Wednesday, May 15, 2019

VET TECH Provides New Options in Planning for Veterans

Since helping veterans and their surviving spouses obtain the benefits they deserve is a very important initiative at Rebecca W. Geyer & Associates, our attorneys were very interested to learn about VET TEC, the newest pilot program from the Department of Veterans Affairs. VET TEC stands for Veteran Employment Through Technology Education Courses. The purpose - equipping veterans with the skills and expertise needed to land jobs in the high tech industry.

The main difference between this new program and the Post 9/11 GI Bill is that VET TEC, which consists of computer coding “boot camps” and other intensive high-tech training courses, is designed to move vets into the job market much faster than traditional college programs.

In this very innovative “public-private” arrangement, companies actually providing the training will be industry-leading commercial tech firms, not government agencies. “Preferred providers” will have agreed to return all money received from the VA if their attendees do not find meaningful employment within 180 days of course completion.

In discussing these new possibilities with vets and their spouses, we explain that not only is the training itself paid for by the VA, but that monthly housing is also provided during the training. The program does not use or take away any benefits to which the veteran is entitled through the GI Bill. In fact, veterans will be paid a partial housing stipend even if they choose to take the training online!

High demand training areas for the VET TEC program will include:
  • computer software
  • information science
  • computer programming
  • media application
  • data processing
A very important part of our law practice at Rebecca W. Geyer & Associates is providing assistance to veterans and surviving spouses of wartime veterans. The Department of Veterans Affairs is made up of three areas, but our firm’s focus is with the Veteran’s Benefits Administration.

While it is commonly known that certain benefits are available for the brave men and women who served in our armed forces, many veterans (and their families) are unaware of some of those benefits. We want to do our part to make sure this new training program helps as many vets as possible find new careers in the high demand high tech industry.

 - by Rebecca W. Geyer

Wednesday, May 8, 2019

Special Needs Planning

“Ongoing advances in medical research and technology will result in children with development disabilities of all kinds living well into adulthood,” Webber Barton Roscher reports on the American Bar Association website.  What that statistic means is that, as estate planning attorneys, we must help clients with special needs adult children provide for those children on a long-term basis, while still tending to their own retirement needs and planning for the inheritances they would like to leave to other children.

Special needs trusts
  • Assets held in a properly drafted special needs trust are not considered to be resources that are “available” to the beneficiary. Therefore, the benefits an adult child is receiving through the Social Security Supplemental Security Income program (SSI) and/or through Medicaid will not be jeopardized.
  • Special needs trusts can be funded during the life of the parent(s) or come into existence upon the death of the parent(s). Sometimes the funding for the trust comes from a life insurance policy on the parent, while the parents’ other assets become the inheritance left to the other children.
  • Funds that are held in a special needs trust are available for many different needs:

    • medical and dental expenses not covered by government programs
    • equipment
    • special dietary needs
    • insurance
    • education
    • vacations
    • recreation
  • When a child reaches adulthood, parents are no longer allowed to either make medical decisions on behalf of that child or manage assets on that child’s behalf. For that reason establishing a guardianship is a crucial step in the planning. Then, looking ahead, a successor guardian (or a series of guardians) will need to be named to take over in the event the parent becomes incapacitated and after the parent(s)’ death.
  • In the ABA article, Roscher makes a point about special needs planning that we, in our practice at Rebecca W. Geyer & Associates believe is especially important:
“Any parent providing care has accumulated a wealth of knowledge about the programs and benefits for which his or her child is eligible.  Passing this information on to the next caregiver will ease the emotional transition that certainly will occur on the loss of a parent. All individuals who may be involved with the transition of care should be given a copy of the letter or statement of wishes.”

 - by Rebecca W. Geyer

Wednesday, May 1, 2019

Stepping Up Your Estate Plan

“Step-up in cost basis is a pivotal factor in deciding whether your clients should gift during life as compared to bequeathing assets,” Philip Herzberg, CFP®. CTFA, AEP® advises financial planners. How true - at Geyer Law, tax basis is one topic that must be thoroughly discussed whenever client are discussing assets they wish to pass on to someone else. Why?

1. If an asset is gifted during the lifetime of the owner, the tax basis is generally the original purchase price. At some point, the recipient will be paying capital gains tax on the difference between that cost basis and the sale price.
2. If the present owner waits and arranges for the asset to pass to the recipient as an inheritance, the cost basis will ‘step up” to the fair market value at the time the inheritance is received. (Unless the asset appreciates further before the heir before the heir sells it, there might be no capital gains tax to pay.)

A step-up in basis, Investopedia explains, reflects the changed value of an inherited asset, and the step-up in basis rule changes tax liability for inherited assets in comparison to other assets. Investopedia offers a simple example: An investor purchases stock at $2 per share, and the shares grow to a value of $15 per share.  If those shares pass to an heir after the original investor dies, the cost basis for each share becomes the current market price of $15. Any capital gains tax paid in the future will be based on the increase over that $15 cost basis, not based on the increase over the original purchase price of $2. Had the investor gifted the shares when he or she was still alive, the recipient would have a cost basis of $2 per share and pay capital gains tax on any amount over $2 per share realized on the sale!

