![]() Twenty years ago or more, when you needed an attorney in rural Kansas, most firms would try to accommodate any legal concern you might bring to them. Today, times have changed. Just as we have seen with the specialization of medical professions, the practice of law has followed a similar path. Many, if not most, law firms now focus their scope of practice to a limited number of areas so they can offer top of the line legal advice. For matters in which they are not well-versed, firms rely on a referral network of other local and regional law firms. In this way, rural residents receive legal advice and services comparable to what they might expect from a large metropolitan firm. Davis & McCann, P. A. is no exception. We focus our practice around estate planning, long-term care planning, Medicaid planning, probate and trust administration, corporate, business succession planning, and real estate. Specifically, we regularly work with clients on the following: · Wills · Powers of Attorney · HIPAA authorization forms · Living Wills · Planning for distributions to children, both minors and adults · Asset protection for professionals or successive generations · Guardianships and Conservatorships · Beneficiary designations · Prenuptial and Postnuptial Agreement preparation and review · Entities to hold and control family assets and family business interests · Farm, ranch, and business succession planning · Living Trusts and ancillary documents (Certification of Trust, Declaration of Trust) · Trust funding · Special Needs Trusts · Charitable Remainder Trusts · Charitable Lead Trusts · Other types of Irrevocable Trusts ![]() If you’re healthy, you’ve probably never really thought about long-term care or Medicaid planning. However, statistically, the vast majority of individuals will end up needing nursing home care at some point during their lives. Some people are able to apply and qualify for Medicaid benefits without hiring an attorney to assist them. However, there are many individuals who could greatly benefit from having an elder law attorney guide them in creating and implementing a long-term care or Medicaid plan. Below are a few situations where you might want to consider hiring an elder law attorney: 1. If you are in immediate need of full-time nursing home care, have more than $15,000 in countable assets, and need Medicaid benefits to help pay for your care, it might be worthwhile to hire an experienced elder law attorney to assist you. Your attorney can complete your Medicaid application and serve as a liaison with the state Medicaid office and nursing home facility. This move can improve your chances of preserving as many assets as possible as well as increasing your chances of receiving all Medicaid benefits for which you might be eligible. 2. If you are living at home and your spouse requires full-time nursing care in a facility, an attorney can help expedite the Medicaid application process to reduce costs. Additionally, an attorney can show you ways to protect your financial interests so that you can live more comfortably at home and not feel the need to spend all of your assets down on your spouse’s care. 3. If you and your spouse both require care, hiring an experienced attorney to help with the Medicaid application process and spenddown rules can save your adult children time, money and stress. 4. If you and your spouse are healthy and not in need of immediate care, an elder law attorney can provide you with long-term care planning advice that can help you avoid missing time-sensitive asset protection opportunities. How much will an elder law attorney cost? In most situations, attorney’s fees rarely exceed the cost of one to two months of long-term nursing home care. For more information on long-term care planning and Medicaid issues, please contact Davis & McCann, P. A., Dodge City, KS. We are members of Wealth Counsel, a national consortium of Estate Planning Attorneys and the National Academy of Elder Law Attorneys (NAELA). We focus our practice on providing clients with the best legal advice on Estate Planning, Medicaid and Long-term Care Planning, Family Business/Small Business Succession Planning, Probate, Trust Administration, Real Estate Transactions, and related matters. ![]() Are you considering purchasing a life insurance policy to benefit your family members after your death? Death benefits from a life insurance policy can be substantial. Benefits can be paid to one or more beneficiaries or to a Trust administered for their benefit. Did you know life insurance can be a key part of your estate plan? While it’s not a necessary component for everyone, it certainly can be useful in many situations. The tricky part comes with knowing whom to name as the beneficiary of your policy. If your estate is very simple and you have few beneficiaries for whom you wish to provide, doing beneficiary planning for your life insurance benefits works well. However, if you have a more complicated family situation or you want to provide your beneficiary with asset protection, you may want to consider naming a Trust as the beneficiary of your life insurance policy. Here are a few examples of why you might want to name a Trust as the beneficiary of your life insurance policy: 1. Asset Equalization. Not all assets are created equal. If you’ve decided to give one child farmland and the other child pastureland, there is likely to be a discrepancy in property valuation. If your goal is to provide an equal inheritance to each child, life insurance proceeds are an easy way to equalize the value of overall estate distributions. If you name a Trust as the beneficiary, you can stipulate how the life insurance proceeds should be used to equalize any inequities among your beneficiaries. 