Estate Planning With 401(k), SEP, and 401(B) Plans

Many of you have retirement plans. If you are reading this article and don’t have a beneficiary designated, stop reading and go designate a proper beneficiary right now! This designation trumps your estate planning documents.

Who Can be Named as a Beneficiary?

  • Individual- 

    Naming an individual as beneficiary of a retirement plan helps protect the account from divorce, creditors and, in some states, bankruptcy and benefits from being subject to favorable tax treatment.

  • Estate-

    Retirement plans payable to an estate are subject to probate which can:

         delay the receipt of such funds

         potentially expose them to creditor claims,

         and necessitate the listing of such assets on the probate inventory

  • Charity-

    Benefits can be distributed to a charitable organization,

    In this plan, the charity receives the benefits free of income tax, as opposed to an individual beneficiary who must pay income tax on the benefits that he receives from a traditional requirement plan.

    Further, any benefits left to charity qualify for an estate tax deduction in a decedent’s estate. This is a win-win.

  • Trusts-

    A trust may be named as the beneficiary of a retirement plan, but it cannot be a Designated Beneficiary.

    However, the beneficiaries of a trust may be treated as Designated Beneficiaries if the trust meets certain criteria.

    The criteria are as follows:

    (i) the trust must be valid under state law;

    (ii) the trust must be irrevocable (either upon creation or upon the death of the owner);

    (iii) the beneficiaries must be identifiable from the trust instrument (essentially, the Internal Revenue Service needs to be able to identify the beneficiary with the shortest life expectancy); and

    (iv) proper documentation (a list of all of the beneficiaries of the trust or a copy of the trust instrument itself) must be provided to the plan custodian by October 31 of the calendar year immediately following the calendar year in which the plan owner died

    If you need help designating a beneficiary or drafting Wills and Trusts, please contact us today! Proper beneficiary designation can save you thousands in inheritance related investment losses.

    817.638.9016

Why Use Elder Law Attorneys?

The name, elder law attorney, makes some individuals think that the attorneys who work at the Weaver Firm only work with senior citizens. Elder law attorneys are those who help people plan for the future–their later years, incapacity, and long term care planning. We also help those who have faced, or are facing, a life changing event. So why use Elder Law attorneys?

A disabled person need not be elderly, yet needs an attorney who understands the nuances and benefits of special needs planning. Government benefits require mountains of paperwork and we help you sort through it.

At our law firm, we definitely work with senior citizens (note that in many cases 55-year-olds are considered seniors) who are having their advance directives, wills and other legal paperwork drawn up. We also work with individuals and families who are facing life-changing or potentially life-altering events.

ELDER LAW ATTORNEYS ARE NOT JUST FOR THE ELDERLY

As mentioned, some of those life-changing events could include: 

  1. Planning for retirement
  2. Facing nursing home or assisted living placement
  3. Buying or inheriting a home
  4. Life changing or potentially life altering surgery
  5. Marriage
  6. Divorce
  7. Child birth or adoption

When working with a Weaver Legal attorney, you’re taking proactive steps to protect your life savings, your legacy, determine who will inherit your estate, putting plans in place in the event you are suddenly unable to make financial decisions, pay your bills or are faced with a life-or-death health situation or hospital stay.

Why Choose an Elder Law Attorney?

Individuals or couples of any age can work with an elder law attorney to have a last will and testament prepared.

Young couples, especially those starting out, buying a house, and having or adopting children should have a will drawn up.  Do you want to decide who the guardian of your children should be, or let the government decide?

What are the benefits of working with an Elder Law Attorney? 

If you’ve lived through the death of a loved one and if they didn’t have a will in place or they hadn’t made their final wishes known, you were left to “take care of things” without really knowing their wishes.

When you haven’t spoken with an elder law attorney to have your will or advanced directives drawn up you are leaving your family to face a burdensome task in addition to dealing with the grief of your passing.

Why hire our Attorneys? 

It is better to be proactive because you simply don’t know if you will be the victim of an accident that could leave you debilitated and unable to make decisions on your own behalf. If you haven’t named a Medical Power of Attorney, the decisions on your medical care may be left up to the medical team and not your family.

Contact us today for Elder Law Needs. 817.638.9016 or RWeaver@weaverlegal.net

5 Tips for Preventing Blended Family Legal Problems

Divorce and remarriage are more common than ever today. Blended families require extra attention from estate planning attorneys, but this extra attention to detail is crucial to avoiding costly legal fees for  probate litigation and more. 

Prenuptial Agreements are Your Friends

Two people blending a family can protect their goals and financial resources by entering into a prenuptial agreement. While a prenup may not be necessary for couples entering a first marriage, for a second marriage or any more after that there are all sorts of complex issues that may make such an agreement not only useful but necessary.

  1. Before getting married, people should discuss estate issues with their new intended spouse;
  2. A prenup ensures that both parties enter into the relationship with a clear understanding of assets and intentions;
  3. Both sides have a chance to discuss this plan with an attorney. 

Separate Checking & Savings Accounts

We encourage newly married couples to clarify any ground rules up front regarding “yours,” “mine,” and “ours” in order to avoid confusion. Understanding each other’s finances is key to avoiding fights down the road. Many people will start out having separate checking and savings accounts, primarily using them to pay for personal expenses, including those for children from a previous marriage. Don’t combine your accounts before speaking to an attorney!

If you choose to maintain a joint account for ongoing expenses as a couple, it’s important to discuss how much each spouse is going to contribute monthly – an equal amount or a percentage. 

Update End-of-Life Medical Documents 

Who gets to make end-of-life decisions? If people don’t put their wishes in writing, their loved ones can be left with legal disputes and family fights at one of the most difficult times in their lives.

Talk with your future spouse about this issue.

Children from a previous marriage may have very different ideas about who should make decisions about health care and what decisions should occur. Without specifying those wishes in a living will, also called an advanced healthcare directive, you are looking at thousands in potential litigation.

Update Your Will & Other Documents

In our experience, the ugliest family disputes that occur after someone passes away are not about money but possessions with sentimental value. Even the smallest item can have a significant emotional value, and squabbles over these belongings can cause rifts that are difficult to heal. Discuss your intentions with your family BEFORE you pass away.

Trusts should be as specific as possible about what each beneficiary is to receive. Once again, add this to your discussion.

For those who wish to leave assets to stepchildren, it’s important to include those directives in the trust or will. Stepchildren are not generally considered legal heirs, and they won’t inherit anything without being named in these documents. This is a rue awakening to those who don’t receive an inheritance when expected.

Estate plans can also become complex when a person wants to provide for his or her surviving spouse and still give the children access to inheritances as soon as possible.

For people with children by a previous marriage, a trust can be a good way to protect their inheritance. It can also be used to help ensure that any previous spouses or step-children who were part of that marriage are not inadvertently disinherited by the new relationship.

Prevent Legal Issues For Your Blended Family – Talk To Professionals

Experienced estate planning attorneys understand the unique challenges facing blended families. If you need to discuss the use of trusts or other asset protection strategies, please contact our office. We encourage people to have discussions and to communicate clearly with loved ones about their final goal: a happily blended family that remains a family after the parents have passed.

Avoid litigation. Plan Ahead. I’m glad to help you with questions about preventing legal problems for your blended family. Give me a call at the Weaver Firm – Attorneys at 817-683-9016 or visit WeaverLegal.net to learn more about our services. 

travis-r-weaver

Travis Weaver, Attorney

Nursing Home vs. Assisted Living: Who They Help

group photo canoeing down riverLawyers with experience in nursing home qualification, including those at the Weaver Firm, provide assistance in creating an advanced plan to get care you require as you get older or if you experience illnesses or injuries that make you unable to care for yourself any longer.  

As you experience age-related illness, there is a substantial chance you will some day require care in an institutional care environment. In fact, as Wall Street Journal explains, more than 70 percent of people who reach the age of 65 will require nursing home care at some point in the future.  

Start planning now. Medicaid has a five year loopback period for gifts. VA Aid and Attendance has NO LOOKBACK period as of this post, but changes are coming.

An attorney can help you to understand your options for nursing home care or other types of care

In particular, you should consider the differences between nursing homes and assisted living facilities so you can make a fully informed choice regarding which environment is right for you.

Assisted living vs. nursing home long-term care

Assisted living facilities and nursing homes both provide an option for seniors who can no longer live independently. But, as the New York Times explains, there are important differences:

  • Assisted living facilities generally provide a more home-like environment while nursing homes have a more institutional or hospital-like feel.  
  • Assisted living facilities involve seniors living more independently in their own rooms or their own apartments
  • Nursing homes generally provide semi-private or private rooms with much less privacy and autonomy than assisted living facilities offer.
  • Assisted living facility may offer housekeeping services, meals, activities, and some help getting medical care, assisted living facilities typically do not provide the same level of supportive services that a nursing home does. 

The New York Times also indicates that nursing homes are more heavily regulated than assisted living facilities.

Who pays for nursing home or other long-term care? 

  • Medicaid will cover the costs of nursing home care for eligible seniors who can qualify for means-tested benefits.
  • Assisted living facilities are often not covered by Medicaid or any other kind of insurance policy.
  • Assisted living facilities ARE covered by VA aid and attendance if you or your spouse was a veteran during time of war.
  • Some facilities have an assisted living section and a nursing home care section for seniors who are attracted to the idea of assisted living but who may need nursing home care in the future.

Getting help from nursing home lawyers

Because the costs of care are expensive and are not covered by Medicare or by most private insurance, our attorneys at the Weaver Firm provide assistance with the creation of a Medicaid or VA Aid and Attendance plan so you can protect assets while getting Medicaid or VA to cover the costs of your care.

Call 817-638-9016 today to schedule a meeting with Weaver Firm attorneys to review your options for long-term care.

Estate Planning for Entrepreneurs

Forbes published a great article showing 9 out of 10 entrepreneurs have out of date Estate Plans. What exactly is an “out of date estate plan”? Basically a plan (i.e. Wills, Power of Attorney, Living Will) that hasn’t been looked at in more than five years.

Here are five reasons to update your Estate Planning documents regularly:

  • changes in the law: tax laws change yearly
  • changes in your family: births, deaths, divorces
  • changes in where you live: did you move to Texas recently?
  • changes in your Estate: did you win the lottery or purchase a home in another state?
  • changes in your life: were you diagnosed with an illness?

Check out the article and understand that it is never too late for Estate Planning…until it is too late

h/t to Professor Beyer and his blog at http://lawprofessors.typepad.com/trusts_estates_prof/ for the article

817.638.2022 or TWeaver@www.weaverlegal.net