Wednesday, December 13, 2017

Holiday Sounds: Tinkle of Bells and Talk of Estate Planning


“We get it: there's no easy way to start talking about estate planning. And who wants to spoil the holidays with morbid talk about what's going to happen after a family member dies?”  Christopher Coble asks. “Then, again, when else are you going to do it? The holidays are one of the few times you can get most of the family together, and maybe the holiday spirit will make everyone a little more patient, understanding, and generous,” Coble adds.

 At Geyer Law, we’ve found over the years, while holiday family gatherings may not be where estate planning issues are actually brought up, those very gatherings serve as triggers, bringing clients in seeking answers to various family-related “what-to-do-about” questions.
Mary Foston-English, MFT, assistant director of Stanford’s Faculty and Staff Help Center, explains that the complications in family relationships, always present, are exacerbated by the stress of the holidays. Divorce and custody disputes, increased awareness of physical and mental illnesses in family members, all seem to come to the forefront at family gatherings.

While holding a family meeting to discuss estate planning may not be what you want to do at the actual holiday gathering, it is wise to plan such a meeting following the holiday, while everyone is still “thinking family”. With everyone together, it’s easier to plan the logistics of the meeting and set a convenient time, so that you can invite your financial advisor, estate planning attorney, and CPA to that meeting if possible.
The purpose? Explaining your vision to your heirs while you’re still around to explain things, the HuckBouma blog points out. “By attaching your values to your estate planning and involving your family in the process, your estate plan now becomes a family plan, minimizing the risk of conflict.”

“Estate planning can go well beyond simply who/what will get your assets.  Other considerations include values, taxes, medical care, charitable gifts, educational trusts, pets and more,” Gary Altman, an attorney in Virginia so importantly adds.

Amen to that. Our objective at Geyer Law is to take the mystery out of the estate planning process so that individuals and families have peace of mind rather than confusion when facing the disability or death of a loved one.

While nobody wants to think about death or disability, establishing an estate plan is one of the most important steps you can take. Proper estate planning not only puts you in charge of your finances, it spares your loved ones of the expense, delay and frustration associated with managing your affairs when you pass away or become disabled.

Turn those “leftover” warm feelings from the holiday family gathering into an estate planning action plan!

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

Wednesday, December 6, 2017

Estate Planning to Take Care of Caregivers

“Companies Need to Care for Their Caregivers” is the headline of an article in a recent issue of the AARP Bulletin. Employers need to create caregiver-friendly workplaces, is the concept, and to that end, AARP has teamed up with the Northeast Business Group on Health to produce an online assessment tool at workandcaregiving.org to measure how well employers are doing to provide assistance to caregivers.

Estate planning attorneys need to help parents take care of their caregiving adult children as well, according to Kathryn Adams, writing about the impact of caregiving on adult children for the American Academy of Estate Planning Attorneys. “The costs associated with caregiving add up over time and often put adult children in a difficult position.  While they’re spending money caring for their parents, it often means they’re unable to put money into their own retirement funds.”  Aside from out of pocket costs, she points out, many caregivers must take time off from work to administer care or at least to drive parents to doctors’ appointments.

How much money are caregivers spending on average? Adams provides some eye-opening statistics:
  • Nearly half spend more than $5,000 annually
  • 16% spend as much as $9.999
  • 11% spend as much as $19,999
  • 5% are spending as much as $49,999
Parents who want to compensate their child for taking on the burden of caregiving may do so in several ways, Elder Law Guides explains.
  1. A parent can leave the child an additional amount through a will or trust. (“If a parent chooses to go this route, it is important that the parent explain his or her reasoning to any other children or family members that might be upset.”)
  2. If a parent doesn’t have cash to compensate the child, the parent may transfer the house to that caregiver, (either through an outright transfer, retaining a life estate for him/herself, or through creating joint ownership).
  3. If the parent qualifies for life insurance, the child can be made beneficiary.
 None of these options is without ramifications and considerations that must be thoroughly weighed. At Geyer Law, we discuss:
  • Medicaid planning advantages of different transfers and other tactics
  • Tax consequences of different strategies
Proper estate planning not only puts you in charge of your finances, it can also spare your loved ones - both the caretaking and the other heirs -  the expense, delay and frustration associated with managing your affairs when you pass away.

Estate planning should be done to take care of caretakers!

- by Ronnie of the Rebecca W. Geyer blog team

Wednesday, November 29, 2017

Estate Planning for Owners of Indiana Family Farms


“Splitting up a family farm is hardly a simple process,” observes Matthew T. McClintock, J.D. of estateplanning.com. How true – each one of the areas of estate planning with which we deal at Geyer Law tends to be more complex when it comes to situations involving family farms. Here are some of the reasons why:
  • Often, one or two of the children are working on the farm, while others are not (and may have no interest in farming)
  • Because so much of the “estate” is in the form of land, you want to be sure your survivors have access to cash to settle your final expenses and support themselves.
  • Again, because there may be estate taxes to pay and because so much of the estate is in the form of property, it is important to have cash available. (While only relatively large estates will owe estate taxes, according to the U.S. Department of Agriculture, the average value of assets for larger family farms was about $4.5 million in 2014.).
McClintock describes three possible estate planning solutions for family farm owners who want to pass on the farming business to one heir without neglecting the others:
  1. The farming heir purchases the farm from the parents while they are still alive but are retiring from the farming business. The proceeds of the sale are incorporated into the parents’ estate plan and divided among all the heirs.
  2. The farming heir purchases the farm from the estate after the parents’ death. There might be an agreed-upon price built into the estate plan.
  3. Upon the parents’ death, the farm ownership is divided equally among the heirs, with the farming heir being given the right to rent the property from the other heirs for his/her lifetime or some other specific period of time.
In addition to these three tactics, families might consider purchasing life insurance to provide sufficient liquidity to pay any taxes due or to provide funds to non-farming children equivalent to the value of the land passing to the child who farms.

Revising the tax law, including the estate tax law, is a big topic of discussion in our country right now, and provisions are being discussed that would ease the tax burden on family farm owners. In fact, some measures have already been in place for years, such as allowing farm real estate to be valued at farm-use value rather than at its fair-market value, and an installment payment provision

No matter what further tax relief is enacted, or which method of estate planning is used, it’s crucial for a detailed, formal plan to be put in place, one that minimizes taxes, avoids disputes, and is hopefully perceived as “fair” by all the heirs.
- by Rebecca W. Geyer

Wednesday, November 22, 2017

November is National Caregivers Month


WHEREAS, over 90 million Americans today are family caregivers for their loved ones; and

WHEREAS, a large number of them are finding themselves providing care 24 hours a day/7 days a week; and

WHEREAS, although caregiving can be a rewarding experience, it is not without its consequences, such as stress, poor health, and caregiver burnout, and

WHEREAS, with the responsibility of family caregivers in our country growing every year, it is even more essential to encourage these heroes to take some time for respite so they may continue their mission of providing that loving care that only they can provide…

Now, therefore, be it resolved that the Mayor/Governor of City/State, does hereby recognize November 2017 as National Family Caregivers Month”.
“No one necessarily sets out to become a caregiver. It often just happens over time”, an AARP story published in the Indianapolis Star begins. How well we know, as our estate planning clients share their own stories with us.  Still some of the statistics provided by AARP were startling, even to our attorneys:
  • There are 45 million family caregivers in America
  • In Indiana, nearly 840,000 Hoosiers care for older parents, spouses, and children with disabilities
  • Hoosiers who provide unpaid care for a loved one are spending a combined 779 million hours a year doing so.
  • Today 40% of caregivers are male, 60% female.
For adult children who are unable to serve as caregivers themselves, the first two challenges facing children whose parents are in need of help include finding and hiring caregivers, then monitoring to be sure that the needed care is being provided, and in a kind, considerate way. 
The third challenge is the high cost of long term care. With proper advance planning, the attorneys at Geyer & Associates can help provide your loved one with proper care while helping your family avoid financial ruin.

