December, 2017 | Profit Law Firm

December 29, 2017

Moving to Another State and Your Estate Plan

I f you move to another state, you should review your estate plan to make sure that it will still work.

Americans often move from state to state, especially after they retire. The laws in most states are similar. However, there are sometimes minor differences that can have a big impact on estate planning.

That leaves many people wondering whether an estate plan they drafted in one state, will still be valid if they move to another state. The answer is “maybe,” as The Times Herald discusses in "Moving can affect your financial planning."

Generally speaking, if a will you had drafted was valid in the state in which it was drafted at the time it was drafted, the other states will consider it to be valid.

Trusts are valid in every state, since the state in which they were created always governs over the trust.

Most of the time your estate plan will be valid in your new state. However, there can be some issues, especially if you purchase real estate in your new home state. Some states have particular rules about how real estate has to be handled.

You should also be aware that your new state could have tax laws that are different than your old state. Something you have done in your estate plan might still be legal and valid, but it might not be tax-wise.

At a minimum, you should visit an estate planning attorney in your new state and let the attorney review your estate plan.

The attorney can tell you whether you should do something different to adapt to the laws of your new state.

Reference: The Times Herald (Dec. 1, 2017) "Moving can affect your financial planning."

December 28, 2017

Incapacity Planning

It is important that you make plans for what will happen to your family and your possessions after you pass away. It is also important to plan for what will happen to them, if you are incapacitated.

You might be aware that you need a will or a trust, so you can make sure your family is taken care of after you pass away. Getting a will or trust also lets you determine what happens to your property after you pass away.

If you have not done so, you really should see an estate planning attorney to get a will or trust as soon as possible, just in case.

While you are at the attorney's office, you should also get plans for what might happen if you become incapacitated, as the Times Herald-Record discusses in "Make plans in case you are incapacitated."

The issue is that if you are incapacitated, someone else needs the legal authority to act on your behalf.

Someone will need to be able to handle your bills and to make medical decisions for you, should it be necessary.

If you do not plan ahead, it can be a difficult process for someone else to get the legal authority.

Someone will have to hire an attorney and go to court to get a judge's permission to act as your guardian.

Fortunately, planning for what will happen if you become incapacitated is not difficult.

You just need a general durable power of attorney and a health care power of attorney.

The estate planning attorney can prepare both of them for you.

Reference: Times Herald-Record (Dec. 12, 2017) "Make plans in case you are incapacitated."

December 27, 2017

Being Under Observation in the Hospital

Many elderly people face gigantic medical bills for hospital stays because of how they are classified by the hospital. This makes a big difference in how much Medicare will pay.

When an elderly person has an extended stay in the hospital, they are almost always under the impression that Medicare will cover most of the costs. However, many stay in the hospital for weeks and only later discover that they are responsible for most of the costs of their stay.

This is because Medicare is very particular about when it will pay for hospital costs.

For Medicare to pick up the bill, the patient must be classified as an inpatient. This means that the patient has been formally admitted to the hospital.

If the patient is an outpatient, Medicare will not pay and those patients who are in the hospital "under observation" are still considered to be outpatients, no matter how long they are actually in the hospital.

The story is picked up by The New York Times in "Under 'Observation' Some Hospital Patients Face Big Bills."

Elder law advocates have long pointed out that the rule is absurd.

The patient does not always get to choose what the hospital writes down in the file. The patient also does not always know the importance of being formally admitted, instead of just being under observation.

There has never been a way for the patients to challenge their designations later, until now.

A judge in Connecticut has recently opened the door for legal challenges.

Reference: New York Times (Sep. 1, 2017) "Under 'Observation' Some Hospital Patients Face Big Bills."

December 22, 2017

Coffin Clubs

Most funerals are boring affairs that do not do justice to the vibrant personalities of the deceased. Coffin clubs seek to change that.

The phrase "coffin club" might invoke some sort of club for people who like to pretend they are vampires. That is not what coffin clubs are.

Coffin clubs are the result of a group of elderly people in New Zealand who had gone to so many funerals for their friends that they began to get irritated with the funeral process.

They noticed that no matter how big of a personality their friends had and no matter how vibrant and joyful their friends were during their lives, their funerals were always boring, somber affairs. These elderly Kiwis were upset that these funerals did not do justice to the lives their friends led.

The first coffin club was created as a result.

