Kansas and Missouri Estate Planning

Can I Still Get My Husband's Pension ... if I Murder Him?

Killing your spouse has consequences.

Do not kill your spouse.

This is sound advice.

Not just because murder is wrong, but it could exclude you from inheriting his estate!

According to a recent Bloomberg article titled “Woman Who Stabbed Husband While He Slept Can’t Get His Pension,” this was the case for a woman recently found not guilty in killing her husband by reason of insanity.

Although she was found to be insane at the time she fatally stabbed her husband—and finished him off with a baseball bat—she will receive none of his pension benefits.

But the surviving spouse is usually entitled to pension benefits according to the Employee Retirement Income Security Act (ERISA), yes?

That is correct, as a general rule.

However, U.S. Court of Appeals for the Seventh Circuit cited another law as taking precedence over this general rule in its decision in Laborer’s Pension Fund v. Miscevic.

What was this law?

The “slayer statute.”

This law basically prohibits a murderer from receiving financial benefits from his or her victim.

Most states—including Illinois where the woman lived—have adopted this rule.

Although the U.S. Supreme Court has chosen not to address this issue, the Seventh Circuit upheld the slayer statute as taking precedence.

What about the "not guilty" verdict?

Because the not guilty verdict was based on "insanity" and not because she did not committed the homicidal act, the slayer statute still applied.

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: Bloomberg (January 29, 2018) “Woman Who Stabbed Husband While He Slept Can’t Get His Pension”

Do Men or Women Need more Estate Planning?

Women may need more estate planning than men.

Everyone needs estate planning.

Gender does not matter.

However, according to a recent Marietta Daily Journal article titled “With women living longer, more financial planning may be needed,” women may have more to consider.

Why?

Women tend to earn less than men.

In 2015, women earned 83 percent of what men earned.

What does this mean?

Women often receive fewer Social Security benefits.

They have smaller pensions and save less for retirement.

These realities can translate into more women having fewer financial resources in retirement.

Women are more likely to live alone in retirement.

On average, men die younger than most women.

Sometimes there is enough for the widow to survive.

Other times there is not enough.

Even if a woman is not a widow, divorce or never marrying can have similar financial results.

How can women be set up for financial success in retirement?

Save enough money.

The amount saved for retirement should be able to cover expenses until the youngest spouse is 92 or older.

Women should be involved in financial and estate planning.

Does only one spouse make financial decisions or know how to access your money?

Stop.

Both spouses should understand the financial plan, budgeting, bill paying, insurance policies, and accounts.

If something should happen to the one spouse, the other could easily continue with everyday life.

Work on an estate plan together.

The surviving spouse should probably be the primary beneficiary of the assets.

Each spouse should know what he or she will receive and when.

Do not leave each other in the dark.

Do not make financial decisions while grieving.

Whether you lost a spouse through death or divorce, you will be emotional.

Wait to make financial decisions until you have had time to mourn.

When it comes to finances, knowledge is power.

Be sure you and your loves ones are empowered before tragedy strikes.

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: Marietta (GA) Daily Journal (August 10, 2017) “With women living longer, more financial planning may be needed”

How can I Encourage My Widowed Parent to Make a Will?

Gently, very gently.

If your father or mother has just lost a spouse, then broaching the subject of estate planning can be stressful ... for both of you.

A recent New Jersey 101.5 article, titled "How to handle a parent not having a will," notes that it is common for the recently widowed to postpone estate planning for as long as possible.

Why?

To avoid dealing with fears relating to their own passing.

They also may feel overwhelmed by the process.

Also, if your father recently passed away, then your mother may be hearing you say "You're gonna die soon, so please leave me an appropriate share."

At the same time, talk of drafting a will may bring back painful emotions linked to your father's death.

These feelings are natural, too.

Instead of "pressuring" your mother to get her "affairs in order," point out the positives of getting her estate plan squared away sooner rather than later.

For example, a will allows her to specify how her assets will be transferred at her death. This includes avoiding potential family "flash points" like clarifying bequests of family heirlooms to specific people or charitable contributions.

Bottom line, Mom, if you have no will then you have no control. Your assets will pass according to the intestate laws of the state.

But there is more bad news when there is no estate plan.

Probating an estate without a will can mean more time and money than an estate with a will.

In addition, not having a will leaves the heirs to clean up an otherwise avoidable mess while already grieving.

Proper planning allows your mother to minimize estate taxes (depending on where she lives and the size of her estate), inheritance taxes (neither Kansas nor Missouri has these), and even some income taxes depending on her circumstances.

This allows more wealth to pass to her heirs.

Parents can be quite uncomfortable talking about these issues with their children, so you might solicit the help of a close friend or other family members like an aunt or uncle to help bring up the subject.

Many families find that an experienced estate planning attorney can help facilitate the process.

Be prepared for this to take some time. It may take several discussions to get things rolling.

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?

There are two helpful resources 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: New Jersey 101.5 (April 7, 2016) "How to handle a parent not having a will"

One Final Gift to Give Your Wife

Fact of life #23: Women outlive men by about seven years on average. (I just made up the #23 part, but the rest is true.) If a husband dies without an estate plan, then he likely will leave a big old mess for his bride to clean up.

What else is new? She probably cleaned up after him throughout their marriage!

I digress.

For some pertinent pointers on this subject, we turn to a recent Forbes article, titled, “The Widow's Guide To Estate Planning And Wealth Transfer.”

As the title clearly suggest, there some fundamentals every couple should cover together and steps widows should take after their better half passes.

While you will want to click over and read the original article, here are the Cliff's Notes:

Make Sure You Have A Professionally Drafted Will. Estate planning is not a do-it-yourself project.

Consult an experienced estate planning attorney as a couple to ensure all of your affairs are in order.

Otherwise, if either a spouse passes away unexpectedly without planning, the surviving partner will be sure to have legal and financial headaches. 

Typically an estate attorney will give a couple an information packet outlining all the topics to consider and documents to bring to the initial meeting.

By the way, bring your life insurance policy and any net-worth statements that tell how different properties are titled. 

Another important part of estate planning for couples with young children?

Selecting "guardians" to rear them if orphaned.

Not only will this will be more cost effective, but it will make the meeting more meaningful.

[Save any arguments over potential guardian candidates (like whose sister is crazier) for outside the attorney's office.] 

Open Your Own Bank Account. A big surprise for widows is that joint accounts are often "frozen" when a spouse passes away.

A separate account in your own name can be used for immediate expenses.

You can also put your joint account in a living trust before the either spouse passes. That way the surviving spouse will have ongoing access to the funds.

Lean on a Friend. The complexities of estate planning make it important to rely an experienced estate planning attorney.

However, in addition to rely on an expert for legal support in the estate planning process, the original article recommends seeking emotional support from a third-party expert, such as a grief counselor or clergy.

Also, a recently bereaved individual might find it helpful to bring a friend to any estate-related meetings.

Why?

In a state of grieving, you can miss important points of discussion with your attorney. If nothing else, a friend can attend the meetings to take notes, as well as to provide emotional support.

_______________________________________________

For Men Only: Look, you have worked hard to provide for your wife and family, right? Would you be interested in spending a little time and money now with an estate planning attorney, so her "next" husband and his family do not end up with your life's work later?

I thought so.

Good news!

The time commitment on your part will take less time than a round of golf (even if you play like I do).

Now, call an experienced estate planning attorney near you and get the ball rolling.

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) and to download free tools to help you organize your estate, visit my estate planning website. 

Reference: Forbes (June 2, 2015) “The Widow's Guide To Estate Planning And Wealth Transfer”

Lincoln Lessons Learned - Pointers for Today's Widows

Losing a spouse is a major life event. No more obvious statement could be made, yes? This is especially true when the surviving spouse was not the head of household breadwinner.

Such was the case of Mary Todd Lincoln after her husband Abraham was assassinated. The world changed and so did hers. 

The story of Mrs. Lincoln in the days following that fateful evening at the Ford Theatre has, ironically, been the subject of a recent plan in that very same historic theater. The play, titled "The Widow Lincoln," chronicles the family and financial catastrophe that followed the assassination.

It was not pretty.

Expelled from the White House with children in tow and bills to pay, Mrs. Lincoln's experience provides lessons for widows everywhere, whether widowed in 1865 or 2015.

Becoming a widow often means a drastic change and a new way of life. For many, it means understanding how to manage finances by yourself and experiencing how to survive on less income, let alone with debilitating grief.  

A recent article in U.S. News & World Report, titled “Modern Money Lessons from Mary Todd Lincoln,” reports that experts recommend participating in money management throughout marriage and preparing for the possibility of one day being on your own, like many women eventually are, due to divorce or death. 

The original article urges women to know their money thoroughly, regardless of life stage.

Keep all financial paperwork, experts says, including estate planning documents, well-organized and easily accessible. 

For example, couples should be able to answer these questions long before retirement:

If my spouse were to die, how would that affect the household’s income?

What would an expensive illness do to our retirement savings?

If either spouse were to die, would the survivor be prepared to take over the management of the finances? 

