Writing Your Tulsa Estate Planning Blog

As much as you might want to help your children by giving them money they can use, it may be best to hold off and seek advice to make sure that you are doing so in the best way.

Most parents like doing nothing more than helping their children when they can and when the children deserve the help. Parents often understand that when their children are getting their careers and lives started, they might need some financial assistance to help them along the way.

Giving children a little money now, might go a long way to helping the child make a lot more money later. However, many parents are so eager to give to their children that they do not think through the best ways to make the gifts.

There are bad ways to give to children, as Kiplinger points out in “5 Ways NOT to Gift to Children … and 5 Better Ideas.”
The most important thing to understand is how giving a child something might affect them and you in the future. For example, if you give a child a large sum of money outright and the child gets divorced, it is possible that your child’s spouse and not your child could get part of the money in a divorce settlement.

Another common problem people run into, is naming a child as the joint owner of a piece of property. That can lead to big problems later, if the child has financial problems as creditors can go after the property.

The best thing to do is to be careful and talk to experts before giving money to a child.

Accountants and estate planning attorneys should be consulted to make sure that the tax and estate implications have all been thought through.

Reference: Kiplinger (January 2017) “5 Ways NOT to Gift to Children … and 5 Better Ideas.”

For most estate plans to go well, it is important that parents talk to their adult children about the family finances. While many parents claim that they do, the children say that they do not.

Estate plans often have many complicated pieces, since they reflect the complicated nature of people’s finances. Those who are not financial experts, often have problems dealing with the complexity of handling an estate, if they have not been told beforehand what they will be dealing with and how to handle it.

For this reason, estate planning attorneys normally advise their clients to have an in-depth conversation with their children about their finances. If the children are going to be called upon to act as a power of attorney in the event of incapacity or to administer any portion of the estate, then they need to know what to do before they need to do it.

Forbes reports that those conversations may not be happening nearly enough in “The Last Taboo: Your Parents Still Won’t Talk About Their Money With You.”

A total of 70% of parents report that they have had detailed conversations with their children. However, only 50% of their children report that those conversations have actually taken place.

What this suggests is that while parents might be giving what they think are detailed explanations about their finances, the children still have questions that should be answered.

It is important not to assume that your children know what they are supposed to do from a brief overview. Invite them to ask questions and answer any that they have.

Reference: Forbes (Jan. 31, 2017) “The Last Taboo: Your Parents Still Won’t Talk About Their Money With You.”

Most of the estate disputes that get reported, involve large fortunes that are being fought over. In reality, most family estate fights involve much smaller things such as personal items.

You may not realize it, but many of the personal items you have around the house have a special meaning to your adult children. Some items might remind them of childhood memories. Some items might remind them of you. Other items they just might like for one reason or another.

While you are alive, these items are unlikely to cause any problems. However, after you pass away, they could very well cause problems for your estate.

If you have more than one child that wants a particular piece of personal property, there needs to be a way for them to decide who gets it, as Business Vancouver points out in “Wills: Leave’em laughing.”

There are several different things you can do to make sure that your children do not argue over your possessions. If you want a child to have something in particular, then you can give it to them before you pass away or you can make specific designations in your estate plan.

Another method is to direct that your children use a reverse draft method. One child picks an item. Then the next child goes and so on. When every child has picked something, then the order of choosing is reversed and they all pick again.

A list could also be presented to each child of all the important items and they can rank them all by preference. The estate executor can then use those rankings to guide the distribution of personal items.

The important thing is that you need to think about the potential problems in your estate plan and have a way for those problems to be resolved.

Reference: Business Vancouver (Jan. 31, 2017) “Wills: Leave’em laughing.”

It is every parent’s worst fear. A child will agree to give away their inheritance for far less than it is worth for quick money.

Recently, MarketWatch published an advice column with the following question as its title: “My drug-addicted friend signed away his $800,000 inheritance to his brother — now he’s clean, can he get it back?”

The title is an almost complete description of what happened. A reader wrote in with a story about his friend who inherited $800,000 from his father’s will. The friend was addicted to drugs and agreed to sign his rights to the inheritance away to his own brother for only $10,000.

