Estate planning—it is an incredibly important tool, not just for the wealthy or those thinking about retirement. On the contrary, estate planning is something every adult should do. It can help you accomplish any number of goals, including appointing guardians for minor children, choosing healthcare agents to make decisions for you should you become ill, minimizing taxes so you can pass more wealth onto your family members, and stating how and to whom you would like to pass your estate to when you die.

​While it should be at the top of everyone’s to-do list, it can be an overwhelming topic to dive into. To help you get started, below are some important terms you should know as you think about your own estate plan.

Assets:  Generally, anything a person owns, including a home and other real estate, bank accounts, life insurance, investments, furniture, jewelry, art, clothing, and collectibles.
Beneficiary:  A person or entity (such as a charity) that receives a beneficial interest in something, such as an estate, trust, account, or insurance policy.
Distribution:  A payment in cash or asset(s) to the beneficiary, individual, or entity who is entitled to receive it.
Estate:  All assets and debts left by an individual at death.
Fiduciary:  A person with a legal obligation (duty) to act primarily for another person’s benefit, e.g., a trustee or agent under a power of attorney. “Fiduciary” implies great confidence and trust, and a high degree of good faith. 

We all have reasons for procrastinating when it comes to estate planning. However, before you put this important life decision back on the shelf again, you might want to know a few of the things that can happen to your money and possessions upon your death if you haven’t planned. These Kansas probate rules may encourage you to move just a little quicker to finish or update your estate planning.

Did you know?

• Kansas probate law states that if you are married and die without a will, your spouse may not inherit all of your property? If you have children, regardless of their age, your spouse is limited to receiving only one-half (1/2) of your solely owned estate property and your children will split the remaining one-half (1/2). This is also true even if your children are minors. If this is not what you want to have happen upon your death, you need to set up beneficiary designations or have a Last Will and Testament or Trust immediately prepared for you that clearly states your wishes.
• If you and your spouse are living separately but you are not legally divorced, upon your death, your spouse may still receive the same estate share as described above. Even if you sign a Last Will and Testament attempting to completely disinherit your spouse from your estate, if your spouse has not consented to that document, then unless you have a divorce decree or other written, legally binding agreement, by law your spouse will be entitled to a certain percentage of your estate depending on the number of years you were married before your death and the value of your aggregate estate. Your spouse is also entitled to your homestead.
• If your spouse predeceased you and you had no children and you didn’t update your Last Will and Testament to name a new beneficiary of your estate after your spouse died, when you die your entire estate will pass to your parents. If your parents are still living, this inheritance could present a taxation problem for them depending on the size of their estate and what they would inherit from you. If your parents have been trying to reduce their own estate value to avoid unnecessary estate taxes, this new inheritance may create a taxable estate for them. Additionally, if you have a parent who is in the nursing home and receiving state aid, then your estate may be claimed by Medicaid. If your parents are no longer living, your estate will be divided among your living siblings. If you prefer that other beneficiaries benefit from your estate, you should put planning in place now.

​These are just a few of the Kansas probate laws that control what happens to your money and property after your death. If you have questions about probate or estate planning matters, 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 husband and I have amassed a nice bit of real estate during our marriage. We have been looking at doing an estate plan, but we aren’t sure how to address an issue we have with our son. Our eldest son is in a rocky marriage and none of us are convinced that the marriage will last, although he and his wife have been together for more than 10 years. My husband absolutely does not want our daughter-in-law to inherit any of our property if their marriage does last and our son dies before she does. Is there anything we can do to ensure that our son receives his inheritance, but upon his death, his remaining share would be redirected to our other children? Our other adult children are in stable, long-term marriages. If this was your family, what would you do?

A:        You might be surprised to know that this is a fairly common dilemma for families, and it shouldn’t stop you from moving forward with estate planning. Given your situation, you would be a good candidate for a living trust. In a living trust you can easily stipulate that your son’s inheritance be held in an asset protection trust for his lifetime and upon his death, distributed outright or in trust to your other children. You can name a trusted individual to act as trustee over your son’s trust to ensure that distributions to your son are done prudently and in keeping with your wishes.
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You may even want to consider putting ALL of your children’s shares into asset protection trusts. Your son may mend his relationship and one of your other children may have an unexpected divorce, bankruptcy or end up in a legal battle with a creditor due to an accident. Without the trust, your child’s inherited share would be vulnerable to their creditors. Additionally, if any of your children were to become disabled, either mentally or physically, and require government benefits, that child’s inherited share, if required to be held in a special needs trust, would be available to your child without preventing them from receiving their benefits.

