Assessing tax options can determine the best way to conduct business or personal transactions and inheritance to reduce or eliminate tax liability. Tax avoidance differs from tax evasion, which reduces tax liability through concealment or deceit. Tax evasion is a crime, but tax avoidance can lower your tax bill by structuring transactions to save the most money.

Minimizing Your Heirs’ Tax Burden

Inherited assets often come with tax burdens, and planning ahead can simplify some of the processes and lower taxes for your heirs. Depending on the state of the deceased’s estate, inheritance taxes will differ. As laws and regulations change regarding inheritable assets, your estate planning attorney can conduct a routine review of your plan to ensure transferring wealth is tax-efficient.

Gifting Your Money And Assets

The most direct way to minimize inheritance tax is to start gifting your heirs money each year while you’re still alive. Taking advantage of the gift tax exclusion of $17,000 per year per person is a quick way to transfer non-taxable cash or assets to heirs. A married couple can gift $34,000 yearly to each child or other inheritor without tax consequences to the gifter or the recipient.

Life Insurance

A solid insurance plan can also set up future inheritors without tax consequences. Choosing between whole life and term life insurance will determine how long the policy will last. A term or whole life insurance policy generally provides the beneficiary a death benefit not subject to income taxes unless they receive payouts in installments.

Irrevocable Life Insurance Trusts

An irrevocable life insurance trust (ILIT) can control whole or term life insurance policies while the owner is alive. Transferring your policy to the trust or using the trust for purchase means you own your insurance policy as the trust grantor. You can determine who administers assets, designate beneficiaries, and the terms of receiving benefits. Your estate planning attorney helps you set up the trust and properly fund it.

An ILIT removes the life insurance policy from your gross estate, which minimizes or eliminates estate tax liabilities on assets not qualified as marital or charitable deductions. The policy provides immediate liquidity to the decedent’s estate and beneficiaries upon the insured’s death.

Death Benefit Annuities

An annuity with a death benefit pays a lump sum to a beneficiary. There are also joint-and-survivor annuities that provide a guaranteed income stream to the beneficiary for life. While annuities are subject to tax, they can be structured to minimize the tax burden to the beneficiary.

Retirement Accounts Converted to Roth Accounts

Heirs will pay tax on any inherited retirement benefits if they are in a 401(k) or Individual Retirement Account (IRA). However, taxes on a Roth 401(k) or Roth IRA are already settled upon conversion, so there is no additional tax on distributions. While this is great for inheritors, when the owner converts a standard 401(k) or IRA to Roth, there will be regular income tax consequences for the conversion to occur.

Real Estate

Real estate is one of the most significant non-liquid assets to pass on to heirs. Capital gains tax will apply to real estate, and the recent IRS Revenue Ruling 2023-02 removes the step up in basis even if the real estate is in an irrevocable grantor trust.

However, this new ruling doesn’t apply if the irrevocable trust is in the grantor’s gross estate. The rules and applications are complex and will require the review of an estate planning attorney to decipher.

If the property is not in an irrevocable trust, there are three other options to pursue:

1. Sell it – If you plan on downsizing or putting your home’s equity to use elsewhere, selling the home to an heir might be a good option. It removes the property from your taxable estate, establishing a new cost basis. The property’s future sale has a cost basis tied to the home’s value on the date of transfer, lowering capital gains tax. Do not, however, sell the property below fair market value, or the difference may be subject to gift tax.
2. Gift it – While a generous gift, providing a home to an heir during your lifetime might have negative tax consequences. This gift will count toward your lifetime gift tax exemption which may not be a problem now, but in 2026, the exemption will be cut in half as adjusted for inflation. Depending on your estate’s size, it may result in up to 40 percent federal estate tax. State-level gift, estate, and inheritance taxes may also be a factor depending on where you live.
3. Pass it Down – Depending on how many heirs you have and their ability to maintain a property, you can leave your home in your will, a living trust, or in some states, a transfer-on-death deed. Again, these methods may no longer receive a step-up in cost basis and should be discussed at length with your estate planning attorney before making a decision.

Stock Investment Accounts

Unlike other gifted securities, inherited stocks don’t maintain their original cost basis. Upon inheriting a stock, the inheritor receives a step-up in cost basis determined by the stock’s value at the date of death. If you have held dividend-producing stocks for a significant time, the cost basis may make selling financially unproductive. However, an inheritor with a step-up in cost basis can immediately sell the stock to create cash flow without tax consequences.

