Wednesday, October 17, 2018

Hip Pocket Resources for Indiana Seniors and Their Children

Kiplinger’s Retirement Report calls it “Information to Act On”; at Geyer Law, we think of them as “hip pocket” resources for seniors,. These are things you may need to know, either right now, or perhaps when life throws you or a family member a “curve ball”.
 
Just three of the resources named in the Kiplinger report include:
  1. Electronic Deposit Insurance Calculator tool at https://www.fdic.gov/edie . This tool indicates whether all of your money in different banks is covered by the Federal Deposit Insurance Corporation.
  2. Social Security Administration’s list of 228 medical conditions for which disability claims will be expedited. This may be found at https://www.socialsecurity.gov/compassionateallowances.
  3. The Family Caregiver Alliance’s “Family Care Navigator”, which helps families locate government, nonprofit, and private caregiver support programs, may be found at https://www.caregiver.org/family-care-navigator.
Here are four other “hip pocket” resources named by the National Council for Aging Care:
  1. PACE® - Programs of All-Inclusive Care for the Elderly coordinate all the types of care a senior living at home might need, including medical care, personal care, rehabilitation, social interaction, medications, and transportation.  Phone number is 1 800 MEDICARE; website is https://PACE4You.org.
  2. Eldercare Locator – This is a free national service of the US Administration on Aging.  It helps find local resources such as legal, financial, caregiving, home repair, and transportation.  Phone number is 1-800-677-1116; website is https://www.eldercare.gov.
  3. Healthfinder is a service under the U.S. depart. Of Health and Human Services.  The website provides links to health-related websites, support and self-help groups, government agencies, and nonprofit organizations that assist seniors.
  4. The National Directory of Home Modification and Repair Resources helps find qualified local services and professionals to modify and renovate seniors’ homes.  The website is http://homemods.org/directory/index.shtml
The attorneys at Rebecca W. Geyer & Associates have themselves, over the years, served as invaluable resources for seniors and their children in many areas of need, including:
  • wills and trusts
  • advance directives
  • estate administration
  • Medicaid
  • veterans benefits
  • special needs planning
  • business services
  • guardianships
  • dispute resolution

Essentially, at Geyer Law, we’re all about things you need to know, either right now, or perhaps when life throws you or your family a “curve ball”!

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


Wednesday, October 10, 2018

Estate Planning Attorneys Reassured by Planner's Retirement Prognosis

 
Clients can stop freaking out about having enough money in retirement, Craig Israelsen assures readers of Financial Planning.
 
At Rebecca W. Geyer & Associates, we were happy to learn of Israelsen’s positive investment prognosis.  While we’re estate planning and elder law attorneys, not financial planners, we’re obviously concerned with our clients’ retirement security.
 
 
Since 1926, the author explains, there have been 33 distinct “client lifetimes”. By following a simple investment strategy, he says, all 33 would have been left with millions of dollars if they lived to age 95. For purposes of the analysis, several assumptions were used: 
  1. The client begins to invest for retirement at age 35, retires at age 70, and lives to age 95, meaning there is a 35-year accumulation period followed by 25 years of distributions.
  2. The client withdraws only the Required Minimum Distribution each year and nothing more, and each year’s RMD is adequate for their needs.
  3. In the accumulation period, the client saves 8% of annual income, investing it in 60% stocks, 40% fixed income.
  4. The average 35-year rolling return for this annually-rebalanced portfolio was 9.97%.
  5. The first of the 33 clients turned 35 in 1926, the last in 1958.
In the Israelsen study, the largest balance in the retirement portfolio at age 70 was $1.76 million, the smallest $860,000. Over the next 25 years, an average $236,843 was withdrawn, based on RMD guidelines.

The moral of the Israelsen study, he says, is this: A retirement portfolio that is built for growth during both the accumulation years and the distribution years can distribute far more to the retiree than its starting balance at the beginning of retirement. Your clients, Israelsen assures financial planners, will likely have enough if they budget reasonably.  All that anguishing in advance, he says, robs those clients of the joy that can accompany the new opportunities in the final chapter of their lives.

At Geyer Law, we understand the challenges, fears, and family dynamics that come into play with clients’ legal issues, and we are delighted to hear that at least some of the fear of portfolio shortcomings in retirement may be unnecessary!

- by Rebecca W. Geyer
 
 
 


Wednesday, October 3, 2018

Changes in Veterans' Benefits Looming October 18th


On September 18, 2018, the Department of Veterans Affairs officially published the amendments to certain regulations having to do with VA benefit claims. The VA hasn’t left beneficiaries a whole lot of time to adjust – those changes become effective on the 18th of this month!

Veteran’s Benefits are perhaps the most misunderstood and underutilized resources available to millions of veterans and their families. At Rebecca W. Geyer & Associates, our focus is with the Veteran’s Benefits Administration. We assist wartime veterans, or surviving spouses of wartime veterans, in obtaining VA Pension Benefits. With the looming October 18th deadline, at which time important changes go into effect, our work with veterans becomes an even more urgent initiative. The new rule changges relate to standards that must be met to qualify for non-service connected pension payments.  Here’s a general summary of what’s happening:

The VA looks at three elements:

NET WORTH
Net worth includes the claimant’s or beneficiary’s assets and annual income. A Veteran’s assets include his/her own assets plus the assets of the spouse. In 2018, the top limit on net worth is $123,600.  Under the current system, that number increases by the same percentage as the cost-of-living increase for Social Security benefits. Net worth may be decreased in three ways: a) the assets themselves decrease b) annual income decreases c) assets and income decrease.

Under the existing rules, assets include the value of real property, not counting the primary residence or the mortgage on it.  Under the new rule, a residential lot may not exceed two acres; anything above two acres will be counted as an asset.

ASSET TRANSFERS
If the VA finds that a claimant transferred (either by selling it for less than market value or actually giving) assets to someone else in order to reduce the assets and qualify for benefits, the amount will be subject to a penalty. This includes converting assets into an annuity.

The “lookback period” will be the 36 months immediately preceding the date of the pension claim.  This does not include transfers prior to October 18, 2018, which is why the deadline is so important!
MEDICAL EXPENSES
Under the current rules, there are no definitions of deductible medical expenses for the purpose of VA pensions. The final rules expand the definition of “Activities of Daily Living” to include:

1. ambulating within the home or living area
2. instrumental activities of daily Living (shopping, food preparation, housekeeping, laundering, managing finances, handling medication, using the telephone, and transportation for non-medical purposes).

In-home care must be from a licensed health care provider (unless a physician has stated in writing that care can be provided by an in-home attendant.

Time is of the essence in notifying clients of these changes, cautions ElderCounsel, because all VA planning that includes transfers must be made before October 18 2018.  At Geyer Law, we’re making time to meet with every veteran and beneficiary to beat that deadline!
- by Rebecca W. Geyer





Wednesday, September 26, 2018

Long Term Care Insurance Choices - Riders and Hybrids


“Planning ahead for long-term care is important because there is a good chance you will need some long-term care services if you live beyond the age of 65,” cautions MyFederalRetirement.com. As Indiana elder attorneys, we certainly agree that long-term care planning has an important place in both retirement and estate planning, helping clients take charge of their finances and protecting both themselves and their heirs.

In particular, at Rebecca W. Geyer & Associates, our attorneys have been paying attention to the reduced number of viable long-term care insurance choices being offered to our Indiana estate planning clients. Why?  “For aging baby boomers, planning for long-term-care costs becomes more pressing every day. But the insurance that helps cover those costs is surging in price, while the benefits are becoming skimpier.”

There are two phenomena to which we’ve been paying special attention:

1.  Living benefit riders on life insurance policies
Living benefit riders take money out of the death benefit to pay for insureds’ medical care needs while they are still alive. The payment of the death benefit is “accelerated” and paid out while the insured is still alive, typically under any of the following three circumstances:
  1. The insured has been diagnosed with a terminal illness with a 6-24 month life expectancy.
  2. The insured has a chronic illness that leaves him or him unable to perform activities of daily living (bathing, continence, dressing, eating, toileting, transferring).
  3. The insured has a critical illness (heart attack, stroke, cancer, renal failure, organ transplant, ALS, blindness, paralysis)
At first, investopedia.com explains, living benefit riders were offered only on cash value policies such as whole life or universal life, but they are now available in term life insurance products as well.

2.  Hybrid insurance
The hybrid insurance policy allows death benefits on life insurance to be used towards long-term care costs. These policies overcome the difficulty many clients have in paying for long-term care insurance, which they may be lucky enough to never need to use, but whose premiums are non-recoverable. With a hybrid policy, Damon Gonzales of NerdWallet.com points out:
  1. After a surrender charge period (usually 10 yrs.), you can cancel and get a refund
  2. There is a death benefit paid to heirs when you die
  3. There is a guaranteed cash value, a guaranteed death benefit, and a guaranteed amount of long- term care coverage
Along with these advantages, Nerdwallet points out three big drawbacks hybrids have:
  1. Premiums, paid over shorter periods of time than traditional long-term care premiums, can be much less affordable
  2. There is hardly any growth offered on the cash value
  3. Premiums are not tax deductible (Hybrids are not considered tax-qualified policies) 

At Rebecca W. Geyer & Associates, we offer no insurance projects or direct tax advice, working with other advisors to address insurance product choices. Long-term care insurance is just one more example of the overlap among professionals in the area of law, insurance, and tax.       
Realizing, however, just how crucially important this subject is for the long-term well-being of our clients and their family members, we at Geyer Law want to provide the most up-to-date information on the subject of long-term care.
      

      
- by Rebecca W. Geyer





Wednesday, September 19, 2018

In Buying Long Term Care Insurance, It Pays to Go for the Sweet Spot


“For aging baby boomers, planning for long-term-care costs becomes more pressing every day. But the insurance that helps cover those costs is surging in price, while the benefits are becoming skimpier,” Eleanor Laise comments in Kiplinger’s Retirement Report.

It’s true. According to the American Association for Long-Term Care Insurance, the overall cost of new long-term care coverage has been jumping roughly 9% a year.

At Rebecca W. Geyer & Associates, our attorneys have been paying attention to the reduced number of viable long-term care insurance choices being offered to our Indiana estate planning clients. For one thing, as Kiplinger mentions, benefits such as lifetime coverage and a 5% compound inflation benefit protection have either become unaffordable features or aren’t being offered by some insurers.

There are most definitely “sweet spots” for purchasing long-term care insurance, we concluded.  Those “sweet spots” relate to wealth, health, and age:

Age related sweet spot:

Ideally, clients purchase long-term care insurance when they are in their 50s. Not only do premiums begin to rise quickly from there, but one-quarter of applicants age 60-69 are rejected, Laise points out.

Asset-related sweet spot:
Wealthy people (Kiplinger refers to those with financial assets of $2.5 million +) may decide to forgo insurance. If they end up not incurring long term care costs, their heirs will receive more; if they do need to pay for long-term care, they can afford to do so. People with limited assets and those who cannot reasonably sustain the premium costs over decades would be better off not buying expensive policies, perhaps choosing lower benefits or limited benefit period coverage.

Health-related sweet spot:
Insurers have been tightening their underwriting standards, Laise emphasizes, so buying while you’re in good health has become even more important. Some companies have added blood tests and scrutinize family history for heart disease and dementia.

At Geyer Law, there are two phenomena we’re paying attention to - permanent life insurance with a critical care rider and hybrid insurance. In next week’s blog post, we’ll discuss the plusses and minuses of each of these approaches to long-term care insurance.  Stay tuned….
- by Rebecca W. Geyer




Wednesday, September 12, 2018

Avoid Aretha's Estate Planning Mistake


Avoid the estate planning mistakes of Aretha Franklin and Prince, advises Richard Eisenberg, writing in Forbes.com. Both these one-time blockbuster music stars died without a will or trust, Eisenberg notes, and, he warns, “Following in their footsteps could mean your loved ones won’t receive the inheritances you intended.” Problems you might cause your heirs include:
  • Disbursements could be long-delayed
  • Ugly family squabbles might ensue
  • Your estate might owe additional taxes
  • Your financial life will become a public record
  • If you have a special needs child, he or she may wind up losing government benefits
Considering the fact that Aretha Franklin knew she had pancreatic cancer, you would think she’d have considered creating a will.  At least one of her attorneys tried to get her to do exactly that, but the singer never followed through, Eisenberg relates.

What’s so all-important about having a will?
Having a will means that you, rather than your state’s laws, decide who gets your property when you die, Lawyers.com explains. Wills can:
  • distribute your property
  • name an executor
  • name guardians for children
  • forgive debts
Without a will or other estate plan, state laws known as "intestate succession laws" decide which family members will inherit your estate and in what proportion. Most people want to distribute their property differently than the state would distribute it, Lawyers.com continues. For example, many people want to leave gifts to friends, neighbors, girlfriends, boyfriends, schools, or charitable organizations – and intestate succession does not allow for any of that.

At Rebecca W. Geyer & Associates, our attorneys are focused on understanding your particular goals and concerns, taking a lifetime planning approach. That means planning for each client’s’ current needs as well as for a potential disability and death.

Control is really the name of the game and the real reason for having a will. Few people have an estate worth $80 million (the estimated value of Franklin’s estate), but deciding how one’s assets are distributed is still most people’s preference. Keep in mind that settling an estate involves a lot of emotions. The slightest differences can result in hurt feelings and recriminations. A will that clearly lays out your wishes may reduce conflict and speculation over what you “would have” wanted.
- By Rebecca W. Geyer

Wednesday, September 5, 2018

The Executor Shouldn't Need to Start from Scratch


When there’s a death in the family, the responsibility of settling the estate is often designated to the oldest child or to a sibling. One problem that too often arises, explains certified home inventory professional Cindy Hartman, is that, in addition to making funeral arrangements, placing the house on the market, and finalizing the financials, the executor needs to create an inventory.

The inventory consists of a list that must be submitted to the court within sixty days of the estate’s opening.  The list needs to include all financial assets as well as the contents of the home (and of any storage facilities) containing the deceased’s belongings. And not only does that inventory list need to be compiled, the executor must determine the fair market value of each item. In other words, besides gathering the estate property, paying debts and distributing assets to the decedent's heirs, the executor must also complete a court-approved inventory form.

That means that, at one of the most emotion-filled times in his or her life, the question on an executor’s mind is typically “Where do I start?” Hiring a certified home inventory professional can relieve the executor of this work, Hartman explains.

As estate planning attorneys, we at Geyer Law counsel:
  • executors
  • personal representatives
  • trustees and
  • beneficiaries,
with the goal of reducing stress and ensuring prompt resolution of the settlement and administration of estates.  We’ve found that regular communication with all parties involved goes a long way to reduce conflict and delays.

Still, it’s always better when you start things out as part of your estate planning process, rather than leaving the job to your heirs.  To start, Investopedia suggests, go through the inside and outside of your home and make a list of all items worth $100 or more. “Examples include the home itself, television sets, jewelry, collectibles, vehicles, guns, computers/laptops, lawnmower, power tools and so on,” the authors of “16 Things to Do Before You Die” advise.

Cindy Hartman has it right: Often individuals do not know where to begin when someone in their family dies. Planning before death can relieve a large portion of the burden work that falls upon the executor, although there are still tasks that will remain to be accomplished. We provide full-service estate administration services to guide families through the process from start to finish.


 - by Ronnie of the Rebecca W. Geyer blog team

Wednesday, August 29, 2018

Grantor or Non-Grantor Trusts - What's the Dif?

Some of the advice financial advisors give clients concerning setting up trusts may be outdated or overly simplistic, Martin Shenkman, a New Jersey CPA and attorney fears. In an article in Financial Planning, Shenkman offers a guide explaining the distinction between grantor and non-grantor trusts.

1. Grantor trust - the client sets up the trust and pays the tax on the income. Some plans, such as those involving life insurance, might be best held in this type trust. All revocable living trust are considered grantor trusts while the grantor is alive.

2.  Non-grantor trust – the trust, not the client, pays income tax on the income. This type of trust might be recommended for those who want to maximize charitable contributions deductions.

“Advisors need to understand the nature of the trust’s structure,” Shenkman explains, “as it affects not only income tax planning but also asset location decisions.” While advisors don’t need to be experts, he says, they need to have some understanding of the different nuances. When the client’s attorney recommends a type of trust, the planner must truly understand the nature of that trust, the author comments.

