The last of the children have moved away from home. You’re officially an empty nester! If you’re like many parents, adjusting to this new found freedom and income will take some time. Here are some great tips to keep in mind as you plan for your future:
1. Schedule an appointment with a reputable financial planner or accountant to review your retirement plan and make any necessary adjustments to your savings and investment plan to accommodate the lifestyle you want to have in your post-retirement age. For example, you may want to lower your household budget because you no longer have expenses related to raising children, but possibly increase your personal spending because you would like to travel.
2. Examine your estate planning documents, old will and powers of attorney and make sure they still reflect what you want to happen if you can’t act on your own behalf. A few things you should consider: (a) Do any of your children have legal or marital concerns that might put their inheritance at risk? (b) Are any of your beneficiaries receiving government benefits, whose eligibility might be jeopardized by an inheritance from you? (c) Do you still want the same people acting as your health care or business powers of attorney? (d) If you plan to become a “snowbird” and travel out of state for extended stays, do you know if your current estate planning documents will be honored in your secondary state of residence? (e) Has your net worth increased significantly since you signed your will or trust? (f) Do you still want the same people named in your original will or trust as beneficiaries? (g) Have any deaths or births occurred within the family that would require an amendment to your will or trust? (h) Have you acquired any titled assets since you did your original estate plan (real estate, minerals, investments, vehicles, business interests, etc.)?
Q: My parents are in their early 70s and have done no estate planning. My mother has wanted to do planning for the last several years but my father refuses to discuss the subject. They own their home as joint tenants, and they have a couple of bank accounts, retirement accounts, and some life insurance, as well as their vehicles. Can my mother do her own estate planning, even if my father still refuses to cooperate?
A: Yes, your mother can and should do her estate planning. While she may be limited with what she can do since your father is unwilling to cooperate, she can do some important basic planning. Without your father’s consent and cooperation, she may not be able to utilize the most advantageous tax saving options, but she will be able to get some very important legal safeguards in place for herself. At the very least, some basic documents that she should immediately request include a health care power of attorney, a financial power of attorney, a living will (if she wants to dictate how her end of life treatment will be handled), and, if possible, a simple will or trust.
With a Health Care Power of Attorney, your mother will be able to appoint a person, or a group of individuals whom she trusts, to make immediate health care decisions on her behalf if she becomes incapable of making decisions for herself. Without this important document, in an emergency, the physician or hospital may require additional paperwork and permissions prior to treatment. This document becomes especially important if the emergency occurs outside your parents’ local area and your mother’s regular physician is not present. The time that it takes to gain additional permissions and paperwork could drastically impact your mother’s care in an emergency.
What is the best way to revoke or change your existing Last Will and Testament? As with many things in law, it depends on your individual circumstance. Some common reasons you may wish to revoke or change your Last Will and Testament include:
• You, a fiduciary, or a beneficiary has changed their name;
• You are recently divorced;
• You wish to add, delete or change beneficiaries;
• You have sold, transferred or gifted away assets previously included in your Will;
• You have acquired new assets you wish to leave to a specific beneficiary;
• Your financial status has changed and your estate could now benefit from more sophisticated tax planning;
• You have married or remarried;
• Your family has grown, either by birth or adoption;
• One of your named beneficiaries is now receiving government assistance for a disability and an inheritance from you may disqualify them from such program;
• Your spouse or another named beneficiary under your will has died;
• Your beneficiary’s life is unstable (financially irresponsible, drug or alcohol abuse, credit problems, rocky marriage, etc.) and you now wish to include some type of limitation or protection for their inheritance.
In Kansas, you can revoke your existing Last Will and Testament in one of three ways: 1) Revoke your original Last Will and Testament in writing; 2) Destroy your original Last Will and Testament and all copies; or 3) Execute a new Last Will and Testament that includes a provision stating that it replaces all previous Wills and Codicils signed by you. In practicality, you also can sell or gift away all of your assets during your lifetime or set up all of your assets to transfer by way of beneficiary designations at the time of your death and nullify the effects of your written Will.
A word of caution however: NEVER, EVER destroy your original Last Will and Testament before you have
In the State of Kansas, a guardianship or conservatorship is an attempt by the state to provide help and protection for a person when that person is incapable of acting in his or her own best interest. A guardianship refers to the need for assistance with physical health, safety or welfare. A conservatorship refers to the need for assistance with managing a person’s estate or business affairs. A guardianship or conservatorship is not necessarily intended to be forever. The State’s objective is to restore the person to complete decision-making capacity and to close the guardianship as quickly as possible, according to the Kansas Guardianship Program.
In order to gain the legal right to assist the person in need of care, a guardianship and/or conservatorship must be filed and the Court becomes involved. The Court subsequently appoints a Guardian and/or Conservator over the person and/or their estate/property. When discussing guardianships and conservatorships, we generally are referring to one of two types of individuals in need: adults or minors.
An individual over the age of 18 is considered a legal adult. Adults are assumed to be capable of making their own health and financial decisions unless a court determines otherwise. If a mental or physical condition renders an adult incapable of making sound decisions and acting in his or her own best interest, the court may appoint someone to make decisions on that person’s behalf. A guardian is appointed to make decisions relating to the individual and a conservator is appointed to make decisions relating to the individual’s finances. In Kansas, adult individuals are only deemed in need of a guardian if they are impaired AND there are no appropriate alternatives for meeting essential needs.
A minor who needs a guardian means a person under 18 years of age who otherwise meets the definition
Thinking of getting remarried? Whether you are divorced or widowed, there’s quite a few things you should consider, in addition to whether you and your new love are ready for marriage. Couples with children from previous relationships should be especially mindful of how to provide a future that is fair for both a surviving spouse and the children, should one spouse die. Here are just a few of the things couples planning a second or subsequent marriage should consider:
Tax consequences. Depending on the planning done with your prior spouse, certain tax advantages may be lost once you remarry, such as portability of a deceased spouse’s unused exemption. You should visit with your accountant prior to your remarriage to fully understand any tax implications your new marriage will have on your tax situation.
Update your beneficiaries. How unfortunate would it be if an ex-spouse received some of your assets because you failed to update a beneficiary designation on your retirement or life insurance account? It is not sufficient to just declare your distribution plans in your will or trust. You must update your beneficiary designations to match your new estate plan. Your estate planning attorney can assist you with this step if you need help.
Have a solid estate plan, IN WRITING. We cannot stress this enough. Put your wishes in a formal, written will or trust. If you have children, a simple will likely will not be sufficient, so look at creating a trust to address all the various needs of your blended family. Include a distribution list of personal items such as jewelry, photos, heirloom dishes and keepsakes. Without a written directive, your family heirlooms may not be passed along to your next generation, even if that was your verbal request. This is a great time to talk with your children about what items they consider emotionally important to them. Having a written plan, such as a prenuptial agreement, is one of the best ways to begin a secondary marriage. A prenuptial agreement will specify what is “yours”, “mine”, and “ours” and what will happen to the distribution of those items upon divorce or death. Because this agreement transpires BEFORE the marriage, much of the stress
Q: My grandfather has very few assets except his residence in Kansas. He would like his house to go to my mother upon his death. Is there any way the property can transfer to my mother without a probate?
A: One of the easiest ways to accomplish this would be for your grandfather to execute a transfer on death deed to your mother. The transfer on death deed will transfer ownership of the property at your grandfather’s death, without probate, to your mother or any other person he names on the deed.
How does the transfer on death deed work in Kansas? The property owner (the “Grantor”) executes a specific deed that names a successor beneficiary as the recipient of the property at the Grantor’s death. The deed is then signed before a notary and recorded with the Register of Deeds in the county where the property is located.
The Grantor remains the legal owner while living. In addition, he may revoke the deed at any time prior to death by executing and recording a formal revocation or new deed with the county Register of Deeds. At the Grantor’s death, the person named as the beneficiary on the deed becomes the new property owner as soon as the Grantor’s death certificate is filed against the property.
Advantages/Disadvantages of transfer on death deed:
1. The property will pass to the named person after Grantor’s death without an expensive and lengthy probate.
2. The Grantor retains ownership and control of the property so long as he/she is living.
3. The property passes to the new owner immediately after the Grantor’s death. No delay occurs in the transfer of ownership; only the recording of the Grantor’s certified death certificate with the county Register of Deeds is required.
4. A transfer on death deed also can be used to transfer mineral interests.
5. A transfer on death deed provides future flexibility and the ability to revoke or change beneficiaries.
Dementia is the term commonly used to describe a person’s decline in memory and other cognitive abilities that interferes with daily life. This decline is not a normal part of aging. Alzheimer’s, a brain disease that results in the loss of brain cells and function, is the most common cause of dementia.
How can Alzheimer’s impact your legal future? If your cognitive ability decreases below a specific threshold set by the State, you no longer will be allowed to make legal decisions for yourself. If you have not executed Powers of Attorney while still mentally competent, the State will step in and decide who will make business and medical decisions on your behalf. The State will similarly decide how your estate will be divided upon your death, if you have not previously signed a valid will or trust. Predictably, the decisions made by the State may not be the decisions you would have made for yourself.
Because Alzheimer’s is a progressive disease, it’s important to detect impairment issues as early as possible and get your business, medical and legal affairs in order. While Alzheimer’s currently has no cure, early treatment may slow memory loss and increase your chances of longer independence. Here are 10 warning signs from the National Institute on Aging indicating when a person may need a medical evaluation:
1. Difficulty remembering.
Forgetting important dates or events, repeatedly asking for the same information, and relying on family members or reminder notes to handle daily tasks are clues that cognitive changes are occurring.
2. Difficulty in planning and solving problems.
Struggling to track monthly bills, follow a familiar recipe, solve simple math problems, or taking longer than usual to complete these familiar tasks can be another indicator of problems.
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, using a life insurance policy beneficiary form to name your beneficiaries may be a good option. Life insurance beneficiary forms typically only allow for 1-2 alternate beneficiaries to be named, should your first beneficiary predecease you in death. These forms do not allow you to have a say in how or when the distributions will be made after your death. If you have a more complicated family situation, 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 producing farm land and the other child pasture land, there is likely to be a discrepancy in property valuation. If your goal is to provide an equal inheritance to each child, you can use life insurance proceeds 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 beneficiaries, and how any excess should then be distributed. Life insurance beneficiary forms do not allow for such instructions.
Q: Dad died without a Will or Trust. From what I understand of Kansas law, my sibling and I will share equally in one-half (1/2) of his estate and Mom will inherit the other one-half (1/2). My parents were not economically stable at the time of my father’s death. My sibling and I both are financially comfortable, are not married and have no children. Is there any way we can reject our inheritance, and have it go to our mother so she could live more comfortably?
A: Under Kansas probate law, you and your sibling can disclaim your inheritance, which would allow your mother to receive 100% of your father’s estate. If you had children, your share would pass to them, instead of your mother, pursuant to Kansas intestate law. However, in this situation, the disclaimers from you and your sibling would provide for your shares to be redirected to your mother.
Disclaimers are used in post-mortem (after death) planning for different reasons. One major reason is to avoid unnecessary tax issues. If a parent leaves his well-off children property this bequest may create future estate tax problems for his grandchildren. If the children disclaim the property now, it can often pass directly to the grandchildren who may not have an estate tax problem.
There are a few rules you must also follow if you intend to disclaim inherited property.
1. Written Document. Your disclaimer must (1) be a written instrument describing the property, interest or power you are disclaiming; (2) contain a declaration of disclaimer; and (3) be signed and acknowledged by the disclaimant.
2. Time Limit. States have different laws concerning how long you have to disclaim property, but if you are disclaiming property due to federal estate tax issues, you usually have to file your disclaimer within 9 months of the decedent’s death. Beneficiaries under the age of 21 have additional time to disclaim their interest.
3. No Acceptance. You cannot receive any benefit from the property before disclaiming it. For example, if the property is an investment portfolio, you cannot cash a dividend check and then disclaim the portfolio. If your inheritance is real estate, you can't accept any rent if you intend to later disclaim the property.
One of the most common concerns of our aging clients is the fear of losing their family home if they need full time nursing care. There seems to be an inclination to transfer the family home to someone else, usually a family member, as quickly as possible to keep the home from being sold. This may sound like a smart idea, but it simply doesn’t work in most circumstances.
Losing the family home is a legitimate concern but one that you should not try to address without the assistance of an experienced elder law attorney. Here are a few of the problems you can encounter if you don’t abide by Kansas law and Medicaid rules:
1. Gift Tax Consequences. Unless the appraised value of your family home is $15,000 or less (the 2019 annual gifting allowance), when you transfer your family home to someone else, you will be required to file a gift tax return and may be subject to a gift tax.
2. Medicaid Reimbursement Claim. If you require full time nursing home care and are counting on Medicaid benefits to cover the cost of your care, transferring your residence to someone else shortly before moving to a nursing home facility will likely result in a problem. Medicaid works on the theory that assets (your family home, for example) that otherwise could be used to pay for your care should not be given away within the five year period prior to requesting the government (Medicaid) pay for nursing home benefits. This period is called the five year look-back. Unless the gift recipient fits certain, clearly specified exceptions, the government will assess a penalty period before they will contribute to your nursing home care if you have made a gift within the five year look-back. During the penalty period, you will be required to private pay for the cost of any nursing home care that you receive.
NEWS YOU CAN USE
Davis & McCann, P. A.,