Now, that the friend is sober, the reader wonders whether there is any way to get the inheritance back.

The column writer suggests that the friend hire an attorney and sue the brother for fraud based on the premise that he knowingly took advantage of someone who was mentally incapacitated. That might work in some cases.
But not so fast.

There are some states and courts that are not quick to undo agreements that drug addicts voluntarily enter into, especially if it cannot be proven they were high at the time of making the agreement.

This is the type of scenario about which many parents have nightmares, when it comes to their addicted children. Leaving the child an inheritance outright can quickly be lost.

Fortunately, there are ways to avoid the problem altogether without disinheriting the drug-addicted child. A trust can be used to protect the inheritance with a trustee who is granted the discretion to only distribute money when the child is able to handle it.

Reference: MarketWatch (Jan. 24, 2017) “My drug-addicted friend signed away his $800,000 inheritance to his brother — now he’s clean, can he get it back?”

If you are going to be a caregiver for an elderly family member, there are some important things that you need to do before you get started.

Being a caregiver for an elderly person is not easy. It takes a lot of time and can come with emotional and financial costs. That is even more likely for people who become caregivers for their elderly family members.

There are a few things that people can do before becoming a caregiver to make things easier.

Recently, Forbes discussed some helpful pointers for caregivers in “4 Critical Things To Do Before Becoming A Caregiver,” including:

•Make sure you have all of the elderly person’s legal, financial and medical documents. You need to know where the person has their bank accounts. You need to have powers of attorney. You need to know who the elderly person’s doctors are.

•Make sure your own finances are in good order. You might want to take some time off of work at the beginning of your caregiving, so make sure that you understand the FMLA.

•Make a personal care agreement with the elderly person. This is a written statement about what the expectations are. While not a legal document, this will help give everyone peace of mind and make the transition easier.

•Have your own support team in place. Caregiving is not easy. Make sure that you have people who can support you when you need it. You should enlist the aid of friends, family and organizations for the elderly.

Reference: Forbes (Jan. 22, 2017) “4 Critical Things To Do Before Becoming A Caregiver.”

The state of New Jersey has often been criticized for its policy of requiring parents who co-sign student loans for their children, to pay back the loans even if the child passes away. The state has now changed its policy.

Generally speaking, when a person passes away any of his or her outstanding creditors must be paid, if claims are made as required by law. There are very few exceptions to that general rule.

However, one of the biggest exceptions is with federal student loans.

If the student passes away with outstanding student loan debt, then the federal government discharges the debt. Even many private student loan companies do the same.

The state of New Jersey has always been different with its state run student loan program, as Financial Advisor discusses in “N.J. Discharging Loans For Families of Deceased Students.”

Not only would New Jersey still expect payment from the estate, it would require co-signers to pay, if the estate was unable to do so. This left many families deep in debt over the unrepaid loans of their deceased children.

The policy was roundly criticized for the burden that it left on grieving parents.

Attempts had been made to change the law and the state’s policy to no avail. However, the state legislature has recently reversed course and will now discharge the debt of deceased students.

If you have a loved one who has student loans and who has passed away, make sure that you talk to an estate planning attorney about how to properly discharge the debt. You can now do so, even in New Jersey.

Reference: Financial Advisor (Feb. 21, 2017) “N.J. Discharging Loans For Families of Deceased Students.”

For a long time, a majority of Americans have believed that a person has the right to choose when they want to pass away and to have a physician’s assistance in death. However, few people actually did have that right. That is beginning to change.

The U.S. has come a long way since the days when Dr. Jack Kevorkian was prosecuted for assisting terminally ill patients commit suicide. At that time, he was popularly viewed as a monster in the media.

He, however, may have ultimately won the war.

Americans have gradually come around to the view that terminally ill people have the right to end their lives when they want to and under the circumstances they choose. For some time now, polls have consistently suggested that more than 60% of Americans believe a physician should be able to help a willing terminally ill patient pass away.

Laws allowing it, have been much slower to pass.

20% of Americans will soon be living in states that allow the practice, as The New York Times reports in “Physician Aid in Dying Gains Acceptance.”

Given the popularity of the idea, it seems likely that even more states will soon allow the practice. That raises new challenges for the elderly, their families and for elder law advocates.

