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.

Tuesday, March 6, 2018

Legacies and Legatees - Not Always the Perfect Match


“As baby boomers grow older, the volume of unwanted keepsakes and family heirlooms is poised to grow – along with the number of delicate conversations about what to do with them…As these waves of older adults start moving to smaller dwellings…they and their kin will have to part with household possessions that the heirs simply don’t want.”

And what if the household possessions were still owned by the parents up until their death? One of an estate executor’s most onerous talks is listing the estate’s assets for the court and for the heirs. The executor, most often a sibling or adult child, needs to gather proof of ownership and get appraisals for heirlooms, jewelry, artwork, antiques, and vehicles.

At the law firm of Rebecca W. Geyer & Associates, where our goal is to be a resource to clients, we know that you want to protect not only the people most important to you, but the assets you’ve worked a lifetime to achieve.  Sometimes, though, when your assets include “stuff”,
stuff your heirs are unlikely to find useful or valued, there is a problem. How can you “rightsize” now, while making your estate plan more streamlined and effective when the time comes?

It’s always best when your gift or legacy is a perfect match with the goals and tastes of the recipient. In a former blog post, for example, we shared a story of a woman who had taught music at her home for many years and who owned close to 300 music books. The happy outcome involved a gift to a charity that provided piano lessons to underprivileged youngsters.

It’s not always that antique china cabinet with the heirloom dinner plates that turns out to be the gift that is more of a burden than a blessing to heirs. There are some types of legacy that heirs might be better off without:

  • Property that is subject to a mortgage or lien
  • Property that has some form of contamination or pollution problem.
  • A share in a business you own that is totally unrelated to the heir’s abilities and interests
When leaving assets to heirs, consider each one’s tax brackets. As HFS Wealth Management points out, “an inheritance is generally worth only what your heirs get to keep after taxes are paid.” Naming an heir as beneficiary of a 401K or IRA is different from naming that heir as beneficiary of your Roth IRA account.

“A growing number of adult children are providing care for elderly parents, and they may feel resentful if they have to share an inheritance equally with siblings who didn’t help out, Eleanor Laise writes in Kiplinger. When a vacation home is left to multiple heirs, those children may not have an equal ability to take advantage of that gift, depending on their own family situation, work demands, and distance.

Legacies and legatees may not always be the perfect match!

Typed, Handprinted, or Written? When It Comes To Wills, Take Your Pick

When it comes to a will, any person of sound mind over the age of 18 (or who is younger and a member of the armed forces) may – and absolutely should - execute one.  In Indiana, the document must be signed and acknowledged in the presence of two or more witnesses.  Typically wills are typed documents, but in many states holographic, or handwritten wills are acceptable. In fact, if a will is made in imminent peril of death, it might even be oral or nuncupative.
At Rebecca W. Geyer & Associates, P.C., when we prepare estate planning documents for our clients throughout the state of Indiana, those documents are typed. Every so often, however, a client of ours is named executor of someone else’s estate, and the will the deceased left is holographic.

Does holographic literally mean handwritten (in cursive), you may wonder, or could it have been printed by hand in block letters? In some states, the answer is yes; a holographic will must be entirely in the will maker’s own handwriting. The important thing to remember is that there must be evidence that the “testator” (the person executing the will) is the one who actually created it, and in the event of a dispute, handwriting experts might be called in.

The state of Indiana has no statutory provisions for holographic wills; on the other hand, Indiana courts have not tended to invalidate wills simply because they have been handwritten, provided that the documents meet the legal standards of this state and were witnessed correctly by two disinterested witnesses.

Whether typed, blog printed, or written in cursive, a will can be made “self proved” by attaching a self-proving clause in which witnesses attest to the authenticity of the will and to the testator’s competency to make that will. And, while this is relatively scarce in today’s digital generation, in the non-urban areas of our state, we’re still seeing adult children asking us for help handling their parents’ holographic wills.

Wednesday, February 14, 2018

The Magic Question to Answer as You Begin Estate Planning

“Once you see the effect it can have, you’ll most likely make it a mandatory part of every first meeting with a prospect,” writes Dave Zoller in the Journal of Financial Planning, referring to what he has come to call “the magic question”.  The great thing about the question, Zoller explains to his fellow financial planners, is that everyone can answer it – but they are required to think before they do. The 20% of his own prospects who do not answer the question, he concludes, are unable to think futuristically, and are not ready to engage in a true planning process.  Zoller’s version of the Magic Question is this:

        “If we were meeting three years from today, and you were looking back over those three years, what has to have happened in your financial life for you to feel happy with your progress?”

The same “magic question”, I realize, might well be posed to estate planning clients who are trying to accomplish certain goals relative to their family and their favorite charitable causes. And just as is true in financial planning, there are many challenges, fears, and family dynamics that come into play as we contemplate those decisions.

What’s more, when it’s an estate planning attorney posing the question as opposed to a financial planner, there’s a big unspoken truth hovering in the air - it’s understood that parts of the plan are set to go into effect only after the plan creator has died!  “Perhaps the estate planning Magic Question might be phrased as follows:

 “If we were communicating three years from today, and you were looking down
from Heaven, observing your family, friends, and other heirs, what has to have  happened in order for you to believe your estate planning had been a  success?”

  • Is the money you left for favorite charitable organizations being used in the ways you hoped for?
  • Are your children and grandchildren more financially stable?
  • Have they been better able to take advantage of educational opportunities than they might have been without your bequests?
  • Are the caretakers whom you appointed carrying out their missions as you envisioned?
  • Are you remembered for the values you imparted as well as for the monetary gifts you were able to bestow?
The Magic Question, Zoller asserts, is effective because “it’s about them” and the results they’re looking to achieve, because it brings clarity (what’s important to them and how they would define success). “If you were looking down from Heaven, what has to have happened for you to feel your estate planning has been a success?”

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

Wednesday, February 7, 2018

Life Does Not Stand Still - and Neither Does Your Estate Plan


“Life does not stand still,” wryly observes the American Bar Association in a chapter of its estate planning document titled “Changing Your Mind”. After you’ve crafted your initial estate plan, that’s hardly the end of the process, the ABA stresses, because a number of things can happen to make document changes necessary:
  • you have more children
  • you acquire more assets
  • you have a falling-out with friends or relatives
  • your children grow up
  • you have new grandchildren
  • you and your spouse divorce or separate
  • the law may change
  • you’ve bought or sold a business
  • you’ve bought or sold real estate
  • you retire
So, how do you make changes in an estate plan?

1. by writing codicils to your will (amendments):
2. by changing your tangible personal property memorandum (a separate document that is referred to in a will)
3. by revoking a will and creating a new one
4. by amending or creating a trust
5. by changing beneficiary designations

Don’t changes cost money, you may ask? The cost of legal services is a concern for every client. The attorneys at Rebecca W. Geyer & Associates, PC make every effort to minimize the costs and expenses of legal representation. Whenever possible, Rebecca W. Geyer & Associates, PC offers legal guidance at a fixed fee. When a client has a question or concern about his or her estate planning, we are happy to respond without “running the clock”; emails and phone calls are free of charge to our estate planning clients.

We often find it necessary to remind our clients that proper estate planning isn’t only about assets and how and to whom you want those assets transferred. A complete plan also incorporates your wishes about personal care should you become ill or incapacitated. Could you change your mind about those things as well? Some developments that might play into those kinds of change-drivers include:

  • New treatments and therapies are discovered that open up different possibilities for “aging in place”
  • Changes in estate planning law affect decisions about qualifying for Medicaid
  • You’re moving to a new state with a different set of laws and a different set of Medicaid eligibility requirements.

At Geyer Law, we know – life does not stand still – and neither does your estate plan!


- by Rebecca W. Geyer

Wednesday, January 31, 2018

Estate Planning Dos and Don'ts Following a Divorce



Divorce is a complex and deeply personal process, and, at Geyer Law, we do all we can to help make the process as painless as possible. We know that, while all our clients can benefit from qualified estate planning advice, there are special issues that need to be considered following a divorce.
Assets
In most cases, spouses in the process of dissolving their marriage no longer wish to have the soon-to-be- ex-spouse inherit their assets. And, when there are children, neither parent wants those kids to be disinherited in the event the other were remarry. What that means is that beneficiary designations will need to be changed on:
  • Wills
  • Employer retirement plans
  • IRA accounts
  • Life insurance policies
  • Annuities
  • Health savings accounts
  • Trusts
Powers of attorney
In most divorce situations, the two parties no longer want to leave health and financial decisions in the hands of the ex-spouse. Documents that need to be amended include:
  • Healthcare Power of Attorney
  • Durable Power of Attorney
Child Custody and Guardianship
Several questions must be fully explored:
  • Does the non-custodial parent wish to (and is he/she fit to) raise the child if the custodial parent dies or becomes incapacitated?
  • What happens if the ex-spouse remarries?
  • Are there concerns that the ex-spouse will not use the support monies for certain purposes such as private school tuition?
Focusing forward
Staying focused on the details of the future, not on the mistakes and hurts of the past, is the best way to defuse feelings of anger and betrayal. Indiana is a “no-fault state”, which means the court will not consider behaviors leading up to the divorce, requiring only that one of the parties believes that the marriage is irreconcilably broken.

