by Dan McCarthy | Feb 23, 2022 | Estate Planning, Trusts and Wills
A letter of instruction (LOI) is an important part of any comprehensive estate plan, whether you’re just starting out or have a plan already in place. A letter of instruction can help your loved ones manage important information about you. A LOI conveys your desires, includes practical information about where to find various items referenced in your plan, and it can provide advice to help those you designate in managing your affairs.
Even with a new or updated estate plan, there exists a lot of information that your heirs need to know that doesn’t necessarily fit into the format of a will, trust, or other estate plan components. In the absence of this information, it is easy for those in charge to miss important items and alternatively become overwhelmed, sifting through all of the documents you left behind. All LOI’s are as different as the persons who wrote them; however, there are some standard data that every LOI should include:
- A current list of people and their contact information to inform of your death
- A list of beneficiaries of your estate plan
- The locations of important documents like your will, trust, financial statements, insurance policies, deeds, and birth certificate
- A comprehensive list of assets such as bank accounts, investment accounts, real estate holdings, insurance policies, and military benefits if applicable
- PINs, usernames, and passwords for debit cards and online accounts
- Usernames and passwords for social media accounts, music or information accounts
- Keys and combinations to digital safes, strong boxes, and safety deposit boxes and their locations
- A list of credit card accounts and any other debts
- A list of organizations in which you belong or are a paying member such as professional organizations, boards, country or golf clubs, social or political clubs, and more
- A current list of contact information for lawyers, brokers, tax preparers, financial planners, and insurance agents
- Instructions for the distribution of personal items with sentimental value
- Instructions for a memorial or funeral service
- A personal message to family members
A note about your digital footprint: your digital world often includes music libraries, storefronts, YouTube channels, influencer social media accounts, etc. When most of us create these accounts, we blithely accepted the End User License Agreement (EULA) without much thought about when we are no longer around to manage its content and activity. A EULA designates the rights and restrictions that apply when using the software known as terms of service (TOS). Naming someone capable of managing your digital assets and their activity is important. Most of your online accounts are not subject to typical estate planning devices like trusts and wills because they are not technically your property. Since most TOS are non-transferable, you will be unable to transfer your online accounts’ ownership legally. However, you can still make a plan for how they are handled when you die.
Once you write your letter, put it somewhere easily accessible and tell your family about it. If you do not want anyone to read the LOI until your death, seal it in an envelope. You should review your letter once a year to be sure it reflects your most current wishes and information. Because your heirs read your letter of intent upon your death, it can be difficult for you to write and have any degree of satisfaction. The final words and conveyances are sobering.
We can help you compose such a letter (as well as other estate planning documents), making sure that it complements and does not contradict your estate plan. Remember that your LOI can bring real peace and be a source of comfort to your grieving family members. It allows them time to contemplate and connect with others to celebrate you rather than sort through documents searching for important papers. Your LOI can also alleviate potential family conflicts and stress because you specifically address personal items’ distribution. Your goal should be to ease the burden for those in charge and gain a sense of peace that you have done all you can to allow your loved ones to focus on reflecting on your life.
When you are ready to take the next step, we will be here to help. If you need assistance or would like to talk about your specific situation, contact our Cincinnati office at (513) 815-7006.
by Dan McCarthy | Feb 16, 2022 | Estate Planning, Health
The COVID-19 pandemic underscores the importance of advance care planning and directives. Responses to vaccinations and understanding their efficacy, reinfection potential, and long-haul symptoms resulting from COVID-19 continue to baffle our scientific understanding. It appears the coronavirus will continue to challenge Americans, indeed the world, as according to an article in Nature, long haul symptoms may include: respiratory conditions, diseases of the nervous system, mental health burden, metabolic disorders, poor general wellbeing, cardiovascular conditions, gastrointestinal system burdens, skin disorders, arthralgia and arthritis, and infections. Our world is forever changed, and so too is our need for planning.
An advance directive pertains to treatment and preferences and the designation of a surrogate decision-maker should you become unable to make medical decisions on your behalf. These advance directives fall into three categories: health care proxy, power of attorney, and living will.
