Monday, February 29, 2016

Don't Pass on Leaving Password Behind

It’s not a good idea to pass on leaving your passwords behind, Professor Gerry Beyer of Texas Tech University School of Law cautions. 

Those who work in the digital assets world are at the very beginning stages, he says, of determining how conventional estate planning tools affect on-line accounts and other digital assets.

Our attorneys at Geyer Law have shared this very concern with our blog readers before, pointing out that estate planning is no longer about just death and death taxes. Technology, we pointed out, has everything to do with complicating our affairs. How?
  • Our social media accounts often contain personal messages, photos, videos, and other information of a private nature.
  • At the same time, social media websites have strict privacy policies that bar even family members from gaining access to the accounts, and email services have strict user agreements.
  • With so much banking and bill paying happening online, it’s difficult for executors to determine the extent of a person’s assets after he or she dies.
Digital assets include:
  • Email accounts
  • Picture and video storage sites
  • Social networking sites
  • Domain names
  • Games
  • Personal or work computers and their hardware and software
  • Tablets, flash drives, CDs  and DVDs
Very few states have begun to deal with the issues of digital assets, although Professor Beyer, addressing the Financial Planning Association of Central Indiana earlier this month, mentioned that Indiana has made significant strides.

In incorporating digital issues in our estate planning, there are two basic issues Beyer points out:

As part of their estate planning, clients need to develop an inventory, including a list of how and where they are held, along with usernames, passwords, and answers to “secret” questions.

One practical problem is that passwords must be periodically changed. In addition, there are obvious privacy issues with placing information such as usernames and passwords in a will or even a trust. Beyer suggests making a list of on-line accounts, passwords, security questions, and answers, noting whether the accounts have monetary value, and special instructions for locating specific assets or information, and designating which assets should be deleted versus which ones should be passed on to family members and who should take care of such business. This document can be printed or stored on a computer, USB flash drive, or in a cloud with remote access.

Meanwhile, Dr. Beyer adds, states are beginning to enact legislation regarding digital assets of the deceased.  Service providers may soon begin to ask for “stand-by” owners to be named in the event of incapacity or death.

At Geyer Law, we discuss with our clients some very practical and everyday considerations when it comes to their online transactions and records even during life.  In the event you become temporarily incapacitated and can’t monitor your on-line accounts, we explain, bad things might happen:
  • identity theft might go undetected
  • your bills might go unpaid, negatively affecting your credit score.
 In many cases, neither the law nor user agreements with providers have fully caught up with these realities. Our thinking is, to the extent possible, we need to help our clients be as prepared as possible to protect their assets - including digital assets!
- by Corinna A. Smith of Rebecca W. Geyer & Associates

Thursday, February 25, 2016

ABLE Act Pending in Indiana

December of 2014 marked the culmination of almost ten years of effort. In an important milestone for all disabled people in our country and their families, President Obama signed into law a bill called the ABLE Act.

                                 ABLE stands for Achieving a Better Life Experience.

As is true of any bill signed into law, ABLE has to be implemented and put into action. The states, autism explains, must each allow for a new type of savings account, one that helps pay for expenses for individuals with developmental disabilities such as autism and Down syndrome.

The idea behind ABLE is to allow individuals with disabilities to save for their future needs while still retaining eligibility for federal assistance programs. The accounts are patterned after 529 Education accounts, and like 529s, income earned on ABLE accounts is not taxable, and withdrawals to pay for qualified disability expenses are also tax-free.

Some of the main features of ABLE include:
  • Individuals would be limited to one ABLE account apiece, worth up to approximately $100,000.
  • Contributions to the account may be made by any person – the account holder, relatives, or friends.
  • There would be an annual cap on contribution accounts.
  • While an ABLE account would not impact an individual’s eligibility for government benefits, states would recoup certain expenses through Medicaid upon the individual’s death

Who would be eligible for an ABLE account?  An individual would need to meet two criteria:
  • He/she became disabled before the age of 26
  • He/she is receiving federal benefits either under SSI (Supplemental Security Income) or SSDI (Social Security Disability Insurance), OR has a disability certification under IRS rules
As of the end of 2015, the following states have signed ABLE into law and are in various states of developing their programs:

Alabama, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Hawaii, Illinois, Iowa, Kansas, Louisiana, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, New Jersey, New York, North Carolina, North Dakota, Ohio, Oregon, Rhode Island, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia.