We were very happy that, effective January of 2016, Indiana passed the CARE Act, requiring hospitals to issue “at home care plans” to at home caregivers and to help educate lay caregivers. Now, we are following proposals for national legislation called RAISE, the Recognize, Assist, Include, Support, and Engage Family Caregivers Act, which would create an advisory council of representatives from the private and public sectors, including family caregivers, older adults and people with disabilities, health care providers, employers, state and local officials, and others to make recommendations regarding the national strategy.

Let’s all remember to salute family caregivers in November – and year round!


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

Wednesday, November 15, 2017

Succession Planning Prevents Split-Ups and Family Divides

Famous designer Giorgio Armani has outlined a succession plan aimed at preventing his fashion empire from being split up, the Merced Sun Star reports. After he dies, Armani says, three people who he names will be put in charge of a foundation that he created last year both as a succession tool and as a vehicle for charity investments.

Choosing a successor can be as easy as appointing a family member or assistant to take the owner's place, Investopedia explains. “However, there may be several partners or family members from which the owner will have to choose, each with various strengths and weaknesses to be weighed and evaluated. Partners who do not need or want a successor may simply sell their portion of the business to their partners in a buy-sell agreement.”

Consider the role family businesses play in job creation: family companies are responsible for 60 percent of the jobs in America and nearly 80 percent of new jobs created, Michael Evans writes in Forbes. But uncertainty about whether junior members will have the aptitude and experience for running a company is the leading concern that family businesses have, Evans adds.

Succession planning isn’t easy, as Armani himself is learning. "Believe me, it is horrendous to decide what to leave to whom, if it is right or not right. Every five minutes, you are placed in front of a reality of a man to whom something could suddenly happen. This is true of everyone, but more so at 83," Armani said.

At Rebecca W. Geyer & Associates, we know that owners of closely-held businesses have special needs. The problem –the owners are so busy developing their business, they don’t have time to address the legal issues needed to ensure their continued success. We advise clients on
  • proper organizational structure
  • the use of buy-sell arrangements
  • corporate restructuring
  • tax reduction
  • succession planning
Typically, other professionals work as a team with our attorneys to design a complete plan.  We work closely with business owners’ insurance agents, tax professionals, and investment advisor to design a complete succession plan.

Properly designed business succession plans can help prevent two kinds of splits:  split-up of the business, and disputes among family members!

by Rebecca W. Geyer

Wednesday, November 8, 2017

Generations Collide and Comfort in Estate Planning

“There’s a fine line between caring and controlling – but older adults and their grown children often disagree on where it is,” writes Claire Berman in the Atlantic. In the course of researching for a book about caring for aging parents, Berman interviewed geriatricians, social workers, administrators of assisted living facilities, and elder law attorneys.

As parents age, their attempts to hold on to their independence can be at odds with even the most well-intentioned suggestions from their adult children. “They are annoyed by children’s overprotectiveness, but appreciate the concern it expresses,” is what Berman discovered.

Wealthmanagement.com comes down firmly on the “Yes” side of the question: Should parents tell their adult children what’s in their estate planning documents? At a minimum, family members should be told:
  • where the documents are located
  • who are the key advisors (lawyers, accountants, financial advisors)
  • what immediate steps they might need to take if an unexpected death occurs. 
Losing a parent can be hard enough;there’s no reason to add additional confusion and potential harm by leaving the family completely in the dark. It’s particularly important to have a frank conversation if parents intend to leave unequal bequests. “If there are special arrangements between parents and one or more children, parents must recognize the ‘truth will out’” and it’s their responsibility, not their children’s, to explain why.”                 

But, even when estate planning considerations have been openly discussed, communication between seniors and their adult children about decisions prior to death can be difficult. Participants in a study at State University of New York at Albany expressed a strong desire for autonomy and connection in relations with their adult children, Berman relates.

“The main contradiction of elderly parents is experienced in terms of individual autonomy and in terms of a need for care by their adult children,” Tetyana Zelinska,  Professor of Psychology in Dragomanov University in the Ukraine explains. “But parents should not accept destructive relationships,” she advises.  It would be better, she says,to write a letter to an adult child in order to express a clear and explicit desire to build constructive and good relationships.”

At Geyer Law, we agree. Proper estate planning, particularly when the discussions involve both generations, helps put seniors in charge of their own finances, while at the same time sparing loved ones the expense, delay and frustration associated with managing affairs after an elderly parents has become disabled or passes away.
- by Rebecca W. Geyer

Wednesday, November 1, 2017

Estate Planning Attorney Cautions Against Senior Fraud

“Some financial professionals use designations that imply that they are experts at helping seniors with financial issues,” the Securities and Exchange Commission website cautions. “Many seniors, however, don't understand the sets of initials that may follow the names of these financial professionals or the meaning of the titles - such as "senior specialist" or "retirement advisor" - they use to market themselves.” Often these titles don’t require any specific study or experience.

As estate planning attorneys at Geyer Law, we often deal with seniors, and are always chagrined to learn about the suffering scammers cause to their victims.
It’s not only the SEC that is concerned about the increasing number and types of scams targeting senior investors. The North American Securities Corporation’s ServeOurSeniors.org website tells seniors, “You’ve worked hard throughout your lifetime to build retirement security. As your first line of defense against investment fraud, NASAA members know scam artists will try to prey on seniors by offering ‘too good to be true’ investment schemes. Education and awareness are your best weapons in the fight against investment fraud.” 

NASAA offers a checklist of questions seniors should post to anyone attempting to sell them an investment product of any kind:
  • What products are you offering?
  • Who regulates or licenses this product or service?
  • How does this product meet my investment objectives?
  • What are the risks?
  • What written information will I receive about this investment before making a decision?
  • What license(s) do you hold that authorize you to sell this product or service?
FINRA (the Financial Industry Regulatory Authority) views the protection of senior investors, as well as baby boomers who are retired or approaching retirement, as a top priority, because a large number of American investors are approaching retirement and control a substantial portion of investment assets. “Even if you have never been subjected to an investment fraudster’s sales pitch, you probably know someone who has. The more you know about the types of fraud and tactics used the better equipped you’ll be to avoid it,” FINRA warns.

“Stranger danger” seems to be all around us. In fact, at Geyer & Associates, we think protecting ourselves – and our aging parents – from scams has become a vital element in estate planning!  If you have questions or concerns about protecting yourself or a loved one, or how to address a fraud you discover, please contact our office.


- by Ronnie of the Rebecca W. Geyer blog team

Wednesday, October 25, 2017

The Role of the HECM in Indiana Estate Planning

At Rebecca W. Geyer & Associates, we’re dedicated to providing in-depth counseling to individuals and families to accomplish practical estate planning solutions.  That includes staying abreast of new developments in investments. tax law, and insurance. One tool that has become increasingly popular, and which is often advertised on TV) is the reverse mortgage (you may have heard the term HECM, standing for Home Equity Conversion Mortgage).

“If you are a homeowner age 62 or older and have paid off your mortgage or paid down a considerable amount,” The U.S. Dept. of Housing and Urban Development website explains, “you may participate in FHA’s Home Equity Conversion Mortgage program.”

At Geyer Law, we were particularly interested in reports of a new study published in the Journal of Financial Planning. For “house-rich” clients, the researchers learned, where the value of their home was double that of the value of their retirement savings, having those clients take a stream of income out of a reverse mortgage’s credit line substantially increased inflation-adjusted retirement income through a 30-year retirement period.
What is especially interesting about this paper is that most retirees who choose to take reverse mortgages have tended to use the reverse mortgage credit line as a backup, or “last resort” in case they were run out of money in the later years of their retirement. In this article, authors Neuwirth, Sacks, and Sacks advocate using income from a reverse mortgage as a planned component of retirement income.

At the same time, our estate planning attorneys find it important to explain to those contemplating a reverse mortgage that a HECM transaction lowers the value of their estate because they themselves are using part of their assets.

