Give your Partner the Gift of Security for the Holidays

Have you thought about the effect your death could have on your long-term partner?

Many long-term couples maintain a joint residence and joint accounts, drive vehicles that may be in the other’s name, and generally share a life together without the protection a marriage certificate provides.  North Carolina does not have “common law marriage,” so regardless of the length of your relationship, if you pass away without a Will, you may be leaving your partner vulnerable to the whims of your heirs and your creditors.

Unmarried partners have virtually no rights in North Carolina to assets they are not listed as an owner on, or to assets they are listed only as a joint (without right of survivorship) owner on.  Potential problems lie in joint checking accounts, vehicles used by one partner but titled in the other’s name, safe deposit box access.

As a general rule, real estate in North Carolina passes outside of probate so as of the moment of your death, title to your home vests in your children, who ultimately have the ability to force your partner out.  Your other assets would become estate property to which only your legal heirs and creditor can lay claim.

It’s a scenario we encounter frequently in our practice, and it is always incredibly emotionally traumatic for the surviving partner who is left not only to grieve the loss of their loved one, but who may have to rapidly restructure their own life as a result of that loss and the lack of proper planning.

A simple Will is an easy way to protect and provide for your partner.  Give us a call to discuss the vast benefits of even a very simple estate plan.

Making the Most out of your Consultation

elder law_asheville_siemensfamilylawgroupIf you’ve been into our office for an estate planning or elder law consultation, then you might recall our lengthy questionnaire and its many blank lines begging to be completed.

Why do we ask so many questions, and want so much information from you up front?

The answer is simple:  we value your time, and we want the time you take to come in for a consultation to be worthwhile.  We also want to make sure we have the information we need from you to ensure that our recommendations are sound, in light of your family and financial structure, and to make sure we ask you the right questions as we work together to construct a plan that fits your needs.

Here’s a list of things you should be prepared to discuss in order to get the most out of us and out of your consultation:

  • Your marital status, any past (or anticipated) divorces, and whether you have a pre- or post-nuptial agreement. More often than not, securing a legacy for remaining family members is one, if not the, primary reason people decide to get their estate plans in order.  If we don’t accurately understand the makeup of your family (i.e., one of your children is not yours biologically, or you and your previous spouse signed a divorce agreement that will continue to affect you in the future) we cannot help you plan around those challenges.  We like challenges, and the planning they require, but we only know what you tell us, so come prepared to be transparent.
  • What you own, where it’s held, and how it’s titled. You might not understand why we want to know things like your “account type” and “account balance” but both are incredibly relevant to the type of planning we ultimately do for you.  Not knowing how much your estate is likely to be worth could result in unintended tax consequences, and not knowing whether an account is tax deferred can have significant repercussions for beneficiaries if your plan is not structured properly.  We (usually) don’t enjoy being nosy, but this is an area where it is crucial that you share the details with us.
  • Whether you are a Veteran and whether you have long-term care insurance. It might seem like these topics are unrelated but that couldn’t be further from the truth.  What we are trying to assess is whether you have resources to pay for your future long-term care needs, or whether you are a client who might need to pursue Medicaid coverage of that care in the future.  The VA offers significant benefits to certain service members that can help tremendously with the costs of long-term care, and many Veterans are unaware that those programs exist.   If you do have long-term care insurance, we are most likely going to want to see the policy, and if it’s old, may encourage you to have it reviewed by an insurance professional.  Bottom line, we want to make sure that when you need care, you can get it, but to do that, we need to know what you already have.
  • Whether you have children (or intended beneficiaries) with special needs or financial problems. The last thing we want to do is craft an estate plan for you that causes problems for your children or beneficiaries after you pass away.  Your plan should be designed in a way that protects assets for your beneficiaries who may have special needs, or who might be anticipating a divorce or bankruptcy, or just experiencing financial problems.  If you have any concerns about your beneficiaries, let us know what they are so that we can talk you through those issues and prepare documents that take those concerns into account.

Don’t be afraid to ask questions or raise issues that you might think are irrelevant.  Our goal is to create a comprehensive estate plan that is tailored to what your family needs and we do that most effectively when we have all of the details.  Help us give you peace of mind by telling us what’s on yours.

Does your Back-to-School Shopping List include an Estate Plan for your Child?

If you have children who recently turned 18, or who are heading to college this fall, it might be time to talk to them about their own estate planning.

Many assume, incorrectly, that banks and health care providers allow parents to make decisions for children in the event of an emergency, regardless of age.  However, legally, once your children reach the age of 18, parents have no ability to take control of their assets or health care needs without proper legal authority.  Without a financial or health care power of attorney in place, a parent’s only remedy if a child becomes ill or incapacitated is to ask the Court to appoint them as legal guardian for their child – a process that can be time-consuming, stressful and expensive.

Our attorneys can help you effectively and efficiently get documents in place to make sure that your children can always be taken care of, even after they leave home.

Taking Time to Prepare Your Will

Siemens Family Law Group - Estate DocumentAs highlighted in the preceding blog posts, Things to Consider When You’re Considering Your Will Part 1 and Part 2, a Last Will and Testament is important in making sure your assets are distributed according to your wishes when you die. While having estate planning documents in place can help reduce stress for your family upon your death, a new report
from found that only 56 percent of American parents have prepared a Will.

There are often many logistics to consider and details to set in place in order to minimize stress after your death, and a Will ensures that your assets are divided among beneficiaries according to your wishes.

Listen to the story on Marketplace Money Report here.

Things to Consider When You’re Considering Your Will, Part 2 of 2

Siemens Family Law Group- elderllaw2Jumping off of the last blog post, which touched on distributing assets and dealing with beneficiaries with special or unique needs, this post is a continuation of key points to touch on when you are considering the details of your Will.  For the preceding blog post, click here.

Appointing a Fiduciary and a Guardian

Part of making your Will is appointing an individual who will be tasked with seeing that your wishes are carried out.  That individual might be identified as a Personal Representative, Executor or Executrix.

Depending on the nature of your estate, this can be a very small job, or a very tedious and time consuming job.  It’s important to consider how much work is likely to fall to your designated fiduciary, and whether that person is comfortable taking that work on.

Like anyone you appoint to act on your behalf, it is important that your fiduciary be someone that you trust, as he or she will be the one who has access to your bank accounts and other assets after your death.

Another key consideration is whether your fiduciary should be a child, or a family member, or whether it would be best to name a third party who has no relation to you and can objectively manage things.  If you appoint one of your children, keeping all of your children in the loop about who you are appointing may reduce conflict following your death.  The death of a parent can have a tendency to bring out the worst in the surviving children.  If your children don’t get along, consider appointing a more removed family member or a non-family member as a fiduciary.

Additionally, North Carolina law allows for the designation of a guardian for minor children to be included as part of an individual’s Will.  This can be crucial for a single parent who is concerned about appointing an appropriate caregiver for his or her young children.

Before designating a guardian in your Will, you should always talk to the person you will be designating, to make sure he or she is willing and able to take on that responsibility.

Tax Implications

To the extent that when you pass away, you leave assets that do not name a beneficiary or a joint owner, those assets will – in most circumstances – default to your estate, and become assets that are distributed pursuant to the terms of your Will.

The effect of this can be quite significant, depending on the asset itself.  Special rules apply to retirement accounts like IRAs and 401(k)’s.  When retirement assets pass to an estate, different tax rules apply than would apply if those funds went directly to an individual, and generally not in an ideal way.

It is crucial that you fully disclose all of your assets to your estate planning attorney, so that proper planning can be utilized to mitigate a negative tax impact.

Other tax considerations to raise in estate planning include whether you have an estate sizable enough to be subject to estate taxes.  North Carolina has repealed the state estate tax effective for estates of those dying on or after January 1, 2013.  However, a Federal estate tax still applies to estates in excess of $5.43 million for those dying on or after January 1, 2015.

In the past, estate tax thresholds were much lower.  As a result, it was necessary to frequently draft documents to minimize the tax hit an estate would take.  With the new, higher threshold in place, fewer estates require that kind of planning.  That said, if your assets are likely to exceed that amount when you die, or if you might receive an inheritance that would put you over the threshold amount, appropriate planning steps should be taken.

Things to Consider When You’re Considering Your Will, Part 1 of 2

Preparing a Last Will and Testament is, the vast majority of the time, what motivates people to call our office for an estate planning consultation. Clients know they need a Will so that their assets will be distributed according to their wishes once they die, and they are eager to get that document completed and behind them – ideally, in short order. However, spending some time at the beginning of the process to consider the details and logistics can pay off in spades for family members and beneficiaries.

1. Distributing your Things

Many people, in the context of estate planning, are so focused on distributing real estate and bank accounts that they forget to take the time to think through the distribution of the things that often matter more, both to the client and to the beneficiary: personal effects. Taking time to think about who to leave a watch, piece of jewelry, or nice piece of furniture to can give you peace of mind, and prevent disputes between beneficiaries after your death. As an example, when you simply direct that your personal property be distributed to your children, you leave it to your executor, and to your children, to decide who gets what. This creates an environment ripe for disagreements during an already emotional time. If you have items that you know you want to go to certain people, taking the time to put those details in your Will can do a great deal to ease tensions and preserve relationships after your death.

2. Beneficiaries with Unique and Special Needs

In most cases, the first objective of a Will is to provide for how your assets will be distributed after your death. Oftentimes, it’s as simple as concise language that specifies, quite literally, who gets what. But what about a child or grandchild with special needs, or a beneficiary who is receiving financial aid, or dealing with creditor issues? When you are preparing your Will, it is important to give some consideration to the impact an inheritance might have on your beneficiaries. In some cases, the receipt of a cash inheritance, or valuable personal property, can have consequences for the recipient that can be avoided by proper planning. Those consequences can include temporary termination of public benefits, loss of housing or food stamp benefits, problems with financial aid, loss of the inheritance to creditors, and unanticipated tax impacts. When you are considering distributions under your Will, you should also consider the person on the receiving end, and plan accordingly.

To be continued…Check back for Part Two, regarding tax implications, gifts to charities, designating a guardian, and choosing fiduciaries.

When the Nursing Home is Inevitable

A recent New York Times article, ‘Nursing Home Unthinkable? Be Prepared in Case It’s Inevitable‘, draws attention to the often inevitable reality of a need for nursing home care. Sometimes, despite best intentions, providing care for a parent or loved one at home can become unsafe, for both the caregiver and for the patient. When the need arises, it is important to have already done the proper planning and considered available facility options. The author makes good points of things to be aware of when visiting facilities. Don’t be afraid to ask tough questions and insist on being shown enough of the facility for you to be sure it is the best fit for your loved one.

Here is a good local resource for questions about nursing homes and patient rights: