Archive for Areas of Practice
Common Estate Planning Myths and Superstitions
In honor of today’s holiday, Groundhog Day, we wanted to share some common myths and superstitions about estate planning. Most Americans know the story of Groundhog Day: if a groundhog comes out of its burrow this morning and sees its shadow, it will retreat back into the burrow and six more weeks of winter weather will follow. On the other hand, if the groundhog does not see its shadow and remains aboveground, winter will soon end.
Most of us recognize that the ability of a groundhog to accurately forecast the weather is just a myth. (The reality is that groundhogs get it right only 39% of the time.) However, many people still believe in the following estate planning myths and superstitions (or at least use them as an excuse not to plan):
#1: You are more likely to die once you complete your estate planning. This is simply absurd; generally, the only people who die shortly after executing an estate plan are people who waited ALMOST too late to plan in the first place.
#2: Estate planning is only for the wealthy. When you hear the word “estate,” do you think of a palatial mansion or fine jewels? The truth is that if you own a home, a car, a bank account, life insurance, etc., then you have an “estate”.
#3: Estate planning only matters after death. A big part of the estate planning we do at our firm is planning for possible future disability. Wouldn’t you like to leave directions for how you want to be treated if you become incapacitated as well as for who gets your stuff when you’re gone? What about requests for who will care for you and/or your children?
Please feel free to post comments on our Facebook or Twitter or make an appointment if you have individual questions or concerns.
Cramer Law Center offers full estate planning services including wills, trusts, durable powers of attorney, health care surrogate designations, living wills, designations of preneed guardian, and more.
PLANNING AS AN UNMARRIED INDIVIDUAL
Many people think that there is no need to make an estate plan until or unless they get married. However, our firm recently handled a case that illustrates why buying into this planning myth can be very stressful and expensive for your loved ones.
Our client, we’ll call him “Bill”, was an unmarried man in his forties with a long-term girlfriend but no children. His only living relatives were siblings. Bill went into a coma after having an unexpected allergic reaction that caused him to have multiple cardiac arrests. He was put on life support and given next to no chance of recovery.
Bill did not have any planning documents in place. He had no will and, more importantly, he had not executed any document granting decision-making authority to a loved one in the event of his incapacity. Since Bill had no parents, children, or spouse, there was no one who had legal authority to take care of his property or to decide whether he should remain on life support.
Bill’s siblings had no recourse but to seek a guardianship over their brother. This expensive process led to stress and family strife over what Bill would have wanted to happen to him in this situation. Bill’s girlfriend, the person most likely to know what Bill wanted, was not even involved. Ultimately, Bill died before a full guardianship could be put in place.
Every person, especially unmarried individuals, should consider executing the following basic planning documents to help their loved ones avoid the “Bill” situation:
Designation of Health Care Surrogate (Health Care Power of Attorney)
Living Will
Durable Power of Attorney
Last Will and Testament
We are here to explain these planning tools and to guide you through the estate planning process, so that your family will not suffer the needless expense and stress that Bill’s family endured.
IRS Gift Tax Audits: Yet Another Reason to Avoid “Do It Yourself” Estate Planning
We have posted in the past about the potential consequences of failing to file a gift tax return with the Internal Revenue Service after doing some do-it-yourself estate planning. (See our February 11, 2010 post titled “Help Yourself to the Big House: Why Would You Risk Going to Jail Rather than Talk with a Lawyer?”).
We feel the need to address this subject again in light of a new IRS gift tax compliance initiative. The IRS is now using land records from state and local governments to identify individuals for gift tax audits. Specifically, the IRS is looking for real property transactions with little or no money exchanged, targeting a common do-it-yourself estate planning practice.
Many individuals choose to transfer real property to their loved ones by adding them to the deed rather than by executing an estate plan. However, this do-it-yourself estate planning move can have serious consequences for the transferor of the property. Adding an adult to a real estate deed constitutes a present gift of that real estate, or at least part of it. This means that a gift tax return must be filed with the IRS after the transfer takes place and that a gift tax may be due.
Although the gift tax lifetime exemption is currently $5,000,000, making it unlikely that you would owe any gift tax, the consequences for failing to file a gift tax return include criminal penalties as well. A conviction for failure to file a gift tax return can result in a fine of up to $25,000 and up to one year in prison.
Because the IRS has been and will likely continue to step up its investigation into and enforcement of the gift tax, it is more important than ever to get professional help with your estate planning to avoid a do-it-yourself disaster.