2. Debt payment. If you are concerned that your estate will not have enough cash to pay your estate debts, you should consider using a life insurance policy to provide the necessary cash to cover expenses after your death. If done properly, this will prevent your assets from being sold to pay for outstanding debts. By naming a Trust as the death beneficiary, your Trustee will be able to pay the necessary debts, preserve your other assets for your heirs, and distribute any remaining cash pursuant to your wishes. 3. Beneficiary/Asset protection. Many people can benefit from being a beneficiary of a life insurance policy but not all beneficiaries are responsible enough to receive cash proceeds outright. If your intended beneficiary has a poor track record with money management, handing them a large sum of money outright from the life insurance proceeds probably isn’t in their best interest. However, if you name the Trust as the beneficiary and give specific instructions within the Trust to provide for the welfare of that same beneficiary, your Trustee can more safely provide for the benefit of that beneficiary, without directly allowing them access to the funds. Additionally, Trust planning can provide asset protection for a beneficiary in a difficult marriage who might be heading towards divorce or is facing a lawsuit or bankruptcy. Having your life insurance proceeds pay to a Trust for that beneficiary means those funds should not be available to that beneficiaries’ creditors. Finally, naming a Trust as the beneficiary of your insurance allows for more control and flexibility in planning should your beneficiary die before you or if your beneficiary is a minor child. If you think using a Trust to administer life insurance death benefits may be an estate planning strategy you want to explore, please contact Davis & McCann, P. A., Dodge City, KS. We are members of Wealth Counsel, a national consortium of Estate Planning Attorneys and the National Academy of Elder Law Attorneys (NAELA). We focus our practice on providing clients with the best legal advice on Estate Planning, Medicaid and Long-term Care Planning, Family Business/Small Business Succession Planning, Probate, Trust Administration, Real Estate Transactions, and related matters. ![]() When a person needs help paying for skilled nursing care, they can apply for government Medicaid assistance. In Kansas, the state agency administering Medicaid benefits is known as KanCare. To qualify for KanCare benefits, you may not have more than $2,000.00 in total countable resources. What are “countable resources”? Sometimes referred to as liquid assets, countable resources are assets that the government has determined an individual can easily convert to cash to pay expenses such as skilled nursing care. Examples of countable resources include: cash, stocks, bonds, investments, savings and checking accounts, certificates of deposit (CDs), retirement funds (excluding pensions) and real estate (excluding your personal residence and business income producing assets, like farmland). Some assets not typically considered “countable” by KanCare when determining your eligibility for benefits include: personal keepsakes and belongings, household goods and furnishings, one vehicle (under some situations, like if a spouse is still living at home), life insurance policies without a cash value, burial plots, irrevocable funeral plans with cash of less than $7,000.00, and your personal residence. If you have gifted away any assets within the five years prior to your nursing home admission date, KanCare will use the value of those assets to calculate a penalty period. A penalty period is a time that an individual is not eligible to receive Medicaid benefits. It’s important to note that assets that have been gifted, either outright or into a trust like a Medicaid Asset Protection Trust, more than five years before an individual applies for Medicaid benefits are not countable for Medicaid eligibility purposes under current law. If a person has more than $2,000.00 in countable resources, they will not be considered Medicaid eligible until they have done what is commonly referred to as a “spenddown”. However, it is important to note that not all of the assets that must be spent down have to be toward the nursing home care. Instead, an individual can use some of their countable resources for their own benefit, so long as the expenditure abides by Medicaid rules. Depending on your unique situation, these expenditures might include: prepaying for funeral and burial expenses up to a specified amount, paying some debts, doing certain home improvements, particularly if a spouse is still living at home, paying medical bills (doctor, dentist, vision), purchasing clothing for the individual being admitted, or even purchasing a vehicle in some instances. To ensure your expenditures will