In the course of discussing all these different needs and wants with clients who are thinking about entering into a HECM but have not yet done so, we encourage them to, wherever possible, involve the younger family members (their heirs) in the discussion. Why? A reverse mortgage doesn’t need to be repaid until the last surviving borrower no longer lives in the home, or the home is sold. Both parents and adult children should consider the ramifications prior to entering into such an arrangement:

by Rebecca W. Geyer

Wednesday, October 18, 2017

Why Health Savings Accounts Can Be Significant in Retirement Planning

“While retirement planning and estate planning are linked, you need to prioritize for everyone to benefit,” firstcoastadvisors.com explains. If you don’t put retirement first, you risk becoming a burden to your children, yet at the same time you wish to secure the future of your descendants. In between the two, though, is one people of the sequence that benzinga.com calls “the pothole”, which is end-of-life medical care costs.
At Geyer Law, we absolutely agree with New England attorney Jules Martin Hass that the cost of living for those who need end of life care is extraordinarily high. With only four basic ways to pay for care, including paying out-of-pocket, long term care insurance, Medicare and Medicaid, even for those who were financially secure throughout their lifetime, medical costs can “feel like insurmountable financial challenges”.

With proper Medicaid planning by an experienced advisor, families can ensure that all of their assets are not lost to a nursing home, and much of our efforts on behalf of retired clients with children is devoted to this area of planning.

Ed Slott, writing in Financial Planning Magazine, suggests planners explore an additional, lesser known avenue of planning to help their clients arm themselves against “the pothole” between retirement and death: Health Savings Accounts.

“A large percentage of many retirees’ savings will go towards health care costs,” Slott points out, and an HSA can be a valuable tool to pay for these expenses. “Most clients with HSAs use them inefficiently,” Slott claims.  Whenever they have a qualified medical expense, their first thought is to turn to the HSA . “In the process,” he explains, “they lose out on the opportunity of tax-deferred growth and perhaps more important, they lose out on potentially larger tax-free distributons in retirement.” For clients 65 and older, HSA distributions are no longer subject to penalty.

While retirement planning and estate planning are linked, the attorneys at our Indiana estate planning firm realize the neither one of these can be secure unless clients prepare to avoid “the pothole” of end-of-life medical costs!
by Ronnie of the Rebecca W. Geyer blog team

Wednesday, October 11, 2017

Why Your Doctors Are Part of Your Estate Planning Team


“If you are to get the medical care you need,” cautions Tim Prosch in the book The Other Talk, ” you and your family will need to learn how to take control of your healthcare.”

At Geyer law, we convey the same message to our estate planning clients. Appointing someone to be your medical advocate or healthcare power of attorney is literally just the first step, because, just as Prosch warns, that representative may someday be called upon to coordinate various doctors and specialists on your behalf, find and organize medical records, deal with diagnoses, even negotiate with insurance companies.

Once you’ve determined which child or other relative would be the best candidate for your medical power of attorney (someone who is emotionally strong and a good communicator, plus has the time available to devote to the task), you must begin the task of organizing your medical history. In addition to the legal documentation, your folder must include:
  • A list of doctors and medical providers (names and contact information, medical specialty, and a brief description of what treatment plan each recommended for you)
  • A list of medications (name, strength, how often you are taking them, who prescribes the medication, where the prescription is filled).
  • Medical insurance information – policy numbers and contact information
Prosch recommends building a medical family history. “The purpose,” he says, “is to create an understanding of potential risk factors by linking family genes to predisposition for many chronic illnesses.”  Rather than creating fear, he explains, such a history allows you to be proactive for preventable diseases so you can be on the lookout for early symptoms.

Having your medical representative participate in doctor visits, possibly via conference call or Skype, would be good practice, Prosch suggests.

We agree.  The goal of our attorneys at Geyer Law, regardless of your financial status, is to help you accomplish your objectives and provide for your family in the best way possible.  We believe assembling your estate planning team, including your medical advisors, is a path to peace of mind.

- by Rebecca W. Geyer

Wednesday, October 4, 2017

How Life Partners Can Inadvertently Disinherit Each Other

“You have to be vigilant to make sure assets will pass to the other when one of you dies,” Marcia Passos Duffy writes in Bankrate.com, referring to unmarried couples living together. “When life partners don’t tie the knot,” Duffy adds, “they don’t enjoy the financial advantages that come with marriage.”
  • Name each other as beneficiaries on pensions, retirement accounts, and insurance policies. Qualified plans must now provide survivor benefits to same-sex spouses.  But some retirement and pension accounts have different rules about naming non-family beneficiaries.
  • Prepare wills. Otherwise, assets can pass, by default to a blood family member under intestacy laws of your state of residence.
  • Be careful about the titling of the home. If both partners have contributed equally, title the home in both names as joint tenants with right of survivorship; if only one partner has bought the home, use your will or possibly a revocable living trust to ensure that the surviving partner can remain in the home.
  • Name each other in durable power of attorney and healthcare power of attorney documents and visitation authorizations. A life partner could be shut out of end-of-life decisions if he or she is not designated as an agent to act on your behalf.
  • Prepare guardianship arrangements. If there are children involved and the couple wants the survivor to have full legal parental rights, guardianship language in a will is necessary.  This is especially true in a same-sex relationship if one party has no blood relationship with the child and such party has not legally adopted the child. The person listed as guardian in the parent’s will is given the first priority in determining who should be the child’s guardian under Indiana law.
  • Prepare a domestic partnership agreement. This is similar to a pre-nuptial agreement used by traditional couples, setting up a process for dividing property in the event of a separation or end to the relationship.

At Geyer Law, our attorneys often explain that estate planning “tools” generally fall into two categories: lifetime documents governing events during life, and post-life documents governing what happens after death. At our Indianapolis estate planning and elder law firm, we know that people face changing circumstances and make ongoing decisions that have legal ramifications. We serve as a resource to clients, combining clear and concise legal recommendations with responsiveness and compassion.

Given proper preparation and legal guidance, it should never happen that life partners inadvertently disinherit each other!
- by Rebecca W. Geyer

Wednesday, September 27, 2017

Does Indiana Law Require Filial Support?

May an adult child be found financially responsible for a parent’s long term medical care?

Back in the 1500’s, under English law, a child had a duty to contribute to the cost of a parent’s care, if parents lacked the ability to care for themselves. Does that principle still govern today?
That’s a question that has been a topic of discussion among elder law attorneys recently, as a recent article in the Indiana Lawyer explains. Two apparently contradictory legal facts are at play:
  1. The Federal Nursing Home Reform Act prohibits nursing homes from requiring a third party to sign or to be personally responsible for a resident’s expenses, or to payment as a condition of admission.
  2. Indiana is one of 30 states with their own filial responsibility laws requiring adult children to financially support their parents if they are not able to take care of themselves.
For filial responsibility laws to apply, medicalalertadvice.com explains, the following criteria would need to be met:
  • The parent must be accepting financial support from the state government
  • The parent has a medical or nursing home bill which they cannot pay (the bill was acquired in that state)
  • The parent is considered indigent (cost of care exceeds their Social Security benefits)
  • The parent does not qualify for Medicaid
  • The caregiver has reason to believe the patient’s child has the money to pay the bill and sues that child
There have been very few instances in which forced filial support has been imposed by an Indiana court. On the other hand, as we caution Geyer Law clients, Federal and state laws permit Medicaid to seek reimbursement from recipients’ estates. As elder law attorneys, we want to help children of elderly parents make sure their parents are as well cared for as possible. In our planning, we utilize many tools, including:
  • Long term care insurance
  • Gifting
  • Trusts
  • Spend-down
  • Annuities
  • Promissory notes
With proper Medicaid planning, families can ensure that their assets are passed on to the next generation, while at the same time avoiding lawsuits based on filial responsibility laws.

- by Rebecca W. Geyer

Wednesday, September 20, 2017

How-Not-To Estate Planning Lessons From Dead Celebs

“Dying without a will doesn’t damage the deceased, but it sure makes it hard on the survivors,” observed John J. Scroggin, J.S., LL.M., AEP at a regional symposium of the Financial Planning Association, citing some notable examples:

(1865)  Abraham Lincoln died without a will despite being a skilled attorney. Lincoln left an
             estate of $110,000, the equivalent of several million dollars today.