Families will need to consider things previously unconsidered, such as when it is appropriate for a family member to choose to pass away.

Advocates will need to make sure that laws and regulations are designed with appropriate protections for patients and doctors.

Reference: New York Times (Jan. 16, 2017) “Physician Aid in Dying Gains Acceptance.”

Increasingly wealthy people are paying for medical services that could potentially help them live for over a century. That creates estate planning challenges that did not exist for previous generations of the ultra-wealthy.

No one can guarantee that they will live a longer than normal life, no matter how much money they have to spend on their health care. However, medical advances and new personalized medical care plans, such as concierge care, make it so that those with enough means can make it far more likely than ever that they will live much longer than their peers.

This could mean that in the near future it will be common for the ultra-wealthy to live for 100 years and even decades longer, in some cases. This will have some benefits, but it also comes with some unique estate planning challenges.

Forbes recently discussed some of the challenges in “Estate Planning For The Ultra-Wealthy When Living To 120 Or Beyond.”

The biggest issue is that it is common for people to retain control of their own assets until they pass away. That can become a problem the longer people live. Scientists still do not have a cure for dementia and the longer people live, the more likely they are to suffer from it.

A long life of carefully managing money could easily be undone. Younger family members might also start to grow impatient waiting to take control and cause problems.

The ultra-wealthy who plan to live long lives, might want to consider an estate plan that gives control to someone else before they pass away. At what age should that be done and under what circumstances, are matters these families should discuss.

Reference: Forbes (Jan. 18, 2017) “Estate Planning For The Ultra-Wealthy When Living To 120 Or Beyond.”

Every year thousands of wealthy people temporarily move from their cold, northern homes to residences in warmer states. Many consider making their warmer homes their permanent residence, especially as they grow older.

Given the choice, many people would much rather live in the warm, sunny climates of states such as Florida and Arizona instead of the colder climates of northern states. However, for most people, that is not an option since they have good jobs they cannot leave in northern states.

Some of them, however, are able to maintain residences in warmer states where they can live during the winter. As they near retirement, many consider switching residences completely and making their southern home their permanent home.

This is reported by the Middletown Transcript in “MAKING CENTS: From snowbird to flamingo.”

What many people do not realize is that if they change their state of residence, then they may also need to change their estate plans.

An estate plan crafted by an expert estate planning attorney is created with your individual state of residence in mind and making sure that state laws are followed. The estate plans are designed to work for the individual states. That means they may need to be changed to reflect the laws of a new state of residence.

If you do move to Florida or Arizona, or any other state, make sure to see a local estate planning attorney so your estate plan can be changed to take advantage of your new state’s laws.

Reference: Middletown Transcript (Jan. 17, 2017) “MAKING CENTS: From snowbird to flamingo.”

Student loans are often thought to be an issue for younger people, but data suggests that they are increasingly becoming an issue for senior citizens.

In recent decades, the costs of getting a college education have skyrocketed at a rate that far surpasses the general rate of inflation. This has caused more and more students to take out student loans.

After graduation these students start their careers with large debts that sometimes are in the six figures, especially if they received post-graduate degrees. This issue has started to attract the attention of many politicians who have tried to figure out how to make college more affordable and how to make it easier for people to pay off their student loans.

Many people assume that these politicians are merely paying attention in order to attract younger generations to vote for them. However, data compiled by the Consumer Financial Protection Bureau suggests that student loan debt is also an elder law issue, according to Financial Advisor in “Student Loan Debts Plague Older Americans.”

In 2015, 2.8 million people age 60 or over had student loan debts. The majority of them took out the loans for children or grandchildren, but 27% had student loan debts from their own educations.

A total of 37% of people with student loan debt over the age of 65 were in default, which means that their Social Security payments can be reduced, their tax refunds can be taken and their wages can be garnished.

This is a particular problem for people on Social Security since the program is designed to eliminate elder poverty.

If the payments are reduced to pay back the government for student loans, then the poverty reduction benefits of the program are also reduced.

Reference: Financial Advisor (Jan. 16, 2017) “Student Loan Debts Plague Older Americans.”