A health care proxy designates an individual to make health care decisions if the other person is medically incapacitated and cannot make their wishes known. This proxy affords the same rights to request or refuse medical treatment as if the individual at risk were capable of making and communicating decisions.
A living will specify the types of medical treatment desired in the case of incapacitation addressing information regarding the following situations: pain relief (analgesia), antibiotics, intravenous hydration, artificial feeding such as a feeding tube, cardiopulmonary resuscitation, ventilators, and do not resuscitate orders (DNR).
Medical advance directives now include specific passages addressing COVID-19 and your desired course of medical treatment. Some advance directives provide express authorization for surrogates or agents to communicate with providers remotely. The directive includes all forms of digital communication such as web conference, telephone, FaceTime, email, etc., and expressly permits medical providers to accept written instruction.
Your advance medical directive can express end-of-life wishes that address the use or withdrawal of specific treatments, particularly intubation, as COVID-19 patients needing a ventilator have poor survival rates. In dire health situations that require intubation, caregivers want and need legal, medical access to advocate for their loved ones, even if they cannot be present due to visitor restrictions or live remotely.
A previously well-drafted advance directive needs small adjustments to accommodate issues of COVID-19; however, it is prudent to revisit an existing document. Be certain to address remote communication authorizations in your directive. If you do not have an advance medical directive, be aware that there are many future unknown health consequences due to COVID-19, its long-haul symptoms, and future vaccination issues that should prompt you to create a directive.
An AARP article describes how these documents are created, whether it is the first time or updating an existing directive. Of course, there is no way to address every possible health condition scenario, but where you can, be explicit about your instructions, best course of actions and empower your health care agent to understand your decision-making process.
We can help by reviewing an existing advance directive, or by drafting new ones for you. We will listen to your wishes and help guide you in making important decisions about your care, where it will be provided, and who will assist you if needed. If you would like to talk about your specific situation, contact our Cincinnati office at (513) 815-7006.
by Dan McCarthy | Feb 9, 2022 | Estate Planning
Suppose the parents have run the family farm for many years. Now, though, they’re getting on in their years and they’re considering moving into a smaller place. One of the daughters and her husband help run the farm, but the rest of the siblings have moved away and they aren’t interested in returning. It’s now time to think about how the farm legacy should be worked out.
The first order of business is to plan the finances so the parents can enjoy a comfortable standard of living in their later years. They may need long-term care in the future, so they should consult an attorney about how to plan most effectively. If they don’t plan, they could lose the farm later to a lien, to reimburse the government if they end up needing Medicaid assistance.
How an Attorney Can Help with Property Issues
Attorneys can also advise about how to avoid problems if a parent re-marries after the first one passes. There’s no telling what can happen to the family property when one spouse is left lonely and finds someone else. Sometimes the results are terrible for family harmony.
Next, it’s necessary to allocate the value of the farm among all the children, so that each child is accounted for once the parents pass. This is by no means an easy process. For a transition plan to be successful, a great deal of planning, preparation, and communication is needed.
Guides and Resources for Farm Planning
Here, it’s best to do some research. There are a host of useful publications that can guide the exploration. Kansas State University provides a twelve-step analysis of questions to be answered.
Farm Bureau Financial Services offers several detailed guides covering various aspects of the planning process.
The Beginning Farmers website is loaded with links to farm-succession courses, blogs, toolkits, farm management advice, and cooperative extension assistance in various states.
For real-life success stories, consult the Successful Farming website, here
https://www.agriculture.com/farm-management/estate-planning/passing-down-the-farm-strategies-ideas-and-real-life-solutions
and here
https://www.agriculture.com/farm-management/estate-planning/tips-on-designing-a-farm-succession-plan
When you’re ready to start planning for your farm and other valuable property, we’ll be ready to help. If you need assistance or would like to talk about your specific situation, contact our Cincinnati office at (513) 815-7006.
by Dan McCarthy | Feb 2, 2022 | Estate Planning, Trusts and Wills
- I don’t own much and neither does my family. Can’t we delay estate planning until we can afford it?
You shouldn’t. It is crucial to give legal authority to a person of your choice, to care for your children if anything should happen to you. You don’t want your children to become wards of the court, or to be delivered to a family member you don’t like. Second, the cost to you at the front end (now) is much less than it could be later when you might face steep legal fees to get the job done. We’re all in favor of lawyers earning a living. We just never want any of our clients to have to pay for costs that are unnecessary or avoidable.
- My son just graduated from high school. He owns nothing but an autographed baseball and a 1997 Chevy pickup. Surely I don’t have to worry about an estate plan for him?
You should. Estate planning isn’t just about owning property. Life needs protecting, too. If your child should lose consciousness in an accident, and he or she is over the age of 18, you as a parent will no longer have the legal authority to decide what medical treatment he should receive. Insurance companies might refuse to deal with you.
Just imagine the stress of it. You’d be there to help, but nobody would be legally required to listen to you. You would have to go to court and get a guardianship – over your own child.
Instead, just think how much easier (and less expensive) it would be to get your adult child to come in to see us, while all is OK now, to make out powers of attorney. Those are documents that convey legal authority onto you, or on people of your adult child’s choice, to act on your child’s behalf if he or she becomes unable.
- Our kids are grown and married. Can’t my spouse and I postpone planning?
You shouldn’t. First, you can never tell when disaster might strike. Second, your kids may seem happily married now, but there’s no telling how long for – and you don’t want to see their, and possibly your, money and property lost in bitter divorce proceedings or lawsuits or bankruptcies.
- Our kids are able-bodied, thank goodness. Why should we worry about protecting disability benefits for them if they don’t need them?
They might not need those benefits now. But if they become disabled in the future, and if they inherit money from you, inherited money could cost them thousands of dollars a year in benefits.
- My doctors know best. I’m not going to tell them how to do their jobs, and I don’t want anyone else doing that either. What’s wrong with that?
Do you want to be kept alive on machines, possibly for years, when you no longer can care for yourself, recognize loved ones, converse, or even swallow? These days, medical machines can breathe for you through a tube in your throat, keep your heart beating, and deliver food and fluids through a tube in your stomach. Many who are on these machines die in the hospital, their arms tied down to prevent dislodging the tubes. Health-care providers are ethically obligated to keep you alive to the bitter end. Few of us want that. You can decline those extreme measures with our carefully crafted legal documents.
- Can’t I just grab a will of the internet, do a transfer-on-death deed for my land, put my kids on my bank account, and call it done?
Just look at some of the complications, in the above answers. An estate plan should protect disabled children’s inheritances from the loss of valuable government benefits. It should avoid probate court. It should protect money from creditors or divorce or remarriage. It should avoid disputes between children as joint owners.
Even a relatively simple situation contains many moving parts. It takes expertise to coordinate the various strategies. Don’t risk a result you wouldn’t want. Call us to create a plan that harmonizes the moving parts, so the gears will work together and you will leave the legacy you intended.
- Can’t I just forget the whole thing and let my kids deal with it after I’m gone?
Sure you can. But your kids will not thank you for leaving a disorganized mess behind, and that may be how they remember you.
Here’s one good idea:
Come see us now. The documents we create for you might be “just pieces of paper,” but they are worth a great deal more than that. At a stressful time when additional hurdles are the last thing you need, powers of attorney and other estate-planning options could save you and your family delay, expense, and heartache. If you need assistance or would like to talk about your specific situation, contact our Cincinnati office at (513) 815-7006.
by Dan McCarthy | Jan 26, 2022 | Estate Planning
In order for your parents to be properly prepared for the future, it is critical to discuss finances with them. To broach the topic, you might bring up current events like the coronavirus pandemic, its effect on economic conditions, and how it relates to the security of their financial future. The conversation should come from a calming place of love and concern. Speak to them respectfully about how the coronavirus pandemic has you thinking about the importance of their planning and preparedness.
Once you begin the conversation, move away from the pandemic as your introductory technique as you do not want to create a sense of panic or fear. Instead, delve into legal and financial reviews, processes, and parameters. US News reports that your parents’ financial analysis should include essential legal documents, financial accounts, and associated vital contacts, long-term care decisions, and claims. If you live apart, lay the groundwork to help them with their finances remotely.