(1973)  Pablo Picasso died without a will, leaving an estate of 45,000 pieces of artwork, five
             homes, gold, and bonds worth $30 million.

(1998) Sony Bono dies while skiing with estate between $1 and $15 million.

(2009) NFL quarterback Steve McNair was murdered, leaving behind a $20 million estate, but
            no will. Under Tennessee intestate law, his surviving wife received only 40% of the estate.

According to AARP, only 17% of Americans over the age of 50 have wills and durable powers of attorney.

At the opposite extreme, Scroggins explains, are celebrities who did create estate planning documents, but who failed to contemplate the unexpected. Again, Scroggins offers a couple of notable examples:
  • The Jimi Hendrix estate passed entirely to his father.  The father later passed the assets on to his adopted daughter, disinheriting Jim Hendrix’s full blood brother.
  • Jacqueline Kennedy provided that the residue of her estate (valued at between $43 and $100 million) would pass to her children. Or, if the children signed a disclaimer, the assets would go to a Charitable Lead Trust for her grandchildren.  The CLT was never formed. (Apparently the children chose to pay the estate tax rather than pass assets to the grandchildren!)
“The unfortunate reality is that like ‘regular’ people, many celebrities do not know how to properly handle their finances,” Scroggins concludes.

So, what causes this broad based resistance to signing a will and preparing estate planning documents? Scroggins posits that it is people’s fear of addressing their personal mortality, coupled with the “inability of the attorney to communicate with the client… the necessity, purpose, and impact of proposed documents.”

That is precisely why our mission statement declares:“We are a resource for clients, combining clear and concise legal recommendations with responsiveness and compassion to create a solution to best meet your needs.”

- by Rebecca W. Geyer

Wednesday, September 13, 2017

The IRA That Doesn't Care How Old You Are

As long as you have earned compensation, whether it is a regular paycheck or 1099 income for contract work, you can contribute to a Roth IRA – no matter how old you are, Fidelity reminds investors. 2017 Roth contribution limits are $5,500 for those under age 50, $6,500 for aged 50 or older. There’s one important note, though: although age doesn’t matter, income does, and the IRS sets income limits for eligibility to contribute to a Roth (in 2017, $132,000 for a single filer, $194,000 for married person filing jointly).

But don’t give up just yet, Fidelity says. Even if your earnings turn out to be over the limits, you can still take advantage of the Roth by converting money from a traditional IRA or 401(k) into a Roth.

And, while at Geyer Law we offer neither tax nor investment advice, we believe Roth IRAs definitely deserve a place in estate planning discussions, for a variety of important reasons:
  • Earnings in a Roth IRA are tax free.
  • You may contribute to a Roth even if you have a 401(k) or 403(b) account.
  • Withdrawals are never required.
  • After age 59 ½, you do not pay tax on “qualified withdrawals” (the account was opened more than five years ago or the balance is being paid to a beneficiary after your death).
Having a Roth IRA allows you to offer some tax planning advantages to your beneficiaries, as well as to benefit certain ones outside of your will and trust:
  • When you die, while your Roth account may be subject to estate tax, your beneficiaries will not pay any income tax on the distributions.
  • Note that the beneficiary designation on your Roth IRA account is going to supersede anything in your will or trust (meaning the Roth planning needs to be coordinated with your overall estate plan).
  • Your beneficiaries have the choice of rolling over the money into an inherited Roth IRA. The assets would continue to grow non-taxed but distributions are required. (The heir would name his or her own beneficiaries for the new account).
  • By Dec. 31 following your death, the beneficiary would need to begin taking withdrawals based on his/her life expectancy. If you had named more than one beneficiary, the oldest beneficiary’s life expectancy would be used in the calculations.
As MarketWatch.comhttp://www.marketwatch.com/story/i-inherited-a-roth-ira-now-what-2013-06-28 reminds readers, it’s important to make sure beneficiary designations on all accounts reflect the IRA owner’s wishes, adding that “Many attorneys prepare customized beneficiary designations.”

The Roth may in fact be the only IRA that “doesn’t care how old you are” when it comes to contributing. On the other hand, as we well know at Geyer Law, reaping all the Roth’s tax and estate planning benefits takes careful and thoughtful planning and legal expertise.
- by Ronnie of the Rebecca W. Geyer blog team

Wednesday, September 6, 2017

After You're Gone, Will Your Disabled Child Be Under the Arc?

If you have a child or other loved one with a physical or mental disability, a special needs trust may be a critical piece of your estate plan. In fact, here at Geyer & Associates, an estate planning and elder law firm, we support parents of special needs children by:
  • helping them navigate through the complexities of federal and state laws
  • connecting them with resources
One of the biggest concerns parents have, we’ve found, is providing for a disabled child after they themselves are gone. A special needs trust is designed to accomplish four basic things:
  1. Setting out specific directives about the care of your child
  2. Providing for “extras” above and beyond governmental benefits (vacations, electronics, entertainment, special dietary needs, education expenses, even gifts for others)
  3. Protecting your child’s inheritance
  4. Preserving governmental benefits such as SSI and Medicaid.
We often help parents or grandparents set up individual special needs trusts, but also recommend they explore becoming part of a very large pooled trust at the Arc of Indiana. Trust I under the Arc uses an annual spending projection to decide how much money may be spent each year on the beneficiary. The Arc trust is designed to be “self-depleting”, designed to be used up by the time the beneficiary passes away.

Why consider a special needs trust through the Arc? The Arc website lists several important considerations:

  • With an Arc trust, should your child outlive his or her projected life span, the trust will continue making disbursements even though the account is depleted. Those funds come from donations of funds remaining after other beneficiaries died. With a bank trust, if the funds are insufficient to cover the trustee’s fees, the trust might be terminated.
  • Many banks are reluctant to administer small trusts.  The Arc master Trust minimum funding is $30,000.
  • The Arc membership and Board of Directors is comprised of people who routinely interact with people with disabilities and are therefore in a position to be more sensitive to parents’ desires for special needs children.
After you’re gone, will your child be under the Arc?

- by Rebecca W. Geyer

Wednesday, August 30, 2017

How Portable Are Your Estate Planning Documents?


At Rebecca W. Geyer & Associates, PC,  a full service estate planning and elder law firm, we serve the people of central Indiana. But, if you move to another state, must you get rid of your estate planning documents and start over from scratch? The answer? “Yes and no”.
First off, all your documents do need to be reviewed to make sure they meet your new home state’s legal requirements. Although estate laws are similar throughout the United States, they may differ in some details.

Power of Attorney documents:
Whenever real property is involved (a house, a condo, a vacation or rental property), where the land is located, controls.  That means you need a specific power of attorney for each property you own, written in compliance with that jurisdiction. In general, although states may have their own requirements, they do generally recognize valid powers of attorney that are created in another state.

Health Care Power of Attorney documents:
Your healthcare power of attorney document names someone to make healthcare decisions for you when you’re too sick to do that yourself, giving that person the power to decide on all aspects of your medical treatment. While every state’s documents must be written to conform with federal law and Supreme Court decisions, healthcare providers in your new state may not be familiar with the form you have. Most state laws contain a “reciprocity provision”, recognizing directives from another state.

Wills and revocable living trusts:
The state to which you relocate will almost always accept your document as valid.  Still, it makes sense to have a local attorney amend the documents to comply with local law.

Beneficiary Designations on Retirement accounts
Retirement accounts and federal benefits are governed by federal law, regardless of where you’re living.

Changes in circumstances make it necessary to tweak your documents:  Other than relocation, specific estate-plan review triggers might include:
  •  a change in marital status
  • an addition to the family
  •  a death in the family
  •  an inheritanceretirement 
  • sale of an important asset

An estate document review will give you peace of mind and alert you to any changes that might need to be addressed, as 360degrees of Financial Literacy points out.

Whether you’re moving to another state or not, estate planning documents need to go for a “checkup” every so often!

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

Wednesday, August 23, 2017

Charlie and Rita Match Charity with a QCD


The names in this story have been changed to protect the charitable, but at Geyer Law, we believe that using QVCs to channel IRA distributions directly to charity is a story worth sharing.
As we explained in our blog post last week, when you reach the age of 70 ½, whether the funds are needed or not, you must take minimum withdrawals out of your IRA.  It’s possible that you, like many of our Geyer Law clients, might now be in a position to make substantial gifts to one or more charities. You understand the general rule: money you withdraw from your IRA accounts will be fully taxable as ordinary income, and, conversely, money you donate to charity will generate a tax deduction.

Last week we shared a particular article we had found in the Journal of Financial Planning about ways Qualified Charitable Distributions (QCDs) can create tax savings. With a QCD, IRA owners who have reached age 70 ½ can move money directly from their IRA account to a charity of their choice.  No income is reported, and no charitable deduction is claimed.

The authors of the Journal article offered several important reasons why the direct IRA-to-charity QCD tactic was better than first taking a Required Minimum Distribution, then contributing the proceeds to charity.  Out of the specific examples that were offered, one (the article refers to them as Jack and Jill) most closely resembles a composite of some recent situations faced by Geyer law client couples. (It’s important to remind readers that we don’t offer tax advice; instead we work in cooperation with clients’ tax advisors to coordinate tax saving and estate planning.) For instructional purposes, I’ll assign the pseudonyms Charlie and Rita.

Charlie and Rita, a high net worth couple, are both in their early 70she’s a retired business owner, she’s a retired professional practitioner). When Charlie wanted to use his IRA Required Minimum Distribution as the source of a $100,000 contribution to their church, we worked alongside the couple’s tax advisor to create the most tax-effective way to accomplish their estate planning goal of reducing the size of their taxable estate. A Qualified Charitable Distribution turned out to work well in Charlie and Rita’s situation. 
  • Less of their of social security income was subject to tax
  • They avoided a hike in their Medicare Part B premium
  • They lowered their federal income tax
  • They reduced the size of their taxable estate
  • The full amount of the QCD was able to be excluded from income, even though the contribution exceeded the percentage of AGI that would normally have been applied to their charitable contributions
For Charlie and Rita, a QCD beat the first-take-RMD-then-contribute route!

by Rebecca W. Geyer 

Wednesday, August 16, 2017

Charities and IRAs - a Match Made for Tax Savings

Contributing to our own retirement and contributing to charity - in our younger years our first thought would have been that these were two separate alternatives. We knew either course of action could offer tax reduction benefits; we simply needed to decide where and how much to divert in each of those two directions.
Fast forward to age 70½, and those two choices are slightly repositioned. Whether the funds are needed or not, our Geyer Law clients must take minimum withdrawals out of their IRA accounts. At the same time, many are now in a position to make substantial gifts to their charities of choice. The money they withdraw from their IRA accounts is fully taxable as ordinary income; money donated to charity, by contrast, will generate a tax deduction.

While our attorneys offer no tax advice, instead working in cooperation with clients’ tax advisors to coordinate tax saving and estate planning strategy, we found Journal of Financial Planning’s article “How to Use Qualified Charitable Distributions as a Tax Saving Tool” very interesting and instructive.

By way of background, in 2006, the IRS began to allow retirees to make what they termed QCDs, or Qualified Charitable Distributions. With a QCD, IRA owners who have reached age 70 ½ can move money directly from their IRA account to a charity of their choice.  No income is reported, and no charitable deduction is claimed. Originally a temporary benefit which, every two years, needed to receive a new “blessing” by Congress, the QCD was permanently added to the law beginning in 2016.

So why is this direct path from our clients’ IRA account into the charity’s account such a big deal?  Wouldn’t the same result be achieved by pulling out money from the IRA, paying the tax on it, and then contributing to the charity and deducting the contribution on the tax return accomplish precisely the same thing?

Not necessarily, authors Gardner and Daff explain, offering four reasons why QCDs beat the RMD-then-contribute route:

1. Financial institutions are not obligated to withhold taxes from a QCD. The entire distribution can thus go directly to the charity (up to $100,000 is allowed.)

2. The full amount of the QCD can be excluded from income (even when that contribution exceeds the percentage limit of adjusted gross income that normally applies to charitable contributions!)

3. QCDs are allowed for each individual.  If spouses filing jointly are eligible, up to $200,000 can be excluded from income.

4. When the money travels directly from IRA to charity, that avoids raising income above thresholds that affect marginal tax rates, whether Social Security is taxable, Medicare part B premiums, and limits itemized deductions.

Charities and IRA accounts, we agree, that’s a match made for tax savings!

by Rebecca W. Geyer 

Wednesday, August 9, 2017

Good News From the U.S. Department of Veterans Affairs


“On behalf of the Department of Veterans Affairs and the nation’s veterans, I want to commend the leadership of the House and Senate Veterans Affairs Committees on their agreement on legislation that will great benefit veterans.” So began Secretary David J. Shulkin’s  statement, just weeks ago, following the passing of legislation to provide $2.1 billion to avoid a disruption in the Veterans Choice program.”

The new funding will allow for several important improvements, Shulkin explained:
  • authorizing 28 major medical leases
  • bringing new healthcare facilities closer to where veterans live
  • attracting the most sought-after medical specialists
  • establishing innovative human resources programs to strengthen workforce management
(An April 17 decision had temporarily suspended certain parts of the program to allow those to be evaluated and necessary changes made.) “The VA is committed to listening to the voices of those who care for Veterans of all eras and to collaborating to improve services, outreach, and awareness,” the Department announced on July 28th.

At Geyer Law, where Veterans Benefits is a core aspect of our practice, we were particularly encouraged after seeing the beautifully redesigned caregiver program website page on Geriatrics and Extended Care. But, even more important, we applaud some of the benefits David Shulkin describes in the new Veterans’ Choice program. A veteran would first speak with a VA clinician, and, depending on the veteran’s proximity to the right provider, he or she might see either a VA specialist or a provider in the community.

The Veterans Administration remains the primary resource, Shulkin stressed in an recorded interview:
  • “We make sure community providers have all the information they need to treat the veteran.”
  • “We get the veteran’s record back.”
  • “We pay the veteran’s bill.”

- by Rebecca W. Geyer 

Wednesday, August 2, 2017

Pearl Harbor Victim Planned His Own Funeral


Raymond Haerry made a thoughtful decision about his own funeral – he left instructions for his body to be brought back to the sunken USS Arizona ship on which he had served more than 70 years ago. Haerry, only 19 when his ship was attacked at Pearl Harbor, lived in New Jersey, never returning to Hawaii.during his lifetime. But when Haerry died earlier this year at age 94, he left instructions saying he wanted his body interred on ”his ship”.

“To help relieve their families, an increasing number of people are planning their own funerals, designating their funeral preferences, and sometimes paying for them in advance. They see funeral planning as an extension of will and estate planning,” the Federal Trade Commission Consumer Information page says”, encouraging citizens to make informed preplanning is such a good idea:
  • you can choose the specific items you want and need
  • you can compare prices offered by different funeral providers
  • you spare your survivors the stress of making decisions under pressure
  • you can decide where your remains will be buried, entombed or scattered
Don’t designate your preferences in your will, the FTC cautions (a will is often not found or read until after the funeral).  In Indiana, your designee under a Funeral Planning Declaration or your health care representative is actually charged with carrying out your funeral plans.  Also, avoid keeping a copy of your funeral plan in a safe deposit box (if arrangements need to be made on a weekend or holiday, the family will not be able to get into the box.

At Geyer & Associates, an important area of our practice is Veterans’ Benefits, and we were very touched by Raymond Haerry’s story. We found another Pearl harbor-related story to be very emotionally-laden in a different way:

A group of forensic scientists in Hawaii is still working to identify the remains of those who died in the attack on Pearl Harbor. Thanks to DNA technology, the remains of many of the hundreds of marines and sailors whose remains had been unidentifiable and who had been buried in common caskets, are now able to be identified. Now, 75 years after Navy Seaman 2nd class Raymond Piskuran died at Pearl Harbor, his family was able to bring his remains home to be buried next to his parents in Elyria, Ohio.

