High school graduations (if you can call them that this year) are a time to think about the future of your children.  And some high school graduates may actually be heading off to a college campus, away from home, this fall.

It may be hard to believe that your 18-year-old is now, legally, an adult. While you may be used to doing his banking for him, calling his school to discuss his grade, or handling her doctor’s appointments, you can no longer do that without written permission from your child. That is why it is important for your young adults to have the following documents:

Power of Attorney. This document allows your child to appoint you to handle legal and financial issues.  If your child is out of the area, it might be much easier if your conduct business for him.  This may also allow you to talk to her college about any issues that arise there, including grades.

HIPAA Authorization. This document allows you to get medical records and discuss treatment with your child’s health care providers or insurance companies.  No parent wants to think about what could happen if a child is rushed to the hospital from the college campus and the hospital will not release information over the phone without written consent from the patient.  This document allows access to patient information, protected by the patient privacy laws, even if your child is not disabled or unavailable.

Patient Advocate. This document takes affect if your child is unable to participate in his own medical decisions, as determined by a doctor’s signature.  This allows the parent to make all treatment decisions.

Will.  If someone dies without a will, the state law determines how assets are disbursed.  Many young adults own things that are meaningful to them (like their pets, musical instruments, or maybe their first car). They may want to decide who should inherit those things. They may also want to leave money to charities that are important to them, to their church or to siblings. This won’t just automatically happen without a Will.

Rather than making the estate plan discussion with your child focus on death, the conversation can be about the first steps towards adulthood.  It can help a young person understand some of the responsibilities of adulthood and to plan accordingly.

(Image:  Google/familytraveller.com)

Many people still believe that a trust is only for the very wealthy.  On the contrary, a trust allows someone, of even modest means, to ensure that his money is distributed as he wishes after his death. The top three benefits of a trust are:

MORE CONTROL. A trust can set rules or conditions about when and how money is released.  For example, you can establish a trust that sets a specific age or a milestone, such as graduation from college, as a condition for an inheritance to be paid.

PROTECTION.  A trust can make sure that your children, or their children, will receive their inheritance even if you divorce or remarry.  It can also help shield assets if your heirs divorce or are in a high-risk profession.

INVESTMENT GUIDANCE. A trust allows you to appoint a professional trustee to handle a family business or investment properties, so that your heirs are protected from making expensive mistakes due to their inexperience.  The trustee can stay in place for younger heirs until they reach an age that you feel is mature enough to let them manage their own money.

Please contact us for more information or to schedule a free estate planning consultation!

(Image:  Google/thebalance.com)

As some of you may be aware, the amount of money you can pass at your death has seen a lot of ups and downs in the past few decades.  In 2018, the amount was doubled from $5 million to $11.4 million per person ($11.5 million in 2020).  The tradeoff is that the amount is scheduled to go back to $5 million in 2026.

So, a smart estate planning strategy might involve making gifts during the next 5 years while this exemption amount is at record highs.  Those gifts can be made tax-free now and “deducted” from the lifetime exemption when you die.  However, many taxpayers have worried about what would happen if they make gifts during the next five years, but die after 2026 (when the exemption might be much lower).

 The IRS recently finalized rules to ease these concerns:

  • Gifts made through 2025 will not be subject to future (possible much lower) estate tax limits.
  • An estate will be allowed to choose either the higher exclusion in effect when the gifts were made, or the exclusion in effect at the date of death.
  • If one spouse dies without using all of his tax-free amount, his spouse can use the balance, even if that second spouse dies after the exemption amount has decreased.

And please remember, even without this clarification, a taxpayer can still gift $15,000 per recipient per year without incurring any gift tax. If you have questions about making lifetime gifts, or other estate planning issues, please call us.  

(Image:  Google/Kiplinger)

The Marchand Advisory Group of Raymond James recently published a list of important questions that you should ask your parents before there is an emergency.

Financial

Where are the financial assets? Ask you parents to create a list of their bank, brokerage and retirement account, including online user names and passwords.  If they are reluctant to share personal financial information, ask them to keep the list in a safe place, that you can find later, rather than giving it to you now.

Where are the documents? Have you parents tell you where they file their insurance policies, Social Security cards, deeds to their real estate, car titles and tax returns.  If that place is a safety deposit box, make sure you have access to it in case of emergency.

Estate Planning

Ask your parents if they have a durable power of attorney and who is named to manage the money if they are disabled or incompetent. Ask if there is a medical power of attorney for end of life decisions and have a discussion with them about what kind of care they want, or DO NOT want.

Find out if there are wills or a trust and where those are kept.  Determine if these documents need to be updated while your parents are still able to do so.

Health

          What doctors do you see?

          What medication do you take?

          What health insurance do you have?

Final Arrangements

Find out if your parents have pre-planned or prepaid for their funerals.  If so, find out where those arrangements have been made.  If no plans are in place, find out how they would like those to be handled.

Feel free to contact our office for free planning forms you can use to make notes about financial, medical and funeral decisions – your parents or yours!

According to a recent article in Hour magazine, Aretha Franklin’s estate is headed to court.

https://mydigitalpublication.com/publication/?m=1511&i=654825&p=20

          At the time of her death, Aretha had four sons and no Will on file with any of her attorneys.  The four sons are her legal heirs. In August of 2018, they agree to have their cousin, Sabrina Owens, act as the representative for Aretha’s estate.

          In May of 2019, Owens told the heirs that she had found two handwritten “Wills” in Aretha’s home – one from 2014 in a spiral notebook under the sofa cushions and one from 2010 in a locked cabinet.

