Q: I am married with four children and I haven’t done any estate planning. I have serious health issues and I’m concerned I won’t have time to do thorough estate planning before I die. I own a home, some investments, a bank account, two insurance policies, and a couple of vehicles. Is there a quick way I can preserve my assets for my family? A: Obviously if you had more time, you would want to do more sophisticated estate planning, perhaps looking at ways to save on taxes or protect your children from the risk of losing their inheritance due to divorce or creditors. However, given that your health issues require you to make emergency decisions, here are a few options for you to consider: 1. Execute a simple Last Will and Testament. Your local estate planning attorney can customize the Will to your specific wishes. This document will help transfer any of your assets that do not have a Payable-On-Death or Transfer-On-Death designation. Given a medical emergency, it’s not unusual to accomplish this in days, rather than weeks. Use caution when considering online estate planning services, as most use a “one size fits all” approach. Rarely do these services adequately address your specific family needs. 2. Sign a Durable General Power of Attorney and a Health Care Power of Attorney to authorize a person whom you trust to make your business and health care decisions should you no longer be able to. With serious illness, it is not unusual for a person to be unable to speak or The Coronavirus pandemic has forced many individuals to quarantine and work from home. A productive way to spend the extra time you may now find in your schedule is to create an estate planning portfolio. By gathering all of your pertinent estate planning information into one location, you’ll make visits to your estate planning attorney, investment advisor, tax accountant, and insurance agent much easier. To help get you started, we’ve put together a guide to organize your estate planning portfolio. SECTION A: CURRENT ESTATE PLANNING DOCUMENTS • Copies of any currently existing estate planning documents, including any powers of attorney for financial or medical, living will, HIPAA, Last Will and Testament and any trust documents. SECTION B: ASSETS Bank Accounts: • Copies of your most recent statements for all checking, savings and money market accounts. • Copies of certificates of deposit. Investment and Mutual Fund Accounts: • Copies of your most recent statements for all investment and mutual fund accounts. Stock and Bond Certificates: • Copies of all stock certificates. • Copies of all bonds. The Coronavirus pandemic has forced families to think about topics they might generally avoid; serious illness and death. Because the virus doesn’t always present symptoms in the early stages, those who are struck with a severe form often do not have time to prepare their business and legal affairs before requiring medical intervention. What can you do now to ensure that your legal and financial matters are in order? Below are some recommendations on what you or your loved one can do to keep your home and business running smoothly in case you are hospitalized or otherwise unable to act on your own: 1. Review your Health Care Power of Attorney (HCPOA). This document allows someone to make your health care decisions in the event you are unable to. You may name one or more individuals whom you trust to act as your agent(s). We recommend that you name at least one alternate agent, should your first agent be unable or unavailable to make decisions on your behalf. If you become mentally competent and able to communicate with your doctor, the authority of your HCPOA agent ceases. 2. Review your General Durable Power of Attorney (GDPOA). This document is often referred to as a business or financial power of attorney. Your agent can pay your bills, file your taxes, and conduct your ordinary business affairs. Similar to the HCPOA, you may name one or more individuals whom you trust to act as your agent(s). Again, we recommend that you name at least one alternate agent, should your first agent be unable or unavailable to make decisions on your behalf. You’ve just come from taking your elderly mother to her doctor and learned that she needs to be admitted to a long-term care facility. Your mother isn’t a wealthy woman and you have no idea how she is going to pay for long-term care. This would be a good time to consult an elder law attorney and here’s why: A good elder law attorney can help you devise a plan to pay for your mother’s long-term care, make suggestions on ways your mother can preserve some of her assets and which assets need to be liquidated, sold, etc. If your elder law attorney determines that your mother will immediately qualify for Medicaid benefits, she will need to provide the following information as part of the Medicaid application process: 1. Non-Financial Documents a. Identification – picture ID (driver’s license, state ID) b. Social Security card(s) c. Birth verification (birth certificate, baptismal certificate or school record with date of birth) d. Marriage license or death certificate/divorce decree of spouse e. Health Insurance Identification Card (for all insurance coverage including Medicare, Medicare Supplemental, etc.) f. Military discharge records including original Form DD-214 g. Names, addresses, phone numbers of all children h. Listing of assets sold or given away in the last 5 years 2. Legal Documents a. Most recent Health Care Power of Attorney, Living Will, General Durable Power of Attorney, Will b. Trust documents c. Business entity/partnership agreements d. Resident admission agreement (if in assisted living or nursing home) Rumors, gossip and hearsay are your worst enemy when it comes to long-term care planning. Many people delay planning because they hear one thing or another from a family member or friend, but they never take the time to investigate whether the information is accurate or if it even applies to their own situation. Before you assume you won’t qualify for Medicaid benefits for nursing home care, or wouldn’t benefit from long-term care planning, do yourself a favor and visit an experienced elder law attorney to get the FACTS. In the meantime, here are a few common long-term care misunderstandings held by many clients: 1. To qualify for Medicaid benefits, I must get rid of all my assets. False. In Kansas, although you’re not allowed more than $2,000 in “countable assets” to receive Medicaid, not all of your assets are counted toward computing your eligibility. For example, in Kansas, your house is an exempt asset so long as your spouse resides there or there is a chance that you will return home. Other exemptions include assets that can’t be converted to cash, burial plots, business or income-producing property, household furnishings, personal property, pre-paid funeral plans and a vehicle. Further, if you are married, your spouse (a/k/a well-spouse or non-applicant) may keep a portion of your countable assets as his/her “community spouse resource allowance”. However, something everyone should keep in mind, is that many of the aforementioned assets lose their exempt status after death. Dementia is a frightening diagnosis for any family. The life expectancy for an individual with dementia can vary greatly depending on the exact diagnosis but patients routinely live more than five, eight or even 12 years after they first begin to require full-time care. These numbers vary depending on the individual and advancing treatments but they give you a better idea of what you might expect should you or a family member receive a dementia diagnosis. Even with the best of intentions to receive care at home, very few family members are equipped to provide the health and safety needs of a patient with advanced dementia. As a result, most dementia patients end up needing full-time nursing home care. Will you be financially able to pay for that care? In Kansas, the average annual cost for around-the-clock care in a nursing home, with a semi-private room, is a little over $65,000, according to a 2019 Genworth report. This means that an individual needing eight years of full-time nursing home care would pay more than $520,000 over that time period. For many families, this equates to most or all the wealth they have accumulated over their lifetime. Medicare does NOT pay for long-term care in a nursing home. It will cover some expenses related to temporary admissions, but not long-term care. Medicaid is the State agency that provides payment for long-term care but only individuals who have less than $2,000 in countable resources are eligible. The application process for Medicaid can be confusing and time consuming. That process is even further complicated if you feel you have been unfairly denied Medicaid assistance (a common event, even for clearly qualified applicants). Have you ever experienced the frustration of forgetting a password or login information for one of your online accounts? The process to regain access to your account can be maddening. Now, think about what your loved one might experience if they need to gain access to your accounts after your death. Would they know where to begin? Have you provided a trusted friend or family member with a list of your digital accounts and passwords, or at the very least, provided them with the location of where that information is stored? In today’s digital age, you must remember access information for not only social media and consumer sites, but also highly sensitive accounts with banks, investment firms, accounting and tax services, and credit card companies. By creating a digital asset plan, you can create a quick reference source of login and password information for yourself, and help your family locate and access your accounts should they need to do so after your death. How should you create a digital plan? 1. First, create a digital inventory. Your inventory may look something like this: • An itemized list of computing hardware, such as personal computers, external hard drives or flash drives, tablets, smartphones, digital music players, e-readers, digital cameras, and other digital devices. It is a good idea to reference the location of each item, the corresponding operational manuals, and warranty information. • List all data that is stored electronically. Detail whether that information is stored online, in the cloud, or on a physical device. This data might include family genealogy, health records, photos, personal and business contact information, educational and military service information, etc. • List online accounts, such as email, social media accounts, shopping accounts, photo and video sharing accounts, online storage accounts, and websites and blogs that you may manage. • List domain names you own and expiration/renewal dates for the same. If you grew up in rural America, it’s a pretty safe bet to say you know a farm or ranch family who experienced a bitter argument after the parents passed away while the farm/ranch assets were being divided. Perhaps you were even one of the unfortunate family members caught up in the turmoil because Mom and Dad never found time to do estate planning, or just couldn’t decide on a method to transition the farm/ranch operation to the next generation. If you own a farm or ranch, would like to keep the operation in your family for future generations, AND desire to preserve family relationships, now is the time to