Two “lessons” to be learned from these two very different stories:

1. Veterans Benefits, we’ve found at Geyer Law, are the most misunderstood and underutilized resources available. Many veterans and their families are unaware that could be eligible for a wide range of services through the U.S. Dept. of Veterans’ Affairs – even if they did not directly retire from the military or suffer injuries in the line of duty.

2. While nobody wants to think about death, establishing an estate plan, including a funeral plan, is one of the most important steps you can take to protect yourself and your loved ones.

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

Wednesday, July 26, 2017

Estate Planning for the New Millionaire Next Door


More than twenty years have passed since Tom Stanley and William Danko published their best-selling book The Millionaire Next Door, documenting how wealthy households tend to handle their personal finances, making the statement that wealth is not what you spend, but what you accumulate. In fact,” identifying the nuances of wealth accumulation at the household level has been the subject of research and discussion for nearly 100 years,” researchers Kruger, Grable, and Fallaw write in the Journal of Financial Planning.
At Geyer Law, our work often involves the protection and the passing on of wealth. We are always interested in reading materials about wealth accumulation – and about what makes wealth accumulators tick.
The study results reported in the Journal showed that, “overall, affluent households generally reported more frequently taking financial risk in their investment portfolios.” At the same time, the affluent were more likely to understand the nature of the risk in a particular investment and the likelihood of risk and return, and were more discerning about the appropriate level of risk to take for their own investment portfolios.

Interestingly, just two years ago, the CNBC Millionaire Survey came to a totally different conclusion, reporting that “more than one-third of high-net-worth families have not taken the most basic steps to protect and provide for their loved ones when they die.” (True, the researchers found, individuals with a $5 million or greater net worth or greater were more likely to have done planning.) One possible explanation offered for the general lack of estate planning preparedness is the higher federal estate tax exemption amount; $5.49 million for 2017.

But, whether you qualify for the “affluent household” category or not, life’s journey is fraught with change, and estate planning is about a lot more than estate tax avoidance. Life’s changes, including marriage, children, business, retirement, incapacity and death all require careful planning to protect the people most important to you and whatever level of assets you’ve worked for– and taken risks to achieve!



- by Rebecca W. Geyer

Wednesday, July 19, 2017

For Estate Planning, Structure Has to Suit the Situation


“Regardless of the form, federal tax rules are generally the same for all IRAs,” the American Institute of CPAs explains, “But the structure of the IRA agreement, the authors of 360 degrees of financial literacy add, “can have a significant impact on how your IRA is administered.”

At Geyer Law, we often discuss with clients the different options when setting up their IRA in coordination with their overall estate planning goals.
Stretch IRAs
Many find the “stretch IRA” to be useful, because, when the IRA owner dies, the beneficiary is eligible to re-title the account as an inherited IRA, taking Required Minimum Distributions based on his or her own age, thus continuing the tax deferral on the bulk of the money.

Attention must be paid to certain crucial details when setting up a “stretch”. 
  • The new account must be properly titled: “Jane Doe IRA (deceased Feb. 27, 2017) FBO Susan Doe”.
  • Jane Doe’s Required Minimum Distribution must be take out before the amount is transferred to the inherited IRA.
  • The funds must be transferred before the end of the year following the year of the original IRA owner’s death.
Trusteed IRAs
An increasingly popular option is a trusteed IRA. Under this arrangement, the IRA itself becomes a trust, with the financial organization acting as the trustee. In a recent article in Financial Planning Magazine, IRA expert Ed Slott explains that a trusteed IRA might be most suitable for clients whose IRA is their largest asset by far.

Advantages to a trusteed IRA arrangement include:
  1. greater control for the IRA owner and less control to the beneficiaries. (In the typical IRA, the beneficiary can take control of the IRA assets and there might be a concern that the assets might be squandered)
  2. greater control over the ultimate beneficiaries (A trusteed IRA lets you specify contingent beneficiaries that cannot be changed by the primary beneficiary.
At Geyer Law, our attorneys are dedicated to providing in-depth counseling to individuals and families. Recommending the appropriate structure for IRA assets is just one aspect of the work we do, helping our clients accomplish practical estate planning solutions.


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

Wednesday, July 12, 2017

In Indiana Estate Planning, the Times They Are A-Changing - Part Two

There are new realities to deal with in estate planning, as families become increasing varied in their dynamics. The Raymond James Point of View names several of those new realities, including the legalization of same-sex marriage, the general increase in non-married couples, and the steady divorce rate.

One modern family estate planning situation that has the potential to turn into a “dilemma” has to do with what Point of View calls “accounting for the kids”. “These days, children can become part of a family in seemingly endless ways” in addition to “traditional” situations; the Raymond James authors observe, including:
  • adoption (by both heterosexual couples and same sex adoptive parents)
  • remarriage
  • in vitro fertilization
  • implantation via surrogate
  • foster parenting
  • posthumous reproduction (father dies after a child is conceived but before it is born)
At our Indianapolis estate planning and elder law firm, we help clients create an individualized estate plan in every one of these “non-traditional” situations.  Fortunately, today a full range of legal options can be explored, options that were not available even a generation ago.

Adoption
Adopted children, by law, are to be treated the same as biological children, but since that has not always been the case, at Geyer Law, we carefully review older estate planning documents to see if new language needs to be inserted.

Assisted Reproductive Technology
Contracts are usually put into place before such procedures are done; still, there is the potential for surrogate mothers or sperm donors to claim rights under the estate unless these issues have been properly addressed in parents’ estate planning documents.

Since Rebecca W. Geyer & Associates practices law in the state of Indiana, we should point out that there are certain important and detailed differences in the way our courts consider certain nontraditional family matters. Just two examples include: 
  1. Surrogacy arrangements have two separate aspects: contract enforceability and parentage establishment with the court, therefore there are two separate legal processes involved.
  2. LBGT individuals can adopt the child of their same-sex partner and can also be named on the birth certificate.
At Geyer Law, our goal is always to combine expertise in the law with highly individualized and compassionate recommendations. The times they are a-changing, and estate planning must accommodate those changes.

- by Rebecca W. Geyer

Tuesday, July 11, 2017

In Indiana Estate Planning, the Times They Are A-Changing

“As times change and social norms continue to evolve, families are becoming increasingly varied in their dynamics," observes the Raymond James Point of View, listing new realities, which include:
  • legalization of same-sex marriage
  • increase in non-married couples
  • reproductive technology (in vitro fertilization)
  • steady divorce rate
  • adoption
“Your estate plan should address your family in its entirety – however large or complicated it may be, Point of View concludes. “The key is to think through who should inherit what in a way that feels equitable.”

At our Indianapolis estate planning and elder law firm, Rebecca W. Geyer & Associates, PC., we absolutely agree. A full range of options must be considered by families today; in fact, there are many legal options that were not in existence a generation ago.

Just one situation requiring special planning involves couples living together without getting married, sometimes to avoid the need for a prenuptial agreement.  In fact, the U.S. Census Bureau estimates that the number of live-in couples in the U.S. rose 25% from the year 2000 to 2010.  At Geyer Law, we see many clients in that situation, and the goal of our work is to put certain safeguards in place to ensure that neither companion is left out of each other’s estate planning when it comes to:
  • staying in the house they shared but did not own together after one dies
  • tax savings
  • disposing of assets
  • end-of-life decisions
  • healthcare
  • financial security for heirs
Important possible steps include:
  1. naming each other as beneficiaries on pensions, retirement accounts, and insurance policies (one or both partners might have children to consider or divorce decrees that dictate otherwise)
  2. creating revocable transfer-on-death deeds to real property
  3. giving each other durable power of attorney and healthcare power of attorney
  4. creating a co-habitation agreement to determine who is responsible for what and who gets what in the event of a break-up
At Geyer Law, our aim is to be a resource for clients, combining clear and concise legal recommendations with responsiveness and compassion in times that most definitely are a-changing!