Here in Indiana, Bills SB11 and SB184 are pending. A Legislative Services Agency report analyzing the effects ABLE might have in Indiana states:

“Given the median family income disparity between families with no disabled children and families with at least one disabled child, ABLE account participation is expected to be small.  With an estimated 67,000 disabled children in the state, a maximum of 1,200 families are expected to request ABLE accounts.”

At Rebecca W. Geyer & Associates, we know that individuals with special needs and their families face unique challenges and a myriad of legal issues. For many of our clients with a special needs child, a special needs trust is a way to provide specific directives about the care of a loved one while protecting his or her inheritance and allowing him or her to receive important governmental benefits.

If Indiana allows for the establishment of ABLE accounts, it would be of enormous benefit to the disabled and their families.

- by Ronnie of the Rebecca W. Geyer & Associates blog team

Monday, February 22, 2016

Spousal Share Can Trump Prenup

“Most people getting remarried have little to no concept of the full legal impact of their new marriage” when it comes to estate planning, asserts John Scroggin in the Journal of Financial Planning.

Scroggin points out two widely held misconceptions:
  1. Prenuptial agreements are needed only by the wealthy.
  2. Spouses in second marriages (particularly where there are children from a prior relationship) should have only limited rights to the assets of the new spouse.
In reality, he explains, prenuptial agreements are very important.  On the other hand, even when a prenuptial agreement exists, certain aspects of the law override that agreement, granting the new (second or third marriage) spouse certain rights and obligations.

 Spousal share
If not waived in a prenuptial agreement, a surviving spouse has a legal claim against a portion of the spouse’s estate, and that claim has priority over the bequests made in the will (very much like the claims of a creditor).

 Qualified retirement plans
Upon marriage, a spouse automatically becomes the primary beneficiary of the other spouse’s ERISA retirement account. Pre-retirement, neither spouse can choose otherwise without the other’s consent. In an annuity payout, the form of payment must be a joint and survivor annuity.
If a spouse wishes to leave his or her qualified retirement plans to a beneficiary other than the spouse, the prenuptial agreement should address this issue and provide that the spouse agrees to execute a consent to allow a different beneficiary on the plan.
Filial Support
While generally, no individual can be held liable for the debts of another person without having agreed to that liability, Indiana is one of the states where there are filial support statutes.  That means family members can be held legally liable for the support obligation of spouses, including health care and long-term care costs.  Failure to provide the necessary support to a spouse can be a criminal felony or misdemeanor. This law holds true even when a prenuptial agreement is in place!

Incapacity decision-making
In the absence of a power of attorney appointing a different decision maker, the current spouse has the highest priority to serve as a guardian over the assets and over the person of an incapacitated spouse.

Medicaid claims

Qualifying for Medicaid benefits will mean that the joint assets and income of a married couple are taken into account. Even if there is a prenuptial agreement providing that certain spousal assets are separate, married couples may need to spend down both spouses non-exempt assets before either spouse can qualify for Medicaid.

Premarital or prenuptial agreements specifying the division of assets and debts in the event of divorce, incapacity, or death are crucially important for people entering a second or third marriage with assets from a prior marriage.

Some might agree with Frank Sinatra that “Love is lovelier the second time around,” but here at Geyer and Associates, we know, it’s also more complicated!

- By Rebecca W. Geyer

Friday, February 19, 2016

You're Never Too Young for Estate Planning

“Estate planning isn’t just an issue to tackle with your older clients, it’s for young clients, too,” writes Tania Brown CFP® in Forbes.

But do most young people, who don’t have a lot of assets, need an estate plan? Yes, if only to help loved ones pay for funeral and burial expenses, Brown says.

Maybe you only have debt, but Brown’s advice still applies, says Marc Henn, CFP® in U.S. News & World Report. “If you want the people around you to appropriately deal with your finances, a plan is still just as important.”

Brown recommends five estate planning steps for younger clients:
  1. Create a health care directive
  2. Create a list of social media sign-on information, designating someone to take over
  3. Consider a life insurance policy to pay for funeral expenses
  4. Write a will designating who will receive mementos that may be important to family members
  5. Designate beneficiaries for your bank accounts, 401K, and life insurance
At Geyer & Associates, we view estate planning as a dynamic, continuous process. Life’s journey, beginning with our youth, is fraught with change – Attending high school, then college. Marriage. Children.  A new business. Retirement. Incapacity. Death. Each stage of the journey requires careful planning to protect the people, the assets, and the values most important to you.