HOLIDAY GREETINGS AND ANNOUNCEMENT
All of us at Cramer Law Center wish you a most enjoyable holiday season. We are so grateful for your support which has made this a year of steady growth for our practice.
As part of that growth, Cramer Law Center is pleased to announce that we have hired Amelia Hough Henderson as an associate attorney. A double-Gator, Amelia earned her undergraduate degree in Business Administration and her Juris Doctorate with honors from the University of Florida. While in law school, she served as Chief Executive Articles Editor of the Journal of Law and Public Policy. Prior to joining us, Amelia gained experience working with probate and guardianship staff attorneys for the Eighth Judicial Circuit in Gainesville. The next time you are in the office, please take a moment to meet Amelia.
We wish everyone a healthy and prosperous New Year! Please note: our office will be closed on December 23, 26 and 30, 2011 and January 2, 2012.
THE IMPORTANCE OF THE PRE-ARRANGED FUNERAL
The single most important benefit of estate planning is peace of mind. We often focus on the legal documents necessary for us to create an estate plan that provides such peace of mind. However, I recently had a personal experience that reminded me of the importance of one of the more practical aspects of planning.
My mother passed away a few weeks ago. Although my siblings and I had a general idea of what the funeral arrangements would be, no plans had been finalized. This lack of planning created a chaotic situation when I arrived to visit my mother in hospice care. I was immediately and less than delicately informed by the hospice caseworker that I had to make my mother’s funeral arrangements straight away. So before I could focus my attention on my mother in her final hours, I had to phone different funeral homes until I found the one I needed.
Making last-minute funeral arrangements for my mother added more stress to a situation that was already emotionally taxing. Especially after my experience, I highly recommend taking care of funeral arrangements in advance to avoid creating greater stress for your loved ones at such a difficult time.
ELDER ABUSE: SEVEN WARNING SIGNS
Many of us have elderly parents or grandparents who may be susceptible to abuse. Here are some warning signs to consider:
(1) Deliberate isolation of an older adult which results in the caregiver having total control.
(2) Sudden appearance of previously uninvolved relatives claiming their rights to an elder’s affairs and possessions.
(3) Power of Attorney given or recent changes of Will when the person is incapable of making such decision.
(4) Sudden changes in bank accounts or banking practice, including unexplained withdrawals of large sums of money by a person accompanying the elder.
(5) Abrupt changes in Real Estate Deeds or other Financial Documents.
(6) Missing personal belongings such as art, silverware or jewelry.
(7) Placement in nursing home or residential care facility which is not commensurate with alleged size of estate.
An excellent way to protect against potential abuse is to have strong estate planning documents in place and open communication about the elder’s wishes and the contents of those documents with close family members. If you have a concern about a family member or close friend, call us for a confidential consultation.
OCTOBER IS NATIONAL DISABILITY EMPLOYMENT AWARENESS MONTH AND NATIONAL DOWN SYNDROME AWARENESS MONTH!
This month we honor two groups of “special” Americans. National Disability Employment Awareness Month celebrates the many accomplishments of employees with disabilities. This effort to educate the American public about issues related to disability and employment began in 1945 when Congress enacted a law declaring the first week in October as National Employ the Physically Handicapped Week. In 1988, Congress expanded the week to a month and changed the name to National Disability Employment Awareness Month.
October is also National Down Syndrome Awareness month. Created in 1981 to raise awareness about the abilities of people with Down syndrome, the celebration is highlighted by the Buddy Walk®, which was established in 1995 by the National Down Syndrome Society (NDSS). Today, the Buddy Walk program is supported nationally by NDSS and organized at the local level by parent support groups, schools and other organizations and individuals. Last year alone, more than 285,000 people participated in a Buddy Walk and the walks raised over $11.2 million to benefit individuals with Down syndrome. To find a Buddy Walk near you, visit www.buddywalk.org.
At Cramer Law Center, P.L., we think this is an ideal time to discuss the importance of Special Needs Planning. If your family includes a special needs child or adult, we hope your plan includes provisions for your loved one’s care when you are no longer able to provide it. If you do not have a special needs plan in place, we hope you will make an appointment with us at your earliest convenience to learn how we can use a wide range of tools, including a Special Needs Trust, to protect your loved one’s financial and emotional future.
PARENTS WITH YOUNG CHILDREN, BEWARE! REVOCABLE LIVING TRUSTS TO TAKE CARE OF MINOR CHILDREN
Many families with young children think they are too young to have a trust or that they don’t own enough for a trust. However, here is a true story showing that nothing could be further from the truth!