. by Ronnie of the Rebecca W. Geyer blog team

Wednesday, June 28, 2017

Estate Planning for Couples with Step-Families

“Managing family finances is difficult to begin with, but when you add in stepfamilies and half siblings, family planning becomes increasingly complicated,” Jane King and Caroline Hedges write in Financial Planning. This is no limited problem, the authors note: According to the U.S. Census Bureau, over 50% of U.S. families are remarried or recoupled after a divorce, and the “blended family” is on track to become the predominant family structure in the U.S. At Geyer Law, we know that, from an estate planning point of view, blended families have many complex areas that need to be discussed and formalized in planning documents.

Start by knowing all your existing obligations, King and Hedges suggest, including:
  • alimony payments
  • child support
  • responsibility for college tuition payments
The next important step is drafting a prenuptial agreement.  That document makes it clear who owns what assets, King and Hedges emphasize. Then, even more important, each party’s intentions are in terms of not only current payments, but future bequests.

As estate planning attorneys, we remind our remarried couple clients that, 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).
Spouses automatically becomes the primary beneficiaries of each other’s 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.
 
Estate planning needs to include powers of attorney. 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.

Prenuptial agreements must cover three possibilities:
  • Divorce
  • Incapacity
  • death
When there are minor children involved, the planning must be highly specific, taking into consideration divorce and child support agreements from former marriages. When one or both spouses has power of attorney for a parent, that consideration needs to be woven into the fabric of the overall plan.

Planning for step-families is both highly complex and highly rewarding (for us as advisors, but also for the newly blended couple themselves. “Enable family members you trust to provide for future generations.  Think ahead,” advise King and Hedges.

- by Rebecca W. Geyer

Wednesday, June 21, 2017

Reverse Mortgages for Now-and-Later Estate and Retirement Planning

Many times, lawyers are asked by clients about financial decisions before they are made, and sometimes we’re told about them after they’ve already occurred.  One example of such a decision concerns reverse mortgages.  Reverse mortgages are home loans also known as home equity conversion mortgages, or HECMs (pronounced Heck-ums). HECMs, as bankrate.com explains, allow seniors aged 62 and older to access some of the equity in their homes without having to move.  At Geyer Law, clients will often discuss the wisdom of using a reverse mortgage as part of their retirement planning.  Other times, new clients will inform us that they’ve already entered into a HECM arrangement.

“The HECM is a safe plan that can give older Americans greater financial security,” says Ben Carson, Secretary of the U.S. Department of Housing and Urban Development. In answer to the consumer question “Will we have an estate that we can leave to heirs?”, the HUD website provides the following answer: “When the home is sold or no longer used as a primary residence, the cash, interest, and other HECM finance charges must be repaid.  All proceeds beyond the amount owed belong to your spouse or estate.  This means any remaining equity can be transferred to heirs.  No debt is passed along to the estate of heirs.”

At Geyer Law, we find it important to explain to those contemplating a reverse mortgage that of course a HECM transaction lowers the value of their estate, because they themselves are using part of their assets. The same would be true were they to tap any of their assets other than home equity.  Anything you cash in and spend reduces your estate.

Reverse mortgages provide financial solutions for homeowners, including:
  • paying off debt
  • settling unexpected expenses
  • funding long term care insurance
  • funding life insurance premiums
  • improving current lifestyle
  • helping adult children and grandchildren with current needs
In the course of discussing all these different needs and wants with clients who are thinking about entering into a HECM but have not yet done so, we encourage them to, wherever possible, involve the younger family members (their heirs) in the discussion. Why? A reverse mortgage doesn’t need to be repaid until the last surviving borrower no longer lives in the home, or the home is sold. However, both parents and adult children should consider the ramifications:
  1. If the borrower doesn’t meet the tax and insurance payments or doesn’t maintain the condition of the home, the loan might need to be repaid earlier, which might impact the heirs.
  2. Once the owner has died, the heirs have six months to pay off the loan or refinance the home with a conventional mortgage. (If the mortgage balance is less than the value of the home, the heirs will be able to keep that balance.)
A HECM represents one of many tools that can help older Americans plan for their own – and their heirs’ greater financial security,” but, as with all tools, a reverse mortgage needs to be used in the right way and for the right situation.

 by Rebecca W. Geyer

Wednesday, June 14, 2017

Awkward Conversations Can Be a Great Gift of Love

Conversations with people you love about money concerns can get awkward and tense pretty fast, writes Tobie Stanger in Consumer Reports, offering the following example:

You and your two siblings inherited the lake house where your family spent many cherished summers. But now, arranging who gets July 4th weekend – and whether you, your banker sister, and your struggling artist brother should all pay the same amount for the new roof – makes you behave like nursery schoolers.
Stanger lists 15 of the toughest money talks in descending order, with the toughest being about:
  • a spouse who isn’t bringing in enough income
  • a parent giving more financial help to one sibling over another
  • one sibling asking another for financial help
  • spouses disagreeing over big purchases
Of those who’ve had these conversations, Consumer Reports reveals, 29% were uncomfortable telling their parents it’s time for someone to take over the managing of their finances. A 2014 Wells Fargo survey revealed similar results: Americans find discussing personal finances the most difficult to do, with death a close second in terms of awkward topics.

At Geyer Law, we understand the challenges, fears, and family dynamics that often come into play with legal issues. After all, estate planning involves broaching three on Stanger’s list of sensitive topics: finances, death, and family affairs. As advisors, we take an empathetic and compassionate approach, assisting clients, yet still allowing them to address in their own way their particular goals and concerns.

So that the cost of legal services does not serve as a deterrent to having those vital estate planning conversations, the attorneys at Rebecca W. Geyer & Associates, PC make every effort to offer legal guidance at a fixed fee, even, under certain circumstances, entering into payment plan arrangements. That way, concerns may be addressed without the ongoing stress of an increasing legal bill.

Yes, conversations with people you love about death, long term care, elder law and inheritance can certainly get awkward. At the same time, those very conversations represent a gift of great love for both older and younger family generations.
- by Ronnie of the Rebecca W. Geyer blog team

Wednesday, June 7, 2017

Individualizing Estate Planning Using Life Insurance


Life insurance has many uses in an estate plan, observes investopedia, listing several of those uses:
  • To provide liquidity in an estate (to pay expenses, provide access to cash for heirs while the estate is being settled)
  • To repay debts
  • To replace income that the deceased was providing to the household
  • To accumulate wealth
Married couples and business partners can make use of special types of insurance policies:

First-to-die (also called joint whole life insurance)
When one of the couple (or of the group) dies, benefits are paid out to the surviving 
insured. Typically this arrangement is used to insure spouses or a parent and child.
 
Survivorship life (also called second-to-die)
This policy pays out upon the last death of the couple or group instead of the first one. This type of insurance is also typically used for spouses, in parent-child or business  
partner situations.

There are some circumstances where it makes sense to continue to carry life insurance past retirement, investopedia goes on to explain:
  • You don’t have enough of a nest egg to provide for a surviving spouse
  • Disabled adult children or other relatives rely on you for lifelong care
  • You’re wealthy and need a tax advantaged savings vehicle (you’ve maxed out your savings in other tax-advantaged accounts)
Yet, failure to consider the estate and gift tax consequences of life insurance is a common mistake, Forbes points out. The decision as to how the policy should be owned and controlled can be complex and is highly individualized, the authors explain, with those decisions dependent on individual circumstances: family dynamics, net worth, financial position, personal preferences and even philosophy about transferring assets to future generations.

That part about estate planning being highly individualized is very much in tune with our approach at the law firm of Rebecca W. Geyer & Associates. Our goal? To be a resource for clients, combining clear and concise legal recommendations with responsiveness and compassion, creating solutions to best meet each client’s needs.

- by Ronnie of the Rebecca W. Geyer blog team

Wednesday, May 31, 2017

Graduation - the Time to Put Documents in Place

The time is fast approaching when many young adults leave the nest and head for college. But, just as the famous American Express commercial cautions consumers not to “leave home without it”, referring to a credit card, at Geyer Law we caution students not to leave home
without first putting two important estate planning documents in place:

1. Durable power of attorney
This document relates to finances and property, and empowers the “agent” to access the child’s bank accounts and financial records, pay rent, utilities, and credit card bills, and manage loans and investments. If a child were to become even temporarily disabled, without this document, parents might need court approval to act on the child’s behalf.