Capital gain tax methods are a highly-contentious topic in the ongoing debate of inheritance and taxes. Often regulations may change without Congress enacting a law, as in the case of IRS Revenue Ruling 2023-02. To ensure your strategy is in tax compliance and advantageous to inheritors, review your estate plan routinely to account for any legal changes.

Estate Planning Attorneys and Tax Planning

Your estate planning attorney can help you legally minimize tax liabilities to your heirs by gifting assets during your lifetime, establishing trusts, and leveraging exemptions. Tax-advantaged accounts, capital gains tax planning, and other tax-efficient investments like life insurance can minimize taxes to your heirs.

Further, you can use family and charitable trusts or philanthropic foundations to receive tax benefits. There are many creative ways that your estate planning attorney can legally help to minimize taxes to your heirs. Estate planning guidance is key in creating wealth transfer management and tax strategies. Your attorney can provide personalized advice based on current tax laws and regulations and work with your tax advisor to create the best outcome for your heirs.

We hope you found this article helpful. Contact our office at (740) 947-7277 and schedule a free consultation to discuss your legal matters. We look forward to the opportunity to work with you.

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Types of Trusts

There are many types of trusts, but they all establish a financial arrangement between three parties: the trustor(s), the trustee(s), and the beneficiary(ies). The person creating the trust is known as the trustor, grantor, or trustmaker. Trusts can be created by more than one person or entity. The trustee manages the trust and disperses income or principal from the trust according to specific terms. The trust is for the benefit of one or more beneficiaries, which can be people or entities, such as charities.

Benefits of Trusts

Trusts provide many benefits. One of the key benefits is transferring assets from the owner to the trust fund, so assets do not have to go through a probate court before reaching the beneficiary. This allows the beneficiary to receive the assets faster and privately. Probate proceedings can last for months, unnecessarily delaying the dispersal of assets. Since court records can be viewed by the public, assets become public knowledge.

A person can establish a trust that they benefit from during their lifetime. Trusts can also be used to hold and disperse assets to beneficiaries who are minors, disabled, or otherwise unable to manage the assets. Some trusts are used to remove countable assets from a person who is planning to apply for Medicaid benefits. Assets intended for heirs may prevent them from qualifying for Medicaid coverage. Trusts created for this purpose are usually established at least five years before the trustor plans to apply for Medicaid.

Since estate taxes and gift taxes can eat into the number of assets a beneficiary receives, trusts provide a way to avoid or lessen these taxes. Trusts can protect assets from creditors, legal claims, and family disputes regarding how your assets should be dispersed. You may have additional reasons to create a trust for your assets.

Types of Trusts

The most common types of trusts are living, testamentary, revocable, and irrevocable. They can be funded during or after the trustor’s life, depending on the purpose of the trust. These common trusts are described as follows:

Living Trust

A living trust is set up while the trustor is still alive. The assets that are held in the living trust are available to the trustor during their lifetime. This type of trust is helpful if the trustor wants to have access to the assets but wants to give clear direction on how they will be distributed after death.

Testamentary Trust

A testamentary trust is often created by an executor of a deceased estate and is set up to benefit the trustor’s descendants. This type of trust is irrevocable and cannot be changed once it created.

Revocable Trust

Similar to a living trust, a revocable trust is created while the trustor is still alive and wishes to continue to benefit from the assets that the trust will hold. Often the trustor, trustee, and beneficiary are the same person while that person is still alive. After the trustor dies, a successor trustee assumes management of the trust for the benefit of the beneficiaries designated in the trust. The trustor can change or terminate a revocable trust while they are still alive.

Irrevocable Trust

An irrevocable trust cannot be changed or terminated during the trustor’s lifetime. Since the assets held in an irrevocable trust are off limits to the trustor, this type of trust helps protect assets from creditors and taxes. It is often used when planning for Medicaid or government benefits. It may also be used to limit access to minors and adults with special needs to distribute funds at specific times or over their lifespan.

Trusts help individuals and businesses protect and direct their assets to beneficiaries while keeping those assets out of probate court. An experienced estate planning attorney can help you create the trust, or trusts, that will best suit your family’s needs and financial goals.

This article offers a summary of aspects of estate planning law. It is not legal advice, and it does not create an attorney-client relationship. For legal advice, you should contact an estate planning attorney.

We hope you found this article helpful. Contact our office at (740) 947-7277 and schedule a free consultation to discuss your legal matters. We look forward to the opportunity to work with you.

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Estate Planning

The main goal of estate planning is to choose legal documents that will determine what will happen to you and your assets once you have passed away or become incapacitated. An estate planning attorney will help you make important decisions, such as:

• Who makes medical and financial decisions if you are unable
• Who is allowed access to your medical records
• How assets are distributed after you are gone
• Who cares for minor children if you become incapacitated or die
• Who manages money for your minor children if you are no longer able
• How to handle your funeral arrangements and burial

Durable Powers of Attorney

By using a general durable power of attorney document, you can name a person, or persons, to make financial decisions on your behalf if you are no longer able to do so. Expressing your end-of-life wishes requires designating a person to make healthcare decisions for you by completing a healthcare directive. By completing a Health Insurance Portability and Accountability Act (HIPAA) form, you will give your healthcare providers permission to share your medical records with the people listed on your HIPAA form.

Wills and Trusts

In your will, you can name the beneficiaries of your estate as well as a guardian to care for any minor children you may have at the time of your death. You can also name a conservator to manage the money you leave for their benefit. Some people create a trust, or trusts, to hold their assets during their lifetime and after death. They then sign a pour-over will that moves assets into their trust(s) upon death. You can leave instructions concerning your funeral or memorial service and what you want to happen to your remains in your will or a separate document.

Elder Law

Whereas estate planning focuses mostly on what happens after a person dies, the area of elder law focuses on a person’s last years or months. This can include planning for long-term care and applying for government assistance, such as Medicaid, Medicare, and veterans’ benefits, if applicable. Using elder law tools and strategies, an elder law attorney can help you find ways to preserve your assets while preparing to apply for benefits.

Like estate planning, it is best to start the elder law planning process well in advance. To qualify for benefits, such as Medicaid, you may have to sell or transfer ownership of some assets years before applying for benefits. Gifting or transferring assets out of your name must be done according to government requirements, so applying for benefits can be a complicated process. Hiring a skilled attorney can make the difference between receiving benefits quickly or not at all.

Since seniors are at a greater risk for discrimination, neglect, and abuse, elder law attorneys can help seniors and their family members recognize when a senior’s rights are being violated and take legal action to counter and remedy the situation.

Tying Estate Planning and Elder Law Together

It is best to start your estate planning process as soon as possible since the decisions involved could come at any time due to an accident or an illness. Planning for end-of-life care and the benefits associated with it may come later in life, but preparing well in advance lets you legally reduce assets for an extended period to qualify for benefits, like Medicaid.

Even younger families just starting their estate planning process may look at elder law planning at the same time for senior family members’ needs. Some estate planning tools, such as trusts, are often used when helping a parent plan for Medicaid and other government benefits for long-term care expenses. An attorney experienced in both estate planning and elder law can advise you in these areas and help you navigate complicated processes.

This article offers a summary of aspects of estate planning law. It is not legal advice and does not create an attorney-client relationship. For legal advice, you should contact an attorney.

We hope you found this article helpful. Contact our office at (740) 947-7277 and schedule a free consultation to discuss your legal matters. We look forward to the opportunity to work with you.

The post What Is the Difference Between Estate Planning and Elder Law? appeared first on Seif & McNamee.

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Those individuals with a will may have moved to a different state or forgot to update their will after life events such as marriage, divorce, births, and deaths, making it ineffective. One of the ways to ensure your will remains valid is to review its contents regularly with your estate planning attorney so that it complies with your state laws and reflects your family situation.

Dying Without a Will

If a will doesn’t meet the state’s legal requirements, it isn’t valid, which is the same as not having a will. Intestate is the legal term describing a person who dies without a will or a valid will. When this happens, determining asset distribution becomes the responsibility of the state probate court. States will follow their current intestacy law, which may not reflect the decedent’s wishes.

The probate court names an administrator to compile a list of assets, pay debts, and address any state and federal taxes that must be paid by the estate.

Then the appointed administrator establishes a hierarchy of inheritors, usually beginning with spouses followed by other close relatives being first in line to receive the decedent’s assets. A court-appointed administrator charges a fee from the decedent’s estate for their services.