Just two of the specific issues younger clients should contemplate include:
  1. Protection from potential creditors’ claims
  2. Protecting privacy in social media accounts and making sure family members have access in the event of incapacity or death
As Indianapolis estate planning and elder law attorneys, we know we need to offer a full range of options – for a full range of ages – and that we remain responsible to serve as a resource for each generation.

- By Kimberly Lewis of Rebecca W. Geyer & Associates

Tuesday, February 16, 2016

Your Estate Plan is a Sum-Up Statement

“Lest you think that people who die are boring….think again,” says Dawn Markowitz in Trusts & Estates. Markowitz cites a few individuals who were “quite creative in their wishes and bequests, to say the least.”
  1. Aaron Collins of Kentucky died at age 30, leaving a will on his computer.  He directed his family to leave a $500 tip for a pizza server. Aaron’s brother started a Facebook page, asking for donations to help make Aaron’s dream come true. The post went viral, and the donations allowed the family to tip more than one hundred different waiters and waitresses $500 each.
  2. After 94-year old Jo Yorke passed away in Cornwall, England, her son used the estate proceeds to purchase a defibrillator for their small village, and to offer training to residents who want to learn how to use it.
  3. Software pioneer Ashawna Hailey was born a male but lived her life as a female. Ashawna made her fortune by designing the launch sequencer for the Sprint Antiballistic Missile System, and building the first Intel compatible processor. Ashawna’s will left $5 million to a non-profit research organization to develop marijuana for patients with unmet medical needs.
  4. Daniel Garr of California provided for a $50,000 gift to Project Purr, a volunteer feral cat advocacy organization. Meanwhile, 94-year-old Italian heiress Maria Assunta left her entire estate for her four-year-old black cat, Tomasso.
  5. Geoff Ostling is still alive in Australia, but he’s famous for pledging to donate his full bodysuit of tattoos to art.

Estate planning involves the development of a strategy for the preservation of property during life and the distribution of property after death. As is evident from the stories collected by Dawn Markowitz, estate planning is one of the most personal statements you can make.

“Many people believe they don't need estate planning because they think they don't have an estate. Or they think the value of their estate is not great enough to cause estate taxation,” writes Constance Fontaine in

At Geyer & Associates, we know that life is filled with change, and that those changes may necessitate action.  We also realize that your estate plan represents a chance for you to make a very unique and personal statement, highlighting those things that you find precious and that you wish to preserve.

- by Ronnie of the Rebecca W. Geyer blog team

Saturday, February 13, 2016

For Scouts and Estate Owners, It's Best to be Prepared

“The easiest estates to settle are those that are well-planned during the lifetime of the deceased,” Alexander Bove, Jr. reminds readers in The Complete Book of Wills, Estates and Trusts. If your estate plan is properly prepared, he adds, your will is going to make up only one part of that plan.

Goals of estate planning include:
  • Simplifying and speeding up estate settlement
  • Saving on taxes
  • Avoiding probate costs and delays
  • Avoiding lawsuits
  • Taking care of beneficiaries who have special needs
  • Providing for your own medical costs in the later part of life

One common misperception Geyer & Associates has noticed over the years of working with clients is that our beneficiaries – and we ourselves - don’t benefit until after our death! In reality, the best-constructed estate plans become operational upon completion, benefiting both the client and his or her family members both now and long into the future. One important reason for this is the conversation that results from well-done estate planning,  conversations not only between the client and the estate planning attorney, but, best-case, among family members.

“Rather than keeping your estate plans under wraps, you may want to discuss them with your family to help them understand what you did and why,” is what Wells Fargo Advisers has to say on the subject. “Sharing intentions, plans, and information can be a good approach when you are planning to treat beneficiaries differently,” Wells Fargo adds. For example, you might leave one adult child his or her inheritance outright and put another’s into a trust. If children are counting on inheriting the family business, it may be helpful for them to know what plans you’ve made about the business.
In cases like these, Wells Fargo posits, if you don’t explain the reasons for your actions, the child treated differently may be left wondering whether you trusted or loved the other sibling more.

Charitable planning can serve as another example of an estate owner getting lifetime benefits. A charitable remainder trust (CRT), for example, benefits multiple parties: the donor, the individuals receiving income from the trust during their lifetimes and the chosen charity or charities.

The scout motto can apply to estate planning:  The more careful the preparation, the greater the benefit!

