Thursday, March 31, 2016

Estate Sales Can Simplify Things During a Tough Time

Estate sale companies simplify what can be a tough time for many, whether it’s downsizing, disability, or death in the family,” Fox 59 reports. When someone has died, the administration of an estate requires that debts and expenses be paid first, with the beneficiaries receiving their share from what is left, Alexander Bove, Jr., author of The Complete Book of Wills, Estates, & Trusts explains. If the estate includes real property, such real estate is not sold to pay final expenses until the cash and personal property are used up. Sometimes specific items of personal property are named to go to specific heirs.  What the estate sale is designed to do is convert the non-allocated personal property (“stuff”) into cash.
As estate planning attorneys, we encourage our clients to create specific instructions for the distribution of tangible items to individual family members or other heirs. There are several reasons why having a plan for disposing of tangible personal property is highly important:
  • Tangible items often have sentimental value far in excess of actual value.
  • The sheer number of tangible items makes it time-consuming for the executor to settle the estate.
  • When tangible items are held inside containers (boxes, desk drawers, safes) a gift of the entire contents of a container can be confusing when cash or stock certificates – which are governed by different probate rules - are held there.
  • Computers are part of tangible personal property, but the digital assets (the data contained on that computer’s drives) must be dealt with separately.
TV news featured one very big estate sale in 2015: “After years of privacy, one of Indianapolis’ most famous homes, the Kessler Mansion, is opening to the public,” Channel 13 shared. “Items up for sale included outdoor statues, artwork, linens, high end furniture, lamps and lighting, glassware, firearms and ammunition, and home d├ęcor.”

“Privacy” is an important word in this announcement, because an estate sale, by definition, is very public. While having a professional company handle all the details of selling items in an estate relieves mourning family members from all the minutiae, family privacy is certainly sacrificed in the process.
It’s important to understand, too, the difference between tangible and intangible property.  Property itself includes anything capable of ownership, the author of Wills, Estates & Trusts explains, and all property is divided into two basic categories: real and personal. But person property is not all alike:

Tangible personal property includes things that can be moved and touched, while intangible personal property includes things that in themselves have no value, but which represent the right to something else. Examples of intangible personal property include:
  • a copyright
  • a royalty interest
  • a promissory note
Estate sales and auctions are two methods of liquidating tangible property after the owner has died.  According to, some advantages of holding an estate sale as compared to consigning the goods to an auction house include:

  • Everything takes place in one central location, with no moving charges
  • Each item can be individually priced
  • Advertising includes only this estate (rather than being listed as only one part of an auctioneer’s catalog
Two disadvantages include:

1. lack of privacy (there will be strangers in the decedent’s house)
2. potential liabilities (for harm done to the goods or accidents happening to visitors - the estate sales company should carry special insurance for this very purpose).

Estate sales obviously have pros and cons, but can offer a way to simplify the handling of assets at a very challenging time for a family.

- by Ronnie of the Rebecca W. Geyer blog team

Sunday, March 27, 2016

Spendthrift Clauses - What They Can and Cannot Accomplish

A spendthrift provision creates an irrevocable trust preventing creditors from attaching the interest of the beneficiary in the trust before that interest (cash or property) is actually distributed to him or her.

You’re working with your estate planning attorney, creating a will and a trust.  You’re planning to leave a legacy for a particular beneficiary, but you have some concerns about how that person would handle a large inheritance. Might he/she be talked into some risky swampland-in-Florida type of investment, using the expected inheritance as collateral? Including a spendthrift clause in your document can stop that possibility in its tracks.

How does the protection work?  A spendthrift trust is meant to protect assets for heirs who are:
  • Mentally incapacitated
  • Wasteful with money
The spendthrift clause is a provision in a trust that prevents the creditors of any beneficiary from touching the assets so long as those assets remain in the trust.  The beneficiary cannot spend the money before getting a distribution. That restriction remains in effect even in the event that your beneficiary declares bankruptcy.

Your estate planning attorney can help you set up an irrevocable trust naming one or more beneficiaries, and the spendthrift provision is part of the language of that trust. (In Indiana, no one can set up a self-settled spendthrift trust for him or herself.)

Interestingly, as the Indiana Law Journal points out, “It is immaterial whether or not the beneficiary is in fact a spendthrift…. The purpose of the settlor in creating the trust is to protect the beneficiary against his own folly, inefficiency or misfortune.” Of course, once a distribution of assets has been made out of the trust and given to the beneficiary, those assets become available to all creditors.