When a beneficiary inherits property from a decedent, Michael Kitces explains, the asset receives a step-up in basis to its value on the date of death – which is both a tax perk for inheritors, and a form of tax simplification (as beneficiaries otherwise may not know what the decedent’s original cost basis was anyway). In most cases, determining what the cost basis of the inherited property will be is fairly straightforward – the executor determines the value, and reports it on the Form 706 estate tax return. In fact, Kitces adds, there is a new Internal Revenue Code section, #6035, requiring executors to file a new Form 8971 to notify the IRS who the beneficiaries are, along with a Schedule A that informs both the IRS and the beneficiaries what their inherited cost basis will be.

Our experience at Geyer Law has been that unless proper planning was done by the person who has died, the heirs simply do not know where to begin, and we must provide estate administration services to guide families through the process. Those services include:

* commencing probate proceedings
* assisting with the evaluation and orderly payment of claims
* advising clients regarding title issues
* assisting with trust funding
* preparing tax returns
* valuation and taxation of property
* closing the proceedings

Proper estate planning not only puts you in charge of your finances, it can also spare your loved ones expense, frustration – and possibly, capital gains tax!.

 - by Rebecca W. Geyer

Wednesday, April 24, 2019

Estate Planning to Avoid the Snow White Effect

Getting married for a second time is fairly common, but the financial and estate planning issues that result from remarriage can be anything but, Mark Eghrari points out in Forbes

To illustrate that very point, Lexology published the piece “A Cautionary Fairy-Tale – If Only Cinderella’s Father Had an Estate Plan", making the observation that it was the parents’ failure to plan for the future that put Cinderella in the terrible predicament in which her evil stepmother stole her inheritance and enslaved her in her own home.

Why are there so many fairy tales that depict evil stepmothers? Is it true that stepmothers today are still resentful or do they love their stepchildren like their own? “I suspect the folk tale step-mother is centrally worried about the original child inheriting all the father’s fortune, and her own children getting nothing,” writes Mary Gentle of the University of London.

At Geyer Law, the fairy tale of Snow White comes to mind.  That story, we learned, was based on the true tale of Maria Sophia Margarethe Catharina, Baroness von und zu Erthal, born in 1725. Maria Sophia’s father was the local representative of the Prince Elector of Mainz.  After his first wife died, Philipp Christoph remarried.  The stepmother used her position to the advantage of her own children from her first marriage.

“Date two years before deciding to marry, then date your future spouse’s children before the wedding,” advises From an estate planning point of view, avoiding family conflict, both now and later, takes quite a bit of thought, as well as quite a bit of legal backup in the form of documents.

Among the many things a couple must consider are these:
  • What legal documents are already in place for each?
  • Does either have support obligations to a former spouse?
  • What debts are owed by either or both?
  • Do family members of either require more support (due to age or disability)?
  • Who owns the home in which the couple will live?  If the home is owned by one, will the other be allowed to stay in it after that person dies?
  • If there are minor children and their parent dies, what living arrangements are in place for them? Will the children live with their surviving parent?  Stay with the survivor of this marriage?  What funds will be available for their support?
Had either Cinderella’s or Snow White’s father lived in Indiana and visited with our estate planning attorneys at Rebecca W. Geyer & Associates, we would have discussed creating a trust for the daughter’s benefit, stating that certain assets were to be the separate property for her, apart from assets left to Wife #2.  As an “and/or”, a life insurance policy could have been established on the father’s life, with the benefits payable to a trust for the benefit of the daughter or Wife #2.
Establishing an estate plan is one of the most important steps you can take to protect yourself and your loved ones. Proper estate planning puts you in charge of your finances, spares your loved ones the expense, delay and frustration associated with managing your affairs when you pass away or become disabled. With proper planning, all those stories about wicked stepparents can fade into fairy tales!

Wednesday, April 17, 2019

Making Sure Your Assets Continue on Down the Line

It is critically important to openly discuss estate planning goals with your own children, cautions Julie Garver in It may be ticklish to discuss divorce with your kids, but having them separate their inherited assets from their marital assets can protect your grandkids' inheritances in the event of a divorce, the author explains. Needless to say, the best situation would be one in which your son or daughter and their spouse had executed a prenuptial agreement before they married.

Another approach would be for grandparents to draft a will that clearly earmarks a specific dollar amount or percentage of the estate for the grandchildren, regardless of what the children do with their own inheritances. Some grandparents legally require that such assets be used for specific purposes, such as college educations or  weddings, Garver notes. A grandchild’s trust can also be set up as a "dynasty trust", which offers asset protection from creditors.