Both spouses need to have a basic grasp of monthly costs, saving and investment strategies, and how to access funds quickly in an emergency. Cash is king.

Here are some practical pointers for widows from the original article:

Replace Any Lost Income. Losses sustained from a pension, Social Security, and a spouse’s salary may be rescued by the proceeds from a life insurance policy or other sources of money. Term life insurance, especially for young, healthy people, is relatively cheap. Consequently, it may make sense to purchase a 20- or 30-year policy before you reach your 40s.

I have never heard the widow of any of my clients complain about the life insurance their husbands had.

Select Your "Trusted Person." Single seniors should have an individual who’s able to make financial decisions for them in case they become incapacitated. Do you have your general durable power of attorney and even a revocable living trust inked? 

Manage Your Financial Risk. Studies show that women tend to invest more conservatively than men. While spouses tend to balance each other out, when women become widows, it can mean that they might be overly cautious in their investments. As a result, their long-term financial security may be at risk due to inflation. 

Experts also generally recommend holding off on any big moves during the first year following the death of a spouse. Why? The grieving process can interfere with good decision-making. Mrs. Lincoln could barely manage day-to-day tasks and was not even willing (or able) to leave the White House for more than a month after her husband died. 

While this story might be 150 years old, the lessons we can learn from it continue to resonate. 

Teaching point: Contact an experienced estate planning attorney and be prepared come what may.

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) and to download free tools to help you organize your estate, visit my estate planning website. 

Reference: U.S. News & World Report (February 23, 2015) “Modern Money Lessons from Mary Todd Lincoln”

Estate Planning for Singles 101

If you are single (or single again), then you are in good company. According to bean counters at the U.S. Census, more than one-third of Americans age 15 and older are single back in 1970. Drum roll, please. As of last year, some 50% of Americans are single.

That is quite a jump, yes?

Among the traditionally retired demographic, among Americans age 65 and older 53% of women and 26% of men were unmarried as of last year. Translation: Your fellow citizens include some 18 million who divorced, never married or single again (as widows or widowers).  

Since this is by and large an "estate planning" blog, you can imagine that the fact of life in American has important estate planning ramifications.

Surprise, surprise, accordingly to a recent Wall Street Journal article, titled “Estate-Planning Essentials for Single People,” single people face some unique estate-planning issues.

This is true whether they have always been single or now single again.

The original article reviewed several areas of exposure when it comes to estate planning for singles, to include:

Heirs. If you die without a will or trust, then your property may be divided up by the probate court according to the laws of your state. While that might work for some married couples who have children, it rarely works for single people.

Typically, if you're married and you die without a will or trust, your spouse inherits most if not all of your assets. On the other hand, if you're single and die intestate, your estate could get distributed in unintended ways. How so?

Generally it passes first to your children (if any), then to your parents (if either or both are living), any siblings, then more-distant relatives. Last, if no living relative can be found (commonly within six degrees of consanguinity), the state will take it!

No joke, no fun.

So you can see how important it is to at least create a will and/or a revocable living trust that states specifically how you want your assets to be distributed after you die, as well as to name an executor and/or trustee to carry this out.

Decision Makers. If you fail to designate an individual to take care of your financial and medical affairs in the event of your incapacity, your assets and care could fall into the hands of a distant relative or a stranger appointed by a judge.

So, what should you have?

Be sure to sign a general power of attorney, an advance health-care directive, and an authorization for federal HIPAA laws to empower trusted individuals to make financial and medical decisions on your behalf in the event you become incapacitated. For those without spouses or children to fill these roles, it is essential to take care of this.

Estate Taxes. Any tax liability for your estate depends on "how" you are single. If you never married or you are divorced, any of your estate in excess of the federal individual exclusion is subject to tax. If you are a recent widow or widower, your federal exclusion amount ($5.34 million for 2014 and $5.43 million for 2015) includes—not only the individual estate-tax threshold—but also may include any unused portion of your deceased spouse’s exemption amount, which is termed “portability.”

This is true even if you remarry. In either instance, however, this "portability" is not automatic and requires the filing of a Form 706 Estate Tax Return with the IRS.

While the federal estate-tax exemption has risen in recent years, 19 states plus D.C. impose estate taxes of their own and/or inheritance taxes on the heirs who receive these assets.

Just a few states follow the federal portability rules, so you might need to create a special trust to make use of two exemptions. 

If you are single or know someone who is, then these estate planning moves should be made without delay. This is not a do-it-yourself project either.

An experienced estate planning attorney can assist you with this.

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) and to download free tools to help you organize your estate, visit my estate planning website.

Reference: Wall Street Journal (December 7, 2014) “Estate-Planning Essentials for Single People”