A few years ago, a young mother became an instant widow. Her husband died in an automobile accident. The husband had left life insurance, naming his minor son as beneficiary. So, not only did the young woman have to raise her son alone, but she had to go to court to be appointed guardian over the young son’s assets. This restricted her ability to use the assets, required her to account for every penny of the assets each year, and required her to pay court costs and attorney’s fees to do so.
Then, when the son reached age seventeen (17), he got into an argument with his mother and left. He moved out because he knew that he would be getting his inheritance within a year. Kids instinctively separate from parents in the early teen years, as any of us with teenagers can attest! The main leverage parents have to continue to encourage children is financial. Ordinarily, children are willing to stay with their parents until they have acquired the skills they need to go out and make their own way. However, when the financial balance is upset, children may be harmed by the assets they acquire.
Preventing children from receiving assets at eighteen (18), creating certainty in who will raise the children, and responsibly providing for them are goals that using a Revocable living trust for your planning can achieve. How much better would it have been for the family if the life insurance proceeds were left in trust for the child, with the mother appointed as trustee and able to use her discretion to invest and spend the money to raise the child without court supervision.
There are many aspects to family dynamics that come into play during the estate planning process. This is but one example. But it’s a good one!
SEPTEMBER 11-17 IS NATIONAL ASSISTED LIVING WEEK
Americans are living longer than ever before. Eventually, many of us will require nursing home care or assisted living. How many? Studies indicate that one in two women and one in four men will reside in a nursing home at some point in their lives.
The National Center for Assisted Living (NCAL), a division of the American Health Care Association (AHCA), helps Americans celebrate our aging citizens each year with an official “National Assisted Living Week”. In 2011, the celebration runs from September 11th through the 17th. During this time, assisted living facilities and nursing homes across the country will bring together nursing home residents, staff, families and community members for events, promotions and games honoring seniors.
This year’s theme is Forever Proud. It was chosen, in part, to remember the tragic events of 9/11/01 ten years ago and how our country pulled together in a spirit of unity and pride afterwards. On another level, the theme was chosen to address pride in other areas as well: pride in a lifetime of work well done; pride in skills mastered and goals accomplished; pride in the achievements of family and friends.
As an estate planning attorney, I applaud the efforts of the NCAL and hope that you will take part in this year’s celebration. We also hope that National Assisted Living Week serves as a reminder to you about the importance of long-term planning. If your current plan does not incorporate legal tools and strategies to protect your assets against the high cost of nursing home or assisted living care, now would be a good time to contact us to add this important component.
In a similar vein, if you, a loved one or a dear friend has recently been informed that they will need to enter a nursing home in the near future, we may be able to obtain assistance from Medicaid, the Department of Veterans Affairs and other sources to help cover the costs. Even if you or someone you care for is already in a nursing home and has been denied such assistance in the past, we may still be able to help.
As our nation reflects upon the events of 9/11/01 this year, we hope you will feel a surge of pride not only in our country, but also in your own accomplishments thus far in life, and for those yet to come.
PRICELESS CONVERSATIONS
In keeping with the theme of August as “What Will Be Your Legacy?” month, we would like to introduce you to “Priceless Conversations”. Share the meaning of your life, the events that shaped your decisions and which causes and people have significance. Thoughtful reflection gives heirs a sense of the wholeness of your wealth and the financial decisions you make. We have a tool for sharing your life story with future generations called “Priceless Conversations” – a precious gift that integrates legacy building into your estate planning.
Recording a “Priceless Conversation” is a way for us to make tangible the “non-financial” dimensions of your wealth for you and your loved ones. Using a handful of interesting questions and a digital recorder, we help you share and save the lessons and experiences of your life. There is no homework, no tedious research, no writing, and no camera. We help you turn a simple chat into a touching and lasting treasure. The process is simple, practical and fun. “Priceless Conversations” can be individual, family, or group events.
Leaving a legacy involves more than just dollars and “cents”. Help future generations have a “sense” of who you are.
When you’re gone, how will you be remembered?
At the end of the day, how will your life have made a difference?
When all is said and done, what will those you love say about what you’ve done?
What have you accomplished with your wealth?
Not just your money, but all the wealth – the real wealth – you have at your disposal?
Whose lives have been touched by your life?
Let us know if you wish to explore how recording “Priceless Conversations” can benefit you.
