|
Careful estate planning may help avoid later conflicts and challenges among the beneficiaries and heirs of a person after their death. It is not always easy for a person to discuss these matters with adult children. While communicating with one’s children ahead of time and expressing wishes about distribution of assets may be the ideal way for an individual to handle the situation, realistically families don’t always follow this practice. Far too often after a parent passes away, the children end up challenging the parent’s decisions.
An experienced and knowledgeable estate planning and trust attorney can help an individual prepare for a discussion of their intentions with their children first before the trust agreement is drafted. A trust challenge can be a long and costly process delaying the distribution of assets to the beneficiaries and legal costs can ultimately reduce the value of the estate. Thus, it is a smart planning strategy for the individual to try and resolve any anticipated disputes prior to the creation of the trust. The chances of a beneficiary or heir challenging the trust after the decedent’s death can be reduced when all parties to the trust are aware of the parent’s intentions.
Of course, there may still be situations that arise after a parent’s death where family members may not agree on all financial decisions made by the trustee. A typical example of this is when the deceased parent’s house is the major asset of the estate, and it needs to be sold in order to distribute the sale proceeds to the children. Typically, the house is appraised and sold at market value depending on real estate market conditions. One or more beneficiaries may be unsatisfied with the proposed sales price or terms. However, choosing a trustee that has the beneficiary’s best interests at heart and has the mutual respect and trust of the beneficiaries will make a big difference in how the conflict gets resolved.
While many people prefer to appoint a surviving spouse or child as the trustee to administer the trust, the size of the estate and type of assets may require the selection of co-trustees, a neutral third party or a professional financial planner or trust manager to act as the trustee. Since every person’s financial situation is unique, the attorney will be able to guide the individual in choosing the best suited person or entity to act as trustee.
From a financial and practical sense, the best way for a parent to avoid major conflicts between their beneficiaries after their death is for the elderly parent to consult with an experienced estate and trust attorney who can help them sit down with their children and discuss their estate planning choices. This way everyone is aware of what to expect later and any concerns or disagreements can be addressed upfront. Even though it may be difficult or unpleasant for both parent and children to have such a conversation, everyone benefits in the end by avoiding conflicts, challenges and delays later when it comes time for the trustee to administer the trust and distribute the assets.
Sanford M. Fisch
CEO & Co-Founder
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128
www.aaepa.com
The Academy is often known for its innovative practice building systems and cutting edge software. However, another unique characteristic of Academy membership is our annual Continuing Legal Education (CLE) requirement. The Academy holds its legal education requirement for membership to a very high standard. Not only are our members cutting edge in their businesses, they are focused in keeping their education current and specific to their practice areas.
State bar CLE requirements vary state to state and can often be in any area of law, not necessarily specific to the attorneys’ core practice area, especially if that attorney practices in a variety of areas. That is where our membership is different. One of the foundation standards of Academy membership has been our long-standing 36-hour annual CLE requirement. Each calendar year, Academy attorneys are required to submit a minimum of 36 hours of CLE specifically in the practice areas of estate planning, tax planning, probate law and/or elder law, including guardianships and Medicaid planning. This requirement can be obtained by attending live courses and self-study courses conducted by approved Continuing Legal Education providers, as well as by teaching courses and publishing books or articles on the required topic areas.
Once an attorney’s submitted hours are reviewed and approved for meeting the requirement, our public attorney listing is updated with “Academy CLE Requirement Met” for that attorney. If the attorney did not submit enough approved hours, the attorney listing will reflect “Academy CLE Requirement Not Met.”
Estate and tax laws continuously change. On top of that, estate planning encompasses a number of complex laws and requires knowledge of many critical areas. So it is important for families looking for an estate planning attorney to seek out those attorneys whose practices not only focus primarily on estate and tax planning, but to also select an attorney who also places a high priority on continuing their legal education specifically in their chosen field. The education ensures Academy Members have the most current tax and estate planning knowledge possible, which we feel in turn, provides the client with the best possible advice available.
Susan Russel
Director of Member Services
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128
www.aaepa.com
Attention Attorneys! If you are NOT a member of the Academy, here is a list of action items that we released to members relating to the recent tax law changes. You may want to consider updating certain materials. If you have any questions about anything specific, email us at info@aaepa.com.
The New Year rang in significant changes with the American Taxpayer Relief Act. The biggest change was the repeal of the sunset provision on the existing law, as well as a few other items. The Education and Marketing departments are busy updating our most frequently used seminars, handouts, tax law insert for handouts (available later this week), Academy Reports, etc. to incorporate these changes and highlight the planning opportunities that exist now.