meet with Medicaid approval, you might want to run your spenddown plan by an elder law attorney prior to moving forward and please keep receipts and records. If KanCare challenges the validity of your purchases, you must be able to prove that the expenses met their guidelines. If you have questions about Medicaid planning or long-term care planning, contact Davis & McCann, P.A., Dodge City, Kansas at 620-225-1674. We are members of Wealth Counsel, a national consortium of Estate Planning Attorneys and the National Academy of Elder Law Attorneys (NAELA). We focus our practice on providing clients with the best legal advice on Estate Planning, Medicaid and Long-term Care Planning, Special Needs Planning, Family Business/Small Business Succession Planning, Probate, Trust Administration, Real Estate, 1031 Exchanges, and related matters. ![]() What can long-term care planning or Medicaid planning do for you? For starters, it can save you thousands of dollars on current or future long-term care. According to a 2020 Genworth study on nursing home costs, the average semi-private, full-time nursing home room in Kansas costs approximately $6,691.00 monthly ($80,292.00 annually). With this type of price tag, people are starting to realize the importance of planning for their end-of-life expenses. If you are healthy and in no need of immediate care, you might want to seek advice on long-term care planning from an experienced elder law attorney. Upon examining a comprehensive list of your assets and their values and listening to your objectives, your attorney may suggest any number of legal strategies to help you accomplish your goals. A few of these suggestions might include purchasing a long-term care insurance policy, creating and funding an irrevocable Medicaid Asset Protection Trust, establishing a gifting plan to family members, transferring assets by beneficiary designations and transfer-on-death designations, or forming some type of business entity. The type of legal strategies recommended for you will depend on your unique situation. Medicaid planning is the term commonly used to preserve assets for individuals already residing in or having an impending need for full-time, skilled nursing home care. Planning at this stage is often referred to as crisis planning. Once again, an elder law attorney will need a comprehensive list of your assets and their values, as well as information on any income streams that you have. Depending on your goals, assets, income, life expectancy, and other issues unique to your situation, your attorney might recommend purchasing a Medicaid annuity, initiating an asset gifting program, purchasing a prepaid funeral plan, having home improvement repairs done on your residence, or any other number of planning choices. All of these are viable options that many people are unaware they can utilize, particularly once someone has already been placed in a long-term care facility. However, be cautious when moving forward with a Medicaid spenddown, because if not done correctly, it can result in a refusal of benefits. Hiring an experienced elder law attorney is a good way to ensure that mistakes are avoided so that you can qualify more easily for Medicaid while preserving the greatest amount of assets allowed by law for your family. If you have questions about Medicaid planning or long-term care planning, contact Davis & McCann, P.A., Dodge City, Kansas at 620-225-1674. We are members of Wealth Counsel, a national consortium of Estate Planning Attorneys and the National Academy of Elder Law Attorneys (NAELA). We focus our practice on providing clients with the best legal advice on Estate Planning, Medicaid and Long-term Care Planning, Special Needs Planning, Family Business/Small Business Succession Planning, Probate, Trust Administration, Real Estate, 1031 Exchanges, and related matters. ![]() If you have minor children, one of most important things you can do is choose a guardian and formally appoint them in your Last Will and Testament. A guardian is the person you legally authorize to raise your children in the event of your death. Naming a guardian is one of the top reasons young parents create an estate plan. To help you decide on a guardian, here’s a list of topics you may want to consider while choosing a potential candidate: Religion, Political, Moral Beliefs. These topics often are the most important considerations for young parents. Are you comfortable with the proposed guardian’s religious, political, and moral beliefs? Are you confident that your children will be raised in a way that honors your current religious, political and moral framework? Location. Does the person you’d like to name as guardian live a significant distance from you? Are you comfortable having your children raised in the community where the guardian resides? Is the guardian’s home large enough to accommodate your children? Would your children need to relocate to a new school and leave their existing friends? Existing Family. If the person is married, is the marriage stable? Would the spouse welcome and respect your children in his/her home? Does the person have children? If so, are the guardian’s views on education and social activities similar to your views? If the person does not have children, would they be comfortable raising your children? Is