Tag: Estate Planning Attorney/Lawyer

Elder Living, Estate Planning

How to Save Money While Aging Well

SchulzeLawGroup

Americans are now living longer than previous generations. Because of this, our retirement years may be extended. Since expenses, taxes, and inflation don’t go away simply because we retire, we need to make sure we have enough money to live comfortably while meeting increasing costs of living.

The first step in the process of planning for retirement is to consult with a financial planner or estate planning attorney. They can help you create a financial plan for living a comfortable life after you receive your last paycheck. In addition to having a solid financial plan, here are some things you can do to increase the funds you have available later in life.

Continue Working

Delaying retirement may not be the most popular option, but it’s a practical one. If you continue working past the usual retirement age, you’ll be able to continue living longer with the same level of comfort and lifestyle. Also, waiting longer to receive Social Security payments after your initial retirement age increases your payments.

If you have retired but have discovered that you need, or at least would like, a steady paycheck again, you can return to the workforce. Even if you can’t return to the job you were doing before you retired, there are many other opportunities. There are part-time and full-time prospects in the retail and hospitality industries. Temp services can find short-term and long-term assignments in offices and remotely.

Some retirees return to the workforce even though they don’t need the money. They enjoy the social aspect of working with others and the sense of purpose that work offers.

Downsize

Think about what you own and find things you can do without. Do you have an extra vehicle you don’t need? Do you have recreational vehicles you seldom use? Could you sell the house you are living in and move into a smaller place? Are you living alone with more than one bedroom? If so, you could rent out additional rooms to generate some income.

Adjust Your Spending Habits

Review your expenses for the past few months to find unnecessary purchases. If you are eating out often, start cooking at home regularly. If you have memberships or subscriptions you’re not using, cancel them. Track your expenses going forward and find things to eliminate.

Move to a Less Expensive Place

If you are living in an expensive area, moving to a place with a lower cost of living could save you tens of thousands of dollars per year. Research a list of cities, states, or even countries that are described as great retirement locations. You could save money and experience life in a different culture.

Stay Healthy

One of the best ways to save money is not to spend it on health-related issues. Staying healthy will help you stay out of hospitals and doctors’ offices. Eating modest portions of healthy food, exercising, and socializing regularly will help you stay fit. Finding ways to reduce stress will go a long way. Kicking bad habits, such as smoking and drinking, can help you avoid many serious health problems. Talk with your doctor about ways to adopt a healthier lifestyle.

Reduce Debt

Debt, especially credit card debt, can take a serious bite out of your monthly budget. Ideally, you should be debt free before you retire, but if you aren’t, make a list of your debts and the interest rates associated with those debts. Pay off the debts with the highest interest rates first.

Putting It All Together

Talk with a financial advisor about how you can save for retirement and manage your money effectively. Ask your doctor how you can adopt a healthy lifestyle. Consult with an estate planning attorney or elder law attorney about ways to pay for future health care costs and about how to leave a legacy. By combining different strategies, you can have enough money to live comfortably in retirement.

Our estate planning law firm is dedicated to keeping you informed of issues that affect seniors who may be experiencing declining health. We help you and your loved ones prepare for potential long-term medical expenses and the need to transition to in-home care, assisted living care, or nursing home care.

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

Medical Estate Planning Documents

SchulzeLawGroup

Typically, people think of estate planning as a means of passing assets on to future generations. However, there is another part of estate planning that doesn’t get as much attention. It concerns advance health care planning.

  • Have you thought about what type of medical care and treatments you want, or don’t want, if you become incapacitated or terminally ill?
  • Who would you trust to make health care decisions for you if you were not able to make decisions or communicate with the medical professionals who were caring for you?

If you don’t have the answers to these questions in writing ahead of time, decisions may need to be made in court by a judge. The care you get may be different from your wishes or beliefs. And the person selected to make decisions for you may not know what you want or share your values.

To ensure your health care wishes are honored, you need to spell them out in appropriate legal documents commonly referred to as advance directives. You don’t need to wait for later years. Every adult should have advance directives since a serious medical emergency could happen at any time.

Living Will

A living will is a legal document to specify which medical treatments you want to keep you alive if the need arises. You can also use a living will to express your pain management and organ donation preferences.

When considering what to put in your living will, think about your lifestyle, how you want to live, and what aligns with your beliefs and values. Here are some questions to ask when thinking about your living will:

  • Would you want medical treatments that would extend your life in any situation or just particular situations?
  • Do you want a life-saving treatment only if a cure is available or you have a good chance of a full recovery?
  • Under what circumstances would you consider your life not worth living?
  • If you can’t eat solid or pureed foods, do you want to be tube fed? If so, for how long?
  • Do you want mechanical ventilation if you can’t breathe on your own? If so, for how long?
  • Do you want to be revived by CPR or similar methods if your heart stops?
  • What type of palliative care do you want if you are terminally ill? Do you wish to die at home or in a medical facility?
  • Would you like to donate your organs and tissues for transplant purposes?
  • Would you like to donate your body to science?

There are other options you can consider. An attorney experienced in estate planning and elder law can help you determine the best options for your situation.

Power of Attorney

In a health care power of attorney document, you name a person or persons who can make health care decisions on your behalf if you are unable to make decisions on your own. The name of this document varies from state to state. And how your chosen person (agent or proxy) is referred to also varies from place to place.

Even if you cover several scenarios in your living will, some situations you didn’t anticipate may arise. Having someone you trust to make decisions for you is especially important. When choosing a person to be your health care agent, choose someone who understands you well enough to know what you want and that you trust to make potentially difficult decisions if necessary. It is a good idea to choose at least one backup agent in case your primary agent is unable or unwilling to act.

HIPAA Form

A Health Insurance Portability and Accountability Act form allows you to name individuals who may receive information regarding your medical condition and history from health care professionals who are caring for you. Your HIPAA form should include all the agents you name in your health care directives.

Creating Your Advance Directives

Some attorneys combine a living will with a power of attorney into a single advance health care directive document. This is convenient since all the information is in one place. As mentioned before, health care documents are usually part of an estate plan, but they may also be stand-alone documents.

Reviewing and Updating Your Advance Directives

Over time your views and wishes regarding your end-of-life treatment may change. Also, you may change your mind about the person you want to make decisions for you. If you decide to update your advance health care directive, talk with your attorney. After updating your directive, make sure it replaces all existing originals and copies of the previous directive to avoid any confusion later.

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

Having a Will versus Not Having a Will

SchulzeLawGroup

It’s a difficult thing to think about your own death, let alone what will happen to your assets after your death, which is one reason why so few people have made wills or other estate planning documents.

According to a 2021 Gallup poll, only 46% of US adults have a will. This is a slight increase from 2016 when 44% had a will. Still, less than half of US adults have taken the time to create this important document. The poll also showed that older adults are more likely to have a will than younger adults. Of those polled who were over the age of 65, 76% said they have a will.

Dying Without a Will

If you were to die without creating a will, a state probate court would choose an administrator to manage the probate process for your estate and choose a guardian for any minor children you have, provided the children’s other biological parent is deceased or unable to care for them. The downside to this process is that the decisions the probate court and the administrator would make may not align with what you would want.

Dying without a will is known as dying intestate, and it can create problems beyond state laws dictating what happens to your assets and children. When your intentions aren’t known before you die, you set the stage for potential conflict among your family members and heirs. Without the will to use as a guide, the administrator has to guess what you would want and have the probate court approve it. This places an undue burden on the administrator, who is often a family member.

The administrator’s duties include the following:

  • Locating all your living heirs and notifying them of your death
  • Publishing a notice of your death so that any creditors you may have can submit their claims
  • Compiling a list of your assets
  • Paying off any debts and taxes that are owed
  • Collecting any money owed to your estate
  • Distributing any remaining assets to beneficiaries deemed valid by the probate judge

To avoid creating conflict that could cause rifts in your family, draft and execute a valid will spelling out how you want your estate distributed, who should become the guardian for any minor children, address funeral arrangements, and what should be done with your remains.

Dying With a Will

When you have a valid will, it makes life for your survivors much easier. In a will, you can appoint a person you trust to manage your estate after your death. The person you appoint is known as the executor or personal representative for your estate. A will acts as their guide.

Even if you have a will, your estate still has to go through the probate process. The first step in the process is for the named executor to file your will with the probate court. The court then determines the authenticity of your will. Upon confirming that your will is valid, the probate court officially appoints the executor, most likely the person named in your will, to carry out the administrator duties.

Avoiding Probate

Regardless of whether a person dies with a will or not, the probate process exists to help ensure the decedent’s bills and taxes are paid and that their assets are distributed fairly. Though this sounds good in principle, the probate process can be a long and expensive process. And since the process takes place in the court system, it’s open to the public and the will can be contested. For these reasons, some people create trusts for their assets before they die. Their estates can settle outside of probate court and there is less of a chance that family members can successfully contest the will.

Consult with an estate planning attorney about your options. You may be able to keep your estate out of probate and leave a better legacy for your heirs. 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

Four Key Obstacles to Digital Era Estate Planning

SchulzeLawGroup

In the age of the Internet of Things (IoT), it is more important than ever to identify and manage your digital property. From smart home devices to online investments and bank accounts, we’ve gone way beyond using the internet to email family and social media to connect with friends.

Today, understanding which digital information and accounts you can legally leave to heirs is crucial to protecting your asset values. Laws governing these online assets are changing rapidly; however, legally gaining access to digital assets and encoded financial data can present challenges for anyone other than the original owner.

Four main obstacles will hinder access to a family member’s vital personal data and digital assets:

1.    Passwords

Without knowing your passwords, personal representatives and family members may not be able to access your data and property stored on a computer, smartphone, cloud, and online accounts. While experts can easily bypass some passwords, others can be practically impossible, like cryptocurrency.

2.    Encryption

Your digitally stored data is often encrypted for an additional layer of protection. Encryption can happen at many levels, from a single file on your device to large amounts of stored information in the cloud. In particular, new smartphone technology may be very difficult to decrypt, so if you have not transferred your data to an external hard drive or USB and shared it with other family members, the digital information may not be accessible.

3.    Privacy laws

In general, federal data privacy laws prohibit turning over electronic communications by online account service providers unless you are the owner or have the owner’s legal consent. Therefore, social media sites and digital storage companies may lock down content without legal documentation sharing the circumstances under which trusted friends or family members can access it. Taking a digital service provider to court to retrieve treasured data is generally cost-prohibitive, so lawful consent from the owner is critical.

4.    Criminal laws

State and federal laws do not allow unauthorized access to computer systems and private data. These laws protect consumers against identity theft and fraud, but additionally, they create insurmountable obstacles for loved ones to gain access to a decedent’s digital information and assets. If you do not give express permission to your fiduciaries, representatives, or family members in your estate plan, they may never be able to access it.

Ways to Access Digital Assets After a Death

Make a list of your digital assets and include important online accounts (social media, banking, bill pay), passwords, and digital property, including cryptocurrency, money transfer apps, and domain names. Store this list in a secure place and maintain its accuracy. There are free password management apps available to simplify your effort.

Many digital assets you think you own, you may not. For example, we tend to carelessly accept end-user license agreements (EULAs) without understanding that a “purchased” item is a non-transferable license to use but not own the asset.

If you store data in the cloud, it is wise to back it up in another location. Secure online safe deposit boxes or digital vaults tied to your banking institution store identification, legal documents, business contracts, finance, tax, and insurance information. By adding emergency contacts, you allow those individuals to access your documents. After a specific time limit, they will be automatically approved. You may also scan electronic copies of paper records to store on an external hard drive and store in a secure location to keep items updated and permit fiduciary, representative, and family access with fewer obstacles. Relying only on the cloud for backup can create future problems.

Consult with an Estate Planning Attorney

Working with your estate planning attorney, develop legal documents that give consent for online providers to divulge your electronic communication content to legally named individuals. You may want to tailor which people have access to chosen online information rather than a blanket approval.

You may have more digital assets than you think. Aside from social media, banking, and other more common digital assets, remember to include any:

  • Digital videos and photos
  • Digital rights to theatrical works, motion pictures, musical, and literary compositions
  • Blog content
  • Income-producing websites and their domain names
  • Cryptocurrencies
  • Non-fungible tokens (NFTs)
  • Online video channels that monetize content and produce advertising revenue
  • Online gaming avatars offering services on goods online that may be worth actual money

It has become essential to account for your digital property in your estate plan as online lives are pervasive. Laws regarding digital properties and their inheritable promise continue to evolve. Your estate planning attorney can help you understand which online assets need to be part of your plan and how to permit fiduciaries, representatives, and family access legally.

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

Will Writing for Blended Families

SchulzeLawGroup

Often, stepchildren in American families receive the same treatment as full-blooded children, even when it comes to inheritance. This is particularly true where stepchildren are part of a blended family from an early age. Biological siblings may have different feelings about a stepchild inheriting what they perceive as theirs as a natural heir. A surviving spouse may have the same feelings about their children’s inheritance.