If you do make the decision to have your children’s inheritance held in trust for them, you may want to talk with them to explain why their inheritance will be administered in this way and the benefits to them. This extra step of transparency can help alleviate possible friction that may arise if your children are under the impression that they will inherit their share outright.

If you have questions about type of estate plan, 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.

Don, age 82, and his wife were married for 45 years before she died. Don had no children but was very close with his extended family. After his wife died, Don revised his estate planning to name his sisters, Rita, age 72, and Catherine, age 78, as the sole beneficiaries of his estate. Rita was never married had no children and Catherine and her husband had 3 children. Don was especially concerned about how Rita might be cared for in her later years as she had no family of her own. He was relieved knowing that she would receive one-half of his approximately $200,000 estate when he died. It gave him peace knowing that she would be able to live a more comfortable life using this inheritance, perhaps going on several nice trips or enjoying a few luxuries.

While this sounded like a wonderful plan, Don didn’t anticipate that Rita’s health would decline rapidly and she would need full-time nursing home care a short time later. Rita qualified to receive Medicaid benefits after only a few short months and she was well cared for in the local nursing home. Don died two (2) years later and his estate was divided between his sisters just as he had instructed. Unfortunately, what Don didn’t understand was that Rita’s share of the inheritance automatically disqualified her from receiving her Medicaid benefits and she was forced to use her inherited money to pay for her nursing home care, instead of using it to make her life more comfortable. Within less than two (2) years, Rita’s inheritance was gone and she had nothing to show for it. Her level of care at the nursing home did not change and she was unable to use the money for any of the things that her brother wanted.

No one can predict the future but if Don had understood that Rita’s inheritance would only be used to pay her nursing home expenses previously being paid by Medicaid, he most likely would have made a different estate planning decision. If Don had revised his estate plan once Rita entered the nursing home to include a Special Needs Trust (SNT) a/k/a Supplemental Needs Trust, for Rita’s benefit, her share of the inheritance could have been held in trust to provide her with the extras that her brother had intended. The Trustee of the SNT would have been able to provide Rita with the things that she wanted or needed to make her life more comfortable, without the trust share disqualifying Rita from receiving Medicaid benefits.
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This scenario illustrates why it is so important to review your estate planning regularly with your attorney, at least every 3-5 years. Be sure to inform your attorney if one of your intended beneficiaries is receiving government benefits or may be a recipient in the foreseeable future. By adding language to your estate plan that creates a SNT upon your death, your loved one can be guaranteed to receive their inheritance without disqualification from government benefits.

If you have questions about of special needs planning or any type of estate plan, 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.

You may find a point in time when your parent needs assistance with their finances. Taking over financial responsibility for a parent can be a touchy topic, but if done properly, can often provide a great sense of relief.

If you have been appointed as your parent’s financial power of attorney and the time has come to begin assisting them, here are a few pointers to ease the transition:
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• ​​​​Begin the conversation early. Do not wait until your parent begins to show signs of senility or other serious health complications to talk about how they would like their business affairs handled. Ask your loved one to prepare a list of their assets. This list should include other information such as locations of assets, helpful business professionals, passwords, etc. If your parent is willing, you might begin by working together to pay bills, review bank accounts, balance checkbooks and prepare taxes.
• Understand your role. As a financial power of attorney, you owe a special duty to care for your loved one’s assets called a “fiduciary duty”. This means that you have a legal obligation to act in their best interest and to do everything in your power to preserve the assets under your control. An intentional failure to do so can have you facing legal consequences.
• Be respectful to your loved one. Accepting help from someone, even a child or other trusted individual, is difficult for many people. Once you assume full responsibility for their finances, make an extra effort to maintain an open line of communication with your loved one to reassure them of their financial status.
• Keep good records. As a financial agent for someone else, your record keeping needs to be clear and concise so you can provide quick and accurate answers regarding the current state of your loved one’s finances. If you are not an organized person, you may want to reconsider accepting the role as financial power of attorney. Banks with a trust department are usually willing to act as financial power of attorney for a fee if a family member is not able or willing to serve in that capacity.

If your loved one is facing admission to a nursing home for long-term care and you’re concerned that you won’t have enough money to cover their expenses, there are a few things you should consider. With an average cost of over $5,600 per month for a semi-private nursing home room in Kansas (2019 Genworth Cost of Care Survey), very few of us could afford to private pay for a nursing facility for very long. KanCare is the Kansas Medicaid Program that you will apply to if you need government benefits to assist with payment in Kansas.