The Function of a Valid Will

A will is the most common type of estate planning document. Upon your death, it accomplishes several different things:

• Designating a personal representative (executor)
• Arranging to pay outstanding debts and taxes via the estate
• Naming and dividing property among heirs
• Establishing guardianship for minor children

When creating their will, many individuals will add advanced directives, trusts, and other documents for a more comprehensive estate plan to manage assets if they are ill, injured, or unable to communicate their wishes.

Legal requirements for writing a will may differ among states but include being 18 years old, having “capacity” or being of sound mind, signing the document, and having two adult witnesses who also provide signatures.

Community Property States, Common Law States, and the Unmarried

Surviving spouses in a community property state are considered joint owners of any maritally acquired property and entitled to at minimum half of the decedent’s estate. However, depending on the court’s determination, they can receive less or more than half or even the entire estate if there are no surviving children or grandchildren.

As of 2022, there are seven common law marriage states plus Washington, DC. Some states will only recognize common law marriages in relationships formed before a certain date. Additionally, some states that don’t permit common-law marriage still recognize this marriage type contracted from other states. Speaking with an estate planning attorney to determine your legal status is important.

If you’re in a relationship without legal marital status, the easiest way to provide for your partner is through joint tenants with the right of survivorship accounts (JTWROS) and payable-on-death accounts (POD). These accounts will pass directly to the named beneficiary outside of a will and the probate process.

Types of Wills

The form and structure of a will may vary:

• Simple will– This will names an executor to carry out your obligations, funeral and burial arrangements, and guardianship for minor children.
• Joint will– Some married couples have one set of wishes. Some states don’t recognize joint wills, and most lawyers discourage their clients from using them.
• Holographic will– A handwritten, unwitnessed will that is only legal in some states and typically only created in emergencies where witnesses are unavailable.
• Pour-over will– This type of will accompanies a living trust and captures any property unintentionally left out of the living trust as a safety mechanism.
• Electronic will– Some states permit remote electronically generated, signed, and stored wills.
• Testamentary trust– This trust is part of a will and goes into effect after the decedent’s probate process is complete.
• Nuncupative will– An oral or verbal will used when a person is too sick to execute a written will. This type of will is not legal in most jurisdictions.

Each of these wills is a variation of a last will and testatment and leaves instructions to follow after your death. A living will is not a last will and works differently. It outlines preferences about future healthcare treatments while you are alive and unable to communicate your wishes to loved ones or doctors.

Ensure Your Will is Legal

Laws concerning wills vary by state, and knowing your state’s requirements is crucial to create a valid will. Conducting online research and creating your own will can be risky and may not meet your state’s specific laws and regulations. An experienced estate planning attorney can assess your situation and determine what type of will best suits your needs. They provide you with the original will and a copy of the document to store in a safe location. Let your loved ones know where you keep your will and other associated documents.

Review and Update Your Will

You can change, update, or revoke your will at any time if you are of sound mind. Planning to revisit the document annually is a good practice, as major life events create the need to make changes more frequently than you think. If the probate court finds your will invalid, state intestacy laws take over.

If you want to change your will, meet with our estate planning lawyers to maintain your will’s validity and see if any changes to state law will affect your decisions. Contact our office at (740) 947-7277 and schedule a free consultation to discuss your legal matters. We look forward to the opportunity to work with you.

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Estate administration typically involves several steps, including the following:

• Probating the will
• Obtaining a death certificate
• Obtaining a tax identification number for the estate
• Identifying and locating the deceased person’s assets, including bank accounts, investments, personal property, real estate, and other assets
• Notifying creditors and paying any outstanding debts, taxes, and other liabilities from the assets of the estate
• Obtaining a court-issued document called letters of testamentary or letters of administration, giving the personal representative or executor the authority to act on behalf of the estate
• Inventorying and appraising the assets of the estate and keeping accurate records of all transactions
• Filing any necessary tax returns and paying any taxes due on the estate
• Distributing the estate’s assets to the beneficiaries according to the terms of the will or state laws of inheritance
• Closing the estate by submitting a final accounting to the court and obtaining court approval to distribute the assets of the estate

The process may vary slightly depending on the estate’s size and complexity and whether the case is probated or non-probated. A probate court action may be necessary for large estates to ensure the legality and validity of the will and to oversee the distribution of assets. Non-probated estates are usually smaller and have fewer legal requirements.

Estate planning can help avoid probate and its complications, and in some cases, estate administration can occur outside of probate court (non-probate administration). It is best to consult with an estate planning attorney or probate lawyer who can help navigate the specific laws and regulations of the relevant state.

State Law Governs Estate Administration

With very few exceptions, estate administration is governed by state law in the US. Each state has unique laws and regulations regarding the probate process and the distribution of a decedent’s assets. These laws can vary significantly, so it is important to consult with an estate planning attorney or probate lawyer familiar with the laws of the state where the decedent lived.

At the federal level, the estate administration must comply with IRS Codes that address the following:

• Estate taxes
• Gift taxes
• Generation-skipping transfer of assets (gifting to grandchildren)
• Special valuation rules

The state probate process includes appointing a personal representative, inventorying and appraising assets, and distributing assets to beneficiaries. State laws may also dictate the procedures for challenging a will or contesting the appointment of a personal representative.

Probate

The length of time it takes to administer an estate can vary depending on the estate’s size and complexity, the number of beneficiaries, and whether or not there are disputes or challenges to the will.

In general, the probate process can take several months to a year or more to complete. If the estate is small and there are no disputes or challenges to the will, the process may go faster. However, if the estate is large and complex, or there are disputes or challenges to the will, the process may take longer. The non-probate process is usually faster and can take several weeks or months to complete, so estate planning often centers on minimizing the potential for probate.

It’s important to note that some states have laws that set a time limit for the probate process and asset distribution. Consult with a probate attorney familiar with the laws of the state where the decedent lived to get an estimate of the time frame.

Estate administration doesn’t conclude with the distribution of assets if the estate has ongoing financial obligations such as trust administration, paying taxes, etc., which may prolong the administration.

Potential Problems

Several problems can occur when administering an estate, including:

• Beneficiary disputes – If the decedent’s will is unclear or there are multiple beneficiaries, disputes may arise over who is entitled to receive what assets.
• Challenges to the will – Challenging a will can occur for various reasons, such as lack of capacity, undue influence, or fraud.
• Lack of assets – If the decedent’s debts and liabilities exceed the value of their assets, there may not be enough to pay off creditors and beneficiaries.
• Probate process delays – The probate process can be time-consuming and may create delays due to missing or incomplete documentation or beneficiary disputes.
• Tax issues – The estate may be subject to taxes at the federal and state level, which can be complex and require the help of a tax professional.
• Not following the law – The personal representative may not follow the state laws and the will’s instructions while administering the estate, which can lead to legal issues.
• Not keeping accurate records – Not keeping accurate records of all estate transactions and assets can lead to confusion and beneficiary disputes.
• Not timely closing the estate – Not closing the estate as quickly as possible can lead to additional costs, legal issues, and disputes among beneficiaries.

It is important to seek the assistance of an estate or probate attorney to administer the estate and address issues that arise properly.

Closing the Estate

Estate administration concludes when:

• The personal representative distributes all assets according to the terms of the will or state laws
• The personal representative closes any financial accounts, such as bank and investment accounts, that belong to the estate
• The personal representative files all final tax returns for the decedent and the estate
• The personal representative files a final report with the probate court, including an accounting of all assets and debts of the estate, and any beneficiary distributions
• The personal representative obtains court approval and discharge, closing the estate

Once these tasks are complete, the estate administration process concludes, and the deceased person’s assets have been properly and legally distributed according to the decedent’s wishes or state laws.

While estate administration has a general template and set of rules to follow, each estate is unique, and ensuring all formalities are properly addressed can be daunting. Meeting with a probate or estate planning attorney to structure an approach and create a list of tasks can help a personal representative track all the necessary elements. A systematic and organized approach with proper attorney oversight can make estate administration run smoothly.

We hope you found this article helpful. Contact our office at (740) 947-7277 and schedule a free consultation to discuss your legal matters. We look forward to the opportunity to work with you.

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A living will only take effect in the event of medically diagnosed incapacity; depending on your state, one or two doctors will make this determination. Your family should know where you keep your living will to present to the hospital if necessary. Having predetermined your boundaries for medical care will provide great relief to your family during the heightened emotional time of dealing with a loved one’s incapacity.

Treatment Options to Consider When Preparing Your Living Will

• Do you want all treatments available to try to save your life?
• Do you want all treatments but add a timeline to stop them if they are not working?
• Do you only want treatments that cause no pain or discomfort?
• Do you prefer only palliative (comfort) care? Palliative care will provide only medication to alleviate pain but not treatments to prolong or save your life.

More Detailed Medical Treatment Decisions

• Treatment types – There may be treatments you always want to have, such as pain medication. There are also those you may never want to receive, such as dialysis or long-term ventilator care.
• Short and long-term treatments – If a short-term treatment provides a good chance of getting better, you may want that. For example, if you are recovering from surgery, you might opt to have a feeding tube for a short while. Alternatively, if you sustain a severe and long-term brain injury, you may not want a permanent feeding tube. You can create time limits for life-sustaining treatments so that you do not linger in a vegetative state if treatments remain unsuccessful.
• Invasive tests and treatment options – Many of these procedures create discomfort and pain. Lab tests, antibiotic treatment, blood transfusions, and surgery may prolong your life even when recovery is no longer possible. You may not want to receive a blood transfusion if you are not COVID-19 vaccinated because of the risk of receiving blood with the mRNA vaccine.
• Feeding tubes – This procedure, also known as artificial hydration and nutrition, can sustain your body if you are unconscious or can’t swallow. A tube from which the sustenance flows is put into your stomach by a healthcare provider.
• Life support – If some of your organs are no longer functioning, life support treatments can help sustain the function of the damaged organ. If your kidneys don’t work, you can receive dialysis to remove impurities and wastes from your blood, or if you can’t breathe, you may be placed on a ventilator.
• CPR and DNR – Without specific instructions to disallow CPR or electric shock, which attempts to restart your heart if it stops beating, healthcare emergency responders and medical providers will use these techniques to save your life. A DNR (do not resuscitate) is a legally binding physician order and can be part of your living will. A copy of your DNR order needs to also be on file with your medical records.

Limiting Certain Treatments

Certain situations can occur where you may want to limit treatments because of the degradation to your quality of life and little hope of getting better:

• You can use a wheelchair, but you can’t walk
• You experience constant and severe diarrhea or nausea
• You are unable to control urination and bowel movements
• You require caregivers to bathe, help you with toileting, dressing, and feeding
• You need a ventilator to breathe
• You need a feeding tube to eat
• You require kidney dialysis to survive
• You can’t think straight or communicate effectively
• You no longer recognize family and friends
• You experience severe or constant pain

Other Questions to Ask

A living will is instructive but can’t possibly determine every scenario for an end-of-life situation; however it can include important ones. Consider what medical intervention you would want if you were in a persistent vegetative state or long-term coma. Do you have fears about your life ending? Is pain relief crucial to you, or do you want to remain alert and awake even if experiencing pain? Do you have religious or other beliefs that should be followed before you die? Who do you want with you as support? Do you want to be in a hospice care facility or at home? Questions that strike at the heart of mortality can be unsettling, but you may find a sense of peace when you have confronted and described them in a living will.

Talk About Your Choices

Speak to your family, estate planning attorney, and healthcare providers about your wishes. Sometimes they might challenge your thoughts or ask questions that help you better prepare your living will. If you are at odds with a medical doctor and can’t agree, it is best to seek new medical care to support your wishes. Include aspects for funeral arrangements, burial or cremation, and where you want to be when you die (if that is an option). Your estate planning attorney can explain your state’s legal requirements regarding signatures, witnesses, and other rules.

Tell your family, friends, and healthcare providers that you have a living will and keep legal copies on file in the appropriate places. Healthcare providers should put a current copy in your medical records at your hospital. Keep your original document in a safe place but also one that is easy to find. Some states have registries that store copies of your living will and other advance directives, and some will even provide healthcare workers access via computer. Some houses of worship may also store a copy of your living will for you. Talk to your estate planning attorney for input regarding your situation.

Creating and Reviewing Your Living Will

When do you create or review your living will? Since a living will only go into effect when you are deemed medically incapacitated, you can create one and change or cancel it at any time. Once completed, your living will is a legal document, and you can’t just tear up your copy and think existing copies will not be relevant. You must legally cancel your last living will to create a new one or have your lawyer make changes and provide copies of the new living will to family, healthcare providers, or wherever else you keep copies.