Transferring an Inheritance

Estate planning for blended families is key to a smooth inheritance process, especially since probate rules and intestate succession law do not treat step and biological children the same when it comes to inheriting. Open communication about your estate plan is also helpful in managing heirs’ expectations.

Trying to be equitable among your heirs can be tricky, and relying on your spouse and children to work things out after you are gone is not a good plan. To create a solid plan, carve out some quiet time and identify your most important estate planning goals, including distributions of all assets. 

These assets include your house, car, jewelry, other personal items, investments, retirement plans, brokerage accounts, and insurance. If you opt to gift items before your death, be certain you no longer include the asset or property in your estate plan. Even items of little financial value may be an expected inheritance from a child. The goal is to reduce tensions among family members. 

Creating a Trust

Share your ideas with your spouse and agree on a basic approach, including scenarios for who might pass away first. Leaving property outright to a surviving spouse may not be the best approach as it does not ensure the children, step or otherwise, ultimately benefit. Many blended family systems use a trust to provide for a spouse while leaving their property to their children.

Will Contests

Stepchildren can contest a will to be treated as a full biological child if they are named in a prior will. A will that was written before a remarriage creates an opportunity to contest. Note that your stepchildren have very little chance of inheritance without a will. Dying without a will or intestate prevents your stepchildren from inheriting in all but a very few states. In states where they are eligible, stepchildren will be considered last in line to inherit because of the laws of intestate succession. 

A stepchild named in a previous will can challenge on the grounds of undue influence, lack of capacity, mistake, fraud, or coercion. If the will being contested is thrown out of probate, estate inheritance reverts to the next most recent will. A stepchild must be named in at least one prior will to have “standing” to challenge the will. If all wills are invalidated, the state will treat stepchildren as intestate heirs.

Separate Wills

Even if a biological parent, in concert with a stepparent, makes their wills simultaneously and identically to leave the estate to one another, a surviving spouse can change their will upon the death of the other. It’s possible they may then exclude the stepchildren. But, if the original will left equal shares to biological and stepchildren, a stepchild could contest to have the most recent will invalidated.

Reciprocal or Mutual Wills

Most states do not recognize reciprocal or mutual wills as a binding contract. A mutual will can only be enforced if it specifically constitutes a binding contract that can’t be changed. It’s far more reliable to create a trust to care for a surviving spouse and your children’s inheritance than depend on mutual wills and goodwill after you’re gone.

While contesting a will is permissible under certain circumstances, there is no guarantee it will be successful. To ensure your legacy wishes are met, consult with a qualified estate planning attorney who understands the intricacies and nuances of estate planning for blended families.

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 Living

Take Advantage of Government Programs for Seniors

SchulzeLawGroup

Due to current inflationary pressures, many US seniors are experiencing financial insecurity. In addition to cutting back on unnecessary expenses, retirees and those approaching retirement should apply for government assistance programs so they may qualify and alleviate the anxiety many Americans experience with a fixed income.

The National Council on Aging (NCOA) works with thousands of national and local partners to provide tools, resources, advocacy, and best practices for every aging American to have health and financial security. Checking out if you qualify for senior benefits through government programs is easy to do with NCOA’s online BenefitsCheckUp tool.

Wasted Benefits

Every year billions of available dollars in US benefits programs are not claimed because older adults (55 or more) are unsure if they are eligible and, if so, how to apply. No registration is necessary, and requests for information are minimal. Personal data entered into the website will remain confidential, and accessing the database costs nothing. If you hate filling out forms and get confused by all the questions, estate planning and elder law attorneys go through this process every day. Contact them for help. There is rarely an upfront cost for legal help, and you will be in a much better financial position once you begin receiving assistance.

The Online Benefits Check Up

If you complete the benefits check-up online, NCOA will send a confidential report to your mailing address listing the help available to you and how to apply for it. Since 2001 this NCOA program has helped millions of older adults receive help paying for medicine, food, utilities, and more. More than 2,000 benefits programs are in the check-up system, including categories such as:

  • Food and nutrition
  • Health care and medication
  • Housing and utilities
  • Income
  • In-home care and aging in place
  • Disability services
  • Skilled nursing facilities and other long-term care environments
  • Tax help
  • Legal, crisis, and general assistance
  • Veterans’ programs
  • Discounts and activities

The online BenefitsCheckUp site helps older individuals identify the federal and state assistance programs for which they can qualify. This NCOA website is newly revamped and permits error corrections and the addition of information if you feel the need to revise your answers. The resulting online individualized Eligibility Results report can be saved in a PDF format to email to yourself, your lawyer, or a trusted family member.

