate, the court will appoint one to oversee the probate process. You may hire a probate attorney instead.

The time frames to begin the probate process are state-dependent. They begin at the decedent’s date of death and range from three to twenty or more years. Some states have no time limits for filing a will for probate, like California.

Removing Conflict and Debt Negotiation

Once the gathering and filing of the necessary paperwork for the probate process are complete, you may find a disgruntled heir or someone bypassed from the will altogether make a legal challenge to the probate court, perhaps contesting the validity of the will. These legal challenges slow administering the estate, as can handling an estate with excessive debt where property needs to be sold to make good on debt claims. A probate attorney can mediate conflicts that arise by removing emotions from the decisions and negotiating debts.

If the probate process is going to be lengthy, immediate family members can ask the court to release short-term support funds in most states. The reputation of probate is at times well deserved for being time-consuming and expensive.

The probate process can be simple only when heirs agree with the will and the dissemination of property and assets. In that case, the executor provides the local courthouse with the decedent’s last will, a certified copy of the death certificate, a list of names and addresses of heirs, and a list of known creditors.

Maintaining Privacy

If there is disagreement among heirs, it is worth sorting out issues before beginning the probate process to avoid a legal challenge to the will. Once filed, probate proceedings are part of the public record, and most people prefer privacy regarding the death of a loved one and inheritance. However, excessive delay in the probate process will likely create more complex and expensive situations to resolve. If you need to work things out with heirs before beginning probate, it is best to resolve issues, if possible, sooner than later.

Avoiding Probate with Estate Planning Tools

While some probate processes can be extensive, taking multiple years to complete, most probate does not. Many estate planning attorneys help their clients avoid extensive probate through mechanisms such as a revocable living trust. This trust type allows the property in the trust to pass outside of probate. Other ways to avoid probate are titling property with survivorship features or adding beneficiaries on accounts, such as an IRA. Knowledgeable estate planning attorneys use these mechanisms and entities to keep the probate process to a minimum. These entities may include:

  • Annuities, life insurance policies, and retirement funds with named beneficiaries
  • Pay-on-death or transfer-on death-accounts
  • Property in joint tenancy with rights of survivorship
  • Property held as tenancy by the entirety
  • All property held in a legal trust

Most individuals seek to minimize the probate process when creating their estate plan. This best practice is suitable for larger and more complex estates as probate can become expensive and significantly decrease your estate’s inheritable value. Even smaller value estates using the entities and techniques for direct transfer or property outside of probate can benefit. Talk over your wishes with your estate planning attorney to create a plan that can minimize probate. If you are already a named personal representative and the existing estate plan is murky or without the presence of a will, a probate lawyer can help you assess the best path forward to accomplish the probate process with minimal loss to the estate’s value. We hope you found this article helpful. If you have questions or would like to discuss your personal situation, please don’t hesitate to contact our Reno office by calling us at (775) 853-5700.

Estate Planning

How Important It Is to Have a Will

Over the past year, the number of Americans having a will has increased by only 2.5 percent according to a Caring.com wills survey. Overall, the percentage of those with a will continues to decline, 33 percent in 2021 versus 42 percent in 2017. The COVID-19 pandemic sees one in three people understanding the greater need for a will, but 31 percent of those acknowledging the need, did nothing about it.

Spikes in new cases of the coronavirus despite vaccination efforts, re-infections of vaccinated individuals, and increasing cases in younger, healthier people indicates COVID-19 challenges will plague the US and world populations for some time to come. If for no other reason, a pandemic should motivate you to create your will. Counterintuitive to the statistics, younger adults are more likely to follow through with a will creation than middle-aged and older adults.

Caring.com

Aside from procrastination as a reason for not having a will, Americans increasingly cite a lack of understanding about obtaining a will and do not know that attorney groups can create legal documents remotely. An attorney can help you develop as complex or straightforward a will and estate plan as your circumstances warrant without setting foot in their office space if need be.

Almost everyone has something of financial or emotional value they would like specific relatives or friends to inherit from them. A will acts as your voice after you are gone, ensuring your wishes are carried out. A valid and enforceable will significantly benefit your family, allowing you to protect a spouse and children. Your will designates who inherits your real property like a home or land you own and personal property like bank accounts, securities, jewelry, etc.

Besides determining how your property is distributed, a will can designate who will care for your minor children after you die. Without a will, the courts decide who cares for your children and their interests. Appointing a caretaker that you trust in your will affords you time to discuss how best to handle your children’s mental, emotional, and financial life preparedness.

Having a will allows you the option to disinherit individuals such as an estranged relative. In the absence of a will, the state will determine who inherits assets that may end up in the hands of someone you do not wish to receive your property. This intestate (dying without a will) distribution of your property varies by state and may not provide for the distribution you prefer. The absence of a will or other estate planning documents, like a living trust, can also lead to family strife.

Caring.com finds most Americans believe that at age 35, you should have a will in place, yet most Americans do not. Though many have started contemplating a will, most get no further than casual conversations with loved ones. Surprisingly the survey finds that 58 percent of respondents who don’t have a will say they do not think about or plan for it.

As the primary document for transferring your assets upon your death, your will is an essential part of your estate plan. As the COVID-19 virus continues to challenge all people’s health and well-being, it is reasonable and responsible to create a plan to preserve for your heirs what it took your lifetime to achieve.

We can help you determine whether a will is right for you, and we can help draft additional supporting documents, like healthcare directives, to support your overall plan and make sure your wishes are carried out. We hope you found this article helpful. If you have questions or would like to discuss your personal situation, please don’t hesitate to contact our Reno office by calling us at (775) 853-5700.