The story is picked up by Market Watch in "Want to spice up your own funeral? Join a coffin club."

In a coffin club, a group of people get together and decorate their future coffins. This allows mostly elderly club members a chance to not only hang out and have fun but to create a coffin for their remains that reflects their own personalities.

It is a way to make their funerals more interesting and more reflective of their own lives.

Funerals are changing all over the world.

Many of today's elderly people do not want a traditional, boring funeral. Coffin clubs are just one example of that.

Reference: Market Watch (Nov. 25, 2017)

"Want to spice up your own funeral? Join a coffin club."

December 21, 2017

Children and Inherited Retirement Accounts

If your children inherit your retirement accounts, they will have a few options about what to do with them.

Most people designate their spouses as the beneficiaries of their retirement accounts after they pass away. Consequently, the surviving spouse then becomes the owner of the accounts and can use the account in the same way that the deceased spouse did.

However, sometimes people name non-spouse beneficiaries, such as their children or the children end up receiving the accounts after the designated spouse passes away.

What the children can do with the accounts is not as simple as it is for spouses. However, there are a few options.

The Wills, Trusts & Estates Prof Blog discusses some of these options in "What Your Kids Can Do When They Inherit Your Retirement Accounts."

The options include:

The assets in the account can be taken out immediately as one lump sum.
The assets in the account can be taken out whenever needed, as long as the account is empty within five years.
The children can choose to stretch the account out over their own expected lifetimes. However, they will need to make annual required minimum distributions and must take the first one by a set time.

If you have questions about your retirement accounts and your heirs, then talk to an estate planning attorney to get answers. While you are at it, learn more about how your retirement accounts can be used as part of an overall estate plan.

Reference: Wills, Trusts & Estates Prof Blog (Nov. 22, 2017) "What Your Kids Can Do When They Inherit Your Retirement Accounts."

December 20, 2017

Vivian Maier Estate’s Copyright Claim

The estate of an unknown woman has won the ability to pursue a claim to her copyrights.

Vivian Maier was never a well-known person during her lifetime. She sometimes worked as a housekeeper and as a nanny.

She did not even always use the same name when seeking employment.

By the end of her life, she was extremely poor. She stopped making payments in 2007 on a small storage locker she had in Chicago. The contents of the locker were auctioned off.

Maier passed away in 2009 still entirely unknown. She had no known heirs or estate plan, as PDN Pulse reported in "Federal Court Sustains Vivian Maier Copyright Claim."

Included in the Chicago storage locker were a number of photographs and negatives that Maier had taken over the years. She apparently loved to take pictures of what she saw on the street.

However, Maier was not an ordinary amateur photographer.

She was brilliant and interest in her work grew immediately, when some of it was posted online.

Collectors began buying up her works, including a man named Jeffrey Goldstein. He began selling prints of the work and licensing the images for use.

Maier's estate sued Goldstein for copyright violations. Goldstein asked that the court dismiss the suit, since he claimed to have purchased the works before Maier passed away.

His request has been denied.

Vivian Maier herself will not get to enjoy the benefits of her now famous works. However, her estate will be able to do so.

Reference: PDN Pulse (Nov. 21, 2017) "Federal Court Sustains Vivian Maier Copyright Claim."

December 19, 2017

Plan for Death to Live Better

It might not seem intuitive. However, if you make plans for your death, you can sometimes live a better life.

People do not ordinarily engage in “death” planning. We tend to think there might be something wrong with people who do.

We might think they are overly morbid, if not suicidal.

If they are a friend or family member, we might even encourage them to get professional help. However, there is a type of death planning that is good and one people should consider doing.

In fact, it can help them live more fruitful lives, as the Wills, Trusts & Estates Prof Blog explains in "How Planning For Your Death Can Help You Live A More Purposeful Life."

What is meant by good death planning is planning for what will happen to your assets after you pass away and planning for how you want to be remembered after you are gone.

We call these “estate” planning and “legacy” planning.

Estate planning starts with deciding who you want to have your assets and personal possessions after you pass away. After that, you can go to an estate planning attorney who will prepare legal documents to make your wishes enforceable.

Legacy planning is not quite as simple. It requires thinking about what is important in your life and figuring out how to impart that to the people you will leave behind.

If you do undertake estate and legacy planning, then you will have a better understanding of what will happen after you pass away.

That, in turn, will help you to live better now.

Reference: Wills, Trusts & Estates Prof Blog (Nov. 23, 2017) "How Planning For Your Death Can Help You Live A More Purposeful Life."

December 15, 2017

Wealth Planners

Wealthy people have so many different advisors for different aspects of their lives, that it is often a good idea to hire someone who can coordinate all of them and keep them on the same page.

If you have a lot of money, it is likely that you pay a lot of people to manage various aspects of your wealth.

You have financial advisors. You have business consultants. You have accountants. You have estate planning attorneys. You have business attorneys. You have a lot more than that.

It can be difficult to keep all of your advisors coordinated and all working toward the same goals.

The advice you get from the different advisors can be contradictory.

While it is good to get a variety of opinions, it might be a good idea to hire someone to help you manage it all, as Forbes discusses in "Estate Planning For the Ultra Wealthy – The Role of A Family Wealth Advisor."

The idea is fairly simple.

Estate planning attorneys who have the expertise to plan how wealth can be transferred down within families for generations can also act as wealth planners. They coordinate the activities of all of the other advisors and make sure the wealthy client's ultimate estate planning goals are always kept in mind.

Estate planning attorneys can make sure that the other advisors are all working toward the one ultimate goal.

Not everyone needs a wealth planner.

Those that do would be well advised to talk to their estate planning attorneys about the benefits of having one.

Reference: Forbes (Aug. 29, 2017) "Estate Planning For the Ultra Wealthy – The Role of A Family Wealth Advisor."

December 13, 2017

Duke’s Will to Be Unsealed

The Duke of Windsor's will has been sealed since his death in 1972. The will of the man once known as King Edward VIII has been ordered unsealed, so copyrights can be determined for a television show.

It is considered one of the biggest acts of romantic love in modern history. King Edward VIII of England abdicated the throne in 1936, so he could marry a divorced American woman named Wallis Simpson.

His title changed from the king to the Duke of Windsor. He passed away in 1972.

The contents of his will were quickly sealed by the court and have never been made public, despite great public and historical interest in them. People are curious whether the will might shed any light on the man's decision to abdicate.

A court in the U.K. has now ruled that the will is to be unsealed as the Daily Mail reports in "Duke of Windsor's will to be unsealed at last… but only so The Crown's writers can get their facts straight."

The Duke's will is only to be unsealed for a limited purpose.

The writers of the Netflix show The Crown would like to use the duke's letters in their show. However, they first need to know who owns the copyrights to those letters, so they can get the necessary permissions to use them.

It is not likely the will's other details will be made public.

For a former king's will to be sealed, is probably a simple matter.

For other people, it is much more difficult since wills are generally a matter of public knowledge.

People who would like to keep their estates private, should see an estate planning attorney for more information about how to do that.

Reference: Daily Mail (Nov. 15, 2017) "Duke of Windsor's will to be unsealed at last… but only so The Crown's writers can get their facts straight."

December 13, 2017

Using a Trust for Educational Funding

Educational costs have risen so high, that accumulating the money to pay for a child or grandchild to attend college can take years. There are a few different ways to do it.

You might have heard the nightmare stories about people with college degrees who end up owing more than a hundred thousand dollars to the government in student loans. That is becoming such a common scenario, that the majority of Americans now support the idea that public colleges should be tuition free.

However, tuition free college is probably not a realistic scenario in the near future.

Families who do not want their younger generations to have to pay back gigantic student loan debts are making plans to have parents and grandparents pay for school.

There are a couple of different options as the Wills, Trusts & Estates Prof Blog discussed in "Funding Education? Consider A Trust Instead of a 529 Plan."

A 529 plan is a great way for families to save for education.

It allows for tax-free investments for educational expenses. However, the investment opportunities can be somewhat limited and people can only sign up for plans that are made available from state governments.

People with more money would be better off using trusts for educational expenses.

With trusts there are more investment options and if the money is not needed for educational expenses, then it can more easily be used for other things.

If you would like to make paying for the education of future generations of your family part of your estate, then talk to an estate planning attorney about the best way to do that.

Reference: Wills, Trusts & Estates Prof Blog (Nov. 16, 2017) "Funding Education? Consider A Trust Instead of a 529 Plan."

Building Legacies that Last Estate Planning and Elder Law

Month: December 2017