Changes in the Law
Regarding federal estate taxes, this new law makes almost all of the previous tax provisions, commonly known as ”TRA 2010,” permanent, with the exception of the tax rate. This means there is an estate tax exclusion of $5 million that will be adjusted for inflation. So for 2013, the exclusion is $5.25 million. The estate tax is coupled with the gift tax and the “unified” exclusion can be used either after death or while the person is still alive, just like under TRA 2010. The tax rate is now capped at 40%, instead of the prior 35%.
The “portability” provision from TRA 2010 is also retained. This means that the estate tax exclusion amount of the first spouse to die may be used by their surviving spouse, assuming an estate tax return is filed for the pre-deceasing spouse.
Regarding state estate taxes, as with the prior law, they remain deductible rather than a credit (as was the case many years ago).
The Generation Skipping Transfer Tax (GST) exemption is set at $5 million and is also adjusted for inflation. As in the prior law, the GST exemption is not portable. Thus, the use of GST exemption, along with remarriage protection, asset protection, etc., are reasons to continue using credit shelter trusts in appropriate cases.
The new law affects everyone’s income taxes. The existing rates on incomes below $400,000 (single) and $450,000 (married, filing joint) have been set permanently to the current level. For incomes over that amount, the rate will increase from 35% to 39.6%, where it was before 2001. In addition, this income bracket will see a raise in qualified dividend and capital gain income tax rates from 15% to 20%. Those tax rates will not change for lower income amounts.
When it comes to “charitable rollover” IRAs, those provisions will be extended for 2012 and 2013 only. This means that an individual over age 70 ½ can give up to $100,000 from their IRA without taking that amount into income. For clients making large charitable gifts from an IRA, this is good news because the deduction for a normal contribution, without the benefit of a “charitable rollover,” may be capped or not offset the income.
As we know, in many ways, Congress basically just kicked the can down the road for a few months which left us with a lot of unanswered questions. In reviewing the expedited law, we see many areas that are in limbo at this time. It does not appear that Congress addressed any of the “sequestration” spending issues and the debt limit hasn’t been raised. It remains to be seen what cuts the President, the Democratic Senate, and the Republican Congress are ready to agree to, if any. If they aren’t willing to make big cuts, they will be back looking to raise more taxes once again in a few months. In the meantime, here are proactive steps you can take now:
Recommendations on What You Can Do Now
Prospective Clients
For prospective clients, the planning is the same as it has been in the last few years – much less about taxes and more about providing provisions for remarriage, divorce, creditor and asset protection, and Medicaid pre-planning. We are updating the current Legacy Wealth Planning Seminar now and next on deck will be the Basic Estate Planning Seminar, which should be posted by the end of the month. If you have seminars scheduled, please keep in touch with your PBC so she can keep you updated on the status of the seminar materials.
Clients
It is always recommended to have all clients come in every several years for trust review meetings to see if their needs have changed and if updates need to be made to their plans. This year is no different, with an additional opportunity to select certain client situations for a special review.
- For clients who set up AB Trusts to take advantage of the tax savings (and not for remarriage, divorce, creditor protection, etc.) there could be the possibility that some may no longer need that planning tool and could benefit by simplifying their plans and save on the administration fees on the first death. We are considering a possible Amendment Package for those who would fall under this category. We are still thinking through the ethical considerations of this before we roll it out. We’ll keep you posted on these developments.
- For clients who have simple Living Trusts, we recommend you still have them come in for trust review meetings even if they don’t need a major change. There are always major benefits to seeing your clients – solidify relationships, referrals, private seminars, Medicaid pre-planning, GST planning, or other services.
Centers of Influence
For professionals, reach out and communicate with them on the many non-tax reasons their clients should be planning. Schedule networking meetings and CE programs to educate the professionals in your area.
Materials Available for Members
Law Firm Website Postings – We posted two tax law updates to Academy hosted law firm sites, one on December 20th about the then pending changes and the second on January 7th about the current changes. You will find these postings under your Law Firm News section of your site. You can also link to these postings in your mass emails and social media postings.
Snipe or Starburst Copy – “How 2013 Tax Law Changes Impact You!” or “2013 Tax Law Changes Revealed!” – add to any seminar advertising, direct mail or marketing letters
Expect These Updates on Materials
For Prospective Clients (Most of these items will be released in January)
- Legacy Wealth Planning “Estate Planning Myths” Seminar and Handout
- Seminar Handout Insert (to update old stock)
- “Basic Estate Planning” Seminar and Handout
- Academy Blog Posting that can be linked on your own Social Media Accounts and Blogs
- Direct Mail Invitation from Response Mail – updated bullets on estate tax and long-term care planning
- Newspaper Ad – updated bullets on estate tax and long-term care planning
For Clients (Most of these items will be released in February)
- “Trust Tune-Up” Seminar for Clients and Invitation Letter
- Client Review Meeting Letter
- 2013 “Income and Estate Tax” Newsletter Insert
For Professionals (Expect the eAlert next week and the CE Course in February)
- Educational Alert – Much of what we outlined above will be available in the form of an Educational Alert for you to download and use in your emails, social media and letters to professional advisors, clients and prospects to give them an update on what the facts are about the law changes.
Other Items
- 2 Estate Planning Articles
- Academy Reports – 35 reports
We will continue to add items to the Academy website as they become available.
Susan Russel
Director of Member Services
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128
www.aaepa.com
Attention Academy Attorneys:
TAX LAW WEBSITE POSTING
As we wait for the final word on how the estate tax laws will be changing, we created a Tax Law posting for all member websites under their Law Firm News section. If you would like to edit it, you can do so through the website control panel. The posting is titled “The Estate Tax Ball is About to Drop!” Be sure to send an eAlert referencing this posting and link to it on your Facebook page.
Once a new law is passed, here is what will happen
Education CCC
The January Education CCC topic is “Estate Tax Deja Vu” which will discuss the changes as they stand as of the date of the call.
Academy Tax Law Update Items
Each year the Academy updates marketing materials and interactive portions of member’s law firm websites when the laws change. As soon as we know what the tax law will be, we will focus on updating the following items for members:
All of these updates will be made available as they are completed:
- Education provides eAlert announcing changes to consumers and professionals
- Legacy Wealth Planning and Estate Planning Seminars and Handouts
- Tax Law Insert for Newsletter and Handout stock
- Member’s Law Firm Website copy and announcements
- Seminar Advertising and RME Direct Mail
- New Estate Planning Articles
This labor intensive process involves Education, Member Services and Web Services and it typically takes 8—10 weeks. We will post and announce these items as soon as they become available.
The current slides in your seminars refer to the exemption going down to $1 million on January 1, 2013. KEEP THEM IN THE SEMINAR until the law changes. Some of this confusion can bolster your point about how unpredictable Congress has always been. Emphasize that this is no excuse to postpone planning. Pause and ask the audience what reasons most people are planning for.
Happy Holidays!
Susan Russel
Director of Member Services
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128
www.aaepa.com
In a perfect world, aging parents would all get along with their adult children, and end-of-life matters would not place a strain on relationships. Unfortunately, the world is not perfect. As such, dealing with matters of estate planning and administration may not always be rosy. In some cases, it can be downright difficult, such as when a deceased person’s children feel the need to challenge that person’s estate plans.
In a recent case, the daughters of a deceased woman successfully challenged the administration of a will after their mother died. According to the facts, the mother had passed away at a time when all of her financial matters were being managed by a friend. Unfortunately, the daughters had a strained relationship with the mother and knew little about the situation. The mother, who had been battling breast cancer, received a morphine administration just prior to her death, and while the autopsy initially showed that the mother died of breast cancer, the daughters hired another doctor who concluded that the mother died of morphine poisoning.
The daughters then challenged the administration of the estate based on wrongful death. They stated that the friend had unduly influenced the mother’s estate planning decisions. After a significant proceeding, a district court jury agreed.
Even though a notary and the woman’s attorney attested to the fact that the mother was of sound mind when creating estate plans, this did not bar the jury from finding that the friend was acting in her personal interest and that the wrongful death was a matter of interference with the inheritance.
Though in this situation, the tensions were high and the relationships strained, it leads to an important understanding. Even where it may not be easy to discuss end-of-life planning due to strained relationships, it is important to communicate based on these matters in order to help avoid situations that may arise as a result of duress or other undue influence.
Families that are in limbo can seek assistance through mediation, as a mediator can help guide the families to results that satisfy all family members. In the case above, the daughters now have recovered leases to some property owned by the mother, but not any monetary damages stemming from the alleged wrongful death. To avoid such complications down the road, it is essential for children to work with aging parents to come to a thorough understanding of matters relating to estate planning – regardless of how difficult that might seem in times of tension.
Sanford M. Fisch
CEO & Co-Founder
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128
www.aaepa.com
AS PROMISED…. WE’RE OFFERING FACEBOOK FANS A FREE COURSE FROM OUR RECENT SUMMIT!
In a previous blog post, I mentioned that our Associate Director of Education, Steve Hartnett, presented a substantive course on the topic of planning for Blended Families at our recent Fall Summit. The favorable response from our Members and Guests was overwhelming! Due to the evaluation forms turned in by all of the attendees of this session, we felt this would be one of the most popular and beneficial sessions of our Summit to offer the recording and materials to our FACEBOOK FANS.
We are just now wrapping up the editing of the audio recordings and posting the materials … If you’re *not* a fan of the American Academy Facebook page, you may want to head over to Facebook and “like” our page before the end of the week when we plan on posting the link to this great session!
If you know other attorneys who would benefit from the course as well, be sure to tell them we’re giving the course (at no charge) to all of our fans!
Jennifer Price
Director, Member Services, Marketing & Recruiting
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128
www.aaepa.com
A Missouri woman is being accused of 1st degree murder and forgery. The murder weapon: her father’s power of attorney, allegedly forged, naming herself as the agent. The actual murder: directing that her father’s life-sustaining medical treatment be discontinued. The accused, Susan Elizabeth (“Liz”) Van Note has pleaded not guilty to the charges.
This case turns even more bizarre. Prosecutors allege that Ms. Van Note is responsible for the critical gunshot wound that landed her father in the hospital in the first place. They claim that she shot her father and his fiancé in their home shortly before their upcoming marriage. (The fiancée was killed. These charges are being handled separately.)
The prosecutor explains that the actual murder charge against Ms. Van Note stems from the document forgery and from her subsequent action as her father’s health care agent – not from the shooting itself – because it is the termination of medical treatment that directly led to his death.
One unfortunate and shocking detail: Ms. Van Note is actually an estate planning attorney. Presumably your clients and prospective clients are savvy enough to understand that case is an anomaly. And presumably they will understand that you truly are committed to, as Ms. Van Note’s own website states, empowering clients “to make a difference in the lives of [their] loved ones” by providing “honest and sincere legal counsel.” Nonetheless, this case has been picked up by AP and might be appearing in your local paper, so it’s worth knowing that this news is out there.
Randi J. Siegel, MBA, is the President of DocuBank (docubank.com), the largest advance directives registry in the U.S., which ensures that the emergency information and healthcare directives of its 200,000 enrollees are immediately available 24/7/365. Working with estate planning professionals since 1997, Randi frequently speaks at national estate planning conferences and has appeared on radio and television as an authority on registries. A member of the International Society of Advance Care Planning, she is active in health policy and health education related to advance care planning and advance directives and serves as Pennsylvania liaison to the National Healthcare Decisions Day initiative. Randi is an ongoing contributor to the Academy blog.
Academy Guest Blogger
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128
www.aaepa.com
If you are planning on giving a presentation for Continuing Education (CE) or Continuing Legal Education (CLE), don’t forget to double check your to do list… before and after your presentation.
Most states require a 60-day timeframe for course approvals, however, some require 90 days. It’s best to go online for your state to see what their requirements are. This will depend on the designation you are submitting for CE or CLE. Here are some basic guidelines to submit for CE and CLE:
- Which designations are you submitting approval for
- Is your provider status current for each designation
- See if your state requires instructor approval
- Do you submit online or hardcopy
- Create a detailed outline for your presentation
- Complete course approval application
- Prepare critique for presentation
- See requirements (does approval need to be posted)
- Certificate of Attendance prepared (your certificate or state form)
- Have attendee complete critique, collect as they sign out
- Complete certificate of attendance based on hours of attendance
- Submit attendance roster (online or hardcopy)
- Submit any fees associated with attendance reporting
- Mail attendee their Certificate of Attendance with reminder for them to keep the certificate in their CE/CLE file for their records
Make sure you keep a complete copy in your file for 3-5 years, depending on what your state requirements are. You will most likely be contacted by at least attendees who have misplaced a certificate, not to mention you can be audited any time by your State.
Donna Higgins has been working with the American Academy of Estate Planning Attorneys since 1999. She has spent most of that time working with the legal education department as well as qualifying Academy courses and Summit training sessions for CE and CLE throughout the country.
Donna Higgins
Executive Assistant / CE/CLE Administrator
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128
www.aaepa.com
If you want the keys to the kingdom of success, a game changer to turbo charging your estate planning practice, this is the Webinar for you. Learn about the 11 essential estate planning systems that bring order to everything you need to run your practice, from system start to finish. It’s really just that simple, thanks to the entrepreneurial minds of Robert Armstrong and Sanford M. Fisch, co-authors of The E-Myth Attorney, and founders of the American Academy of Estate Planning Attorneys (AAEPA).
Running an estate planning practice and elder law business is the ‘here and now’ reality of today. Just look at the statistics on America’s graying population; 79 million baby boomers are due to hit retirement age over the next 20 years. To put that into perspective, 79 million people are about equivalent to Germany’s entire population. Seniors definitely need the assistance of competent, qualified estate planning attorneys to protect and manage their assets. It’s all about getting the right estate planning information into the right hands at the right time.
“Immediate Action You Can Take to Create More Time and More Profit in
Your Elder Law and Estate Planning Practice”
This Webinar is slated for July 19th, 2012 at NOON, Pacific Time teaches you how to:
- Work fewer hours while maximizing your income
- Build the practice you have always wanted
- Keep staff and clients happy
- Pinpoint new efforts you need to include in your law firm marketing plan
- Avoid the things that prevent you from hitting the next level of success
For participating in this Webinar, you receive:
- A signed copy of The E-Myth Attorney
- An invitation to qualify as a VIP guest at the next 8-hour Boot Camp and Summit in San Diego
Entrepreneurial attorneys and key staff in your office, click here and register for our 90 minute Webinar—you won’t regret it.
Jennifer Price
Director, Member Services, Marketing & Recruiting
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128
www.aaepa.com
It’s appropriate this blog post is appearing on April 16, National Healthcare Decisions Day. The initiative is designed to encourage individuals to prepare and discuss their advance medical directives. Advance directives enable families to know what kind of care is desired, should a loved one become ill and not be able to communicate.
Studies indicate 73% of Americans would prefer to die at home, but up to 50% die in hospital settings. It takes courage and determination to carry out a loved one’s wishes for end-of-life care. Knowing what those wishes are and discussing them is the first step.
If a family member says he or she wants to die at home, I recommend the following books for those caring for a dying loved one. The links in the titles (in color) take you directly to the corresponding Amazon.com page.
Coming Home: A Practical and Compassionate Guide to Caring for a Dying Loved One by Deborah Duda
Coming Home provides end-of-life care guidance that helps the reader acknowledge feelings of fear and guilt, and transform them with love. It provides helpful resources and practical information on preparing the home, talking openly about dying, legal and medical considerations, and how to be with someone in their final days. The book was first published in 1981 and the fourth edition came out in 2010.
The Last Gifts: Creative Ways to Be with the Dying by Jillian Brasch, OTR
The Last Gifts shares 17 first-hand accounts by an occupational therapist in a hospice program and her work with dying patients. Jillian Brasch details ways to help family be present and comfortable and help the dying patient to meet their final goals. Written for anyone in the vicinity of a dying person, this award-winning book is practical and insightful, with a direct simplicity that makes it entertaining and easy to read.
Dying the RIGHT Way: A System of Caregiving & Planning for Families by Janice Louise Long
While the title lacks appeal, Dying the RIGHT Way provides a lot of good information. The book draws upon the author’s experiences caring for her parents during their final four years. It is a guide for keeping elders or others requiring long-term care healthy as long as possible. The caregiving information includes tips, forms, checklists, and questions to ask. It also provides guidance for funeral planning and steps toward settling an estate.
The Needs of the Dying: A Guide for Bringing Hope, Comfort, and Love to Life’s Final Chapter by David Kessler
The Needs of the Dying uses comforting and touching stories to provide information that helps meet the needs of families and a dying loved one. David Kessler, a student and coauthor with Elisabeth Kübler-Ross, identifies key areas of concern for the dying: the need to be treated as a living human being, the need for hope, expressing emotions, participating in care, the need for honesty, spirituality and to be free of physical pain.
Any of these books can foster the conversations we need to have with our families on National Healthcare Decisions Day – or any other day, for that matter.
Gail Rubin is a Certified Celebrant who brings light to a dark subject and helps get funeral planning conversations started. Her book, A Good Goodbye: Funeral Planning for Those Who Don’t Plan to Die, has won multiple awards. Learn more at www.AGoodGoodbye.com. Gail is an ongoing contributor to the Academy blog. Contact: 505-265-7215 or email Gail@AGoodGoodbye.com.
Academy Guest Blogger
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128
www.aaepa.com
|