Divorce time is by definition, a hard time, no doubt about it. Sound legal counsel from a qualified attorney – and each party needs his/her own lawyer – is needed to navigate all the issues and obtain the best outcomes for everyone involved.

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

Wednesday, January 24, 2018

When It Comes To Medicaid, the Question Is - Is It Covered?

“To be or not to be? That is the question,” Shakespeare’s Hamlet mused.  When it comes to Medicaid eligibility, however, there’s a whole ‘nuther question to ask: “Is it counted?”
Medicaid is a joint federal-state government program which helps make medical coverage more affordable. For eligible residents of Indiana, Medicaid helps pay for services such as:
  • hospital care
  • clinical services
  • visits to physicians and nurse practitioners
  • lab tests
  • x-rays
  • nursing home care
  • prescription drug coverage
For our Geyer Law estate planning and elder care clients, the big concern is whether an individual must spend down all of his or her assets in order to qualify to receive Medicaid benefits. Will I lose my home? Will our life savings disappear?

Enter Medicaid planning. With careful, knowledgeable advanced planning, it is possible to obtain Medicaid eligibility and still preserve assets. As elder law attorneys, we choose from an arsenal of planning tools to qualify an individual for Medicaid while yet protecting assets for a healthy spouse or for children. Special Medicaid planning tactics may include:
  • gifting
  • trusts
  • long term care insurance
  • annuities
  • promissory notes
  • reverse mortgage
In practice, the National Care Planning Council explains, Medicaid comes into play for seniors when there is a need for nursing home care. “Most older people do not have the income necessary to cover nursing home costs, especially if there is a healthy spouse living at home.”

In fact, many of the features of Medicaid are designed to protect the spouse of a Medicaid applicant or beneficiary who needs coverage for long-term services and supports in either an institution or a home or other community-based setting, from becoming impoverished.

On the other hand, in order to make sure there are enough resources to help those who are truly in need of assistance, there are some very strict Medicaid rules.  For example:

1.   Medicaid beneficiaries will be denied coverage if they have transferred assets for less than fair market value during the five-year period preceding their Medicaid application. 
2...State Medicaid programs must recover from a Medicaid enrollee's estate the cost of certain benefits paid.

In determining eligibility for Medicaid benefits, Medicaid measures two things: income and “resources” (assets). Income includes: pensions, social security, income from annuities, rental income, interest, dividends, capital gains distributions. Income eligibility for Medicaid is determined on a monthly basis (income that is not periodic is counted in the month it becomes available).

The rules are too complicated to cover in one blog post.  The point to remember is   When it comes to Medicaid eligibility, “Will it be counted?” The attorneys at Geyer Law can help you answer this important question.


- by Rebecca W. Geyer

Wednesday, January 17, 2018

Estate Planning for Modern Families No "Leave-It-To-Beaver" Task

“We don’t all look like the conventional nuclear family once famously depicted in ‘Leave It To Beaver’, a Raymond James’ Point of View article observes, pointing out factors such as:
  • the legalization of same-sex marriage
  • an increase in the number of non-married couples
  • advances in reproductive technology
  • the steady divorce rate, including “gray divorces”
  • the increase in blended families
This list illustrates just how complex modern estate planning has become.  Raymond James’ advice: “Rather than set something in stone, think of your estate plan as a living document that should evolve as your life does.”

At Geyer Law, we couldn’t agree more.  As we talk with clients, we find the discussions expanding to cover a variety of situations and topics:

Step parent adoption
If biological parents become incapacitated or die, step parent adoption can be a saving factor.  The consent of both biological parents is needed; a child over 14 must also consent.

Modification of parenting plans after a divorce
Even if both ex-spouses agree on changes to the order, those changes are not official until the court agrees.

Same-sex marriages
Although same-sex marriage is legal throughout the United States, not  all states have updated their laws to reflect this change., There is a potential for legal issues when laws have not been updated, and non-married couples must still create documents to protect their partners’ rights.

Advance directives
With rapidly developing medical technology, elder health law is evolving.  One relatively new development, for example, is the opportunity to include an “override option” in healthcare documents.

Guardianships
In personal injury cases of coma, brain injury, or severe trauma, a guardianship might need to be created to provide care for an incapacitated adult.