- By Rebecca W. Geyer

Wednesday, February 10, 2016

Executors Have Statutory, Not Super, Powers

“One of the most common misconceptions about executors is the extent of their power in administering an estate,” Alexander Bove, Jr. observes in The Complete Book of Wills, Estates and Trusts.

That story about the practically new Cadillac sold by the widow executrix for $50? (Her late husband had specified that the car was to be sold and the proceeds given to his mistress.) Not a true tale, Bove assures his readers.
“An executor’s job is to settle the estate and distribute the remaining assets according to the terms of the will and the best interests of the beneficiaries.”
In fact, the executor’s powers are derived from the will itself, Bove explains.

At Geyer & Associates, we typically draft wills granting the executors all “statutory powers” granted by the state of Indiana.  The idea is to allow the executor to function without going through layers of hassle and delay at each step, and to enter into any “necessary and advisable” actions.

Such statutory powers include:
  • Employing the services of real estate agents, stockbrokers, or other specialists
  • Lending or borrowing money on behalf of the estate
  • Mortgaging or leasing property
  • Making investments
  •  Continuing a business
It is well established for executors to be paid a fee, and that holds true even in cases where the person named as executor is a beneficiary of the estate. The fee should be approved by the court prior to payment.  That executor’s fee is separate from any attorney fees. Whoever is named executor in the will  must have their appointment approved by the court, regardless of that person’s experience or expertise. This court appointment activates the powers granted in the Will and gives the executor the authority to collect assets and administer the estate.

Under certain circumstances, Bove explains, it might be wise to consider a professional executor, such as an attorney or a bank, as opposed to a family member. What factors might make choosing an experienced professional a smart idea?
  • The estate includes income-producing real estate
  • The estate includes out-of-state property
  • There is a closely-held business involved
  • The estate is quite large and/or complex
  •  Disputes among family members are anticipated
At Geyer& Associates we take our clients unique goals and circumstances into account when drafting their estate planning so that the estate administration process is smoother and easier to accomplish.
We counsel and represent executors, personal representatives, beneficiaries and trustees. Often, i
helping our clients create their estate plans, we will recommend a “compromise plan” when it comes to selecting an executor for the will.  Under such a plan, a family member is named to serve alongside a professional to carry out the terms of the will.

No, despite the myths, executors have no super powers.  And while each estate situation is different, the goals are the same: To provide prompt resolution, minimize disputes, and carry out the wishes of the person who has died, all with the least possible stress for heirs.

- By Kimberly Lewis  of Rebecca W. Geyer & Associates

Sunday, February 7, 2016

Wait...Wait...Wait For It....

“After all debts, expenses, and taxes are paid, and the final account has been approved, the beneficiaries can finally get their shares, although this does not usually happen as quickly as the beneficiaries would like,” explains Alexander Bove, Jr. in The Complete Book of Wills, Estates and Trusts.

Why all the waiting? In most cases, at least, the executor of the estate must wait until:
  •  the allowable period for creditors’ claims has expired (in Indiana, that is 3 months after notification is published)
  •  the tax authorities are satisfied
  •  any lawsuit or contest is settled
The probate estate, remember, consists of property for which there is no contract that names beneficiaries or title which directs the asset to an owner. Property that would not need to go through those “wait….wait….wait…”  delays before being distributed to beneficiaries include:
  • Assets held in trust
  • Property held jointly with rights of survivorship
  • IRAs, 401Ks, and other tax-deferred retirement plans
  •  Life insurance
There is a set of rules prioritizing the expenses and claims that the executor of an estate must follow.  In Indiana, that priority is as follows:
#1 priority:  funeral expenses
#2 in priority: administration expenses, including the executor’s fee and attorney fees
#3 in priority:  statutory allowances due to a surviving spouse or minor children
#4 in priority: taxes (Federal first, then state), including unpaid income tax, estate and inheritance taxes
#5 in priority:  reasonable debts and medical expenses
#6 in priority:  other claims have preference under state law
#7 in priority:  all other claims

“A provision in the will to pay bequests early, by the way, does not give the executor the right to pay them out before debts, expenses, and taxes are paid,” Bove reminds readers.

The hopeful side, as our attorneys at Geyer & Associates are able to reassure some heirs, is that Indiana is one of several states that allow an abbreviated probate procedure known as unsupervised administration.  Unsupervised administration is allowed if the decedent’s will specifically authorizes such type of administration and/or the heirs of the estate agree to unsupervised administration. 

An unsupervised probate process allows the executor to collect and secure assets of the estate without having to secure a court order at each stage of the process. 

