Kansas and Missouri Estate Planning

What Estate Planning is Needed Post-Divorce?

Divorce may seem like a simple solution.

Many marriages crumble.

In addition to your dearest relationship, your financial security can disintegrate before your eyes.

According to a recent Forbes article titled “9 Things You Need To Know About Estate Planning After Divorce,” if you divorced last year, you need to update your estate plan.

Yes, you are probably tired of working with an attorney.

Divorce proceedings and mediation are no fun.

The last thing you want to do is work with an estate planning attorney.

I get that.

The truth?

It will be worse if you do not.

Your divorce decree may have stipulations regarding your responsibilities when you die.

Your attorney will be able to navigate these to create a new plan to fit your circumstances.

What are other things you need to consider?

Advance Health Care Directive.

If you had one before you will likely need to update it.

An advance health care directive appoints someone of your own selection to have authority over your health care decisions should you be unable to communicate them yourselves.

It is highly likely that you appointed your former spouse as this someone.

Chances are you do not want to leave your life in the hands of your now ex-spouse.

By the way, in our practice the advance health care directive consists of the health care treatment directive, durable power of attorney for health care decisions, and even an anatomical gift declaration.

Durable Power of Attorney (Financial).

The kissing cousin to the advance health care directive is the general durable power of attorney for financial decisions.

So, should you become incapacitated, who will continue operating your financial life from paying bills to filing tax returns to making investment decisions and more?

Unless you execute a new DPOA, that someone will continue to be your former spouse.

Your Will and Trust.

To avoid unnecessary confusion, execute a new last will and testament.

Not only could unnecessary confusion reign at your passing, why leave behind any unintended consequences regarding the fiduciaries you appoint and the inheritance you leave.

Guardianship.

Do you have minor children?

If yes, chances are your ex will be named as the guardian if you die.

Did you divorce your spouse because of his or her personal issues, maybe even physical or emotional abuse?

There is a possibility a judge would see your ex as an unfit guardian.

You can select another individual to rear your children should this be the case.

If yes, you should leave enough money in a joint bank account with your appointed guardian so she has funds to fight for custody in the courts and prove your ex is unfit to rear your children.

A trust for your minor children.

Do you want to leave an inheritance for your minor children that is protected from your ex?

You should set up a trust.

This allows you to have someone besides your ex control and manage the inheritance for your children.

Life insurance.

Oftentimes you must maintain life insurance as part of a divorce decree.

Work with your attorney to see what your responsibilities are.

Make sure you follow the requirements of the divorce decree to the letter.

Beneficiary designations.

Your 401K and IRA beneficiary designations must be consistent with your divorce decree.

Update your beneficiary designations accordingly.

Note: when it comes to ERISA retirement plans (think 401K), whoever is named as the beneficiary upon your passing will inherit that retirement plan.

That includes your ex, even if "disinherited" under state law!

See the United States Supreme Court decision of Egelhoff v. Egelhoff for more on this.

Prenuptial agreement.

Are you planning to get remarried?

Be sure to ink a prenuptial agreement to protect your assets, as well as your children from your previous marriage.

Although you may be sick of attorneys, now is the best time to update your estate plan.

Reference: Forbes (January 8, 2019) “9 Things You Need To Know About Estate Planning After Divorce”

Do I Really Need an Estate Plan?

Estate planning should be a priority.

If we are honest with ourselves, we all know that.

What are your thoughts on estate planning?

If you have not completed your own estate plan, is your excuse that you are not wealthy enough?

You are not alone.

Still, popular viewpoints are not always correct.

According to a recent Investopedia article titled “4 Reasons Estate Planning Is So Important,” ignoring this fundamental personal responsibility could have terrible consequences.

How so?

You may disinherit your heirs.

Without estate planning, you will have no say regarding where your assets ultimately pass.

What will happen?

By default, your possessions will be distributed according to the laws of your state of residence.

The process can be long and expensive.

Your children could be left without a guardian.

Do you have minor children?

If yes, you probable want to rear them in a particular way.

You will want to select a guardian for them should you and your spouse die before your children turn 18.

