January 11, 2018November 26, 2024

You Might Need More Than One Will

People who have substantial assets in more than one nation, might need more than one will to have an effective estate plan.

Ordinarily people only have one will. They cannot have more than one. If they create a second will, then the first will is no longer valid.

This principle is central to estate law.

The last will a person drew up and executed, is the only will that should be used in the absence of extraordinary circumstances to settle an estate.

However, it is not always technically true.

There are people who might need more than one will. If you have assets in more than one country and are a citizen of both countries, then you might need a valid will in each country, as the Financial Review explains in “Double trouble for dual nationals.”

The problem is that some countries have strict laws about who can inherit certain property. There are laws about how much of an estate must be given to a spouse and to children.

Most countries do not allow deviation from these laws, even for people who do not live there full time and who have a valid will in another nation.

Even if your will is valid in the U.S., it is possible that another country where you hold assets could invalidate it for the property you hold in that country.

If your estate might be subject to the laws of more than one nation, make sure that your estate plan is valid in all the nations where you own property. If that does not seem possible, then have separate estate plans for the property in each nation. You may want to see an estate planning attorney in Bethesda, MD.

Reference: Financial Review (Sep. 20, 2017) “Double trouble for dual nationals.”

January 9, 2018

Tax Reform and People with Disabilities

Republican tax plans have some people with disabilities worried. For parents and grandparents of those people with disabilities, it suggests that a special needs trust is more important than ever.

The ramifications of the new Republican tax reform for individual Americans are still being assessed.

Some people will pay lower taxes, but a few will likely see their taxes increase. One group concerned about the new law was people with disabilities.

Not only will those with disabilities enjoy the standard deduction doubling under the Republican plan, but their taxes might decrease even further due to another provision. The plan includes a provision to lower the itemized deduction threshold for health care expenses in tax years 2017 and 2018. The new tax law lowers the deductibility threshold from 10% to 7.5% of adjusted gross income.

Not until 2019 will the threshold increase return back to 10% where it was pegged in 2016.

Accordingly, the fears expressed by The Hill in "Restructured tax code would unduly burden people with disabilities" did not come to pass.

There is something parents and grandparents of the disabled, as well as the disabled themselves, can do and that is create a special needs trust. These trusts do not ease anyone's tax burden but do allow people with special needs to have more income to help cover any increased taxes.

If you would like to learn more about special needs trusts, then talk to an estate planning attorney Bethesda Maryland for the details about setting one up.

The process is complicated and needs to be done in a particular way in order to work but an experienced attorney can help you with that.

Reference: The Hill (Nov. 24, 2017) "Restructured tax code would unduly burden people with disabilitie

January 5, 2018February 23, 2022

Assisted Reproduction and Technology

Estate laws have not kept pace with all of the latest technological ways that help people have children today. That means that you should have an estate plan that covers them.

The average family today looks a lot different than just a few years ago. Many couples do not stay married for life today and not all of a couples’ children are biologically their own.

Americans today live in all sorts of blended families rearing children from multiple marriages.

Estate law has generally kept pace with these changes. However, it often requires careful estate planning.

In the past couple of decades, things have become even more complicated as medical science has developed new ways for people to have children through such things as surrogacies and frozen embryos.

The law has not kept pace with all of these developments, according to Private Wealth in “Yours, Mine, Ours And ‘ART’.”

When children become part of a family through technological means, it is not always clear what their legal inheritance rights are. Different states have different rules.

For example, if a child is born after someone passes away through implantation of a frozen embryo, should that child have a right to a portion of the estate of the deceased? The default answer is different in different states.

What this means is that people who have or who might have children with technological assistance, need to be sure their estate plans take the laws of their state into account. That makes it more important than ever to have the assistance of an estate planning attorney.

Reference: Private Wealth (Sep. 13, 2017) “Yours, Mine, Ours And ‘ART’

January 4, 2018

David Cassidy’s Will

David Cassidy is the latest deceased celebrity to have cut one of his children out of his will.

David Cassidy was once a well-known figure, who starred on the TV show "The Partridge Family" and had many adoring teenage fans of his music.

Many people still recognize his name. However, it has been a long time since Cassidy was able to profit from his former fame.

He recently passed away with an estate valued at only $150,000, which is a low amount for someone who once made as much money as Cassidy did.

The details of his will have been made public.

Cassidy chose to cut out his daughter, so she will not receive an inheritance from him, according to the Los Angeles Times in "David Cassidy cut daughter Katie Cassidy out of his will."

It had previously been acknowledged by David Cassidy that he had never had much of a relationship with his daughter. She was raised by her mother and stepfather and rarely saw her father.

David regretted this and the two reconciled before he passed away. However, Katie was specifically excluded from her father's will.

David's son and brothers will instead inherit his modest estate. We probably do not need to have financial concerns for Katie, because she is famous in her own right as an actress on the TV show "Arrow."

Katie Cassidy likely does not need the inheritance.

This is becoming something of a trend in recent celebrity estates. Many have chosen to disinherit some of their children for various reasons.

A fight over the estate is unlikely in this case.

Reference: Los Angeles Times (Dec. 7, 2017) "David Cassidy cut daughter Katie Cassidy out of his will."

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, 2017October 25, 2023

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."

Building Legacies that Last Estate Planning and Elder Law

Author: Profit Law Firm