Too often, well-intentioned friends, neighbors and non-elder law attorneys or other professionals make recommendations on how to apply for Medicaid benefits to cover nursing home expenses that result in a denial or extended delays in benefits, both of which result in unnecessary expenses to the applicant. To prevent this from happening to you, we’re sharing some things to consider:

1. Consider who is giving you advice. Everyone seems to have advice to give in this situation, because many people have experience with someone going into the nursing home. However, Medicaid rules change frequently and planning is extremely specialized to each individual’s personal needs and their assets. Thus, what worked for your neighbor’s grandmother WILL NOT work exactly the same for your loved one.
2. Seek knowledge from someone who is going to look out for your best interest. This is typically going to be someone that you hire, like an experienced elder law attorney. While most nursing homes offer to file your Medicaid application for free, you should keep in mind that their goal is simply to get you eligible for benefits so that they can continue to receive payment for their services. It isn’t their job, nor do they have the time or the resources, to put an elaborate Medicaid plan in place. Alternatively, an elder law attorney hired by you is there to create a plan that allows you to preserve the maximum amount possible and establish eligibility quickly and efficiently in the most cost-effective manner.
3. Be careful when spending down assets for eligibility and be honest on your application. Recommendations on how to spend down assets in order to qualify for Medicaid benefits from anyone other than a highly trained individual, like an elder law attorney, can result in a prolonged denial of Medicaid benefits. If an individual does become eligible, but it is later determined that they improperly spent down assets that were not reported correctly, they could find themselves facing fraud charges. Elder law is a complicated body of law and without a full understanding of the rules, you can easily and unintentionally make costly mistakes.
4. If you have filed an application and been denied, don’t despair. While it is better to not be in this situation, it doesn’t mean that all hope is lost. Because elder law is not generally well understood by the public, mistakes commonly happen with people who are sincerely trying to help their loved one receive the financial assistance they need for nursing home care. As the phrase goes, “You don’t know what you don’t know.” As quickly as you are able, you will want to make an appointment with an experienced elder law attorney to discuss whether an appeal is possible.

Now that you are armed with more knowledge, remember to consult with an experienced elder law attorney should you need to file for Medicaid benefits in the future. More than one client has told us after we corrected an inaccurately filed Medicaid application, “I wish I would have just come to see you first!”

If you have questions about Kansas elder law or Medicaid 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.

It’s not uncommon for new clients to be undecided on what type of estate planning vehicle will work best for their situation. A good attorney will listen carefully to a client’s needs and wants to suggest the ideal estate plan to achieve a client’s goals (or explain why those goals are unrealistic or unachievable).

To help you prepare for your initial visit with your estate planning attorney, we’ve put together some of the questions you should consider before your meeting. This list isn’t comprehensive, but if you can answer most of these questions, your attorney will be better able to guide you toward the type of estate plan that will best serve your needs. 

• Who would you want to act as your agent for healthcare and financial purposes if you were incapacitated?
• Who would you want to be in charge of your estate after your death?
• Are you planning for distributions to minor children?
  • If yes, do any of these children have special needs that cause you concern, such as a disability or health condition?
  • Have you selected guardians and conservators to care for those minor children in the event of your death?
• Are you planning for distributions to adult children?
  • If yes, do any of these children have special needs or circumstances that cause you concern, such as creditor issues, substance abuse, rocky relationships, etc.?
  • Is there any conflict between the children that causes you concern?
• If you are married, do you have any concerns you wish to address regarding distributions to your surviving spouse? (ie…restrictions on property transfer if remarriage occurs, liquidation of property, etc.)
• Do you want your estate details to remain private after your death?
• Are you concerned about the speed of the distributions to your heirs after your death?
• Do you own a business outright or as a partner/shareholder?
  • If yes, do you already have a succession plan and a dissolution plan?
  • Do any of your children work with you in the business?
• Do you own real estate, wind energy, or minerals?
  • If yes, is/are the real estate, wind energy, or minerals located in Kansas or in another state?
  • Are the minerals and wind energy currently producing?
  • How is ownership currently titled? (jointly with spouse, tenants in common, sole owner)
• Do you have a taxable estate? ($11,580,000 for married couples in 2020)
• Are you concerned about capital gains taxes?
• If you are a single person with no children who would you like your property to go to after your death?
• Are you interested in supporting or establishing a charitable organization after your death?
• Are you concerned about preserving your assets for your beneficiaries in the event you need long-term nursing home care?
• Is life insurance or long-term care insurance part of your plan?

​If you have questions about Kansas estate 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:       Our son is leaving for college this week. He has signed a Health Care Power of Attorney, Durable General Power of Attorney and a HIPAA release. Is there anything else legally that we need to do before he leaves?