A good rule to follow for reviewing your living will include:

• Decade – At the beginning of each new decade of your life (the 30s, 40s, 50s, etc.)
• Divorce – Significant changes to your family or personal relationships
• Death – Your spouse or a close relative dies
• Diagnosis – You receive a diagnosis of a serious disease or health condition
• Decline – Your health diminishes, and you find self-care harder

Life is an uncertain experience. Those things you can control through legal preparation will benefit you and your family if you become incapacitated. Having a living will is for all adults, not just seniors. Younger individuals may take more risks and experience higher incidences of accidents, leaving them unable to make medical care decisions. Whatever your adult age preparing a living will brings peace of mind, protects your medical future as you wish, and reduces the decision-making burden on your family and loved ones. Get started with an estate planning attorney to implement this critical document.

We hope you found this article helpful. Contact our office at (740) 947-7277 and schedule a free consultation to discuss your legal matters. We look forward to the opportunity to work with you.

The post A Guide to Writing a Living Will appeared first on Seif & McNamee.

While the answers depend on your family circumstances and concerns, be aware of several known scenarios to watch out for as you make your decisions. Without a will, there are sure to be problems between family and loved ones. You may find it difficult to sort out, but creating a will is the responsible thing to do.

Equal? Or Fair and Equitable?

Your estate planning attorney will likely point out that there is a difference between leaving an equal inheritance, where each child receives precisely the same amount, and an equitable inheritance, where you determine what is fair for each child, given their circumstances. The obligation is only to yourself as it is your money and your decision. Should circumstances change, you can amend your will.

Special Needs Children

The first and most obvious inheritance issue happens if the family has a special needs child. After minor guardianship, if your adult special needs child can’t care for themselves, you will want to create a special needs trust. Depending on your financial situation, this trust can take up most of your estate to meet basic living expenses and funds for ongoing medical needs. Siblings will often understand and not be offended by receiving less money. However, it is important to let all children know the arrangements.

This third-party-funded special needs trust can also use life insurance policies to preserve a larger aggregate of the parents’ assets for the rest of the children. The special needs child must receive the necessary financial assistance for functional needs without the risk of losing existing or future government benefits. If the special needs child passes, the leftover trust monies can go to the remaining siblings as secondary beneficiaries.

Caregivers

Another situation that may inspire equitable but not equal inheritance is when one of your adult children acts as your caregiver. Often, this family caregiver is uncompensated for their efforts, works fewer hours in their job, or can’t further their career to fund their social security benefits for their retirement. This situation can have disastrous consequences for the caregiver’s future. Therefore, providing more inheritance to this child can compensate for their family support efforts.

Lifestyles and Financial Circumstances

Your adult children may experience different financial needs during your lifetime. A child who marries and provides grandchildren may need your help funding a down payment on a house for their growing family. If this is not a documented loan with the expectation of repayment, it is wise to consider reducing this child’s inheritance proportional to the financial aid provided earlier. Weddings, grad school, and other life events of your adult children may have created a substantial inequity among the siblings that you want to offset in your will. You can easily address the situation by reducing inheritable cash amounts to the child or children who have already received substantial financial help while you are alive.

Blended Families

Suppose you are a blended family comprised of biological and stepchildren. In that case, managing the expectations of non-biological children who may receive less than natural-born children is a crucial conversation. Honest communication between the parents and writing wills that complement one another brings a sense of fairness to inheritable assets. This will go a long way to avoiding a possible lawsuit. What one stepchild loses in one will, they may gain in their biological parent’s will.

Be of Sound Mind and Free from Undue Influence

If you divide your assets unequally among your children, know that you may be putting your estate plans and children at risk of litigation. Heirs can sue to contest a will, but you can mitigate the likelihood with careful estate planning. An estate planning attorney will be familiar with family dynamics if one inheritor feels slighted. Drafting your will while you are of sound mind and without undue influence from one of your children is a good start. If your other children believe or think they can prove in court that you were subject to another’s manipulative tactics while writing your will, they will likely sue. Do your estate planning earlier in life when it is clear to everyone you know what you want.

Incapacitation

Another legal challenge to your will can be for lack of testamentary capacity. This term means you were unaware or did not understand what you were doing when creating or changing your will. Lack of testamentary capacity may be due to mental illness or a physical condition. Always ensure your will is properly drafted and witnessed by an estate planning attorney to help avoid possible challenges to your will.

