Young adults. They’re still your children, but legally they’re not (under the law). What are your options? Krystal and Merrell cover legal documents for young adults, and issues for them to consider.

Timestamps

1:09 – In Florida, a parent’s legal right to be in charge of their children is severed at eighteen years old.

2:33 – Durable Power of Attorney and why we recommend it for young adults. (It will allow your child’s college to talk to you about grades, tuition and other things.)

4:30 – Why we also recommend the Health Care Surrogate.

6:50 – Adult children may be in a broken family, where contact is limited with another parent, and guardianship issues in worst case scenarios.

8:10 – Funeral arrangements, example of a UCF student’s parents arguing for over 5 years over his ashes.

11:45 – Pre-need guardianship – going back to the issue of splits in the family. (Britney Spears as example, and her father Jamie Spears being appointed as her guardian.) Merrell also explains her admittedly strange obsession with the National Enquirer.

14:34 Krystal discusses Living Wills and Medical Power of Attorney. Ensuring the person you name as agent understands your wishes.

22:20 The sad case of Bobbi Kristina Brown and her live-in boyfriend, estranged parents, and who was in charge? Would she have chosen differently?

24:20 Why we speak to the (adult) child without the parents present.

25:00 On your college student’s packing list, make sure you include this list of legal documents. (See ebook below.)

Resources

Free ebook from Your Caring Law Firm, 18 and On Your Own

Merrell and Krystal give examples of common real estate fails and how they show up in probate. It’s important to get in front of the right attorney, one who practices in their area predominantly.

Timestamps

:48 – Example 1: Dad is getting ready to move into assisted living, and wants to sell his condo. But there are some major issues with the deed (as in, Dad doesn’t own the condo because of a quit claim deed from 1994 that conflicted with his mom’s will from 1996.)

2:44 – Life Estate definition

3:30 –  Example 1 – Incredibly, the same attorney who prepared the quit claim deed was the same one who prepared Mom’s will and created the mess. Krystal explains how Dad’s siblings also own this property. Two have passed away. Each sibling’s interest passed according to their will, or laws of intestacy. Someone has to open probate for the deceased siblings before the property can be sold.

5:20 – Example 2 – A piece of Florida land owned by 59 people that took multiple probates to clear it up.

6:50 – Example 3 – Mom and Dad had separate trust-based plans, so the homestead was owned 50% by each. But Dad’s half never went into his bypass trust when he “got on the bus.”

7:50 – Clean up a title before passing a mess on. Or it will be costly, and several people/multiple generations of family will need to find a way to come to an agreement.

9:25 – Deed swaps are complicated and create taxable events.

10:05 – Why it’s important to meet with all of your documents so that an attorney can get the whole picture.

11:10 – Merrell’s frustrations about “threshold law” (as in, ‘anybody who crosses the threshold of the door, we can do it.’) Also, shout-out to attorney Joe Seagle in Orlando, and why we outsource all deeds work to his office – because he’s really good at that.

12:35 – Back to example 1, Grandma thought she was doing everything she should have been doing. Unfortunately, it looks like she was, but she was getting it done by someone who didn’t know what they were doing.

12:50 – Example 4 – YCLF looked at four wills a few weeks ago. Not one had a residuary clause. No excuse, because three of four of those wills were prepared by attorneys.

 

If you haven’t done your estate planning (which includes legal documents that allow someone to handle your affairs in the event of an emergency) don’t panic; however, now is a really good time to get them done.

We talk about remote options and some of your most common concerns during the coronavirus pandemic.

Timestamps

:40 We’re getting a ton of calls about what can people do if they kept putting off writing their wills and other documents. What you can do to get prepared in a hurry.

2:30 Planning in advance is far less expensive overall than trying to manage affairs in a crisis, and it’s much easier on your loved ones.

3:20 Legal services and firms are still an essential business, and we’re all still open to help you.

4:45 Krystal explains that before this crisis, they didn’t usually do remote meetings. However, everyone is adapting, and there are ways to get an estate plan done without being physically present.

6:15 Florida’s remote notarization laws. They weren’t supposed to go into place for wills and trusts until July. Florida still requires two witnesses, and Florida has no provision currently for remote witnesses.

8:00 Colorado allows remote notarization due to an emergency directive.

10:00 What happens if you don’t have any legal documents and you end up in the hospital?

10:45 Health care surrogate and living will documents. Most hospitals will provide a health care surrogate and living will form…which isn’t ideal, but they are better than nothing.

12:00 A Do Not Resuscitate order or DNR – hospitals provide this, not lawyers. This ONLY addresses if the heart stops. What’s the difference between a DNR and a POLST?

13:12 A case example: an older woman changed her Living Will to explain that she did not want a respirator/ventilator if they were in short supply. Merrell argues that this would have been better placed in the Healthcare Surrogate form.

14:45 Capacity: If you can communicate, we never get to these documents. But they are a good place to inform everyone of your boundaries and wishes.

16:00 Because of Coronavirus, if your loved one goes to the hospital, you may not be able to go with them. So, you may be someone’s health care surrogate, but the hospital may have the right to refuse you; doctors may communicate by phone.

17:00 Merrell discusses the right to make funeral arrangements and how important it is to include this in an estate plan. Krystal explains what this form looks like in Colorado.

20:30 Hospitals CANNOT provide the essentials: Durable Power of Attorney and others. Good attorneys are out there to help you now.

 

The Tax Bosses share what they know about Coronavirus relief and resources for small businesses.

Timestamps

:50 Introduction of programs

Paycheck Protection Program (banks will have their own requirements on top of the app)
Economic Injury Disaster Loans

2:00 How do you know if you are a sole proprietor or not?

3:45 For the PPP, small business and sole proprietorships can begin applying April 3rd. Independent contractors and self employed can begin applying April 10th.

4:15 Other resources:

American Institute of CPAs
American Bar Association
Florida Bar
Orange County Bar Association
Small Business Administration: PPP, Bridge Loans, 10K EIDL, Debt Relief

6:30 It’s not that there’s a lack of resources…try to find ones that are specific to your business.

 

Merrell and Krystal discuss helping clients through the grieving process.

Timestamps

:38 Introduction – The Likely Resolutions of Oliver Clock by Jane Riley

1:30 Multiple generation family businesses and family participation

3:00 Synopsis of Oliver Clock’s dilemma, and evoking memories of a loved one, sense of smell

5:56 Assistance advisors can provide through the grieving process

6:25 Are you sleeping? A physician could be more valuable than a grief counselor. Grieving is a different chemical reaction than depression.

7:10 Grief can be a reaction to a diagnosis, not just death. Processes and timelines vary.

8:30 Support networks in the modern era

The SECURE Act of 2020 (Setting Every Community Up for Retirement):

  • is changing retirement, and it may change how your wealth is distributed;
  • it may require a check-in with your estate planner to adjust your estate plan’s language and/or structure to do what you originally intended;
  • or if you’re an advisor, it may require a check-in with the estate planner and other financial professionals in your client’s sphere

Timestamps

:30 Krystal and Merrell introduce the impacts to qualified retirement plans and what changes after the planholder passes away. What should advisors expect from other advisors in response to the SECURE Act?

1:30 The rules before 2020…inherited IRAs, rollover IRAs, and ability of a beneficiary to stretch distributions over their life expectancy

2:33 As estate planning attorneys we considered passing wealth to another generation in IRA trusts. (A two-year old grandchild as example)

3:38 Krystal outlines the rules now, as of January 2020. If you inherit an IRA and are not a spouse, the entirety of the retirement plan must be paid out within ten years (and associated income tax)

5:00 Merrell discusses the SECURE Act in context of leaving wealth to grandchildren…

5:52 Exceptions to the ten year rule include: a surviving spouse; and person that fits the SECURE Act’s definition of  disabled and chronically ill persons; a beneficiary that is fewer than ten years younger than the planholder; and a minor child – not grandchild – until the age of majority

7:30 Krystal talks about revisiting client goals and trust provisions with CPAs and financial advisors

8:30 Merrell compares beneficiary possibilities – either as a trust or as a human, and the respective tax rates for each; she explains how the trust may need to have accumulation language so as not to force distributions and give the trustee some discretion

10:52 Common trusts (aka pot trusts, multiple beneficiary trusts) vs. Separate trusts; spreading the IRA tax hit

14:43 Explaining to the client how the 2020 SECURE Act laws are different than when we did their initial planning, and opening up the possibility of letting other assets appreciate

16:00 Merrell compares the relative risk of setting up a structure that requires the trustee to distribute wealth that will harm the beneficiary vs. taking the tax hit under the new law

17:28 Takeaways for estate planning clients as well as their advisors; revisiting your plan with your estate planning attorney to make sure it still makes sense and if an advisor, reaching out to make sure the client has the option to make changes

Resources

Other provisions of the SECURE Act 

If you like charts, National Association of Planners’ summary points of SECURE Act

 

When is estate planning through beneficiary designations and/or payable on death designations a good idea? Merrell and Krystal discuss the very particular situations and criteria that makes this a safe estate planning tool.

Timestamps

:30 Merrell discusses her perfect client for this kind of estate plan – life insurance, homestead, checking account, and a retirement account, a modest estate and two adult children that are in good places in their life.

1:47 Krystal elaborates on additional things she looks for in trying to plan outside of a will, recommending estate planning through beneficiary designations: children that get along and have a good relationship if they will inherit assets together; no special needs issues, and more

3:08 The estate planning quadrant (take a trip inside Merrell’s head). “The Asset Action Plan” is divided into 1) own it with someone else, joint tenants, rights of survivorship, 2) assets that have beneficiary designations, 3) in their own name, not owned with anyone else and without a beneficiary designation (this kind of asset would go through probate), and 4) if a revocable living trust, the things that are titled in there.

4:08 How the Asset Action Plan works to avoid probate – moving all assets into box 1 or 2. Caution – this does not provide asset protection to the next generation.

4:36 What about business ownership transfers upon death?

5:30 If you’re going to do estate planning like this, you MUST have a good Durable Power of Attorney. A good one!

6:14 When other advisors tell you to use beneficiary designations and screw up a carefully crafted trust-based estate plan. (Advisors and estate planners, this is why we need to work together.)

7:22 For example, financial advisors, our mutual client may not be comfortable discussing her daughter’s bad marriage and why I have things set up so that she won’t inherit everything outright.

Resources

When is not making a last will and testament a bad idea? See Your Caring Law Firm’s article about jointly owned accounts and Quit Claim deeds.

 

 

Everything you need to know about a planned giving plan and the IRS:

Timestamps

1:00 Merrell explains why she generally advises against her clients gifting large amounts

1:25 Krystal discusses a client who wants to gift the proceeds from a house sale to her children, and whether or not she’d be better off paying off their mortgages or making smaller gifts over the years to fall under the reporting requirements

2:06 Tax reporting, and IRS form 709

3:05 Gift tax rules, what has to be reported and what doesn’t

4:25 Gifts that don’t count toward the gift tax limit (tuition, medical expenses directly to the provider, charitable giving, etc.)

5:50 Splitting gifts with a spouse

6:45 What about gifting portions of a Family Limited Partnership?

10:00 Gifting a house – now or after you get on the bus?

12:00 Summarizing – conversations that need to be had about reporting, basis, and getting a professional to help fill out a 709

 

 

 

Thinking about gifting DNA testing for fun this holiday season? What if you find new relatives – or if they find you?
How does that impact your estate plan?
How can you take ownership of, and control, your test results?

Timestamps

:30 A story about an entire family doing 23andMe DNA testing

1:35 How does it affect your estate plan if you have a relative out there you were unaware of? How can you take control of your DNA test results?

2:15 Would you want to include new relatives in your estate plan? Is it on your radar if you’re planning on taking one of these tests?

3:00 Legally, are unknown, biological children heirs under state law? Generally, heirs at law are your biological child, not adopted out. Or, someone you have adopted, who isn’t your biological child.

3:45 What if your client doesn’t know they have a child – how can they be legally adopted out? Family attorneys, private investigators are helpful for that question. A good estate plan is more helpful.

4:40 State intestacy laws and other children popping out of the woodwork

5:25 Law enforcement using DNA test results to find criminals through relatives

6:00 What do you do if you find out your dad is not your dad? (Michael Jackson as an example) A child born of a marriage is considered to be a child of both parents, and an heir at law, even if not biological.

7:10 DNA testing and multi-generational asset protection trusts – “I’m an heir at law!”

8:08 Who get the information about your DNA when you die? DNA tests as a digital asset

9:55 Concluding thoughts – if you’re planning on gifting DNA testing for the holidays, you may want to revise your estate plan…just in case.

 

 

 

What can you do when your client already knows what they want, and it’s not a good fit?

Timestamps

:37 Case example – clients wanted a charitable remainder trust set up using retirement assets.

2:50 Counseling the client, thinking about the next generation that is living through decisions

3:45 Case example #2 – Mom set up a special needs trust. Dad set up a trust that split assets three ways, including to the special needs sibling. Trust administration issues abound.

6:13 Case example #3 – three siblings, five years, and one of them wants to make a deal. Merrell counsels holding sibling #1 to the fiduciary standard rather than accepting the deal.

8:28 Clients ultimately need to make the decision. We provide the best advice we can.

Merrell and Krystal discuss Death with Dignity Statutes, and their concerns as estate planners. What about pressures on the elderly? How young is too young for a young adult trying to arrive at such a decision?

Resources

States with Death with Dignity Statutes

Colorado Medical Aid in Dying Statistics

Me Before You, a book by Jojo Moyes

Timestamps

:40 Introduction, Death with Dignity Statutes

1:21 A 17 year old girl in Belgium who used legal assisted suicide to end her life after rape

1:43  Elderly clients under pressure from children to use aid in dying laws?

2:28  States that have these laws and their various names (Medical Aid and Dying, End of Life Options Act, Death with Dignity Act, Patient Choice and Control at the End of Life Act, :  Colorado; California; Hawaii; New Jersey effective August 2019; Oregon; Vermont; Washington; and Washington, D.C.; and Montana rules that nothing prevents a doctor from prescribing meds that would end a patient’s life.

3:28 Colorado’s laws and hurdles

4:55 Vulnerability with elderly clients feeling pressured to die sooner than would be natural, and undue influence

6:21 What if you don’t have a diagnosis?

6:52 If the aid and dying statute is used, the death certificate shows that they died of their condition, or inanation

7:30 Merrell discusses her mother’s own decision to stop eating (where death with dignity was not an option)

9:06 As practioners, Krystal and Merrell discuss the difference that knowing of a terminal diagnosis makes in the counsel they feel comfortable offering.

12:03 Outlook for other states, being a resident of a state in order to take advantage of these kinds of statutes

13:00 Me Before You, the book about the Englishman who went to Sweden to take advantage of their laws

14:03 Discussing this option with clients

 

 

In this episode of Tax Boss, we discuss gift tax and how to help your clients make friends by giving their wealth away.

Resources

Marilyn Monroe estate plan

IRS Gift Tax FAQs

Timestamps

1:17 Gift reporting and gift tax rules; when drafting a will to leave everything to one person with instructions to divide it further

2:30 The burden of gift reporting requirements

3:10 Gifts in excess of $15,000 in any calendar year need to reported to the IRS (married couples may gift up to $30,000 in a calendar year between the two of them)

3:30 Exceptions

4:20 Gifts and lifetime exclusion

4:39 Back to burdening one individual with reporting, and why her ‘actual’ gift would be less than what counts toward her lifetime exemption amount

6:10 Explaining why a Personal Representative solution is much better

6:42 What if your friend doesn’t gift out your estate the way you plan? What if she is in the middle of a divorce? Or is being sued?

7:17 Marilyn Monroe’s estate planning fail – why a woman she never met inherited everything

8:17 Leaving assets to one person in the hope they’ll gift to another person is a very, very bad idea

 

 

 

In this episode of Tax Boss, we discuss solvency certificates and why attorneys request them.

Resources

Solvency explained

Timestamps

1:17 What is a Solvency Certificate? Why is a solvency certificate used?

3:04 Evidence of use of asset protection structures as estate planning measures and not measures against avoiding creditors

3:40 Risks of co-signing on student loans

 

In this episode of Tax Boss, we discuss titling and homestead, tenancy in common, and how state law can change the outcome of your estate plan if you’re not paying attention!

Resources

Florida Statute 732.7025 to waive spousal homestead rights

Timestamps

1:17 What happens when you have jointly owned property, and you don’t want the co-owner to inherit it? Florida’s homestead laws

2:36 Colorado homestead laws and value of total estate (Family Allowance and Exempt Property Allowance)

4:00 Options in handling a jointly held homestead

6:30 Differences between tenancy in common, tenancy by the entirety (TBE), and joint tenancy with rights of survivorship (JTROS)

9:15 In JROTS properties, either party can sever the JROTS and bring it to Tenants in Common; both members in Tenants by the Entirety would have to agree

10:30 Approaching personal estate planning assets in four quadrants: 1. Joint tenancy by entirety or rights of survivorship; 2. Anything that has a beneficiary designation form; 3. Anything owned by them individually that would be a probate asset; and 4. Trust asset (if they have a trust.)

13:15 Does your attorney understand Florida Statute 732.7025 or will they create an invalid deed?

In this episode of Tax Boss we discuss portability and estate planning, transfer taxes between married couples, prenups and generation-skipping transfer tax.

Resources

IRS form 706 (Revised November 2018)

Timestamps

1:43 Portability and transfer taxes between married couples (11.2 million dollars exemption currently, 22.4 together)

2:43 “I love you” Wills

3:50 how portability works and filing an estate tax return form 706

5:12 capturing the portable amount before Congress changes their mind

6:20 what about getting re-married? How would the IRS handle the prenup?

8:07 the generation skipping transfer tax is not portable