No, we don’t all look like “Leave-It-To-Beaver” families, and our clients don’t need cookie-cutter estate plans.  At Geyer Law, we see ourselves as a resource for clients, combining clear, concise – and situation-differentiated – legal solutions.
- by  Scott Watanabe of Rebecca W. Geyer & Associates

Wednesday, January 10, 2018

Helping Veterans and Surviving Spouses Obtain the Benefits They Deserve

A very important part of our law practice at Rebecca W. Geyer & Associates is providing assistance to veterans and their surviving spouses  to help them obtain the VA benefits they deserve. The Department of Veterans Affairs is made up of three areas. Our firm’s focus is with the Veteran’s Benefits Administration.

“For tax purposes, a veteran is an individual who has served at least 24 continuous months in active duty and has not been released with “dishonorable” status upon discharge,” explains thesimpledollar.com’s “Ultimate Tax Guide for Veterans”. Spouses, children, and parents of a deceased or disabled veteran are also eligible for benefits, which include but are not limited to:
  • Disability Pension
  • Disability Compensation
  • Education and Training Allowances
  • Dependents and Survivors
  • Life Insurance
  • Housing Grants
  • Compensated Work Therapy Program
Not only is service-connected disability compensation tax-free on both federal and state levels, disabled veterans may be eligible to claim a federal tax refund, based on two situations:
  1. There has been a retroactive determination of an increase in the disability benefit
  2. The combat-disabled veteran has been granted combat-related special compensation, after an award for concurrent retirement and disability.
According to Leo Shane III, writing in Military Times, “The sweeping tax reform measure passed by Republican lawmakers this week includes few items specific to service members, but significant repercussions for military families in years to come. While some of the rules for mortgage interest deductions have been changed in the new tax reform plan, with some deductions for moving expenses eliminated, there is an exemption for military families who often have to move frequently, Shane points out.

We at Geyer Law are focused on helping veterans and their families understand – and claim - the benefits they deserve.

- by Rebecca W. Geyer

Wednesday, January 3, 2018

"Translating" the New Tax Law for Geyer Law Clients

On Friday, December 22, 2017, President Donald Trump signed a new tax bill, formally named the “Tax Cuts and Jobs Act of 2017“. The 500-page long document covers many, many aspects of taxation and the economy.  Realizing that our clients and blog readers are not interested in learning all the thousands and thousands of details, however, over the coming weeks and months we will be writing about the little ways in which this big change in the tax law is likely to affect your estate and healthcare planning.


Let’s begin with federal estate taxes.
The 2017 federal estate-tax exemption thresholds are $5.49 million for individuals and $10.98 million for married couples. If you die with assets worth less than those amounts, you don’t owe any estate tax. On January 1, 2018 these thresholds doubled to $11.2 million for individuals and  $22.4 million for couples. These exemption amounts are scheduled to increase with inflation each year until 2025. On January 1, 2026, the exemption amounts are scheduled to revert to the 2017 levels, adjusted for inflation. The highest marginal federal estate and gift tax rates will remain at 40% and the GST tax rate will remain a flat 40%.  For some Geyer Law clients, this will lessen the need for tax planning, and estate planning documents should be reviewed to remove outdated tax language. 
New opportunities in education planning.
529 plans, also known as “qualified tuition plans”, have been expanded. In addition to using them to fund college expenses, parents may now use them to pay for K-12 education tuition and related educational materials and tutoring. What’s not new, but very beneficial, is that 529 contributions grow tax free and can be withdrawn tax free as long as the money is used for “qualified educational expenses”. What’s more, the IRS allows you to “front load” a 529 plan with an amount equal to five years’ worth of annual gift tax exclusions ($75,000 in 2018); the annual gift tax exclusion is $15,000 in 2018) with no gift tax consequences.

Planning opportunities for business owners.
Owners of closely-held businesses have special needs, yet are often too busy developing their business to address the legal issues necessary to ensure their continued success. At Geyer Law, we advise clients on critical business planning issues, and the new tax code provides several new planning opportunities. Our clients who are independent contractors and small business owners, for example, will now benefit from a pass-through deduction of 20% business income, while both pass-through and corporate business owners will be able to write off 100% of the cost of capital expenses for five years.

Charitable contributions.
For 2018-2015, the limit on the deduction for cash donations to charities is raised from 50% to 60% of Adjusted Gross Income. The increased deduction can serve as an important benefit to be considered in the in-depth charitable planning counseling we offer our clients.
Continue to follow this blog over the coming weeks and month, as we continue to offer insights into the effects of the new tax law on estate and healthcare planning.

- by Rebecca W. Geyer