Providing this eligibility information to your elder law or estate planning attorney is a smart strategy. Suppose you already receive disability benefits through SSDI, SSI, or other programs. In that case, adding other government assistance programs may result in unintended and negative consequences that may render you ineligible for benefits you already receive. Your lawyer will know the strategies already in place and how additional programs may affect your current planning.

The chart above shows how many older adults struggled to manage basic expenses even before the inflationary circumstances of late 2021 – 2022 (and predicted beyond). Participation rates in government assistance programs are at a historic low, with a mere low to mid sixty percent of eligible individuals participating.

Benefit take-up rates are low due to program enrollment barriers. Many older adults lack awareness that these benefits exist, and when they do, the application process for many programs can be cumbersome and complex. Additionally, perceived stigma about receiving government assistance and other program misconceptions contribute to lower participation rates.

Ramsey Alwin, NCOA CEO and President, admits, “In today’s economy, inflation is taking a bigger and bigger bite out of people’s incomes.” He adds, “We completely redesigned BenefitsCheckUp to make it even easier … no one should have to choose between paying for medications or food.”

To worry less and age better with more resources at your disposal, explore the NCOA’s BenefitsCheckUp website and learn what is available to you. Before you use the contact information to take the next step to apply, be certain to consult with your elder law or estate planning attorney. All assistance you receive should not interfere with existing plans and help you age successfully. More than 2,000 government benefits programs are available to help you, and it can make the difference between thriving or just surviving.

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

Probate’s Timeline

SchulzeLawGroup

A will must go through probate before it is acknowledged, a personal representative (executor) is named, and assets are distributed according to the will. It also requires paying the decedent’s outstanding debts and federal and state taxes. Each state has different laws determining if probate is necessary or can be expedited, whether the fiduciary requires bonding, and what reports must be prepared. The probate experience is unique, as no two wills are the same.

In general, the timeline of the probate procedure moves quickly if the estate has minimal assets and little debt. Larger estates can expect a process lasting anywhere from nine months to a few years, especially with problematic family dynamics. An estate planning attorney or probate lawyer can help guide efforts in these more complex or contentious circumstances. During a time of grief, it is reassuring to have a general probate timeline to help manage expectations and deadlines as you move through the process.

Prepare and File the Probate Petition (1-4 months)

Filing a probate petition requires a valid will and the decedent’s death certificate, usually provided by the funeral home. The personal representative or executor sends an official notice of probate to beneficiaries or interested parties, with each state having specific requirements regarding the notification process. To speed the process, when there is agreement among beneficiaries, each party signs the “waiver of process consent to probate.” This consent form advises the court there are no issues with the will, and beneficiaries forfeit the right to challenge the will or its executor.

Usually, an executor sends a notice of probate within the first two months of the decedent’s passing. Some states require a notice of death published by the executor in the newspaper. The executor provides the funeral home with the decedent’s Social Security number, and they create a legal death certificate. An executor may prefer to purchase several death certificates for larger estates. It is a responsibility to report the person’s death to the Social Security Administration. If the decedent received medical benefits, a notice of death to the Department of Health and Human Services (HHS) is a requirement.

Provide Notice to Creditors (3-6 months)

Like all beneficiaries, all creditors must be aware of the decedent’s will. The estate’s personal representative notifies appropriate claim holders via a formal notice to creditors and other firms, companies, or people to whom the decedent owed money. It is important to follow court rules for notifying creditors. Discovery regarding the deceased’s outstanding debts is most easily achieved by gathering the remaining bills or requesting a copy of the decedent’s credit report.

Payment of Debts and Fees (6-12 months)

The decedent’s creditors receive notification of the individual’s death with a formal notice of death and notice to creditors. The executor must pay all professional and personal debts from the estate with estate funds. The estate is also responsible for payment of the decedent’s state and federal income taxes before the probate process can conclude.

Additionally, the process of probate itself costs the estate money. All fees and administration costs relating to probate are to be paid by the estate via the personal representative’s actions. The fee structure can increase based on the length of time a will is in probate, so the executor benefits by moving quickly and carefully.

