Kansas and Missouri Estate Planning

What are Some Advantages of a Revocable Living Trust?

Trusts can help solve a number of estate planning issues.

Perhaps the first thing you think of when you hear the word "trust" is a “trust fund baby.”

You imagine trusts as preserving wealth so future generations do not have to work.

You simply cannot see how a trust could possibly benefit you.

According to a recent Forbes article titled “Revocable Trusts: The Swiss Army Knife Of Financial Planning,” trusts serve greater purposes than merely protecting massive amounts of wealth for children of the leisure class.

In fact, a trust may be a viable option for you.

Yes, you.

You may want to consider creating a revocable living (inter vivos) trust.

What is it?

It is a trust where you create the trust and "fund" it as the "grantor," manage it yourself as the "trustee," and enjoy the assets funding the trust as the "beneficiary."

In short, you retain management and enjoyment rights to the trust assets without restriction.

You can also choose to revoke or modify the trust at any time to better meet your estate planning goals.

How do you create a revocable living trust?

You should work with an experienced estate planning attorney.

He or she will create the trust and guide you when it comes to funding (i.e., retitling asset directly in the trust name or designating the trust as a beneficiary) the trust.

What are benefits to a revocable living trust?

It can help manage assets held in the trust while you are live, whether you are healthy or incapacitated.

You could use either an investment manager or a trust company to manage the trust for you, if you do not want to manage them yourself.

If you were to become incapacitated, you can arrange to have a trusted individual or institution step in as trustee to represent your needs as beneficiary.

Once you recover, your duties would be restored to you.

Without these protections in place, someone may have to petition for "guardianship" to handle your financial decisions and manage your assets.

A guardianship is a time consuming and public proceeding.

A final benefit of a revocable living trust is that your assets will be administered and distributed for your loved ones through the trust rather than through probate.

Ask your experienced estate planning attorney about whether a trust might benefit your estate plan.

When you do this, be sure to address the other components of your comprehensive estate plan, to include a general durable power of attorney, advance health care directives, and a last will and testament.

Thoughtful and strategic estate planning will provide peace of mind to you and your loves ones.

Reference: Forbes (February 20, 2019) “Revocable Trusts: The Swiss Army Knife Of Financial Planning”

What is a "Bare Bones" Estate Plan?

Basic estate planning requires three points of planning.

You think you are fine without an estate plan.

You are healthy.

You are young.

You do not need to prepare one until you are older.

According to a recent Motley Fool article titled “3 Must-Have Estate Planning Documents To Get Done This Year,” you cannot predict when you will need an estate plan.

Because you do not know the future, you need to prepare for it now.

How?

Create a will.

Your will goes into effect when you die.

Through a will you provide instructions regarding how you would like your estate divided, whether this be to family or charity.

If you have minor children, this is where you will designate a legal guardian to care for them should you and your spouse both pass away.

Without a will, these decisions will be up to the courts according to the laws of your state.

With a will, time and money will be saved in the probate proceedings by having our own plan and not relying on the state default plan.

An executor you nominate and trust will handle your estate under the supervision and protection of a judge.

Set up health care treatment directives.

Some estate planning is beneficial while you are alive.

This is where health care directives come into play.

What do these do?

They provide a legal record of your instructions for medical treatments should you be unable to communicate them yourself.

If you are placed on life support, this keeps your loved ones from having to make difficult decisions during hard times.

Name acting agents through powers of attorney.

Through powers of attorney, you can provide trusted individuals with the authority to handle your personal, health care, and financial/legal matters on your behalf should you become incapacitated.

Although loved ones may be able to obtain such permissions after the fact through the default probate process, it will cost precious time and money.

Do not leave your loved ones in a vulnerable estate.

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

Reference: Motley Fool (February 18, 2019) “3 Must-Have Estate Planning Documents To Get Done This Year”

How can I Botch My Estate Plan (without Really Trying)?

Negligence in estate planning is problematic.

Estate planning may seem like a vague concept.

Many people believe merely giving thought to your estate is sufficient for estate planning.

They have an idea of who should get what.

It is simple.

According to a recent Investopedia article titled “5 Ways to Mess Up Estate Planning,” this kind of thinking will get you in trouble.

The truth is estate planning needs to be intentional and thorough.

There are many ways to leave a mess for your loved ones.

What are they?

Neglecting to update beneficiary designations.

Not all assets pass through a will.

Do you have IRAs, 401(k)s, or life insurance policies?

Most of these assets pass directly to beneficiaries through designations within the account.

You will want to review these after life changes such as marriage, remarriage, divorce, births, or deaths in the family.

The last thing you want is an ex-spouse to receive your money.

Overlooking important legal documents.

Let us say you created a revocable living trust.

You figured this would be a good idea to keep major assets out of probate.

Surely you do not need a will.

False.

You may still need a will as it does more than instruct probate courts how to distribute assets.

For example, a will is the primary tool used to name guardians for minor children and to "fund" the trust with assets subject to probate.

Poor record-keeping.

Are you a messy person?

If yes, you should take steps now to organize your assets.

When you have done so, leave a letter of instruction for your executor.

This will help him know what he needs to do to gain access to accounts.

Breakdown in communication.

If your loved ones expect one thing and you do another, it can cause pain and confusion.

Do not leave them with these wounds.

Take the time to create a letter explaining your intentions and your reasons.

Not planning.

The worst thing you can do is to not create a plan.

Even if you do desire to do so in the future, you do not know when you will die.

Take action now.

This will save time, unnecessary grief, and money in the settlement of your estate.

Work with an experienced estate planning attorney to walk you through the creation of a plan to meet your needs and the needs of your family.

Reference: Investopedia (September 30, 2018) “5 Ways to Mess Up Estate Planning”

What Should I Know About Online Wills?

All wills are not created equal.

Most people do not think estate planning is important.

Seems like a bold statement, yes?

Unfortunately, it is backed up by numbers.

A recent Caring.com survey showed 50 percent of Americans did not have at least a last will and testament.

Can you just prepare a free online and call it good?

According to a recent U.S. News & World Report article approriately titled “Should You Make a Free Will Online?,” estate planning is often more complex than a free online resource leads you to believe.

Yes, you have several options.

You can do your own estate plan.

You can use a do-it-yourself program.

You can also work with an experienced estate planning attorney.

Not all are DIY estate plans are as simple as they seem.

There are pitfalls to drafting your own will.

The truth is probate, tax, and property laws all need to be addressed.

You need to understand how each of these applies to your unique circumstances both in your own state and at the federal level.

Successful do-it-yourself wills demand that you have a very basic estate with very little to pass on when you die.

Think young single male with no wife, no children, a truck, a dog, and his first real job.

An online service is essentially the same, but with software to help walk you through the process.

Not all software companies are state-specific when it comes to the applicable laws for your state.

This fact alone can make DIY estate planning incredibly dangerous.

While you think you have addressed everything in your estate plan, it could be ineffective when needed.

Working with an experienced estate planning attorney is your best option.

In fact, if you have complex investments, property in multiple states, or a blended family, you should not even consider taking on your estate plan by yourself.

Why?

Although paying an experienced estate planning attorney may seem wasteful when compared to free software, you will be saving money in the long term.

He or she brings understanding of relevant state and federal laws to your specific situation.

This alone helps ensure that your plan will meet your needs and the legal requirements to protect everyone you love and everything you have.

After all, that is what estate planning peace of mind is all about.

Reference: U.S. News & World Report (January 9, 2019) “Should You Make a Free Will Online?”

What can I do to Make My Estate Pass Smoothly?

Probate does not have to be a nightmare.

After you die, you will not be facing the settling of your estate.

But your loved ones will!

To make matters worse, they will already be grieving your loss.

Consequently, do not give them more stress by leaving your estate a mess.

According to a recent Tupelo (MS) Daily Journal article titled “A simple way to simplify estate planning," properly utilizing your beneficiary designations will help make probate simpler.

What is the purpose of a beneficiary designation?

It allows a given asset to pass directly to the named beneficiary rather than being include in a potentially long probate proceeding.

What assets typically have a designated beneficiary?

These include IRAs, 401ks, annuities, life insurance policies, pay-on-death accounts, transfer-on-death accounts, stock options, and executive deferred compensation plans.

In fact, in Kansas and Missouri, you can designate nearly everything to pass by some form of beneficiary designation with the exception of tangible personal property like furniture, jewelry, and firearms. 

How do you make your beneficiary designations work for you?

Name beneficiaries.

If an asset permits a beneficiary designation as an option, use it.

What happens if you do not?

The assets may be caught up in probate.

The result?

It could cost you in more legal fees, and delays.

Name contingent beneficiaries.

There is always a possibility for your primary beneficiary may die before or when you do.

What should you do?

You should name a contingent beneficiary.

This could be another family member or even a charity.

By naming a contingent, you will still have a say as to where the funds end up.

Update your designations.

Life happens and things change.

Be sure to review and update your beneficiary designations.

Any time there’s a birth, adoption, death, marriage or divorce, you should review your accounts and polices.

Read the instructions.

Do not sign blindly.

Each form may have different rules and guidelines.

Align the designations with your will and trusts.

What happens if you do not?

The probate proceeding could be delayed and assets may not end up where you intended.

Work with an experienced estate planning attorney.

Estate planning law is complex.

For example, do not name a trust as a beneficiary without speaking to your estate planning attorney.

It could have negative tax consequences.

Understand the tax consequences.

Why?

Not all assets have the same tax consequences or benefits.

Remember, a will or trust does not overrule a beneficiary designation on a given asset.

Beneficiary designations are great unless they are mishandled.

They deserve your full attention.

Reference: Tupelo Daily Journal (November 2, 2018) “A simple way to simplify estate planning”

What was in the "Last Will and Testament" of Artetha Franklin?

Franklin may have neglected her estate planning.

Aretha Franklin was a gifted artist.

Her music was masterful.

Unfortunately, her estate planning may have been less so.

According to a recent CBS.com article titled “Report: Aretha Franklin left no will,” Franklin may have left no last will and testament regarding her estate.

Her sons and her attorney recently filed a document with the Oakland County Probate Court in Michigan.

That court filing noted the absence of a will for the estate.

Her four sons have formally declared themselves as interested parties in the estate of their mother.

Why did Franklin fail to create a will?

The answer remains a mystery.

Her entertainment lawyer had advised her to create a trust to help expedite the process and keep her affairs private.

She did nothing.

Now she has died intestate.

So, what now?

The Franklin estate will be divided according to the laws of the state and all information will be available to the public.

Who will likely get her money?

In Michigan, the assets of an unmarried individual will be divided equally among the children.

Creditors will be able to bring claims against the estate.

Dying intestate is not ideal.

Do not procrastinate.

Work with an experienced estate planning attorney to create a will.

Reference: CBS.com (August 22, 2018) “Report: Aretha Franklin left no will”

Has the Glen Campbell Estate Cleared Probate?

The Campbell estate still has a few details to sort out.

Serving as an administrator for an estate is no simple task.

Especially when your powers have been limited by the court.

According to a recent article in The Tennessean article titled “Glen Campbell estate 'paralyzed' as will contest looms, lawyers say,” this is exactly what happened with the Glen Campbell estate.

Stanley B. Schneider is the attorney serving as the administrator for the estate.

He claims his duties were limited to making mandatory payments and receiving money to be paid to the estate.

Stanley is seeking more authority to accurately estimate the value of the Campbell estate.

The estimate he derived came to about $410,000.

The earlier estimates were roughly $50 million.

I would say that is a bit of a discrepancy, yes?

Schneider is seeking authority to obtain a full valuation, including future royalties.

Schneider was appointed by the court because three of the Campbell children contested the will.

Campbell had made his wife the executor and a beneficiary with five of his children.

Until the court makes a decision on the will contest, the estate will be stuck in probate.

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: The Tennessean (July 2, 2018) “Glen Campbell estate 'paralyzed' as will contest looms, lawyers say”

Why is "Joint Tenancy" Legal Dynamite?

Holding title to assets as joint tenants with rights of survivorship is not a panacea.

Do you have a business partner or a spouse?

Are you trying to determine the best way to divide asset ownership?

Are you considering holding the asset as joint tenants with rights of survivorship?

If so, each of you will own such property equally and the survivor will inherit when the other owner dies.

According to a recent Investopedia article titled “The Benefits And Pitfalls Of Joint Tenancy,” this strategy does have its advantages, but it also has some disadvantages.

What are they?

ADVANTAGES

Probate avoidance.

When you die, the probate court will review your will.

If the will is valid, the court will then instruct debts to be paid.

Any remaining amount is disbursed to beneficiaries per your wishes outlined in the will.

With no will, the court will divide your assets according to the laws of the state.

These proceedings can take anywhere from a few weeks to a few years.

With joint tenancy, the survivor will inherit without having the asset pass through any probate proceedings.

