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.

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