A:       First of all, congratulations on your son’s new adventure. Sounds like he has received some solid advice even before he moves on to pursue his higher education.

It is great that your son completed the important legal step of executing Powers of Attorney and a HIPAA. These documents likely will be his most utilized legal instruments until he graduates.

Unless your son feels extremely comfortable keeping his signed estate planning documents with him while away at college, I would recommend that he place the originals of these documents in your family bank box or fireproof safe. The originals should always remain in a safe location and only copies should be provided to others, barring a few exceptions. However, it is important that he have access to a copy of the documents while away from home. I also would recommend that he provide a copy of these documents to anyone he has named to act as his agent under the Powers of Attorney. Further, I suggest that he and his agents all keep a scanned copy of these documents on their phones for easy access in the case of an emergency. Most attorneys routinely keep a hard and/or an electronic copy of these papers in their client files that can be sent to doctors, hospitals, etc. if a client needs them, which will give you another way to access the documents if you do not have them. However, emergencies do not always happen during business hours and so it is a good idea to try to keep a copy close-at-hand.

If your son has a chronic health condition that will require constant monitoring and checkups while he is away from home, your son may want to provide a copy of his Health Care Power of Attorney and HIPAA to the medical providers at his new location. This will expedite communication between his new health care providers and his appointed agents in the event of an emergency.
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If you have questions, about any estate planning matter in Kansas, 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 have changed my mind about who I want to serve as my Executor. How complicated is it to make that change in my Will?

A:        As long as you are mentally competent, you can revise your Will in any way you wish. We recommend the use of a Codicil when a person wants to make minor changes to an existing Last Will and Testament. A Codicil is a short legal document that serves as a type of addendum to your existing Will. Generally speaking, this is a quick and easy change.

The language contained in your Codicil supersedes the language contained in your original Will, replacing the old language. The Codicil is executed in the same manner as your original Will, in that you sign the document before a notary public and two disinterested witnesses. Your original Codicil and Will should always be stored together in a fire-proof location. In the situation you describe, a Codicil would be the most cost-effective choice to achieve your desired change. If however, you decide to revise multiple provisions within your original Will, you may want to consider simply executing a new Last Will and Testament, as a Codicil under these circumstances would likely cost the same as a new Will and executing a new Last Will and Testament would be clearer and more concise. You will also want to keep in mind that when you have a Will-based estate plan your Last Will and Testament and any Codicils will be filed of public record. Therefore, if you would not want someone to know about a change that you made, you might decide it is more prudent to simply sign a new Last Will and Testament rather than have the changes that you made to your planning filed with the Court.
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If you have questions, about any estate planning matter in Kansas, 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:  What happens if my husband and I can’t agree on what we want in our Will or Trust? Do we need to have separate lawyers prepare our estate planning documents?

A:  Maybe. When couples choose to do estate planning with one attorney, complications can arise when the couple disagrees with how their estate plan should be drafted. If the disagreements are minor and the couple is otherwise amicable, you can have the same attorney work on a mutually agreeable resolution and draft all your estate planning documents. However, if the differences of opinion remain substantial and/or the couple has an adversarial relationship, it may be prudent for each individual to seek independent legal counsel. This will ensure that both husband and wife have received fair, unbiased advice and their estate planning reflects their individual wishes. Please be aware, though, that spouses have certain property rights that can only be waived if they have a prenuptial agreement or consent to one another’s planning.

Here are just a few of the common points of contention between couples we have encountered over the years:

1. One spouse wants to leave a substantially larger (or smaller) inheritance to one or more of their children than does the other spouse. This is often common when a child is involved in a business venture with the parents and the other children are not.
2. One spouse doesn’t want the surviving spouse to have control over their assets in the event of a remarriage.
3. The spouses disagree on who would be the best conservators/guardians for their minor children.
4. One spouse has “family property” he/she inherited from his/her family and wants said property to remain in their bloodline rather than go to their surviving spouse.
5. A difference of opinion on how to treat “his, her and our” children is very common in secondary marriages.
6. Adult children from a first marriage often want their parent to severely limit any inheritance to a stepparent.
7. If a child has an addiction, is financially irresponsible, or has a troubled marriage/relationship, spouses are often at odds about what, if anything, the child should receive by way of inheritance.

​Please remember, for every problem, there exists a solution. Your willingness to compromise on non-essential items and to have an open mind are essential to a successful plan. Additionally, the experience and expertise your estate planning attorney brings to the table also is a key element. If you have questions, about any estate planning matter in Kansas, 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.