Equal Responsibility.

Two people are responsible for the asset.

Any liabilities or benefits are shared.

Continuity.

The asset will not be left in limbo after the death of one partner.

If the surviving spouse or owner has expenses or debts to be paid, he or she can use the funds immediately.

DISADVANTAGES

Deteriorating Relations.

Sharing control can be tricky and a risky business.

It means a consensus much be reached to do anything with the asset.

One party cannot act without the approval of the other.

This can create gridlock.

Frozen Bank Accounts.

The court is still allowed to freeze the account.

If the decedent was in heavy debt, the court may require liabilities to be paid from this account.

The court may also investigate whether the account received contributions from a single or individual party.

The money may not be accessed while the court determines what actions to take.

Partner Asset Control.

When the first spouse or partner dies, he or she has no control over what happens next.

The survivor can sell it or give it to someone else.

If this is a business relationship, you may effectively cut your own family out of receiving benefits from your business.

Are there other options besides joint tenancy?

Yes.

One alternative is tenancy in common.

What is this?

The asset is divided between the two parties.

One can take action with his or her portion without the approval of the other party.

The asset will not pass to the joint owner.

Instead, it will be passed to heirs through a will.

The surviving partner will be able to access or sell his or her half while the estate of the decedent is in probate.

If the disadvantages of joint tenancy seem to outweigh the benefits, you may want to consider tenancy in common.

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 (March 20, 2018) “The Benefits And Pitfalls Of Joint Tenancy”

So, Why do I Need an Estate Plan?

Estate planning is key to avoiding a big legal and financial mess for your family after you pass.

Estate planning.

It does not sound like fun.

But it is important.

According to a recent Wealth Advisor article titled “The 3 Reasons Why People Do Estate Planning,” the majority of Americans do not make this a priority.

Bad idea.

At the very least, you will need a last will and testament to help direct the distribution of your assets.

You should work with an experienced estate planning attorney.

Why?

Reduce taxes

If your assets exceed a certain amount (i.e., $11.18 million), you may have to pay a federal estate tax.

There may be separate estate taxes and even inheritance taxers for your state.

Fortunately, for Kansas and Missouri residents this is not the case.

A plan to reduce these taxes will look different from one state to the other.

You will want to work with an experienced attorney who can walk you through the laws of your state and the options you have to reduce fees or taxes.

Asset protection

If you are considering Medicaid to help pay for future nursing home expenses, you should know there is an asset spend down requirement.

By planning early, you may be able to protect your assets or avoid the need to apply for Medicaid.

An elder law attorney is the right go-to professional when it comes to any Medicaid matters.

Control your estate

Do you know how you want your estate to be managed and divided?

You will need a valid estate plan to accomplish your wishes.

If you do not, your estate may be distributed according to the laws of the state where you died a resident.

Not having a plan in place will also create more headaches for your family.

Do not do this.

Instead, work with an experienced estate planning attorney to create a plan to meet your specific 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: Wealth Advisor (May 29, 2018) “The 3 Reasons Why People Do Estate Planning”

What is the Latest on the Legal Fight Over the Body and Estate of Charles Manson?

Manson is still causing legal issues after his death.

Charles Manson.

Yep, that guy.

The man terrorized and terrified citizens of Los Angeles in the 1960s.

He left innocent bodies in his wake.

Now two people want his body.

According to a recent The Los Angeles Times article titled “Bizarre legal battle over Charles Manson's body and estate begins in L.A. court,” a pen pal and the grandson of Manson both submitted claims to the body and property of Charles Manson.

The grandson Jason Freeman is making claims based on relationship.

He wants to cremate his grandfather and spread the remains in an undisclosed location to deter morbid tourists.

Michael Channing, who was a pen pal to Charles Manson for 30 years, claims he has a will created by Manson 15 years ago.

Both must submit the reasons and documents for their claims, as well as preference regarding the county where the case should be decided.

Why?

The state says probate decisions are made in the county where an individual lived when he or she passed away.

The issue?

Before he was arrested, Manson lived in Los Angeles County.

When was imprisoned and died, he lived in Kings County.

The Kern County attorneys want a quick decision.

The reason?

They have been keeping the body of Manson on ice since his death in November.

Literally.

The next hearing on the matter has been set for March 7.

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: Los Angeles Times (January 8, 2018) “Bizarre legal battle over Charles Manson's body and estate begins in L.A. court”