Can creditors ever reach the assets in a spendthrift trust while the assets are still in the trust? Yes, exceptions to the spendthrift protections usually involve:
  • Child support
  • Alimony
  • Governmental claims (taxes and penalties)

A spendthrift trust is a useful tool, helping to ensure that the assets you’ve worked so hard to build are used in the ways you intend.
- by Rebecca W. Geyer

Thursday, March 24, 2016

Assisting Wartime Veterans

An observation we find ourselves making all too often at Geyer Law is that Veteran’s Benefits are among the most misunderstood and underutilized resources. Our firm’s focus is with the Veteran’s Benefits Administration, one of three areas within the Department of Veterans Affairs

Within that administration, there are two types of benefits:
  • disability/compensation benefits for medical conditions related to the veteran’s service in the military
  • pension benefits for disabilities unrelated to the veteran’s service in the military. These benefits are in the form of cash paid monthly to the veteran or surviving spouse, and the money can be used for any purpose.
There are two basic eligibility requirements that apply to both types of benefits, as explained in the Indiana State Bar Associations’s Laws of Aging:
  • Active duty - the veteran must have served at least 90 days of active service with at least one day of service during a wartime period.
  • Honorable discharge
(For the pension benefits only, the claimant must have limited income and assets available.)

There are two levels of pension benefits available, depending on the claimant’s level of disability: Service Pension and Special Monthly Pension. Both are available to both the veteran and his or her surviving spouse and dependents. There is also a Death Pension.

Basic Service Pension:
  • Individual must have a total and permanent disability, not caused by willful misconduct.
  • Individual is 65 years old or has been determined to be disabled by the Social Security Administration
Special Monthly Pension:
  • Housebound Allowance– claimant must meet the Basic Service Pension criteria and be unable to leave the house for employment purposes without assistance.
  • Aid & Attendance Allowance - the claimant must meet the Basic Service Pension criteria, plus require assistance to perform at least two activities of daily living, such as bathing, dressing, feeding, toileting, taking medication, etc. Or, the claimant must require residence in a protective environment (such as assisted living facility due to the risk of falling).
Similar to Medicaid planning, there are tools available to help individuals protect assets and qualify for these needs-based benefits. As experienced elder law attorneys with the proper VA benefits training, we are able to create comprehensive, individualized plans designed to maximize eligibility for VA benefits.

- by Rebecca W. Geyer & Associations

Saturday, March 19, 2016

Who Pays Estate Taxes and When?

When it comes to administering an estate, the same common sense rule applies as when the testator (the one who has passed away) was still alive: a person must first attend to his own debts and expenses before he or she can give away what is left, observes Alexander Bove, Jr., author of The Complete Book of Wills, Estates, & Trusts. With the exception of funeral expenses and certain priorty allowances, the beneficiaries of an estate, Bove explains, can only take what is left after the debts and expenses of the estate have been paid.

The priority of payment depends on state law but is typically as follows:
  1. Funeral expenses (these must be reasonable in proportion to the size of the estate)
  2. Administrative expenses
  3. Taxes (both federal and state)
  4. Expenses of last illness
  5. All other debts
Creditors sometimes have to act fast to collect what is owing them, because, as Bove points out, the burial often takes place right after the death and long before the will is probated and an executor appointed.

Quite often, a surviving spouse will pay the funeral expenses out of accessible funds such as a joint bank account. If the spouse is not the only beneficiary, Bove suggests, doing things that way might not be the best idea.

The person responsible for paying all the charges is the executor of the estate. This is a highly important task, the author reminds readers, because if an executor fails to pay a debt that should have been paid, he/she could be held personally liable for the money. Matters are more complicated than simply getting all the bills paid, however.  Which assets should be used to pay those expenses and debts? The general rule is that debts and expenses are paid out of the “residuary” estate, meaning what is left after specific bequests are taken care of. And, after paying all those expenses, what should be done with all the rest of the estate’s money?

When it comes to estate administration, as Tevye remarked in “Fiddler on the Roof”, “It isn’t easy!” At Rebecca W. Geyer & Associates, we know. We counsel and represent executors,
personal representatives, trustees and beneficiaries on the proper settlement of estates and administration of trusts, with an eye towards minimizing stress at an already difficult time.