No-Contest Clauses

Some states permit a no-contest clause combined with at least a nominal gift that can create an incentive for family members not to challenge your will and any estate trusts. The language in the will (or trust) essentially states that any inheritor who litigates the document as written will forfeit any bequests. While this is not the best option, it may help keep your will intact. The enforceability of these clauses will vary by state, so be sure to talk about it with your lawyer.

A few tips that can help avoid challenges to your will include:

• Having your medical doctor witness your signature to your will to invalidate lack of capacity claims
• Use a trust to provide structure and limitations for children who may not responsibly manage their inheritance
• Exclude all children from your estate planning process and will writing to invalidate claims of undue influence
• Discuss your will with every one of your children to explain your reasoning and avoid surprises

Ultimately this is your money to divide as you wish, and you have every right to do so. However, if your inheritors perceive inequality, they will likely explore legal options to remedy their inheritance. Weighing your children’s temperaments and their relationships with each other will provide insight into whether leaving unequal inheritance poses a risk to your will. Sometimes unequal inheritance may not be worth what you are trying to accomplish. Evaluate your unique family circumstances and financial situation with your estate planning attorney. Doing the work upfront can mitigate issues after you are gone, leaving your family happy and intact.

We hope you found this article helpful. Contact our office at (740) 947-7277 and schedule a free consultation to discuss your legal matters.

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The post-WWII economic environment allowed the growth of assets during decades of economic prosperity. Rising real estate values, stock markets, and favorable tax policies contributed to the baby boomers’ ability to aggregate significant wealth. These 45 million households will see their generational wealth pass to Generation X and millennial inheritors, dramatically shifting the landscape of American wealth management.

Baby boomers collectively hold thirty to forty trillion in assets, controlling roughly seventy percent of all disposable income. While families of already established generational wealth may have plans in place, much of the upcoming wealth transfer hails from self-made men and women who have avoided discussing estate plans and family fortunes with their heirs. Predictions are that Gen X will inherit about 57 percent of these assets, with millennials inheriting the rest. Yet the mechanisms for inheritance through sound estate planning are missing in many of these family systems.

Wealth management groups and estate planning attorneys posit that inheritors will needlessly lose much of their wealth due to parents who failed to develop comprehensive end-of-life plans. On the other side of the equation, younger generation inheritors must ramp up their knowledge about asset management to grow their inheritance for future generations.

Generation X and millennials have vastly different financial experiences and attitudes towards money than their parents. On average, while millennials are the highest-earning generation, they have significantly less money, controlling just 4.6 percent of US wealth in 2021. They have lower levels of financial literacy, are less likely to own a home, and have less interest in investing in the stock market. They also tend to have higher debt after experiencing two recessions before the age of 40, cost of living increases that outpaced wages, and increasing college tuition and vehicle loans.

These younger generations will also change the landscape of financial planning and management. Financial firms will have to bridge the gap of immediate expectation with a generation raised in an era of enormous technological transformation. Smart technology can provide an incrementally higher return on investment through transaction speed alone. Digital financial tools and apps will be the norm, including robot advisors as a convenience for investing.

Are these younger generations ready to be stewards of generational wealth? Will they see the need to protect this wealth through comprehensive estate planning? To better protect their inheritors’ interests, baby boomer parents can include their children in estate planning goals. The older generation can implement or update an existing plan and guide their inheritors to protect from squandering assets.

Some family systems may find the surest and safest way to protect generational wealth is via trusts. Both revocable and irrevocable trusts can create structure and limit new inheritors’ access to assets. A trust can grow wealth and also save on taxes. The objectives and conditions of a family trust are wide-ranging and easily tailored to a family’s specific needs.

Charitable trusts and charitable remainder trusts can generate income for heirs while protecting assets and favorable tax consequences. There are also asset-protection trusts, testamentary trusts, and special needs trusts. A qualified estate planning attorney will assess the best trust type(s) for you and your family based on your unique set of parameters. With trillions of inheritable dollars in motion over the next twenty-five years in America, proactive estate planning is key to securing generational wealth for your family. We hope you found this article helpful. Contact our office at (740) 947-7277 and schedule a free consultation to discuss your legal matters.

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