There are more variations of trusts than ever before, which means clients and their families can benefit from more strategies, Shenkman says, and planners should remain proactively involved in the planning.

“Recognize the value in a strong partnership between financial planner and estate planning attorney,” urges Mike Piershale in WealthManagement.com. “It’s vital that clients have not only a strong estate plan, but have their finances secured as well.”

At Rebecca W. Geyer & Associates we fully agree. As a full-service estate planning and elder law firm serving the people of central Indiana, we work as a team with our clients’ tax, insurance, and financial planning advisors to best meet our clients’ estate planning and business goals.

Whether building a room addition or an estate plan, one important part of any strategy involves choosing the right tool. The choice of a grantor or non-grantor trust – and the choice to work as a team with our clients’ other advisors - can make a very big difference in terms of achieving the desired estate and tax planning outcomes!
- by Ronnie of the Rebecca W. Geyer blog team


Wednesday, August 22, 2018

Priority Added to the Indiana Health Care Act


Indiana has joined other states in specifying an order of priority for health care decision-making. House Bill 1119 establishes which parties can make health care decisions for an adult who:
  • is incapable of consenting to medical treatment (too physically or mentally impaired, or unconscious)
  • has not appointed a health care representative
How does the process work under the new law?
1.  The health care provider must make reasonable inquiry (by examining medical records and personal effects), attempting to locate and contact persons who can act on behalf of the patient.

 2. The law establishes a specific order of priority, (from most preferred to least preferred) of individuals who can make health care decisions for the patient in the absence of legal documentation appointing a representative:
  • judicially appointed guardian or representative
  • spouse (but not one who is legally separated from the patient or where a petition is pending for separation or annulment)
  • adult child
  • parent
  • adult sibling
  • grandparent
  • adult grandchild
  • nearest other adult relative
  • adult friend (one who has maintained regular contact and is familiar with the individual’s activities, health, and religious or moral beliefs
  • religious superior
House Enrolled Act 1119, remember, is designed to establish priority when the patient has not appointed a health care representative. At Geyer Law, a health care proxy document, which allows you to give another individual legal authority to make health care decisions for you, is an important part of the estate planning process. A second document, the living will, allows you to determine if you want your life artificially prolonged by tubes and machines if you’re suffering from an incurable illness or injury.

House Bill 1119 contains a second section referring to a document about end-of-life decisions called a POST or POLST (Physician Order for Life Sustaining Treatment).  While your living will is part of your legal documents, a POST is a medical order signed by a doctor, Advance Nurse Practitioner, or Physician Assistant, referring to immediate treatments. POSTS are usually recommended for terminally ill or very frail seniors, dailycaring.com explains.

Although it’s a positive development that Indiana law now prioritizes who may make medical decisions on your behalf, advance directives ensure that your wishes are respected.

 - by
Rebecca W. Geyer

Wednesday, August 15, 2018

Beginning Next Year, Roth Conversions Can't Be Undone

With the halfway mark of 2018 behind us, it might be appropriate to direct some thought towards calendar-sensitive estate planning and tax planning topics. (Last week in our blog we covered donating Required Minimum Distributions from IRA accounts to charity, noting that the law has allowed more flexibility in the timing of Qualified Charitable Distributions.

Unfortunately, when it comes to Roth IRA conversions, flexibility appears to be going away. As Bill Bischoff puts it in marketwatch.com, the new tax law “creates a perfect storm for Roth IRA conversions.”

By way of quick review, Roth IRAs have two big tax advantages as compared with “traditional IRAs:
  1. Withdrawals are federal income tax-free (assuming you’ve kept a Roth account open for at least five years, and you’ve reached age 59 ½ - or have become disabled).
  2. There are no annual required minimum distributions, even after age 70 ½.
Because of these two advantages, many individuals moved significant sums of money into Roth IRAs by “converting” their traditional IRA accounts to Roth status.  Yes, the conversion is treated as a taxable withdrawal, usually triggering a big federal and state tax bill, but…many believe today’s tax rates are the lowest we might see for the rest of our lives.

Since withdrawals from a Roth will be federal-income-tax free (so long as at least one Roth account has been open five years or longer), the motivation for doing the conversion now is to pay tax at today’s low rates (and enjoy spending it tax-free later – or leaving it as a legacy with less tax liability for the heirs).

Up until this year, a Roth conversion represented a reversible decision. Under prior law, if it turned out that the decision to convert traditional IRA monies into a Roth had a greater than anticipated negative tax impact, you could undo the deal up until October 15th of the following year. In fact, if you converted a traditional IRA into a Roth in 2017, you have the chance to reverse that conversion between now and October 15, 2018.

However, for 2018 and beyond, no longer will reversals of Roth conversions be allowed.

Handling IRA planning is yet another example of the way tax planning and estate planning tend to overlap. While Rebecca W. Geyer & Associates does not offer direct tax advice, we do coordinate efforts with other advisors to address the tax aspects of the planning process. This is an important change, and we want to be sure to keep our clients and blog readers apprised of all the latest updates in tax law.


 - by Rebecca W. Geyer

Thursday, August 9, 2018

Any Time is Now the Right Time for Donating IRA $ to Charity

After you attain the age of 70 1/2, you're required to take a minimum distribution from your retirement plans on an annual basis, regardless of whether or not you need the money. If you don't need your required minimum distribution (RMD) and have a charitable intent, it is possible to donate the RMD directly to charity and avoid paying income tax.

Details to note:
  1. Does the law include transfers from 401K’s or other pension accounts besides IRAs? The answer is no. A Qualified Charitable Distribution must come – and must come directly - from an IRA account.
  2. Is there a limit on the contribution? If you’re 70 ½ or older, you are allowed to transfer up to $100,000 to charity tax-free each year, even if that is much more than your RMD.  Your RMD for the year will have been satisfied, and the rest will not be included in your adjusted gross income.
Cautions: 
  1. You cannot “double dip” by also deducting the money you’ve transferred to the charity as a charitable deduction.
  2. You cannot withdraw the money from the IRA and then write a check to the charity; the money needs to be transferred directly from the IRA to the charity.
Bonus benefits:
  1. Because making a tax-free transfer (rather than taking your RMD) keeps the money out of your adjusted gross income, you help avoid the Medicare high-income surcharge.
  2. Keeping money out of adjusted gross income can mean less of your Social Security benefits might be taxable.
The Qualified Charitable Distribution is just one example of the overlap between tax and estate planning.  And while the attorneys at Rebecca W. Geyer & Associates do not offer tax advice, we do coordinate efforts with other advisors to address the tax aspects of the planning process, and we make sure we keep our clients apprised of all the latest updates in tax law.

When it comes to IRAs, we don’t want you to miss out on any of the details, cautions, or benefits!

 - by Rebecca W. Geyer

Wednesday, August 1, 2018

Does an Indiana Estate Plan Survive a Suicide?

Suicide is a disturbing topic, New York attorney Mark Michael Campanella admits, yet suicide is a reality that many families unfortunately face. While there’s no question suicide can devastate a family, Campanella assures clients and their heirs that if a person’s wishes have been outlined in a properly executed and valid estate plan, those wishes will still be followed regardless of the manner of death. The one caveat, Campanella adds, has to do with life insurance contracts, which are often issued with suicide exclusion clauses.

It’s actually not true that,if you commit suicide, your life insurance will always refuse to pay out, insurancequotes.org explains. Some insurance policies will pay benefits even if the policyholder committed suicide so long as the policy has been held for a certain minimum period (usually two to three years, depending on the carrier).

Here at Geyer Law, we could not help noticing that just within the past few weeks, headlines announced the suicides of two celebrities - designer Kate Spade and TV personality Anthony Bourdain. “The reality is that suicide does not discriminate based on age, sex, status or financial well-being,” east coast attorney Gary Altman writes, pointing to the following frightening statistic: Suicide is the tenth leading cause of death in the United States. 

If suicide does affect your family, the attorneys at Rebecca Geyer & Associates can help you navigate the difficult issues which arise when someone dies.

A properly executed estate plan describes in detail what happens to a person’s assets at death. The plan goes into effect as soon as a person dies, and will be followed so long as it is valid. The manner of a person’s death is ultimately irrelevant so long as the plan was executed properly, and we can ensure that the individual’s assets properly pass to his or her intended recipients.

- by Ronnie of the Rebecca W. Geyer blog team


Wednesday, July 25, 2018

Estate Planning with Both Income and a Charity in Mind

“They aren’t for everyone, but this sort of donation could generate income, Eileen Ambrose writes in Kiplinger’s Personal Finance, referring to charitable gift annuities.  Typically a contract between you and your alma mater (or other institution), the charitable gift annuity is a special arrangement whereby you make a donation of cash, securities, or other assets to the organization. The institution invests the money and gives you fixed payments for the rest of your life.

“Consider yourself a prime candidate for investing with your college,” William Baldwin explains in Forbes, if:
  • you’re in a high tax bracket
  • you’d like to consume a certain chunk of your own principal (rather than leaving those assets to heirs)
  • your health is good
  • you own appreciated assets in a taxable account and you’d like to sell (but the capital gains tax would be burdensome)
  • you really like the institution’s mission and want to support it
Particular advantages of charitable gift annuities:
  1. You can diversify without paying an immediate capital gain (in fact, you can claim a tax deduction all in the first year, “skipping over” the tax that would be due on the appreciation in the assets).
  2. The annuity payments are highly secure, backed by an endowment many times larger than its liabilities.
  3. You get a tax deduction upfront.
  4. You receive a fixed, reliable amount of income for life (regardless of the rate of return the charity actually earns on the money).
  5. The income can begin immediately or be deferred until a later time (the older you are, the higher the payout rate.
“And, if you die young after buying a collegiate annuity, it’s not an insurance company that gets a windfall.  It’s an institution you admire,” Baldwin observes.At Geyer Law, we’ve found the charitable aspect of gift annuities is an attribute our estate planning clients find reassuring.

While the attorneys at Rebecca W. Geyer & Associates do not offer tax advice, we do coordinate efforts with other advisors to address the areas of tax and estate planning that overlap.  For estate planning that keeps both income and charitable wishes in mind, a gift annuity might be just the thing.


- by Rebecca W. Geyer

Wednesday, July 18, 2018

Inherited an IRA - What Are Your Options?

If you inherit an IRA from a parent or sibling, writes Eric Vogt in Forbes, you probably have many questions:
  • What options do I have for taking distributions?
  • What are the tax implications?
  • How do I incorporate this inheritance into my existing financial plan?
Two things you can't do:
  1. roll the inherited IRA into your own existing IRA
  2. continue to defer tax until your own age 59 1/2
Things you can - or must do:
  • Roll over the inherited assets into an inherited IRA in your name.  The account would be titled as follows: "Your Parent's Name, Deceased for the benefit of Your Name, Beneficiary".
  • Begin taking required minimum distributions by Dec. 31 of the year following the original owner's death (however, if the person who died was 70 1/2 or older, any Required Minimum Distributions due prior to or during the year of the rollover must be taken out right away).  If you leave the money in the account, but fail to take the necessary distributions, there is a 50% tax penalty.
  • Distributions in excess of your share of your Required Minimum Distributions must first go into an inherited IRA.  All distributions you take will be included in your gross income for tax purposes.
There are three ways to take cash distributions:
  • All at once (lump sum) - you will pay income tax on the entire amount.
  • Over five years - there will be no penalty, but you will pay tax each year on the amount withdrawn.
  • Over the course of your own life expectancy (using the Required Minimum Distribution table based on your age and on a percentage set each year by the IRS. 
"An IRA's greatest gift is long-term tax shelter," writes Jane Bryant Quinn in AARP. "The tax-sheltered growth of these investments could continue for years, even for decades," she explains, coming down on the side of heirs deferring tax on inherited IRAs as long as possible.

Correct titling of the account is critical. At Geyer Law, we often meet with the beneficiaries of our estate planning clients, helping each beneficiary select the best course of action given his or her own financial situation.

If you inherit an IRA from a parent or sibling, it's important to know the things you can't do, the things you can do, and the things you must do to make the most out of your legacy.

 - by Rebecca W. Geyer

Wednesday, July 11, 2018

Estate Planning Around Social Security


“Social Security is known as the ‘third rail’ of politics: American voters are so protective of the federal retirement program that they’ll electrocute any politician who messes with it,” quips Richard Stolz in Employee Benefit Advisor.  The problem for advisors, Stolz emphasizes, is the “yawning gap” between clients’ expectations of the benefits they will receive when they retire and the benefits they actually will receive. “We’re usually saying that, if you’re 50 or older, you’re probably going to get what you think you’re going to get,” a CFS Investment Advisory Services partner says. If you’re younger, you’ve got to monitor it, he adds. Some advisors are running retirement scenarios for their clients with and without Social Security.

“Isn’t this a great system we have? In order to get your fair share of Social Security, you have to bring in a Ph.D. and a programmer,” William Baldwin remarks sarcastically in Forbes, referring to the many considerations - and configurations – through which couples can plan the claiming, and the suspension – of benefits.

In our Indiana estate planning law offices, discussions about our clients’ social security benefits are part and parcel of their estate planning.  Why so? Here's a typical scenario: With social security benefits providing an important – even if hardly primary - source of her own regular income, June Brown feels more comfortable making substantial current gifts of cash and assets to her three children (as opposed to waiting and leaving those assets as an inheritance).

Most people can give away property without needing to pay federal gift taxes, Kiplinger.com points out, since most states do not have gift taxes and the federal gift tax limit is $11.18 million. And, as Maryalene LaPonsie adds in U.S. News, one of the best ways to ensure your money stays in the family is to simply give it to your heirs while you’re alive.”  One factor to take into consideration, of course, is one’s own income needs. Social Security benefits already being collected make up an important component of that income flow.

While the attorneys at Rebecca W. Geyer & Associates do not offer tax or retirement planning advice, estate planning overlaps both these areas. Our goal is to coordinate our efforts with those of other advisors in order to address all aspects of a clients’ financial plan. Meanwhile, we can assist you in maximizing your Social Security benefits, with the reassurance of regular income allowing for flexibility in designing a gifting plan.

- by Rebecca W. Geyer


Thursday, July 5, 2018

Equine Trust - a Pet Trust Using Horse Sense


Estate planning for horses?  Certainly.  In fact, as Jenny Montgomery discusses in the Indiana Lawyer, since 2005, Indiana residents have had the option of creating a trust for the benefit of pets. The pet trust bill was originally introduced by an attorney specifically for the benefit of several clients who wanted to provide for their horses. The concept of an equine trust? Making sure a horse continues to enjoy, after the owner’s death, the quality of care to which it is accustomed.

How does a pet trust work?
  • Each trust is created to provide for the care of one animal.  It must be an animal alive during the settlor‘s (person who establishes the trust’s) lifetime.
  • The trust automatically ends when the animal dies.
  • Either a person is named to carry out the terms of the trust, or one may be appointed by the court.
  • The pet owner sets aside funds in the trust, to be used for the care of the animal.
“Horses are not ‘pets’ in the classical sense,” observes Washington State attorney Rial Moulton, “as their needs are far greater than those of the family dog or cat.” Horses enjoy longer life spans than many other pets, he points out, and the upkeep of a hose can be expensive. One of the biggest challenges, Moulton says, is selecting the proper caretaker for the horse.  He cautions horse owners not to assume that rescue organizations or shelters would step in to care for the horse. 

Adding your wishes for taking care of your horse to your will may not be sufficient, thehorse.com explains. It will take some time for your will to be probated. And, will your wishes be enforceable and honored by the probate court? Thehorse.com. recommends preparing a letter of last instructions, giving someone permission to come onto your property and take care of your horse from the date of death until the will is probated, and explaining if there is an equine trust set up.

“If you have a client or know someone that rides a horse, owns a horse, or has a business that involves horses in any way at all, you may be surprised at just how many legal facets are involved,” read the preview of a special session at a recent legal education conference.

Our work at Geyer Law is dedicated to helping clients provide for those they want to comfort after they die, including the equine pets who have comforted them!

- by Rebecca W. Geyer

Wednesday, June 27, 2018

Estate Planning with the Smothers Brothers in Mind


“Whether you go back to Cain and Abel, or only as far back as the Smothers Brothers (‘Mom always liked you best’), sibling rivalry is the chief factor in many disputes arising after a parent dies,” attorney Karen Gerstner writes in Law Trends & News. Many people attribute litigation to greed, but in the case of family situations, Gerstner observes, often much more is involved.  Deep-seated resentments may be based on perceived unfair treatment by a parent or sibling, often going back many years, and the last living parent may have been the only “glue” holding the children in the family together.

Contested matters handled by probate courts include disputes over:
  • validity of a will
  • guardianship contests (should a guardian need to be appointed for an individual who allegedly has lost the mental capacity to make decisions)
  • breach of fiduciary duty against an executor, trustee, or guardian
“When a parent dies, siblings may battle for years over their inheritance,” begins a Wall Street Journal piece, which cites the example of Al Hendrix (father of guitarist Jimi Hendrix), who left Jimi’s inheritance under the sole control of one of his siblings..

At Rebecca W. Geyer & Associates, we know that sibling rivalry does not end when parents die, and when one heir challenges a will or trust, the costs of litigation can be high, not only in legal fees but in damage to family harmony.
In the aftermath of a death, emotions tend to be particularly volatile, so the fewer surprises, the better. If assets – or control over assets – are to be unevenly distributed among children, those intentions are best discussed with the children ahead of time. As estate planning attorneys in Indiana, our goal is to help parents identify possible issues and, to the extent possible, create a plan that will be unlikely to further aggravate a touchy family situation. Sometimes that involves helping parents write personal letters explaining the thinking that went into the estate plan.

“Many things can exacerbate the already trying process of settling a parent’s estate and distributing the inheritance,” observe the authors of the Smart Planner Blog, including:
  • differing perceptions of what each sibling has “earned”, say by taking care of an aging parent
  • economic disparity between siblings
  • how step-siblings and new spouses fit into the picture
  • the perception that one sibling may have exerted undue influence over the parent(s) for personal gain
Good planning, but even more important, good, open family discussions can help avoid having estate settlement become a battleground for the settlement of old resentments.
- by Ronnie of the Rebecca W. Geyer & Associates blog team

Wednesday, June 20, 2018

The Indiana Department of Education Can Help in Charitable Planning


The concept is an interesting one, and very much in keeping with the charitable planning goals of certain of our Geyer law estate planning clients - helping both corporations and the well-to-do help their low-income neighbors.

The Indiana legislature established the School Scholarship Tax Credit Program to incentivize private donations that fund educational choice for low-income families, while the Indiana Department of Revenue and the Indiana Department of Education adopted the rules for implementing the program.

How does the program work?
Private donations fund SGO scholarships. The State of Indiana provides funds for School Choice Scholarships, which are vouchers that enable students from low-to-middle-income families to attend non-public schools in Indiana.
Donors (either individuals or corporations) can take advantage of a 50% state tax credit when they make contributions to a qualifying SGO (scholarship granting organization). Donors’ gifts also qualify as charitable contributions for federal income tax purposes.  Contributions of appreciated stock or mutual fund shares, plus qualified charitable distributions from IRAs can create even greater federal tax savings.

Parents apply for scholarships for their children who want to go to a participating non-public school of their choice. (The student must be member of a household with annual income of no more than 200% of the amount required to qualify for reduced or free federal lunch program.)

Overall cap – There is no limit on how much a donor can contribute to a qualified SGO, but the entire program has a limit of $12,500,000 for the fiscal year beginning July 1, 2017, and ending June 30, 2018 (just over a week from the publishing of this blog post).

As Indiana estate planning attorneys, we offer no tax advice, instead working together with our clients’ tax and financial planning advisors, we find that charitable giving is an important element in many of our clients’ overall estate plans.

It’s good to know: the Indiana Department of Education can be a partner in charitable and estate planning!
- by Ronnie of the Rebecca W. Geyer & Associates blog team

Wednesday, June 13, 2018

Cases in Canada Shed Light on U.S. Estate Planning No-Nos


A court ruling in Canada presents an important reminder for our blog readers. Canada, of course, has a different law system from that of the United States, but the issue itself is one that often comes up in our discussions with Geyer Law estate planning clients, having to do with treatment of property held jointly by parents and children…
In this 2007 ruling (Pecore v. Pecore), the Supreme Court (of Canada) acknowledged that there are legitimate reasons why parents transfer property into joint names with children, including
  • assistance with financial management
  • simplification of estate administration
  • avoidance of probate fees payable on death
But holding property with children can be risky, the Pallettvalo newsletter points out, and “parents should never add a child's name onto bank accounts or other property without proper legal advice, as few other issues cause as much conflict in the administration of estates”.

Why does adding a child’s name often cause conflict? ”Whenever property owned by a parent is transferred into joint names with one of his or her children, it raises questions about whether the parent intended to have the property go to the child/joint owner alone, or intended to have such property distributed according to his or her will.” (What if the will divides the parent's estate among all of his or her children equally, and now the child who is joint owner believes the property was intended to be theirs alone?)
As estate planning attorneys in Indiana, it is very interesting to us that, because of the Pecore case and others like it, it is now the law in Canada that whenever a parent gratuitously transfers property into joint names with an adult child, the court will presume that the property is not intended to pass to such child on the death of the parent, but is intended to form part of the deceased parent's estate to be distributed in accordance with his or her will.

Proper estate planning, we explain to our Geyer Law clients, does more than put you in charge of your finances. It can also spare your survivors misunderstandings and bitter disputes.

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

Tuesday, June 12, 2018

Pre-Nups Avoid Messy Issues that Develop on Death

One high-risk factor for probate litigation is the so-called “second marriage” situation, Karen Gertsner writes in the American Bar Association’s Law Trends and News. Many people, including the media, the author points out, mistakenly believe that the sole purpose of a pre-nuptial agreement is to specify how assets will be divided if the couple divorces. But estate planning lawyers, she says, are more concerned with the “messy issues” that develop upon the death of one of the spouses. Not to be too harsh, Gertsner says, but it appears irresponsible for persons who own any significant assets to enter into a second marriage without a pre-nup. A classic “mess” that can result is probate litigation where the children of the first marriage are fighting the spouse of the second marriage for assets.

At Geyer Law, we highly advise people entering into a second marriage to consider using a premarital or prenuptial agreement.  Not only will that enable them to pass assets to children from a prior marriage (or to retain assets should the marriage end), there are many other details that are best handled through a well-thought out and properly drafted agreement that specifies:
  • how debts will be handled (upon separation, divorce, or death)
  • how spousal maintenance (for an ex-spouse or this one) will be handled
  • how medical and long term care costs not covered by insurance will be handled
  • how funeral costs will be handled
The process of developing the prenuptial agreement may inadvertently raise concerns regarding trust in the relationship or comfort with the broader family, acknowledges Abbot Downer in A Thoughtful Approach to Prenuptial Agreements, but good communication is key to a good marriage.

As estate planning attorneys, we strongly agree. The very process of discussing the points to be covered in the prenuptial agreement document forces the couple to get to know each other better and to think about how they plan to handle life together.

Each partner must consider his/her own general attitudes towards money, including spending and savings habits, as well as accepting that the other partner’s goals and attitudes may differ. The goal is not to have the same views, says Abbott Downer, but to come to a place of understanding, empathy, and agreement regarding how differences will be addressed.

Negotiate lovingly is the advice, focusing on “the value of agreeing in advance to financial guidelines that will serve you for many years to come”.

Prenuptial agreements avoid those messy issues that tend to develop upon death!

Wednesday, May 30, 2018

Don't Be Part of the "I-Dunno" 72% Business Owner Statistic


72% of small businesses don’t have a succession plan, reports Isaac O’Bannon, Managing editor of the CPA Practice Advisor. What’s more, O’Bannon found, 87% of small business owners were unaware that there are documents that can be created to specifically protect their businesses.

“Meanwhile, the new tax bill changes the rules for pass-through entities (Limited Liability Corporations, sole proprietorships, partnerships, and S-Corporations), which make up 90% of all businesses in the U.S.,” the law firm Petefish reminds us.

Even more startling is a statistic released by CNBC showing that some 10 million small business owners are planning to sell or close their businesses over the coming ten years, yet most of those have no succession or exit plan in place in order to cash out for retirement.

And, yes, the new tax law roughly doubles the federal estate tax exemption, Eleanor Laise writes in Kiplinger. But, far from meaning that you should “take your estate planner off speed dial”, she says, be aware that the law doesn’t address creditor protection and maximizing bequests.

At Geyer Law, we do know. That’s why, working in cooperation with our clients’ tax, insurance, and financial planning advisors, we counsel on business matters, including:
  • choice of business entity
  • internal corporate documents
  • liability issues   
  • succession planning
Don’t make the mistake of being part of that 72% statistic!

Wednesday, May 23, 2018

Yes, Bylaws and Operating Agreements ARE Part of Estate Planning


Bylaws? Operating agreements? Choice of business entity?  Those may not sound like estate planning topics, but they most definitely are. In fact, all too often, entrepreneurs are so busy developing and then running their businesses, they don’t take the time to address legal issues that can make the difference between failure and success.

What are some of those important legal issues?
  • choosing the proper organizational structure (C- corporation, S-Corp partnership, LLC)
  • buy-sell arrangements
  • corporate restructuring
  • tax reduction
  • succession planning (in the event of the death, disability, or retirement of a current owner)
“If you own a business or a professional practice, it is even more important that your estate planning begin today,” Entrepreneur Press cautions.  “As a business owner, it’s quite likely that a significant portion of your wealth – and your family’s source of income after your death – is tied up in the family business…The success of your estate plan is dependent upon the business being transitioned to the next generation or sold to someone outside the family for a fair price. Either result takes years of planning and preparation, sometimes as much as 10 years.”

The fact that a business will literally die when the owner retires or dies does not mean the business can be ignored for estate planning purposes. For one thing, as entrepreneur.com so rightly points out, liability does not die with the owner, and the family will need to consider procedures to reduce the applicable statute of limitations. Steps can be taken to avoid estate tax on a business that no longer exists.

While many entrepreneurs are focused on growing the business, they often neglect to consider what will happen if they are injured, writes Fred Cohen in business.com. “By failing to have a plan that enables the business to continue operating, partners, owners, and family members will be left scrambling to manage the business assets, and disputes are likely to arise.”

“Without a plan in place for how various scenarios should be dealt with, the continuity of that business can be compromised,” Tamara Schweitzer observes in Inc.

The attorneys of Rebecca W. Geyer & Associates, PC counsel clients on a range of business issues, including choice of business entity, preparing and filing the organizational documents, business record keeping, succession planning, and advising clients on critical planning issues which entrepreneurs face.

All these things are, we know, very much a part of estate planning!

Wednesday, May 16, 2018

You're Legally Married Until You Aren't - Divorce and Estate Planning


“It doesn’t matter how far along the divorce is or how long the action has been pending, the law considers you to be legally married until the judge signs the final decree ending the marriage,” writes  Patti Spencer in thebalance.com. That means your spouse may still have legal control over you and your estate, and may be entitled to most, if not all of it.

What happens to all the spousal rights when a divorce is pending but one party dies before the final divorce decree is entered? In most situations, practitioner Kent A Jeffirs writes in ICLEF’s Law Tips, not much.  You’re still husband and wife. That means that even if one spouse changes the documents while the divorce is pending, the other spouse’s right to elect against the will remains until the divorce is finalSurviving spouses are also entitled to a $25,000 surviving spouse allowance, even if a divorce was pending.

There are five estate planning documents to be updated when you’re planning a divorce, Spencer points out:
  • your will
  • your trust
  • your power of attorney
  • your living will
  • your beneficiary designations
“If you’re going through the emotional and financial turmoil of a divorce, estate planning may be the last thing on your mind,” concedes attorney Mary Randolph in Nolo.com. Don’t count on state law to automatically revoke the naming of your spouse as executor – in your new will, appoint a new executor and an alternate.

At Geyer Law, we’ve come to realize, many people don’t know that it is not only marital assets that are divided in a divorce; marital debt is also divided between the spouses.  Some serious things to think about include:
  • Can you afford to take on half of the debt you and your spouse have incurred over the course of the marriage?
  • If you do take on half or part of the marital debt, what impact will it have on your credit score?
Estate planning may indeed be the last thing on your mind during a divorce, but don’t neglect your planning if you want your wishes to be followed!

Wednesday, May 9, 2018

Now-and-Later Charitable Giving

“With markets up and a desire to make an impact strong, charitable giving is growing,” says Pamela Norley, President of Fidelity Charitable. There are four factors driving this generosity, she posits:
  • the strong stock market
  • increased awareness of issues (due to the 24/7 news cycle)
  • the desire to make an immediate difference by giving
  • the desire to minimize taxes
Carrie Schwab-Pomerantz, CFP®, President of Charles Schwab Foundation, lists four ways to incorporate charitable giving into your estate plan:

1. Include a contribution to a charity in your will
2. Designate a charity as beneficiary of an IRA
3. Create or participate in a split interest trust (you receive part of the benefit; the charity  receives  part of the benefit)
5. Use a donor-advised fund to give during your lifetime and beyond

Donor-advised funds are charitable investment accounts that individuals or families can use exclusively for the support of charities they care about. These funds can be opened with a minimum gift of $5,000 and have significantly lower administrative burden and costs than trusts.

Donor advised funds are ideal if you have not already committed a specific dollar amount to a charity in writing and you want to give substantially to more than one charity,” explains Deborah L. Meyer, CPA/PFS, CFP®. The way it works is that you donate assets or cash to the fund, but don’t decide how much is going to one or more charities until later on. Your charitable tax deduction applies now, but the distribution decisions can come later.

“You likely have a big heart and want to give to several different causes.  Yet there are so many valuable causes in the world.  Your contribution will go further if you select a few causes and give meaningfully to them,” Meyer suggests.

At Geyer Law, we generally recommend that our clients periodically review their estate plan, just to make sure nothing major has changed since their planning was originally drafted. One of the topics to discuss might be charitable planning. Are you in a different position when it comes to donating certain assets to charity than perhaps a year or two ago? Has your tax situation changed? Has “increased awareness of issues” made getting involved with the right charity seem more important? Have you learned of a charity that seems to be in better accord with your principles than the ones to which you’ve donated in the past?

Do you have a strong desire to make an impact? Let’s talk about now-and-later charitable giving!

Wednesday, May 2, 2018

Don't List User Names or Passwords in Your Will

“Talk to your clients about how they want their online life handled after their death, Philip Herzberg, CFP® and attorney Michael Dribin advise financial planning practitioners. Digital assets may include:
  • photo files
  • images
  • videos
  • email accounts
  • social media such as Facebook, LinkedIn and YouTube
  • purchasing accounts (eBay, store accounts, PayPal, etc.)
  • iTunes
Digitizing your personal and financial information online makes data easier to store and recall – for you!  Bu, after you’ve died, family members might not be able to access those accounts unless you’ve made arrangements in advance, Herzberg and Dribin caution.

Under the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), owners of digital property in Indiana can name people in their estate planning documents who will have the ability to access their digital assets along with their financial assets.
Your “digital executor” can be named in your will, along with instructions on what you wish to have happen with your digital assets.  That person will have the responsibility of following your wishes regarding each online account. You might want the executor to:
  • simply close the account*
  • “memorialize” the account by posting your obituary on it
  • respond to new friend requests
  • archive photos
The purpose of closing digital accounts which are no longer being used is to protect family members from identity theft. Your digital executor will need a list of all your online accounts, including the login IDs and passwords to access them. However, the authors warn, do not put user names or passwords in your will, because that document becomes public upon your death!

“It’s important to understand what your clients really own,” Herzberg and Dribin tell planners.
Digital assets (in addition to those listed above), might include domain names and even blogs, the authors caution.

With our objective of bringing peace of mind to individuals and families and avoiding confusion following the death of a loved one, at Geyer Law we agree: For most people today, digital assets must be included in the estate planning discussion. But remember NOT to list user names and passwords in your will!

Wednesday, April 25, 2018

You Don't Need Life Insurance - Or Do You?

“I don’t need any,” was David M. Cordell’s conclusion after doing some soul-searching combined with financial planning. Cordell, director of finance programs at the University of Texas at Dallas, came to the conclusion that his life insurance policy, with its seven-figure death benefit, would no longer be part of his retirement plan.

Rules of thumb in financial planning aren’t always applicable to everyone’s situation, Cordell explains in an article in the Journal of Financial Planning. One particular rule is that the amount of life insurance a person needs is seven to ten times his annual income. In Cordell’s case, though, there was little reason to continue to fund the policy:
  • Cordell’s wife is a retired teacher with a pension
  • He has reached full retirement age
  • They don’t own either a farm or business, so do not need insurance proceeds for estate equalization
  • They aren’t wealthy enough to worry about estate tax
  • They live in a state with no inheritance tax
  • Their estate plan is structured to avoid probate
  • They have prepaid funeral and burial arrangements
  • Although Cordell has earning capacity going forward, it generates excess income
  • In the event of his death, there would be only a modest decrease in income, but the outflows would shrink even more.
As an estate planning attorney, I couldn’t help admiring Cordell for all the thought he’d obviously put into his decision to drop the life insurance.  How I wish all our clients were that organized in their planning!  At Geyer Law, we follow Cordell’s line of thinking.  Rules of thumb should never be followed blindly, because they are not appropriate for every situation.

As just one example, we help prepare advance directives, which are written instruments that give others advance instructions on how to manage health care and finances should you become incapacitated Although Indiana law grants authority for certain individuals to make health care decisions for you if you cannot speak for yourself, tailor-making advance directives based on your specific, perhaps non-traditional situation, and on your specific concerns helps ensure that your wishes are respected.

There may be areas of estate planning where solutions exist about which you are not aware.  In other areas, your response might well be “I don’t need any.” From the arsenal of tools and opportunities available, our process involves helping clients choose only what they do need, and what works for them!

Wednesday, April 18, 2018

Contingency Estate Planning for Pets



Pet owners are turning to their financial advisors for guidance, Margarida Correla reports in financial-planning.com.  Most of the upswing, Correla notes, is coming from young, single individuals who have not yet settled down but who are committed to their pets and concerned about who would take care of the pet should they die. But for people of all ages who live alone, removed from family members, pets play an important role as companions, and the number of people planning for pet care is notable, with more than four in ten pet owners making financial arrangements for pet care. “They’re part of the family,” as one advisor puts it.  “If you care for them and want to make sure they’re taken care of, you have to have a contingency plan for them or else they end up at the Humane Society.”

At Geyer Law, estate planning steps and choices we recommend to pet owners include:
  • microchipping each pet’s unique ID number
  • designating  a pet caretaker
  • designating a trustee or representative to distribute the money to the caretaker over time
  • setting up an “animal care panel” (consisting of veterinarian and other professionals to check on the pet to make sure care is happening in the manner intended)
  • bequeathing pets to nonprofit pet sanctuaries where the pets can stay until a proper home is found for them
Important facts to consider in deciding how much money to transfer to a pet trust:
  • type of animal and what the life expectancy is for that type of animal
  • the standard of living you wish to provide
  • what is to happen when the caretaker is on vacation, out of town, or in the hospital
  • whether transferring an unreasonably large sum of money to a pet trust might encourage other heirs to contest the trust
Our work at Geyer Law is dedicated to helping clients provide for those who have been important in their lives.  Quite often, that list of heirs includes our clients’ beloved pets.

Wednesday, April 11, 2018

Seniors Can Move and Buy, Using a Reverse Mortgage

“The HECM is a safe plan that can give older Americans greater financial security,” is the way Ben Carson, U.S. Housing and Urban Development Secretary puts it. Carson is referring to reverse mortgages, which allow seniors aged 62 and older to access some of the equity in their homes without having to move.

But, as Marcia Honz of Finance of America Reverse explained in a recent lecture to the Financial Planning Association, “reverse mortgage financing” can be used in a number of other creative ways to help seniors improve their own lifestyles while still fulfilling their planning goals. In fact, a reverse mortgage can be a tactic for seniors who want to move into a new home.

At Geyer Law, when we’re advising clients on their estate planning, we explain that a HECM transaction has the power to lower the value of their estate (since they themselves are using part of their assets during their lifetime). On the other hand, we find that seniors are often choosing to relocate in order to be closer to children and grandchildren. Using a HECM (Home Equity Conversion Mortgage) for Purchase allows them to buy a new home or condo without taking on a monthly mortgage payment.

Borrowers who qualify for a HECM for Purchase loan, bankrate.com explains, include those who:
  • are at least 62 years old
  • will be using the home as their primary residence
  • are able to pay the property taxes, insurance premiums, homeowners’ association dues, and maintenance costs
Does the reverse mortgage cover the entire cost of the home? No. The loan typically covers only 38-71% of the new home’s purchase price. The variation is dependent on several factors, including:
  • age of the borrower and his/her spouse
  • current interest rates
  • appraised value of the home
  • the mortgage insurance program

The buyer must come up with the rest of the purchase price from sale of a former home, retirement accounts, or savings.

What can be good for a senior about financing the purchase of a new home using a reverse mortgage? The HECM allows older Americans to buy a house or condo that better suits their needs without dumping all their retirement assets into it, and without dipping into their monthly fixed income.
  • seniors unable to navigate stairs may want to move to a one-story home
  • seniors may choose to move closer to their medical providers
  • seniors may choose to move closer to their family members
What can be not-so-good about a reverse mortgage home purchase?
The senior loses equity in the second home, rather than building equity, Kiplinger.com points out. When the owner moves or dies, whatever is left in equity after paying off the reverse mortgage - and there may well be only a small amount left, since the loan in accruing compound interest – is the part remaining in the estate.

As an Indiana estate planning and elder law firm, our goal is to offer a full range of options for families facing changing circumstances. Planning for seniors involves so much more than wills, trust, and other estate planning documents. Our work is all about is helping seniors improve their own lifestyles while still fulfilling their estate planning goals   

- by Ronnie of the Rebecca W. Geyer blog team

Wednesday, April 4, 2018

Roth Conversions Changed Under the New Tax Law

Roth IRAs can play an important role in estate planning, and, at Geyer Law, we think it’s important to remind our clients that the rules have changed under the new tax law. “Clients will require more advice,” retirement planning expert Ed Slott writes in Financial Planning, and he’s absolutely right.

Tax law changes that bode well for doing Roth IRA conversions include:
  • Tax rates are lower compared to last year, with a doubled standard deduction and lower rates, which makes a Roth conversion less onerous in terms of paying tax on the money when it is moved from a traditional IRA into a Roth account.
  • Roth IRAs will now be free of estate taxes for most clients, now that the law has increased estate tax exemptions to $11.2 million per person.
  • Since the gift tax exemption has also been increased to $11.2 million, it is easier to gift funds to younger family members to begin their own Roth IRA accounts, or to help the older generation pay the tax on their own Roth conversions.
  • The new tax law raised the bar for generation-skipping transfer taxes, freeing more Roth IRA funds to be passed tax free to younger relatives.
One change in the law about which we need to caution clients contemplating doing a Roth conversion is that, beginning this year, Roth conversions cannot be undone.  For that reason, Ed Slott actually advises waiting until after Thanksgiving to do a 2018 conversion, when you have a more precise estimate of your 2018 tax burden.

At Geyer Law we offer neither tax nor investment advice, but 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 be able to 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.
  • Your beneficiaries will not pay any income tax on the distributions.
  • Your beneficiaries have the choice of rolling over the money into an inherited Roth IRA, where the assets would continue to grow non-taxed (distributions are required based on the oldest beneficiary’s life expectancy).
Roth IRAs have quite an important role to play in estate planning, and under the new tax law, the benefits can be better than ever!

Wednesday, March 28, 2018

Encase, Don't Laminate Medicare Cards


The Social Security Administration advises against card lamination.  Why? Cards may have built-in security features that could be compromised in the process.  Instead of laminating your Medicare card, purchase a plastic ID card holder. Why is Social Security suddenly concerned with our cards?  New Medicare cards are set to be issued April 1, just a few days from now. The new cards will no longer display your Social Security number, a move designed to protect against fraud and identity theft.

Do safeguard your card, Medicare.com advises, just as you would an identity document or credit card.  Remember to take the card with you, though, when going on a doctor visit. What should you do if you lose the card? Contact Social Security by:
  • visiting the website: https://www.ssa.gov/
  • calling 1-800-772-1213  M-F, 7AM-7PM
  • visiting your local Social Security office  (locator is at https://secure.ssa.gov/ICON/main.jsp
  • https://medicare.com/administration/can-laminate-medicare-card/
AARP Fraud Watch Network ambassador Frank Abannale suggests keeping the real card at home, but making a copy, blacking out all but the last four digits of your Social Security number.

By way of background, this whole change in Medicare cards is coming about because of a law enacted in 2015 called the Medicare Access and CHIP Reauthorization Act, which requires that the Social Security numbers be removed from all cards by April 2019. In this transition period (now through April 2019), providers can continue to use MBIs (Medicare beneficiary identifier numbers).

There’s no need to take any action to get the new Medicare card, and the new card won’t change your Medicare coverage or benefits.  And, of course, there’s no charge for the new card. Super-important alert: Medicare will never ask you to give personal or private information to receive your new card.
At Rebecca W. Geyer & Associates, our attorneys are reminding everyone to encase, not laminate their new Medicare cards!

- by Ronnie of the Rebecca W. Geyer blog team

Wednesday, March 21, 2018

Per Stirpes or Per Capita - Know the Difference


“Make sure your life insurance policy correctly lists your beneficiaries and how you want the money divided because you won’t be around to fix any mistakes if it’s not,” Natasha Cornelius writes in Quotacy.

Primary, secondary, and tertiary beneficiaries
If 100% of the policy proceeds are set to go to one person, that’s your primary beneficiary. But in case the beneficiary is unable to receive the proceeds, you can name a secondary beneficiary. A tertiary (third in line) beneficiary would be the backup if both primary and secondary beneficiaries are unable to receive the death benefit.

A simple example Quotacy gives is this: John Smith has a $500,000 life insurance policy and names his wife as primary beneficiary.  In case John and his wife die at the same time, John names his brother as secondary beneficiary.  As tertiary beneficiary, John names his favorite charity.

Per stirpes beneficiaries and per capita beneficiaries
Stirpes means “branch”.  If you say you want the proceeds of your life insurance to go to Lilly Brown and Donald Brown, per stirpes, then if Lilly is not alive to receive the money, her two children would split only Lilly’s portion of the inheritance. Don Brown would still get his 50%.

If you use the words per capita (per head), and Lilly has died along with you, your life insurance proceeds would be split evenly among Don and Lilly’s two children, with each receiving one-third.

It’s not only life insurance where you choose beneficiaries.
“Beware the beneficiary form,” cautions Carolyn Geer in the Wall Street Journal. Why? Even if you’ve gone to the trouble of making a will (and carefully selecting the beneficiaries of your life insurance as described above), all your hard work can be undone with the stroke of a pen when you open a bank, brokerage or retirement account, Geer explains.

People often seem perfectly willing to have huge sums of insurance proceeds or retirement funds distributed to their beneficiaries without any structural protections, Geer warns.  Merely writing down someone’s name as beneficiary will not protect against predators, creditors, or potential ex-spouses. Naming minors, special needs individuals, or even financially irresponsible heirs as direct beneficiaries is never a good idea, she adds.

Leave peace of mind along with assets
When mistakes are made, you’re not creating problems for you,” Keith Friedman writes in NASDAQ. “You’re creating problems for the people you leave behind.” While nobody wants to think about death or disability, we explain to our Geyer Law clients, proper estate planning puts you in charge of your finances and spares the people dear to you the expense, delay, frustration – and confusion.


- by Rebecca W. Geyer

Wednesday, March 14, 2018

When It Comes to Nursing Home Care, Haave a healthy Respect for the Doctrine

You might be responsible for your spouse’s medical bills even if you didn’t sign a thing, writes Mark Cappel in bills.com.  It’s called the Doctrine of Necessaries Rule. In Indiana, a spouse can be obligated to pay for medical care received by the other spouse if the debtor spouse is unable to satisfy his or her own debt.

The whole “necessaries” thing started back when women had no independent legal right to procure food, shelter, or medical services on credit separate from their husbands, so the law counterbalanced that “legal disability” by creating a duty on the part of the husband to provide all necessities for his wife. In Indiana today, there is “secondary liability” for both spouses.  The liability extends only to amounts that don’t exceed the non-debtor spouse’s ability to pay at the time the debt was incurred.

When does the issue of “necessaries” commonly arise?  When someone dies in a nursing home, leaving a surviving spouse and unpaid medical care bills. If a medical provider has not been paid for its services, it can look to the other spouse for repayment of the debt.
In an actual Indiana court case dating back to 2013, the Court of Appeals held that a nursing home could not collect money from Ms. Comb’s husband to pay expenses incurred before her death. Why? The nursing home did not first work to collect from the patient or her estate. But had the nursing home first tried to collect from the estate, the nursing home could have gone after her husband.

What about the responsibility of children?  Could the nursing home have gone after Ms. Combs’ children to try and collect the money owed?  Indiana does, indeed, have a filial responsibility law, which says that adult children have a legal obligation to financial support their parents if the parents are physically and/or mentally unable to take care of themselves.

The Indiana Lawyer summarizes the situation as follows:
Indiana Code 31-16-17, “Liability for Support of Parents,” specifies that if a child is “financially able,” and a parent is “financially unable” to pay for medical care, the child shall contribute to the costs. “

As elder law attorneys in Indiana, we know that nursing home costs can wipe out the savings of all but the wealthiest families.  Meanwhile, achieving Medicaid eligibility is becoming more and more difficult, with regulations involving “look-back periods”, penalties, and waiting periods. Our law firm has the experience to help families avoid financial ruin – and avoid the sort of Doctrine of Necessaries and filial responsibility legal complications which can arise.

There are ways to avoid the estate settlement delays and legal costs such as the ones the Ms.Combs’ survivors needed to go through. Make it your “doctrine of necessaries” to update your estate plan now.

Wednesday, March 7, 2018

New Securities and Exchange Commission Rule to Protect Seniors

The same sheriff is in town, but there are some brand new rules. The Securities and Exchange Commission just last month approved - FINRA Rule 2165, officially called the Financial Exploitation of Specified Adults. What’s it all about?

Financial services companies are now allowed to place temporary holds on disbursements of funds or securities from a customer’s account when there is a reasonable belief of financial exploitation of these customers. In addition, an amendment to FINRA Rule 4512, which governs the way customer account information is collected and stored, now requires financial companies to make reasonable efforts to obtain the name and contact information for a trusted person for a customer’s account.

In explaining the reasoning behind the changes, the FINRA Regulatory Notice says: “With the aging of the U.S. population, financial exploitation of seniors is a serious and growing problem.”

For our attorneys at Geyer Law, this is hardly “new news”. As Indiana elder law attorneys, we join the Indiana Attorney General, the FBI, and now FINRA in constantly preaching the need for vigilance in fighting scams that target senior citizens.
“As an individual ages, his risk for financial exploitation increases dramatically,” financial planning certificant Tom McAllister reminds blog readers. The National Adult Protective Services Association defines “financial exploitation” as occurring when a person misuses or takes the assets of a senior or other vulnerable adult for his own person benefit.  Exploitation may involve:
  • deception
  • false pretenses
  • coercion
  • harassment
  • duress
  • threats
When it comes to investment accounts, the new FINRA Rule 2165 allows broker-dealers to place a temporary hold (for up to 25 business days) on disbursement of funds or securities from an account if the broker-dealer has reason to believe that financial exploitation of a client:
  • has occurred
  • is occurring
  • has been attempted
  • will be attempted
While disbursements out of the account are put on hold, the hold does not apply to transactions in securities. Meanwhile, investment advisers can encourage their clients to look at their entire estate plan to ensure that they have given durable power of attorney to trusted people.
As FINRA explains in the regulatory notice, if a financial advisor “suspects that a customer is suffering from Alzheimer’s disease, dementia, or other forms of diminished capacity.” That advisor could reach out to the trusted contact person to address possible financial exploitation. At FINRA, the Financial Industry Regulatory Authority, the new rules are all about protecting seniors.