There are quite a number of services we regularly provide for clients when it comes to probate and estate administration:
  • advising clients regarding the valuation and taxation of property interests
  • assisting with the evaluation and orderly payment of claims
  • advising clients regarding title issues and the proper disposition and distribution of assets,
  • completing beneficiary claim forms
  • assisting with trust funding
  • providing trustee representation
  • preparing inheritance tax returns,
  • closing the proceedings.
It’s a process, dealing with an estate, no doubt about it. “Whether the estate is large or small,” Bove says, “the important thing is that it is properly settled and that the beneficiaries get their money as quickly as possible.”

- by Kimberly Lewis of Rebecca W. Geyer & Associations

Thursday, March 17, 2016

Naming Grandchildren as IRA Beneficiaries

Although IRAs have no special provisions for naming grandchildren as beneficiaries, explains, you have several options for having them receive IRA assets as part of your estate plan:
  • Name them all as beneficiaries; if any pass away prematurely, the assets would be equally divided among the rest.
  • Name the grandchildren, but add “per stirpes”.  If one of the beneficiaries passes away before you do, his/her share would automatically go to his/her descendants.
  • Name the grandchildren contingent beneficiaries, with your spouse as primary beneficiary.

While all of the above are options, careful attention should be paid to naming minor grandchildren as beneficiaries as state rules may require a guardianship be established in court for the funds to be collected. Working with an estate attorney can help you accomplish your objectives without the hindrance of a guardianship.
The rules for naming grandchildren as beneficiaries of 401K or other retirement plans are similar, but, if you’re married and are not naming your spouse as primary beneficiary, you’ll need written permission from your wife or husband.

“Remembering our grandchildren in our estate plan can be a wonderful gesture of love,” observes Pennsylvania attorney Jeffrey Marshall, but, he cautions, for a grandchild with special needs, even a small inheritance can create big problems for them. Recipients of SSI and Medicaid are allowed to have only a modest amount in assets. A special needs trust is the best way to include a disabled grandchild in your estate plan.

Inheritances for grandchildren work best when there’s a conversation attached, but no strings, says Bambi Holzer in Holzer offers a few pieces of advice about giving money to grandchildren:

“To help ensure that grandchildren respect their inheritance – whatever their age, whatever the amount – start a conversation with them now about where the money came from, how you earned it, and what you hope they’ll do with it.”
  • Be careful not to control the inheritance.
  • Be very specific in the will or trust about how much money and whether the money is to be divided equally, or in unequal amounts, among your grandchildren
  • Consider giving your grandkids their “inheritance” while you’re still alive.
At Geyer Law, our focus is on understanding your particular goals and concerns so that we can design an estate plan that accomplishes your objectives, including providing for your grandchildren!
- by Rebecca W. Geyer & Associates

Tuesday, March 15, 2016

Grandparents Stay Connected With the Third Generation

It is wonderful when grandparents can stay involved in their grandchildren’s lives, sharing those grandchildren’s successes and incorporating grandkids’ special talents and career aspirations – or their special needs – in their own estate planning.  It sometimes happens, though, that, due to a divorce, grandparents’ visitation privileges are affected.

According to Indiana Legal Services, in our state the court can grant visitation rights to grandparents if the court determines that visitation would be in the best interest of the grandchild.  However not all grandparents are entitled to ask for visitation.

A paternal grandparent can seek visitation in Indiana if:
  • the child’s father is deceased
  • the child’s parents were divorced in Indiana
  • the child was born out of wedlock AND paternity is established in the grandparent’s son
A maternal grandparent may seek visitation in Indiana if:
  • the child’s mother is deceased
  • the child’s parents were divorced in Indiana
  • the child was born out of wedlock (whether paternity has been established or not)
The primary right to decide what is best for a child always belongs first to parents who are still married to each other.  “The court will presume that a fit parent’s decisions are in the best interests of the child,” and will probably not interfere with parents’ decision on how much, if any, visitation is given to grandparents, Indiana Legal Services explains.

“Indiana grandparents petitioning for visitation face long odds,” writes Marilyn Odendahl in The Indiana Lawyer. In past years, the Indiana General Assembly, the article reports, has entertained proposals to extend grandparental visitation rights and even to expand visitation rights to great-grandparents, but no change in the law has been passed.