form a solid succession plan. A good succession plan takes time and isn’t without emotion and compromise, but the result can provide a future for your family and ensure your operation transfers to the next generation with as few problems as possible. Succession planning is a complex matter but here is a brief synopsis of three common succession options we see: 1. Farming heir purchases farm assets from parents as they reach retirement age. The proceeds are incorporated into the parents’ estate, with the intent to share those proceeds with the children upon their death. Drawbacks to this approach may include the requirement that the farming heir have access to large amounts of money or credit to complete the purchase. (Too much debt may financially cripple the farming heir if he/she does not have adequate collateral prior to the sale.) Also, the parents’ will have capital gains tax on the proceeds from the sale. Both of these could be lessened by the parents financing the sale. Keep in mind that should one or both of the parents require multiple years of nursing home care, some or all of this income could be required for their care, leaving little to nothing for their heirs after death. 2. Farming heir purchases farm assets from estate after both parents pass. The drawbacks to this option are very similar to the first option. The farming heir must have access to large sums of money or credit and if the parents required extended nursing home care and received Medicaid, the heirs may be required to sell farm property at public auction to pay Medicaid debt. The upside here is that since the assets would have received a step-up in basis at the parents’ death, the selling heirs will not have to pay capital gains tax. If the task of helping your parents coordinate medical services, home repairs, caregivers, and legal and financial consultants has fallen to you, below is some important information you might need. As your parents’ physical and/or mental health declines, they may require skilled nursing home care. If this is necessary, you will need to be aware of your parents’ financial information to determine if they will have enough to pay for their care versus if you will need State assistance. Similarly, you should have a comprehensive knowledge of their medical needs and treatments to ensure adequate health services will be provided to your parents. If your parents are agreeable, begin to accumulate this information now before you are faced with an emergency nursing home admission or a death. Gathering this information while your parents are alive and able to advise you on the location of assets, names of advisers, etc. will save you countless headaches - trust us! What’s the easiest way to gather this information? Your parents can most easily assemble the necessary documents and contact information, if they are in good health and willing. If they struggle with their health or organizational skills, they could legally appoint you to serve as an immediate Power of Attorney for their financial and health care matters, to help them with this process. These Powers of Attorney would allow you to communicate with any business or health care agent working with your parents even if your parents still have capacity. You could also make decisions on their behalf, should that become necessary. As a legally appointed Power of Attorney, you can pay their bills, sign contracts, make investments, etc… Be aware, however, with this power comes greater legal responsibility. Your decisions must be beneficial to your parents and be in keeping with their standard practices. You will be held to a higher standard by the Court if it is determined that you acted against your parents’ best interests. So, you and your significant other want to get married? Congratulations! Because a marriage is a legally binding contract, you need to be aware of your legal rights and obligations before saying “I do”. Most couples, in addition to the actual marriage contract, will enter into multiple other contracts while planning the wedding event of their dreams. To help your wedding day and marriage run more smoothly, we’ve assembled a few ideas for you to consider: • Get written contracts with vendors. Early in the planning process, you will likely arrange for vendors to supply your venue and reception needs. Vendors can include bridal or tuxedo stores, photographers, bakers, reception halls, musicians, caterers, florists, security, clergy, wedding coordinators, printers, travel agencies, etc. Make sure you obtain written contracts from each vendor specifically stating what they will supply for you and the price, including details of when and where everything will transpire. The written contract should be obtained at the time you make a payment. Failure to have a written contract can lead to unimaginable stress and disappointment at your wedding. • You will need a marriage license. Contact the Clerk of the District Court at your county courthouse to fill out the required paperwork at least a week prior to your wedding date to ensure all the proper documents are completed in time for your ceremony. In Kansas, once you make an application for the marriage license, there is a 3-day waiting period before you can pick up the actual license required for your marriage ceremony. You also will need to provide identification and pay a fee. After the ceremony, both spouses, the officiant and two witnesses must sign the marriage certificate. Either you or your officiant must record the signed marriage certificate with the state to make the marriage legally official. If you plan to change your name, you should inquire about this procedure at this time. |
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