At Geyer & Associates, we advise families on estate administration and lessen their burdens by determining what must be done and the best option to use to make the process easier and minimize expenses. With appropriate planning in place, there can be less "wait....wait.... for it!

 - by Corrina Smith of Rebecca W. Geyer & Associates

Friday, February 5, 2016

Pre-College Estate Planning?

“Many people, when they think about estate planning, think it’s a way of giving away their stuff,” says Deborah Jacobs, author of Estate Planning Smarts.  There are some aspects of estate planning, though, that have nothing to do with stuff, she explains.  In fact, there are two estate planning documents that Jacobs recommends parents get their 18-year olds to sign before they go off to college!

Just as Jacobs reminds her readers to be prepared, at Rebecca W. Geyer & Associates we often remind clients that life events often happen without warning.  College is certainly one of those life events where the unexpected occurs.  Students may need assistance paying bills or may be injured and need medical care while at school.  If a child is over the age of 18, doctors are prohibited from speaking to the child’s parents about the child’s medical condition unless the child has signed a Healthcare Proxy and HIPAA Release allowing them to do so.  Due to these potential issues, it is recommended that all individuals over the age of 18 have the following documents in place: 

1. Durable power of attorney: This document gives someone authority to step into your shoes to handle financial matters if you, for any reason, can’t do it for yourself, even temporarily.

2. Healthcare proxy:  This authorizes someone to make decisions about your medical care if you can’t. Today most hospitals ask for this document when someone is admitted, and provide a standard form for a patient to fill out if they don’t already have a healthcare proxy.

(The legal age in the state of Indiana – as in most other states – is 18 for the purpose of contracting, and hence for signing one’s own estate planning documents.)

It’s interesting that under the Family Educational Rights and Privacy Act (FERPA),  when a student enters a postsecondary institution at any age, the rights under FERPA transfer from the parents to the student, making an all the more compelling argument for a student to have properly signed and executed “estate planning” documents in place.

“College is full of hazards. Most are due to stupidity, but they’re hazards nonetheless,” says ihelploan.com
.  “The lessons you learn through trial and error during your college years will prepare you for life in “the real world.” Having the proper legal documents in place for those “just in case” times should be part of the learning process.

Monday, February 1, 2016

Plastic-Bag-and-Sticky-Note Estate Planning

Remember the 50’s song “Only You”? Well, in the estate planning process, there are certain steps that only you can take care of, as we often remind clients of Geyer & Associates. Only you, for example, can create a complete list of everything you own.  In fact, as the authors of The Beneficiary Book advise, you should “make two lists: your assets and the people you would like to own those assets.

One Indianapolis professional, Tom McAllister, CFP®, likes to tell about a certain home-style estate planning technique he tested on his own family…

“About a year before my mother died, my next younger brother and I decided to do something about her “multiple gifting” problem. She had four sons, one deceased, and twelve grandchildren as well as their mothers in her life. She had been verbally promising some of her jewelry, collectibles, clothing, recipe books, etc., to more than one of her heirs since my dad had died twelve years before.

“Back in my home town on business one Saturday in October, 1993, my brother Mike and his wife Rita and I proceeded with my now-famous (in our family) estate planning tools - zip-lock
bags and yellow sticky notes. We proceeded to go through all Mom’s jewelry and collectibles as well as small furniture items which she had promised to various heirs”.

Tom and Mike would bring forth articles for their mother to examine and determine to whom among her many heirs she wanted each item to go. Mike’s wife Rita would then write the name of the heir and a description of the item, depositing both into a Zip-lock bag, and putting the bag in the safe. Things too large for the safe would go through the same procedure, with a sticky
Note taped to the back of the item.

Once the adult children were through with this exercise, which took a couple of hours, Tom relates, he sprang his trap, suggesting they go back through everything, and separate the items into two piles. The first and smallest pile consisted of items their mother would use occasionally or regularly for the rest of her life.

Tom then asked his mother if she would like to give away the items in the other pile as Christmas gifts that year, 1993. Mom, he remembers, was absolutely thrilled with the idea. She
exclaimed “I won’t have to do much Christmas shopping at all.”

“So now you now know one of McAllister’s high tech estate planning techniques,” Tom exclaims. “You are welcome to use it as you need to!” he adds.

While the creation of legal documents appointing someone to administer your estate after death is important, it remains true that there are certain estate planning tasks that (perhaps with plastic bags in hand), “only you” can take care of!