2. Healthcare proxy
The formal name for this document is Durable Power of Attorney for Healthcare. The language should stipulate that HIPAA-protected private medical information can be released to the “agent”.  Without this document, parents don’t have the authority to make health care decisions for the young adult; doctors might even refuse to discuss their son or daughter’s condition with parents due to privacy laws.

“Accidents happen, and it’s important to realize that when they do, having the proper paperwork in place can greatly improve a parents or loved one’s ability to help,” says the Virtual Attorney, reminding readers that, upon reaching the age of 18, an individual is an adult in the eyes of the law, and a parent’s rights in controlling some affairs of that child become significantly diminished.
http://thevirtualattorney.com/blog/essential-legal-documents-college-student

While these terrible situations are difficult for any parent to contemplate, it’s vital to be prepared. In the event a child is not only hospitalized, but unable to determine his own course of treatment, medical professionals’ hands will be tied without the intervention of the court. Meanwhile, the financial repercussions of failing to keep the bills paid can result in bad credit and even collections.

At Geyer Law, our estate planning attorneys tell parents: Graduation is a time to celebrate, to congratulate your son or daughter – and yourselves! Graduation is also a time to put the proper estate planning documents in place!
- by Rebecca W. Geyer

Wednesday, May 24, 2017

Keeping Farmland in the Family


Over the next decade, a quarter of our nation’s agricultural land is expected to change hands, according to the USDA Natural Resources Conservation Service. The NRCS identifies four key goals for a strong estate plan for farm owners:
  • Transfer ownership and management of the agricultural operation, land, and other assets to a new operator
  • Avoid unnecessary transfer taxes, such as income, gift, and estate taxes
  • Provide for financial security and peace of mind for all generations
  • Foster the next generation’s management capacity
Further complicating the task of assisting farm owners with their estate planning, we’ve found at Geyer Law, is knowing that complete estate planning for farmland owners must involve the needs of all family members, even those who may not be actively involved in farming.
The Farm Journal Legacy Project outlines four possible strategies farm owners can use in estate planning:

First Right of Refusal: 
A landowner can give first right of refusal to a family member, friend, neighbor, or tenant.  The farm cannot be sold without first being offered to the holder of the first right on the outlined terms. That right to purchase can be effective immediately or set up to be in effect upon the death of the owner. A will or trust might leave the farm equally to all the children, requiring the non-farmer children to offer their interests for sale to the farming children using the appraised value as of the date of death.

Dynasty Trusts:
A dynasty trust gives the farm income to your heirs for their lifetime and can help keep the farm intact for distribution to your grandchildren without being included in your children’s taxable estates.

Limited Liability Company (LLC):
Parents and children contribute land to an LLC. Each receives proportionate ownership shares. An LLC may restrict the right of non-family members to acquire interests in the farm ground. An LLC may avoid probate administration upon death if used in conjunction with a revocable trust agreement.

Buy-Sell Agreements:
A buy-sell agreement is used when unrelated parties are in business together or when brothers or cousins farm together and want to set forth exactly how the business will transfer upon the death of one.

Often farm owners are so busy they don’t have time to address all these legal issues. At Geyer Law, we advise clients on proper organizational structure for preserving the farm interests or preparing to transfer the farmland with minimal disruption to operations. Such plans may also result in the reduction or elimination of costly taxes.

- by Rebecca W. Geyer

Wednesday, May 17, 2017

Do Unequal Inheritances Mean There was Undue Influence?


Whenever there is a very uneven distribution of assets among heirs, state law carries a presumption of the exercise of undue influence, a 2014 article in the Indiana Lawyer points out. Whenever it appears that a dispute among rightful heirs might result in litigation, attorneys have a duty to ensure that their client hasn’t exercised undue influence over the estate owner. In other words, as an estate planning attorney in Indiana, if my clients make changes in their wills or estate plans that result in favoring one of their heirs over others, it’s up to me to determine they are competent and capable of handling their own affairs at the time they are making those changes.

Here is the case described in the Indiana Lawyer article:
In her new estate plan, Phyllis Hayes agreed to give her son Kenneth the right to purchase the family’s 200-acre farm for $500,000. When Kenneth was about to exercise the option agreement his mother had signed, sisters Jo Ann and Diane objected, since the value of the farmland had more than tripled since the contract was signed. The case went to court, which ruled in favor of Kenneth; the sisters appealed, claiming that undue influence over their mother had resulted in this “unfair” distribution of their mother’s assets.
  • The Indiana Court of Appeals ruled in favor of Kenneth’s purchasing the farmland at the price agreed upon in the original contract. The reasoning:
  • The agreement had been based on fair-market value per acre of farmland at the time the contract was drawn.
  • The mother explained that her son had helped her out during hard times, and had helped run the farm after his father did.
  • A doctor’s statement said Phyllis was capable of making decisions regarding her estate.
  • The attorney had videotaped Phyllis talking about why she was changing her estate plan.
As a colleague of mine in the Indiana Section of the National Academy of Elder Law Attorneys, Claire Lewis expressed in the Indiana Lawyer article, “There are legitimate reasons….. why an older adult might choose to amend a will.  Perhaps one sibling has sacrificed to provide care, for example, and the parents decide a greater share of the estate is warranted.”

Still, whenever a client of ours treats one heir more or less favorably than others, it’s incumbent on us, the attorneys at Geyer Law, to understand why – and to be able, if the plan is challenged later on, to be certain of the grantor’s competence.

- by Rebecca W. Geyer

Wednesday, May 10, 2017

Don't Wait for a Triggering Event - Do You Know Your Own Personal Property?

Insurance company claims adjusters refer to them as “triggering events”, which might include:
break-ins, tornados, hailstorms, fires or even divorces
(disputed items sometimes “disappear” in the process). In any event, it’s up to the insured to prove what items were lost. That means producing available receipts, photographs, and other evidence.  “It doesn’t matter where you live…the insurance claim process is the same, United Policyholders points out. “When it comes to collecting on your insurance policy to replace the contents of your home, it’s all about documentation, organization and negotiation.”

Sometimes, when inventory professional Greg Holton gets a call, it isn’t from an insured or an insurance agent. Instead, it’s an executor or trustee calling. One of the executor’s most important – and often most onerous – tasks is listing the estate’s assets for the court and for the heirs. To complete that inventory list, the executor must gather:
  • proof of ownership, including vehicle titles, property deeds, and financial statements
  • appraisals for heirlooms, jewelry, artwork, antiques, and vehicles
Once the executor has completed the inventory, it is filed with the court and copies are ‘served” to all the heirs at their proper addresses.

At Geyer Law, we counsel and represent executors, personal representatives, trustees and beneficiaries on the proper settlement of estates and administration of trusts to ensure prompt resolution and minimize stress at an already difficult time. Services we regularly provide include:
  • commencing probate proceedings
  • advising regarding valuation and taxation
  • paying of claims
  • funding trusts
  • preparing tax returns
  • closing the proceedings
 “People always seem to have their eye on their next purchase,” Holton observed in an interview.
“We’re not about keeping track of those purchases, at least not until a triggering event happens. Then you realize you don’t even know what you own.”  T

You need to think of both business and personal assets the same way you think of your money, Holton asserts. We turn to professional advisors such as accountants and financial planners to manage and “inventory” our money; we need to do the same with our physical assets, hiring a professional inventory specialist to create and then, as we add assets, updating our inventory list.

An executor is most often a sibling or an adult child. The duties and responsibilities he or she is required to complete are often overwhelming. While experiencing one of the most difficult times of their lives, executors are burdened with completing the emotional task of creating the estate inventory. Taking inventory of your assets is a must-do, not a mere “should do”. Don’t wait for the triggering event, Holton urges.

- by Ronnie of the Rebecca W. Geyer blog team