If you do not, you may be leaving this important decision up to the courts.

You may create a tax burden.

You want to leave your affairs as simple as possible for your heirs.

This includes planning for the tax consequences of your estate.

Your goal should be to pass along your assets efficiently and effectively to protect as much as possible from the IRS.

Your estate could be left a mess.

Without a plan to organize your estate, you may cause conflict among your loved ones.

You may incite arguments about responsibilities and wishes.

You should name agents to handle your medical and financial decisions should you become incapacitated, as well as fiduciaries to oversee the administration of your estate upon you death.

Take control now.

Work with an experienced estate planning attorney who to help you navigate the process successfully.

Reference: Investopedia (May 25, 2018) “4 Reasons Estate Planning Is So Important”

How do I Get Going on My Will?

Creating your last will and testament is important.

You have heard tragic tale after tragic tale of celebrities dying without a will.

This is costly in time, emotions, and money.

According to a recent The Minneapolis Star Tribune article titled “How to get started on making a will,” it is not only celebrities who make this mistake.

Do not fall into this category.

You should start your own estate planning now.

Work with an estate planning attorney to create a plan to meet your needs.

This should include drafting a general durable power of attorney and an advance health care directive.

If you wish, your attorney can also help you create an ethical will.

What does this do?

It helps communicate your values, priorities, and traditions to your family.

Do not be afraid to talk to your family about hard topics.

Avoiding a "failure to communicate" your wishes will benefit everyone.

Speaking of "communication," be sure to provide copies of your executed general durable power of attorney to each of your appointed agents and every financial institution where you do business.

And that advance health care directive? Provide a copy to each of your appointed agents and any physicians you see. While you are at it, discuss your health care wishes with each of them or communicate them in a "letter of instructions" you may revise and share from time to time as those wishes may change.

Finally, share the details of your estate distribution plan now to head off inheritance fights later. Better to gauge the temperature while you can still turn down the heat as needed.

Reference: Minneapolis Star Tribune (September 8, 2018) “How to get started on making a will”

Does Your Pastor have an Estate Plan?

More than half of Southern Baptist pastors do not have an estate plan.

Christians tend to look up to pastors.

People go to pastors for wisdom and advice.

Pastors are supposed to practice what they preach.

In the end, however, pastors are just as human as the rest of us when it comes to estate planning.

This news comes to us through a recent Baptist Press article titled “Young or old, many pastors lack a will, survey finds.”

Although 74 percent of pastors believe estate planning is important financial stewardship, fewer than 50 percent actually have an estate plan.

Of pastors ages 18 to 44 only 31 percent have a will and only 14 percent have health care directives or a power of attorney.

Of pastors ages 55 and older, only 54 percent have a will and only 25 percent have a heath care durable power of attorney.

Yikes!

Many of the survey respondents do not know the laws of estate planning in their states and how it will impact their families.

Although more than half understand that courts appoint guardians for minor children when there is no will, 48 percent think their families are left to distribute their estates as they see fit.

The truth?

The courts decide what happens in both instances.

This can be expensive, time-consuming, and difficult for the family left behind.

Regardless whether you are in the pulpit or in the pews, do not delay.

Work with an experienced estate planning attorney to make proper plans today.

Reference: Baptist Press (August 31, 2018) “Young or old, many pastors lack a will, survey finds”

Why is having an Estate Plan so Important?

Fewer than half of Americans have a last will and testament.

Having a will is a basic part of estate planning.

Unfortunately, most Americans have not created one.

According to a recent Chicago Tribune article titled “Don't leave a mess for your heirs,” those who have minor children do not make estate planning a priority.

Really?

Yes.

About 36 percent of these individuals have an estate plan.

Yikes!

There are many excuses people make.

“I am too busy.”

“I am not wealthy.”

“I do not know where to start.”

Do not let any of these rationalizations stop you.

An estate plan is important to protect and provide for your family.

What are some things you should include or consider including in your estate plan?

Will.

With a will, you can choose who gets what when it comes to your assets.

You may also designate an executor (also known as a "personal representative") for your estate as well as a guardian for any minor children.