As estate planning attorneys, we often find ourselves designing legacies specifically targeting the needs of our clients’ grandchildren.  Factors that require special attention in planning for grandchildren include:
  • Education accounts, including Uniform Transfers to Minors Accounts and 529 Plans,can be tools for reducing the value of your taxable estate and helping with education savings goals.  The grandparent generally maintains control of the account, so part of your estate planning would be naming a successor to take over management of the account upon your death.
  • You can set up a trust stating how you want money you leave to grandchildren to be managed and distributed.
  • Naming grandchildren as IRA beneficiaries.
  • Special needs trusts
As a grandparent, you can use both estate planning and lifetime gifts to help your grandchildren, but spending time with those grandchildren may be the most precious gift of all.
- by Corrina Smith of Rebecca W. Geyer & Associates

Thursday, March 10, 2016

Questions to Ask the Important People in Your Life

Wealthy or not, many people have the desire to leave a legacy of ideas and values along with tangible inheritances. The centuries-old concept of passing along ethical teachings to ones heirs has found its way into modern estate planning in the form of “ethical wills” – audio tapes, photo albums, and even social media content, all designed to bequeath one’s values, along with one’s assets, to the next generation.
An ethical will may be just what the younger generation needs to get that values conversation started. Perhaps the best way to do this is through a set of interview-like questions. Often, while discussing estate planning with Geyer Law clients, we suggest they arrange an intergenerational interview with children and grandchildren. Some families might choose to make a video tape that will someday serve as the values portion of the inheritance.

Since beginning the process may be awkward, a set of “interview” questions may be prepared in advance.  And, while each situation is unique, we think Karl Pillerner’s list of “10 Questions to Ask the Important People in Your Life” can be used to get things started:

1. What are some of the most important lessons you have learned in your life?
2. What kind of advice would you have about getting or staying married?
3. What kinds of advice do you have about raising children?
4. What advice can you share about finding fulfilling work and how to succeed in a career?
5. Difficult or stressful experiences can yield important lessons. Is that true for you?  Can you give me examples of what you have learned?
6. Do you see any turning points - key events or experiences - that changed the course of your life?
7. What would you say you know about living a happy and successful life that you didn't know when you were age 20?
8. What would you say are the major values or principles that you live by?
9. Have you learned any lessons regarding staying in good health?
10. What advice would you give to people about growing older?

Is it possible to use your estate plan to pass along your values to your beneficiaries along with your “stuff”?  As estate planning attorneys, we know the answer is “yes”.  Certain trust planning techniques may steer funds in certain values-based directions, but equally as powerful can be “intergenerational interviews”, conversations among family members, asking and answering questions and turning those all-important responses into a legacy all its own.

- by Ronnie of the Rebecca W. Geyer blog team

Monday, March 7, 2016

Estate Planning to Pass On Your Values Along With Valuables

Is it possible to use your estate plan to pass along your value system to your beneficiaries along with your “stuff”? That’s the question posed by Robert Powell in a 2012 Wall Street Journal article on estate planning.

“Educators, financial advisers and technology providers are approaching the task on two fronts: encouraging and helping older adults to share their stories and values before they die, and teaching adult children and grandchildren how to tap their parents' and grandparents' thoughts,” Powell observes.

Tim Maurer, co-author of The Ultimate Financial Plan: Balancing Your Money and Life, admonishes both seniors and their adult children to be proactive about the older generation’s intangible legacy.

At Geyer & Associates, we agree with what Richard B. Schneider, writing in Legal Resources, has to say:. “Not only can you leave a legacy of your actions, since those certainly speak louder than words, but you can incorporate those values into your estate plan itself.”

  • Values-generated estate planning techniques may involve a trust, where a portion of a trust may be earmarked for a specific purpose, such as helping a child start or buy a business, buy a home, or attend college.
  • You may enable children to pursue careers they love by dedicating funds towards buying their health insurance, (so they don’t need to take jobs they don’t like just to get benefits), explains Ken Kam, writing in Forbes.
  • You can pass along your religious values by funding children’s or grandchildren’s religious education.
One way to pass along values is through what is called an ethical will. This tradition, explain Steven Abernathy and Brian Luster in, can be traced back to the 13th century. The purpose of an ethical will isn’t to serve as a legal document, but “to bequeath the intangibles – lessons learned by the grantor over a lifetime, personal history, and wishes for the family’s future.”

Today’s ethical wills may be in the form of an audio or video, or a photo album with special comments, sharing life lessons learned with loved ones.

- by Kimberly Lewis of Rebecca W. Geyer & Associates

Friday, March 4, 2016

Tough Love From the Grave

As the U.S. Supreme Court put it, “The right of a testator to attach to a gift in his will any lawful terms he sees fit…is widely, if not universally, recognized.” Conditional bequests in an estate planning document stipulate that a particular beneficiary will receive an inheritance only if he/she meets certain conditions.
  • The condition must be legal and not go against public policy (you can’t dictate that the beneficiary divorce his/her spouse or commit a crime).
  • The time for performance must be clear.
  • The condition must be capable of being carried out and of being monitored (how would you know if a person had quit gambling?)
  • There must be a plan for unmet conditions (who gets the gift if the condition isn’t met?)
  • The beneficiary must be a person or legal entity capable of appearing in court (can’t be a pet, for example).

Some common conditional bequests have depended on a beneficiary's:
  • Pursuing a particular profession
  • Finishing a certain level of schooling
  • Following a particular religion or not marrying outside a certain faith
  • Taking care of a favorite pet 
  • Keeping the family surname in its original spelling
  • Abstaining from alcohol or tobacco or drug use (these conditions present problems when it comes to monitoring the behavior)

Conditions in a will can be divided into two general categories, explains Trevor Todd of the notaries’ association in Canada.
  1. Conditions precedent make a gift contingent upon the happening of a specific event. Not unless and until the event occurs will the gift take place.
  2. Conditions subsequent make the gift contingent on the continuing of a particular situation.
Todd tells the true story of Reina Gagne, who died in Quebec at age 82, whose next of kin were eight siblings who were her nieces and nephews. In her will Reina stipulated that half her estate would be divided among those of the nieces and nephews who attended the funeral.  Only one of the siblings came to the funeral. The disinherited seven went to court to argue that the executor had not notified them of the time and place of the funeral.  The judge dismissed that complaint, saying it had been their responsibility to ask.  Reina’s intent was to reward those who paid her that final respect.                                                                                                                                                                                                                                                                                  
Including conditional bequests in your will is one way to exercise control of the actions of survivors. You might think of such bequests as examples of tough love from the grave!

- By Corrina A Smith of Rebecca W. Geyer & Associates

Wednesday, March 2, 2016

Pre-Arrangements Prevent Body-Snatching

If someone dies at a hospital or nursing home, the staff will usually know whom to contact, the authors of Indiana Laws of Aging explain. But what if the death occurs at home or somewhere else?
  • You’ll need to call the coroner or a doctor or 911 EMT to verify the death.
  • You’ll need to call a funeral home.
“The death of someone close to you brings shock, grief and bewilderment,” the authors continue.  Had arrangements already been made with a particular funeral home? Had arrangements been made to donate the body or any part of it for transplanting or for medical research?

David Ring, owner of Indiana Funeral Care shared two disturbing true stories (Senior Life, February 2016):
  • Mom had prearranged and paid for her cremation at a certain funeral home, stipulating that the cremated remains were to go to the same cemetery where her parents’ remains had gone.  In the confusion following their mother’s death, the children called the funeral home only to learn that the cemetery had already picked up the body and taken it to a funeral home owned by their parent corporation….
  • Dad was found dead in his own kitchen.  EMT’s confirmed the death, but no plan could be found.  The children called various funeral homes to inquire about pricing and services, choosing one funeral home.  Instead, one of the other funeral homes showed up first, uninvited….
To avoid this type of misunderstanding and confusion, Ring advises:
  • Research and plan ahead.  The differences among funeral homes in pricing and services can be significant.
  • Stand your ground and do not give in to high pressure tactics applied at a time when you are so vulnerable.
There are several advantages in arranging in advance for your funeral and burial and in prepaying for those services, the Indiana State bar Association advises:

1. You can make certain your wishes are known by your family and make it easy for them to follow those directives
2. You can make thoughtful, unpressured decisions
3. You can get itemized lists of services that the cemetery is promising to provide
4. If you need financial help paying for a funeral, you have the time to investigate benefits available through Social Security, Medicaid, or the Veterans Administration.

Even if you choose not to prepay funeral expenses, Indiana grants you the right to sign a Funeral Declaration form, describing what your choices are for burial arrangements and services, and naming people who should be in charge.

Pre-arrangements can help prevent heartaches along with body-snatching!

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