the guardian’s method of discipline similar to your own? Age. If you prefer an older guardian, they might be in a better financial position and may have more time to spend with your children, but he or she might be less equipped to help your children face the social pressures of the future. Younger guardians may be more in tune with current issues but due to career demands, they may have less time for the day-to-day duties associated with child rearing. Health. Raising young children is mentally and physically demanding. A guardian with ongoing health issues may not have the energy or strength necessary to provide a stable environment for your children. Is this person in a position to devote the necessary time and energy to help your children fulfill their potential? Finances. Will acting as a guardian for your children cause a financial burden for this person? Do you have provisions in place to provide finances for your children’s care after your death? Is this guardian capable of managing the children’s finances or should you consider naming a separate person as conservator of their funds? Willingness. An honest conversation with the proposed guardian is an absolute necessity. Be sure to discuss the anticipated responsibilities and your desires for your children’s future. He or she needs to understand the role of a guardian and be willing to assume the responsibility. It is important that you always choose an alternate person to name as guardian just in case your first choice is unable or unwilling to serve. Remember, without formally naming a guardian for your children, you will allow the State to make that choice for you. If you have questions about naming a guardian for your minor children or any Kansas estate planning topic, contact Davis & McCann, P.A., Dodge City, Kansas at 620-225-1674. We are members of Wealth Counsel, a national consortium of Estate Planning Attorneys and the National Academy of Elder Law Attorneys (NAELA). We focus our practice on providing clients with the best legal advice on Estate Planning, Medicaid and Long-term Care Planning, Special Needs Planning, Family Business/Small Business Succession Planning, Probate, Trust Administration, Real Estate, 1031 Exchanges, and related matters. ![]() Hoping to retire as the owner and manager of a family-owned business? Ready to turn over the reins to a successor, but not sure where to begin? Here are a few simple suggestions to help you in the process: Bring in Professional Advisors (tax professional and attorney). An accountant will advise you on potential tax implications you might face if you sell or gift a portion of your business. An experienced attorney can assist with the preparation of all necessary legal documents for your business succession. Typically, the most advantageous plans are those that are implemented with the assistance of both your attorney and your tax advisor. Aside from the obvious professional experiences they bring to the table, your attorney and accountant can provide an objective, neutral viewpoint during what is often a very emotional time. Choosing a Successor. If you have someone in mind to succeed you, make sure to provide them with ample opportunities for training, internships, and work experience. Assessing your successor candidate’s drive and passion during this time will be important to the future success of your business. Some candidate screening topics you might consider are:
Bridging the gap between generations. Incorporation of new ideas from young leadership will be critical to moving your business successfully forward after your retirement. To foster a smooth transition from the “old guard” to new leaders, you might consider:
If you have questions about business succession planning, contact Davis & McCann, P.A., Dodge City, Kansas at 620-225-1674. We are members of Wealth Counsel, a national consortium of Estate Planning Attorneys and the National Academy of Elder Law Attorneys (NAELA). We focus our practice on providing clients with the best legal advice on Estate Planning, Medicaid and Long-term Care Planning, Special Needs Planning, Family Business/Small Business Succession Planning, Probate, Trust Administration, Real Estate, 1031 Exchanges, and related matters. ![]() Q: My father’s mental status has been declining this past year and now I’ve discovered he doesn’t have any planning in place. Does his diminished mental capacity mean it is too late for him to do estate planning? A: Not necessarily. If your father’s attending physician has not declared him incompetent, and he still has some capacity, your father may be able to execute legally binding estate planning documents. There are different levels of capacity required for an individual to sign some legal documents versus others. For example, it takes more capacity for an individual to sign a Last Will and Testament than a General Durable Power of Attorney for financial decisions. To determine what level of capacity your Dad has and, thus what planning he is legally competent to execute, he will need to meet with an experienced estate planning attorney. Some of the questions an attorney may ask while visiting with your father include:
Part of an estate planning attorney’s role is to evaluate a client’s competency (or incompetency), as legal capacity or competency requires a subjective opinion provided by a trained attorney. Sound mind a/k/a capacity is determined on a situation-by-situation basis, as legal capacity can fluctuate, even from day-to-day. Attorneys are trained to assess a client’s legal capacity and proceed to a signing only if they believe the client meets the standards of competency necessary for the execution of a client’s legal documents. It’s common for family members of clients who have diminished capacity to request appointments at very specific times of day because their mental clarity is best at that time. For example, they may struggle to understand certain events in the morning but exhibit a good understanding in the afternoon. Mental capacity can fluctuate due to any number of factors: medication, illness, lack of sleep, stress, time of day, etc... It is possible that a client is legally competent one day and incompetent days or even hours later. Failing to have full capacity all day, every day does not prohibit a person from executing estate planning documents. If, in an experienced attorney’s opinion, the client meets the basic threshold of legal competency at the time of signing documents, those documents are legally binding. Because your father has some diminished capacity, it is extremely important that you choose a highly reputable estate planning attorney to assist him with his estate planning. If you have a contentious family who may dispute your father’s estate planning, make sure to let your attorney know so that they can take every precaution to determine legal capacity and to document his/her findings in the client’s file. If your family is contentious, we recommend that your father meet privately with his attorney so that there is no doubt that the contents of his planning were voluntarily and willfully made by your father, without undue influence from you or anyone else. If you have questions about diminished capacity or any Kansas estate planning topic, contact Davis & McCann, P.A., Dodge City, Kansas at 620-225-1674. We are members of Wealth Counsel, a national consortium of Estate Planning Attorneys and the National Academy of Elder Law Attorneys (NAELA). We focus our practice on providing clients with the best legal advice on Estate Planning, Medicaid and Long-term Care Planning, Special Needs Planning, Family Business/Small Business Succession Planning, Probate, Trust Administration, Real Estate, 1031 Exchanges, and related matters. ![]() Q: I want to add my child’s name to the title of my home, so they can keep the house out of probate and receive my home quickly after my death. Do you see any concerns with my plan? A: The answer to your question is a solid “maybe”. Your personal circumstances will dictate whether this estate planning strategy is the best move for you. Adding your child’s name to your deed could speed the transfer of your home to your beneficiaries and keep it out of probate. But, before you run off and put your child’s name on the title of your house you should consider a few of these risks. Gift Taxes. By adding your child to the title of your home, you have made a gift that is subject to gift taxes. The gift is likely far below the current federal gift tax exclusion amount, so you shouldn’t have to pay gift taxes. However, you may need to file a gift tax return if the gift is over the annual exclusion amount. Medicaid benefits. If you need KanCare (Medicaid) assistance to pay for nursing home care within 5 years of adding your child’s name to the deed, you could be penalized when requesting benefits. Child’s Death. If your child dies before you, his/her interest in your home becomes part of his/her estate. This interest in your home will be subject to his/her liabilities and would pass to his/her beneficiaries as named in your child’s estate plan. Someone you don’t know or trust could become the new co-owner of your home. Disagreements. If you decide to sell the house and move, your child could legally refuse to transfer ownership back to you. Also, if your child wants to sell your home, that child could force a partition action, a sale of the real estate done through the court. Child’s creditors. If your child is involved in a serious accident, your house could have a lien placed on it to cover his/her debts not covered by insurance. Similarly, if your child is a joint owner, the value of the home could be subject to his/her creditors, should they face bankruptcy or credit issues. Child’s divorce. If your child gets a divorce after being added to your deed, his/her interest in your house may be part of the divorce settlement. Capital gains tax. If you sell the home after adding your child to the deed, your child may encounter unintended capital gains tax problems. No legal obligation. If you add one child’s name to the deed and instruct him/her to share the proceeds from the sale of the home with your other children after your death, they may not be legally obligated to do so. Your other children could be cut out of the inheritance that you intended for them to have. The type of ownership that you give to your child is a very important factor in your considerations. Should you establish a joint tenancy with rights of survivorship (JTWROS), a tenancy in common (TOC), or perhaps you should do a transfer on death deed? Consulting an experienced estate planning attorney prior to adding anyone to your deed will inform you of the pros and cons of each option, as it relates to your personal circumstance. Without adequate counsel, the complications that could arise from such a move may outweigh any possible benefits. For more information on estate planning, probate or real estate matters, contact Davis & McCann, P. A., Dodge City, KS. We are members of Wealth Counsel, a national consortium of Estate Planning Attorneys and Elder Law. We focus our practice on providing clients with the best legal advice on Estate Planning, Probate, Trust Administration, Medicaid and Long-term Care Planning, Family Business/Small Business Succession Planning, Real Estate Transactions, 1031 Exchanges, and related matters. ![]() If you want your estate plan to be as comprehensive as possible so your family is provided for after your death in the way you intend, there are some key issues you may need to include in your plan. During our 20+ years of estate planning work, we’ve seen some of the same mistakes in estate plans drafted by inexperienced attorneys or online computer-generated forms. Those mistakes generally appear as omissions of language addressing tax planning, incapacity, divorces, spendthrift beneficiaries, beneficiaries with substance abuse issues, or the possibility of a beneficiary receiving government benefits. Here are the most common issues we’ve seen overlooked and that you may need to address in your own estate plan: Federal Gift and Estate Taxes Federal Gift and Estate Tax is a tax on the wealth you accumulated or transferred during your lifetime. This tax typically is paid during the probate of your estate or administration of your trust. Too often we see clients’ families pay more taxes than necessary because simple tax planning language was omitted in their estate plans. After a thorough review of your assets and consideration of your life circumstances, a good attorney will recognize if there is a need for special tax protection language in your estate plan. This language easily can be added to your estate plan and will protect your beneficiaries from potentially hefty and unnecessary taxation. Incapacity Powers of Attorney for both health care and financial needs are the most basic and essential parts of a good estate plan. Yet, routinely, we meet with clients whose prior estate plan does not include either a Health Care Power of Attorney or a General Durable Power of Attorney. Anyone over the age of 18 should have a Power of Attorney for both health care and financial needs. Without these documents, the State will make decisions about your health and assets should you become incapacitated. If your attorney does not offer these as part of their estate plan package, you should be concerned. Divorce No one plans on a divorce when they get married, but it happens. For individuals with an existing prenuptial agreement, your estate plan should reference this agreement and comply with its terms. This is especially important with second marriages involving children. If you have a beneficiary that may be headed for a divorce, then you may want to offer them certain protections within your estate plan to keep your family assets from being distributed to your beneficiary’s soon-to-be ex-spouse. Beneficiaries Everyone wants to believe their loved ones are perfect, but that’s not reality. Nearly every family we see seems to have a spendthrift, someone who simply cannot manage money for one reason or another, or a family member who struggles with alcohol, drugs or gambling. Fortunately, you can provide for beneficiaries who cannot or should not manage money. Additionally, you may have a beneficiary who is receiving governmental benefits. If such a beneficiary were to inherit your assets outright, there is a chance that they would no longer be eligible to receive their government benefits without first spending down the inheritance that you left to them. There are ways to avoid this by utilizing trust planning. Within your estate plan you can appoint a trustee to manage and distribute funds to these beneficiaries, according to your wishes. If your family members struggle with money management for one reason or another, or are receiving government benefits, you should ask your attorney if a trust might be warranted. To provide your beneficiaries with the smoothest transition after your death, we recommend having your estate plan reviewed every 3-5 years by an experienced estate planning attorney. This includes a review of your Will, Trust, Trust funding documents and assets, Powers of Attorney, HIPAA Authorization, Living Will, and Prenuptial Agreement. If you are a business owner, this review should also include your insurance policies, corporate formation documents, annual minutes, and Buy-Sell Agreement. If you have questions about your existing estate plan or new estate planning options, please give us a call. At Davis & McCann, P. A. our focus is to provide the best legal advice in estate planning, farm family estate planning, Probate, Trust Administration, Medicaid and Long-term Care Planning, Family Business/Small Business Succession Planning, Real Estate Transactions, 1031 Exchanges, and related matters. |
NEWS YOU CAN USEDavis & McCann, P. A., Archives
February 2021
Categories
All
|