Asset Inventory (6-12 months)

An inventory of the estate’s assets is a crucial part of the will since it becomes part of the official estate record. The task can be time-consuming, particularly if the estate’s records are in disarray. Most asset inventory will include:

  • Bank accounts, including savings and checking accounts
  • Property and real estate
  • Stocks and bonds
  • Retirement accounts
  • Life insurance and annuities
  • Luxury items of significant value, like jewelry, watches, art, and other collectibles
  • Intellectual property, including patents, trademarks, copyrights, software databases, and design rights
  • Online line business ventures that produce income or have stand-alone value

Jointly owned real estate, property, vehicles, and financial accounts transfer to the surviving owner. Probate is also not required for IRAs with a beneficiary or other accounts with a pay-on-death designation.

Asset Distribution (9-18 months)

Before asset distribution, the estate’s executor should make every effort to pay all outstanding debts. When all creditor bills are paid, and the remaining assets are accounted for, some state probate law dictates the distribution of assets occur only after the probate hearing. Concluding the probate hearing first prevents the opportunity for an ungrateful or disgruntled beneficiary to threaten the will’s validity.

The Estate Closing (9-24 months)

Probate can conclude when all creditors are paid, taxes are filed, and assets are sold or distributed. After finalizing the executor’s duties, the probate court judge then issues the final order of discharge of the personal representative. This court action officially closes the estate.

All wills go through probate proceedings; however, it is not the only available option. Larger estate owners may prefer to protect the futures of their loved ones using trusts. There are advantages to avoiding probate as it can be lengthy, complex, expensive, and is always a matter of public record.

Your estate attorney can customize an estate plan for your family situation. Our estate planning firm can advise trusts and other legal mechanisms to lessen the probate process or let you know if your estate is a candidate for an expedited process. There is a general timeline for the probate process, yet, all wills and state laws are different.

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

Estate Planning to Reduce Probate

SchulzeLawGroup

The probate process occurs after someone passes away. Probate can be lengthy, complex, and expensive, but good estate planning can mitigate unwanted risks by anticipating and preventing problems before they arise. Sound estate planning can make the probate process run efficiently and smoothly, protecting your estate’s value and legacy, and preserving your family’s well-being.

Probate includes:

  • Validating a deceased person’s will
  • Identifying and inventorying the property of the decedent
  • Getting property appraisals
  • Paying valid outstanding debts and taxes
  • Distributing the remaining assets and property according to the will
  • Applying state intestacy laws if there is no will

Avoiding Probate

An estate planning attorney can structure your estate to minimize or avoid probate entirely. Circumventing probate reduces legal fees for your surviving heirs, protects privacy as probate is part of the public record, and avoids estate tax which can significantly reduce inheritable assets.

Popular Alternatives to Probate

A revocable living trust transfers assets to the trust but allows access to them during your lifetime. This probate-avoidance technique can protect any property you own, including:

  • Bank accounts
  • Real estate
  • Jewelry
  • Art collections and heirlooms
  • Vehicles

A revocable living trust

This trust functions like a will by leaving your property to heirs, but you can change the terms of your trust and the beneficiaries or revoke it while you are still alive. After your death, the property in the trust is in the control of your named successor trustee. They distribute the property to inheritors according to the trust’s instructions without involving probate court.

Life insurance and annuity policies

Death benefits are paid directly to a designated beneficiary upon the death of the insured or annuitant and pass outside of probate. And in some states, for example, Texas, death benefits are exempt from creditor claims for either the insured or beneficiary.

Payable-on-Death (POD) accounts or Transfer-on-Death (TOD)

A simple, no-cost strategy to keep money, even large sums, out of probate by designating a beneficiary via the financial institution’s POD paperwork process for all types of bank accounts. A TOD transfer applies to stocks, bonds, and brokerage accounts in the same way. These accounts are not accessible to the beneficiary while you are alive. You can designate beneficiaries on various accounts types, such as:

As the testamentary deposit account owner, you can withdraw money, close the account, or name a different beneficiary at any time. There may be a short waiting period after the designator’s death before the bank or credit union releases funds, but probate is not a requirement.

Depending on where you live, a POD account can also be a:

  • Totten Trust
  • Tentative trust
  • Informal trust
  • Revocable bank account trust
  • ITF, short for “in trust for”

In most cases, you cannot name an alternate beneficiary, so staying current with the paperwork designating your choice is important. No matter what information is in your will, it can’t override a properly established beneficiary designation.

Joint tenants or joint tenants by the entirety designate real estate

This property designation type has two owners. When one owner dies, the surviving owner automatically owns the property. This ownership is commonly referred to as the right of survivorship and also applies to community property in community property states.

Streamlining the Probate Process

Many states have simplified probate procedures for smaller estates, meaning they are under a certain dollar valuation. Depending on your state’s rules, even if your estate exceeds the definition of a small estate, there may be an avenue to exclude large chunks of assets to lower its size and value.

Many states don’t consider the value of certain properties when evaluating an estate. These property types may include real estate, real estate located in another state, and even motor vehicles. Additionally, many states won’t count the value of a property that doesn’t pass through probate. In essence, probate avoidance can pay double dividends after your death.

When trying to minimize an estate’s value to streamline probate, some states permit you to subtract any amounts owed on a property you don’t fully own. This can make a huge difference. Knowing your state’s definition of a small estate is crucial when creating probate-avoidance strategies. Staying under a certain threshold can simplify probate.

Probate Takeaway

A sound estate plan can circumvent many issues that arise from probate, which may cause a lengthy process and reduce your estate’s value and legacy. Avoid the additional costs of probate, both monetarily and to your family’s well-being.

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

Estate Planning for Farm and Ranch Properties

SchulzeLawGroup

In succession and estate planning, farm and ranch real estate, livestock, equipment, and other personal property face unique challenges. There is a common misconception that federal estate taxes threaten farm or ranch property, preventing assets from getting to rightful heirs. Over the past twenty years, legislation has managed to ease the estate tax burden.

According to the current Tax Cuts and Jobs Act (TCJA), tax exemptions will remain at $12.06 million per inheritor until 2026. Although farm assets may require filing a federal estate tax return, debts against assets will lower the final estate value. Depreciation will protect the estate from excessive valuation and taxation.

Assets and Reinvestment Strategies

Farm or ranch assets typically fall into three categories: 

  • Business 
  • Retirement 
  • Inheritance 

Much of the tangible assets come from reinvesting a majority of farm profits back into the business to build capacity and maintain or modernize buildings and equipment. Reinvestment can also expand the operation’s size to capitalize on economies of scale. However, too much reinvestment may unbalance other asset categories, particularly retirement.

Succession Planning

If there is a successor already working in the business, a family farm hand in training to one day run the operation, they might assume there is planning to make business assets affordable and accessible when they take over the farm. Yet, there may also be off-farm heirs, and the owner may include farm assets to serve as an inheritance. So what happens to inheritances if the focus is on the business and retirement assets? Early and careful succession planning is required to determine how best to balance the farm’s business, retirement, and inheritance goals.

Property inheritance is common within farm and ranch families. There is an emotional symbolism attachment to the property transfer from generation to generation. Throughout the years, the farm or ranch may come to symbolize love, trust, power, history, and family rituals. Identifying the right course of action and making estate planning decisions can be a daunting task with so much legacy investment. Because of these emotional attachments and complexities, many farm owners mistakenly do not create a plan.

Why Estate Planning is Important for Farmers and Ranchers

Without estate planning, owners leave the farm subject to the state’s succession plan, where the assets are typically divided equally among the heirs. This equal distribution of farm assets increases the chance that the on-farm successor will not have all the farm assets required for business operation. In time, this situation will impede the farm’s ability to grow or put the business at risk of failing as the on-farm successor must buy sibling inherited farm assets back at near full market value. Most farms do not generate enough cash flow for the successor to purchase the farm assets outright. This situation puts the farm business in the position of having to pay for its assets twice to cash out off-farm heirs’ inheritance.

Statistics Regarding Heirs and Asset Division

Oklahoma State University developed a statistical model comparing probabilities of success rates of various farm inheritance transfer strategies. The lowest success rates and farm failure most often occur when farm assets are divided equally among heirs. As an owner, if you want your farm or ranch legacy to continue as a working business, your estate planning strategy needs to be more creative.

Three guiding principles can help an owner think through fair and practical distribution decisions:

  • Equality principle – Regardless of contribution by each heir, assets will divide equally
  • Proportional equality principle – Asset distribution is contingent upon individual heir contributions in maintaining or growing the asset
  • Need-based principle – Those heirs with more need receive primary consideration

Making the Right Decision

Farm families generally incorporate all three principles to varying degrees. Updating the estate plan may change the decision-making emphasis dependent on fortunes outside the farm, goodwill, and necessity. Like many decisions in life, timing is everything, and your estate planning attorney can readily amend your plan to meet changing challenges and fortunes.

However the farm or ranch owner decides to split assets, one of the most important aspects of estate planning is an honest appraisal of the farm’s financial capacity to continue as a family business and achieve its goals. If the goal is the continuation of the family farm for subsequent generations, then the equal distribution of farm assets is not a tenable solution.

Communication is Critical

The owner generation must communicate expectations to family members, presenting clear goals to ensure a smooth future transition. The more off-farm heirs understand the decision-making process, the better their expectations are managed to reduce the possibility of family conflict after the owner passes. Identifying and documenting near and long-term goals for a farm or ranch business owner and how they affect family heirs often make clearer pathways to success.

An estate planning attorney can take the owner’s goals and financial information and structure an estate plan that will preserve the business without unnecessary family conflict for those heirs who are not in the farm or ranch business. The sooner you begin planning with your lawyer, the easier it will be to accommodate all heirs while preserving the family legacy. Life insurance policies and other techniques can provide inheritable money to off-farm heirs while permitting the farm to continue operation, keeping your legacy intact.

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, Estate Planning

Components of Life Care Planning

SchulzeLawGroup

Estate planning and elder law are two terms that get used interchangeably often, however, there are significant differences between the two. While some overlap exists between the two, learning and implementing strategies from both law practice types is crucial to prepare for successful aging and preserving a family legacy. 

Estate planning lets families:

  • Name guardians for minor children
  • Manage and protect valuable assets
  • Distribute property according to specific instructions after you die
  • Minimize potential estate taxes
  • Simplify or avoid probate
  • Distribute property to beneficiaries
  • Create a business succession plan

Younger people tend to focus on asset protection in their earlier years. They are building their legacy.

Elder law primarily deals with later stages in life and an aging individual’s needs while they are still alive, like:

  • Retirement goals 
  • Paying for long-term care 
  • Protecting the family if they become incapacitated due to an accident, severe illness, or reduced cognitive function 
  • Accessing proper health care without depleting a senior’s resources 
  • Protecting the legal rights of aging adults 
  • Address the needs of persons with disabilities and war veterans, including their spouses, children, and caretakers

Seniors worry about protecting their legacy from medical costs, fraud, or abuse. They want to keep the family home for a spouse or the next generation.

What is Estate Planning?

Estate planning is for adults of all ages. An estate plan determines what will happen to assets upon death. An estate planning attorney can use wills and trusts to ensure your wishes are followed. If there are minor children, a will identifies a guardian to guide and protect them through life until they become adults. Naming a guardian for minors is a crucial aspect of a will.

Estate planning lawyers can structure assets and property to help an estate avoid probate. Various revocable and irrevocable trusts can save money on estate taxes, leaving more to beneficiaries. The probate process is slow, can be very costly, and is a public process, so it makes sense to keep as much of your estate out of probate as possible.

Several assets can pass to heirs without being addressed in a will or a trust through beneficiary designations. Insurance plans, IRAs, and 401(k)s are all examples of beneficiary designation account types. Reviewing your designations is crucial upon major life changes, particularly death or divorce. Update your beneficiaries. If they have changed or are deceased, a court will decide the fate of your funds.

If you have a small business, estate planning is also relevant to the business’s future success. A succession plan helps a future business owner or family member to run the business upon your retirement, incapacitation, or death. An estate planning attorney can help structure inheritance using life insurance policies to balance inheritable assets if one adult child is particularly interested in running the business and others are not.

What is Elder Law?

Focused on later stages of life, elder law anticipates future medical needs, including long-term care, to ensure a senior can live a long, healthy, financially secure life. The goal is to develop a plan to pay for future care that meets their comfort level while preserving as many assets as possible. An elder law attorney knows how to help you qualify for Medicaid or other government benefits while keeping a portion of your assets. In addition, they may support you through Medicaid hearings and appeals.

Elder law attorneys can help protect individuals from elder exploitation or abuse as they become older and caring for themselves becomes difficult. Designating a durable power of attorney (DPOA) for property and financial affairs and another for health and well-being permits representatives to oversee and protect seniors when they are no longer able. DPOAs are documents used in estate planning. Without a power of attorney, elder law and estate planning can assist with guardianship and conservatorship.

What is Life Care Planning?

As an estate grows in value and minor children become adults, it is important to revisit and amend your estate planning documents. Review them regularly as your life evolves, particularly after marriages, births, divorces, deaths, and substantial changes in finances. You may find yourself straddling the needs of children and aging parents. Estate planning shifts as estate planning attorneys consult with you on elder law matters.

Life care planning protects your assets, health, and legacy at every stage of life and addresses common concerns to avoid potential problems. Proactive planning is the key to living your best life, from raising a family to fears of declining health.

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.