A Bloodline Trust should be considered, Thomas Begley, Jr. writes in, whenever a son- or daughter-in-law:
  • is a spendthrift and/or poor money manager
  • has difficulty holding a job
  • is a gambler
  • has an addictive illness such as alcoholism or drug addiction
  • is emotionally and/or physically abusive to child and/or grandchildren
  • has children from a previous marriage
  • is unfaithful
  • is not close to and/or not on good terms with children from the child’s previous marriage
Under Indiana law, marital property is property a couple acquires during marriage, while separate property is property one spouse owns before marriage, or acquires by gift or inheritance while married. Still, a judge may divide all of a couple’s property in any manner that seems fair, regardless of which spouse actually owns it or when it was acquired, Susan Bishop writes in

In many cases it is difficult to determine what is marital property and what is separate property. Advise your son or daughter to take inherited assets and keep those assets in a totally separate account. They should choose an investment manager different from one they share with the spouse, and only they should pay the taxes on any income derived from the account.

At Geyer Law, we highly recommend prenuptial agreements, particularly when people are entering marriage with assets they want to pass on to their own children from a prior marriage. When that has not been done, we can tailor an “after-the-fact” plan that will reassure both parents and grandparents that assets continue down the line as planned.

- by Jennifer Hammond, Associate Attorney at Rebecca W. Geyer & Associates

Wednesday, April 10, 2019

Modern Estate Planning Must Cover a Wide Range of Issues

“While minimizing tax remains the focus for some, most estate planning attorneys work to address other critical goals,” the American Bar Association explained in introducing its 2018 conference. The wide range of issues that constitute a modern estate planning practice include:
  • transitioning a business across generations
  • protecting inherited assets from creditors
  • planning to avoid family disputes
  • litigating those disputes
  • addressing incapacity for an aging society
  • proper trust administration
  • taxation
Meanwhile, as Martin Shenkman, CPA, MBA, PFS, AEP, JD cautions clients, “If you have not updated your planning and documents for the new world of estate planning, your planning will likely NOT (caps intended) work.” It might help, Shenkman says, to consider how planning might differ based on wealth levels.
  1. Ultra-high net worth clients - The current environment with its high exemptions may be the best it’s ever going to get, so plans must be flexible to deal with the possibility of law changes in Washington.
  2. Lower wealth clients - Old trusts should be examined and life insurance policies might need to be adapted to accomplish goals other than paying estate tax.
  3. Moderately wealthy clients - It’s important to use some of the high exemptions before they sunset in 2026, and look into non-grantor trusts (that pay their own tax).
At Geyer Law, our attorneys agree with Martin Shenkman that “estate planning is a new ballgame.” Yet, people are people, just the way they have always been. While family arrangements may be more varied and complex nowadays, our mission has remained the same:
  • Guide clients through the process
  • Demonstrate a full range of options
  • Educate clients on changes in the law
  • Make clear and concise recommendations
  • Be responsive and compassionate
Estate planning documents should not be done just once and then forgotten, Sabrina Winters reminds readers in her Lexis Nexis blog. They must be reviewed and changed according to life events and changes. The addition of a child to the family, the acquisition of new assets, health changes, changes in marital status - all these can trigger a need to take a second or third look at your estate plan.

As a full service estate planning and elder law firm serving the people of central Indiana for the past two decades, we understand that the one constant in our work - is change!
 - by Cara M. Chittenden of Rebecca W. Geyer & Associates

Wednesday, April 3, 2019

Modern Era Estate Planning

“Traditional notions of family are changing in the 21st century,” estate planning advisor Ashok Sanghavi writes. “New reproductive technology advances are challenging the concept of the family,” he adds, and estate planning documents need to be ready to reflect these new family dynamics.

It is now common to meet, Sanghavi points out:
  • blended families
  • non-traditional marriages
  • second marriages
  • unmarried couples
  • children born to unmarried couples
  • senior citizen marriages
  • posthumous births using preserved genetic material.
At Geyer Law, we know. Since, in Indiana, only recently have same-sex couples been afforded the rights and privileges of marriage, some newly-merged family members often don’t think about creating new wills and adjusting the handling of their estates to ensure their survivors are cared for – without requiring extensive litigation to defend their rights. Our attorneys, very early on, became adept at dealing with the legal challenges associated with nontraditional marriages.

Some of the thorniest issues in modern-day estate planning involve the way the terms “children” and “descendants” are defined. In the U.S., the law uses DNA testing on children to determine a contested paternity case. Since our attorneys also deal in divorce mediations, we find that sometimes grandparental visiting rights can become an issue in addition to posing challenges to right of inheritance. Are adopted and biological children to be given the same treatment?  “Financial and estate planning documents must now consider alternate parental definitions,” Sanghavi reminds readers.

Times have changed; in fact they are still “a-changing”. Modern era estate planning presents new challenges – and new opportunities – with each passing year. Documents must be created - or changed – to reflect these new family dynamics, and our goal as Indiana estate planning attorneys is to take a lifetime planning approach which encompasses planning for our clients in this modern era.

 - by Rebecca W. Geyer