Letter of Instruction.

This informal, non-binding letter provides more guidance regarding how you would like your estate distributed and minor children reared.

This can be especially important if your wishes differ from how your family typically distributes assets.

The nice thing is this letter can be updated on the fly to reflect your current thinking.

Power or Attorney.

With a power of attorney you select someone to act as your agent in financial or legal matters should you need one due to incapacity.

Advance Health Care Directive.

With an advance health care directive you can specifically designate someone to make medical decisions for you if you cannot make them yourself.

You may even give them guidance on making those decisions.

Trusts.

Trusts can help you better plan for taxes or specific family issues.

This could be either through a revocable or an irrevocable trust.

Your estate planning should not be done alone.

Work with an experienced estate planning attorney.

Do not delay.

Reference: Chicago Tribune (August 30, 2018) “Don't leave a mess for your heirs”

What do I Need to Know About Guardianship?

Guardianships are no small matter.

You value your independence.

You enjoy making your own decisions, whether it be the use of your finances or what you do on a given day.

These fundamental rights are yours alone and are safeguarded at the very core of our legal system.

What if you ever become unable to make you own decisions due to an injury or illness?

What if you become "legally" incapacitated?

Click over to a recent nj.com article titled “Worried someone may want to be your guardian? Here's what you need to know,” for a quick overview.

What are guardianships?

A guardianship is granted by a judge for minors or incapacitated adults.

Application for a guardianship must be made through the court of the county where the minor or incapacitated individual resides or holds property.

If a guardianship is found to be necessary, the judge will appoint a guardian.

Can guardianships end?

Yes.

If the minor turns 18, the guardianship no longer stands.

If the incapacitated individual regains full or partial competency, the guardianship may be limited or terminated.

The individual must apply for this limitation of guardianship with the courts.

Are there different types of guardianships?

Yes, there are.

The first is guardianship of the person.

What does this mean?

The guardian will be limited to making medical or other similar decisions for the individual and his or her property.

The second is a limited guardianship.

What does this entail?

The guardian is appointed and restricted to only certain decisions.

For example, the guardian may only be allowed to make financial decisions.

The third type is a "plenary" guardianship.

This type grants the guardian the most authority.

He or she will have the authority to address any and all issues in the life of the incapacitated individual.

What happens when a guardian is appointed specifically over the property of an incapacitated individual?

The property is often retitled to the name of the guardian for the benefit of the incapacitated individual.

What does this do?

It grants notice of the guardianship to third parties.

Can someone petition for guardianship behind your back?

Most likely no.

For example, New Jersey law requires that the incapacitated person be given notice and legal representation for the proceedings.

Are this proceedings public?

The details are not.

Why?

They often include private and sensitive information from physicians.

However, basic information like the name of the incapacitated person and the guardian should be made available to the public.

This will help creditors or others to know the legal point of contact for situations involving the incapacitated individual.

Reference: nj.com (August 24, 2018) “Worried someone may want to be your guardian? Here's what you need to know”

What Should My Estate Plan Include?

Estate planning is an important step in protecting your loved ones.

Estate planning is more than merely having a piece of paper to submit to the probate courts upon your death.

It involves strategizing, organizing, and comprehensive planning.

According to a recent Investopedia article titled “6 Estate Planning Must-Haves,” there are specific items you should include in your estate plan to best prepare for the inevitable.

What are they?

Wills and Trusts

A will is foundational to any estate plan.

It allows you to instruct the probate courts regarding who receives what from your assets.

What happens if you do not have one?

The laws of the state may determine who gets your things, if you do not have a surviving joint owner or beneficiary designated.

Trusts are another layer to asset distribution and protection.

They are often included to help reduce taxes or legal complications.

In my experience, trusts are a great way to protect the inheritance "from" heirs and protect it "for" heirs when prudent.

After all an inheritance should be a blessing and not a curse.

In any event, neither your will nor your trust should be a DIY project.

Rather, you should work with an experienced attorney to ensure that the legal language actually aligns with your wishes.

Durable Power Of Attorney

A durable power of attorney addresses the issue of what happens should you become incapacitated and unable to handle your own affairs.

Using a durable power of attorney, you can choose an agent to act on your behalf.

The power of attorney can be revoked at a specific time set by you or at any time you choose.

When might it be revoked?

This could be only when you, the principal, have been deemed physically or mentally able to act on your own behalf.

This is known as a "springing" power of attorney. I really do not prefer this approach.

I mean, if you trust someone to act when you do not know what is going on, then why not trust them now?

Beneficiary Designations

Not all assets pass through probate.

Some assets are distributed directly through beneficiary designations.

What are examples?

These assets include retirement accounts, insurance policies, and certain bank accounts.

Be sure these are up-to-date.

For example, the last thing anyone wants is for their ex-spouse to receive all of your money.

Letter of Intent

A letter of intent can cover a number of subjects.

It is not a legal document, but it can help provide more specific guidance as to your specific wishes for certain assets or your funeral arrangements.

Healthcare Power of Attorney

A healthcare power of attorney allows you to select an individual to make your health care decisions should you become incapacitated.

This is an important and stressful role.

Be sure you inform the person in advance and make them aware of your views concerning specific medical treatment.

You should also select a second option should the first refuse or be unable to carry out the responsibilities.

Guardianship Designations

Do you have minor children?

If yes, this is vital.

You should select a guardian with similar values to rear your child.

Discuss your decision with the desired party and get their approval.

You should also select backup guardians.

If you fail to appoint a guardian, then the court will decide who rear your child.

This could be someone you would have avoided at all costs, like crazy Uncle Eddie!

It also may mean your child could become a ward of the state.

Neither is ideal.

As you can see, estate planning is more complicated that DIY estate planning websites would suggest.

Work with an experienced estate planning attorney to create a plan to meet your specific situation and goals.

So, how do you find an "experienced" estate planning attorney?

First, ask around. Friends, family and other professional advisors are trustworthy sources.

Second, conduct an "organic" search on "Google" for "estate planning" near you (e.g., "Estate Planning Anytown MoKan").

Third, either way, verify! Check out the education, experience, ratings and client reviews of any attorney before you contact him or her.

How?

Two helpful online resources are just a mouse click away to assist with your due diligence:  Avvo.com and Lawyers.com.

Check any Avvo ratings, client ratings/testimonials and attorney endorsements on Avvo.com and any "peer ratings" by judges/other attorneys and any client ratings/testimonials on Lawyers.com.

In fact, I use both of these services to thoroughly vett attorneys before referring members of our "client" family for legal help in other areas of law or for matters in jurisdictions outside Kansas or Missouri.

Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: Investopedia (April 18, 2018) “6 Estate Planning Must-Haves”

What Elder Abuse Laws did Congress Recently Pass?

The federal government is becoming more involved in the elder law fight.

As Baby Boomers age, elder abuse is expected to increase.

Investigating and prosecuting these crimes will become a priority.

According to a recent creators.com article titled “Congress Steps Up to Control Court-Ordered Guardianships,” the federal government is taking steps to do this.

How?

Congress passed the Elder Abuse Prevention and Prosecution Act.

What will this do?

It will give the federal government authority to prosecute and investigate conservators and court appointed guardians who victimize the elderly.

Why is this important?

Some court appointed guardians exploit those seniors placed under they care.

They have opportunity as they are given much power in the affairs of such seniors.

This includes finances, funeral arrangements, and medical matters.

The Americans Against Abusive Probate Guardianship advocacy group is pleased with the action.

What exactly will this bill do?

If the President signs the bill into law, one assistant U.S. attorney in each federal district will be assigned to lead investigations into reports of abuse.

These individuals can enlist the assistance of special federally trained FBI agents.

The Department of Justice will be mandated to set up a system for information sharing between federal prosecutors.

Attorney General Sessions would also have to designate a Depart of Justice elder justice czar to oversee these investigations.

The legislation is not perfect.

There has not yet been a means established for monitoring and registering complaints against guardians.

Even without this, it is a big step for Elder Abuse legislation. 

Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: creators.com (October 7, 2017) “Congress Steps Up to Control Court-Ordered Guardianships”

What are the Primary Benefits of Estate Planning?

Estate planning is not simply for tax minimization.

This is especially the case with the Federal Estate Tax Exemption at $5.49 million per customer.

Nevertheless, do you think estate planning is only for those who are incredibly wealthy?

Think again.

According to a recent Trust Advisor article titled “Why An Estate Plan Is Beneficial,” estate planning is for everyone.

You worked hard for your money and your assets.

You do not want to lose any of it through improper planning.

Although charitable and financial planning are great estate planning goals, they are not the only ones.

How else can estate planning help you?

Incapacity healthcare planning.

By definition, you are unable to make decisions when you are incapacitated.

Does this mean you have no say?

Not if you have an estate plan.

With an advance health care directive (ours contains three components: a health care directive, durable power of attorney for health care decisions and anatomical gift declaration), you can state your wishes in advance and know they will be carried out when necessary.

Asset distribution.

Without a last will and testament, revocable living trust or beneficiary designations, you may have no say over who gets what when it comes to your worldly assets.

The state will decide for you based on its own intestate laws.

Having your estate planning legal documents ship-shape will can save your loved ones time and money while transferring what you have to the proper people.

Naming guardians.

Do you have minor children?

If you die, who will care for them?

Will they be reared with the same values you would instill?

Will they be reared by someone who knows you or by a complete stranger?

In most states, guardians for children are designated in a last will and testament.

Be sure to discuss this designation with the chosen guardians as well.

Selecting Beneficiaries.

Many of your assets are probably in the form of retirement accounts or insurance policies.

These are not necessarily transferred via a last will and testament or in a revocable living trust.

Instead, beneficiaries are designated directly in the accounts.

What does this mean for you?

Review and update often.

If you have a divorce, marriage, death or birth in your family, your wishes may change.

Be sure the correct people receive these assets—whether it be a loved one or a charity.

Whatever you do.

Do not do it alone.

Working with an experienced estate planning attorney will give you the best results for your specific needs.

So, how do you find an "experienced" estate planning attorney?

First, ask around. Friends, family and other professional advisors are trustworthy sources.

Second, conduct an "organic" search on "Google" for "estate planning" near you (e.g., "Estate Planning Anytown MoKan").

Third, either way, verify! Check out the education, experience, ratings and client reviews of any attorney before you contact him or her.

How?

Two helpful online resources are just a mouse click away to assist with your due diligence:  Avvo.com and Lawyers.com.

Check any Avvo ratings, client ratings/testimonials and attorney endorsements on Avvo.com and any "peer ratings" by judges/other attorneys and any client ratings/testimonials on Lawyers.com.

In fact, I use both of these services to thoroughly vett attorneys before referring members of our "client" family for legal help in other areas of law or for matters in jurisdictions outside Kansas or Missouri.

Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: Trust Advisor (April 29, 2017) “Why An Estate Plan Is Beneficial”

What Misconceptions do Most People have about Estate Planning?

Age and money are the basis of the two greatest estate planning lies.

Great question.

Unfortunately, there are many falsehoods floating around regarding estate planning.

All of them are detrimental.

According to an article in the Pauls Valley Daily Democrat titled “More on estate planning myths,” two misunderstandings are particularly common.

What are they?

Only older people need a will.

Wrong.

Do you have children?

Naming a guardian in your will allows you, not a judge, to select who will rear them in the event both you and your spouse die.

You know better than anyone who would love and care for your children according to your wishes.

Do not make the court decide by default.

I have too few assets for a will.

Also, false.

Even if you do not have much money, you probably have items of sentimental value.

Giving these to specific people can be done and explained in a will.

Do you only need a will to transfer assets?

No.

An estate planning attorney can help you plan the use of Transfer on Death deeds, Payable on Death transfers or other probate-avoiding transfer method as part of your estate planning.

Every situation is different.

The best way to find out what you need?

Work with an experienced estate planning attorney.

This will even reduce the potential for conflict after your passing.

Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: Pauls Valley Daily Democrat (March 1, 2017) “More on estate planning myths”