          The 2010 Will gave out specific personal items and let an allowance for each of her sons.  But the 2014 Will divided her assets between her children and her grandchildren and let her three younger sons decide how much to give their oldest brother (who has mental illness and lives in a group home).

          The 2014 Will named all three sons to manage her estate, but two names are also crossed out.  Now, one of the sons has accused the other two of mishandling the estate. Those two have countered with objections of their own, including that the estate paid all the attorney fees to defend their brother’s DUI arrest.

          Franklin’s estate was estimated to be worth $17 million at the time of her death so there are lots of people interested in how it is resolved. Aretha may have owed $8 million in taxes at the time of her death, but her earnings could continue to increase after her death, if handled properly.

          So, what is next for the heirs of the Queen of Soul? The Oakland County Probate Court has appointed an attorney to act as the temporary representative of the estate.  A trial of all the issues should to begin this September.

(Photo provided by :  uk.news.yahoo.com)

Most people are driven to plan their estate because they are worried about their major assets – their home, a business, a large life insurance policy. But it is often the personal items – such as jewelry, collectibles and mementos, that have the highest sentimental value.

It is easy to divide money by the number of beneficiaries you’ve named.  It is much harder to split up a one-of-a-kind item.  Even an item with little “market value” can lead to emotionally charged disputes, or even litigation. What is the best way to avoid a lawsuit that could cost more than the item itself?

Have the Conversation

You don’t have to guess who wants what.  You can create a dialogue to find that out, and to identify the “hot” items that everyone wants.  If there is a conflict, work out a compromise during your lifetime so you don’t leave a legacy of fighting after your gone.

Be Specific

The best way to avoid conflict is to make a specific bequest of an item in your will or trust. If personal property is going to someone outside the family, it is even more important that the gift be in writing.

In Michigan, your Will or Trust can be drafted to refer to a separate personal property memorandum.  That list can then be in your own handwriting, and if you date and sign it, it is legally binding.  That can save you attorney fees if you later change your mind.  You would not need to amend your Will or Trust each time you revise the gift of personal property. You could just do a new list. Just be sure the list is stored where the right people will find, and honor, it!

Accordingly to a recent article from Merrill Lynch, many people still believe that a trust is only for the very wealthy. On the contrary, a trust allows someone of even modest means to ensure that his money is distributed as he wishes after his death. Merrill Lynch points out the three benefits of a trust:

More Control. A trust can set rules or conditions about when and how money is released. For example, you can establish a trust that sets a specific age or a milestone, such as graduating from college, as a condition for an inheritance to be paid.

Protection. A trust can make sure that your children, or their children, will receive their inheritance even if you divorce or remarry. It can also help shield assets if your heirs divorce or are in a profession with a high risk of litigation.

Investment Guidance. A trust allows you to appoint a professional trustee to handle a family business or investment properties so that your heirs are protected from making mistakes due to inexperience. The trustee can also manage assets for younger heirs until they reach a suitable age to make their own decisions.

If you are new to estate planning and not sure where to start, contact us today for a free consultation.

In a recent newsletter, Relevar Home Care reported on the often-fatal combination of a dementia patient and access to firearms, and they offered some safety suggestions.

According to a Pew Research Center survey, 45% of people aged 65 and older have guns in their household. Another 12% reside in the home of a gun owner. About 9% of Americans aged 65 and older have some type of dementia, and that number is growing. By 2050, the number of Americans with dementia who also live in a home with guns could reach 8 to 12 million.

The hallmarks of dementia are confusion, paranoia, delusion and aggression. So, it is no surprise that someone with dementia might reach for a gun when he doesn't recognize his family members or wrongly believes that they are intruders.

Ideally, families should discuss firearm access immediately after a diagnosis of dementia and set a "firearm retirement date" as an advance directive. It is similar to a discussion about when to take away car keys when driving becomes too dangerous. Or they can draw up a "gun trust" to pass guns to family members once a certain level of incapacity is reached.

Obviously, gun control is a controversial topic. Many people do not believe that taking away someone's guns is akin to taking away his car keys, since gun ownership is protected by the Constitution. That may also explain why only 11 states have laws that allow law enforcement, or sometimes family members, to petition a court to temporarily seize a weapon if someone exhibits dangerous behavior. Michigan is not one of the those states, so it is important for families to have these discussions and make a plan in advance.

If you are new to estate planning and not sure where to start, contact us today for a free consultation.

house insurance

If your home is owned by your Trust, or if you are the Trustee or Personal Representative for someone who owned a home, you need to make absolutely certain that your homeowner's insurance knows that!

Earlier this year, the Michigan Court of Appeals was faced with a case where a homeowner transferred his house to his Trust as part of his estate plan. He never notified his insurance company of the transfer.

After the homeowner died, the Trustee renewed the insurance policy, but never told the insurance company that the house was owned by the Trust. While the family was at the home to divide the deceased's personal items, a family member fell through the stairs and was injured.

The insurance company denied the claim, and the Michigan Court of Appeals agreed with that decision. The Court found that although the Trust owned the home, the Trust was not the insured party on the policy, the homeowner was. Even with the Trustee paying the insurance premiums after the homeowner's death, that did not create a contract between the insurance company and the Trustee.

If you are new to estate planning and not sure where to start, contact us today for a free consultation.

Legal Strategies, P.C. 

Terri North is the Macomb County, Michigan attorney who heads up the Legal Strategies practice. Legal Strategies assists clients in the areas of estate planning, probate and real estate. 
BOOK APPOINTMENT
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram