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 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. 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 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