It is generally most comfortable to begin your conversation with legal documents that hopefully your parents already have in a place like a will, trust, living will, and a health care proxy. If your parents do not have these documents, they must retain an attorney and create the ones that best suit their needs. If you need to help your parents manage their finances, you must have a durable power of attorney. A durable power of attorney allows you to make financial decisions for your parents in the event they become incapacitated. This is an essential estate planning document. In the absence of a durable power of attorney, the courts become involved, and solving health or financial issues becomes a lengthy, expensive process over which you have little control. If your parents already have their legal documents drawn up, find out where they keep them and review them carefully. If any documents need to be amended, suggest that your parents meet with an attorney to make the relevant changes. Be sure their documents reflect the state law in which they reside.
Once you have assessed your parents’ legal documents, it is time for some financial discovery. Even if your parents do not currently need help, having an overview of their finances and a durable power of attorney to help them in the future is crucial to their aging success. Begin by listing all of their accounts, account numbers, usernames, and passwords as well as employee contact names. Include insurance policies, the agent’s name, and where the policy is, as well as how they pay their premiums. Include any online medical accounts or list their doctors’ names and office numbers. The idea is to create a comprehensive list of all of these accounts. Gather your parents’ Medicare and Social Security numbers and their drivers’ license numbers. Know where they keep this information so that in the future you will know where to look. Also, learn about any online bill paying or automated, re-occurring activity. These usually include monthly bills like electricity, natural gas, water, etc. but may also include quarterly payments or annual subscriptions.
If your parents still live in their long-time home, discuss if it is viable that they live out their days there, or if downsizing to a retirement community or moving closer to where you live appeals to them. Help them come to a decision that is best for their set of circumstances. If they do not have long-term care insurance or some other mechanism to aid them in times of need, talk about the topic, and try to come up with a solution. If they do have long-term care, be sure you have a copy of the policy, contact information, and the name of the insurer and agent. Review the requirements for receiving benefits so you can help them when they need to file a claim as most policies have a waiting period of 30 to 90 days before benefits begin. Know what to expect.
Digital technology has made oversight of parents and their finances easier than ever as long as you have a durable power of attorney and access to their account information. If they do not yet pay their bills online, or use auto payment, help them set up this option for their monthly bills. Remind them you will provide oversight to ensure proper billing. Offer to help them with their annual tax filings. Your help relieves some pressure on them and provides you with information about the goings-on in your parents’ accounts. For your parents’ peace of mind, you can establish a monthly video chat to let them know their bill payments are progressing normally. Your involvement will allow you to identify any abnormalities in account activity, which may indicate scam attempts.
Having these financial and planning conversations with your parents today can help them live more securely and with less stress as they age. Most parents will try to avoid these discussions with their children because they may not be adequately prepared for what can lie ahead. Conversations that focus on proper legal documents and gathering financial account information will give you the data you need to help protect your parents.
We would be happy to help you and your parents with critical planning documents. We are open and taking new clients, and we hope to talk with you soon about your particular needs. If you need assistance or would like to talk about your specific situation, contact our Cincinnati office at (513) 815-7006.
by Dan McCarthy | Jan 19, 2022 | Estate Planning, Trusts and Wills
During your lifetime, you spend the first part trying to attain financial security and the second part working to maintain it. This adage is why many people spend substantial time and effort maximizing their legacy goals in their estate plan, ensuring their wishes come to pass. Your life’s work and ability to provide for your family provide a gratifying feeling for you and your heirs. However, your careful planning can go awry when last-minute changes become part of the mix, often guided by advice from well-meaning family and friends but not a professional estate planning attorney.
Here are five common mistakes that people make that will upend your estate planning:
- Leaving money to someone while you are alive but not changing your will. Frequently people include cash gifts in their will. For instance, a favorite nephew may inherit $50,000, a childhood friend $100,000, even a housekeeper may receive $10,000 for loyal service. It is quite common when family members meet after a loved one has passed to hear that the deceased has already gifted these particular cash amounts. The mistake is that the gift is given, yet your will continues to reflect the named individual should be given what has already been received. In the absence of an updated will reflecting the gift, the probate process will still award the individual named the cash amount or, in essence, an additional gift. While some recipients will approach the gift during their lifetime as an advancement on inheritance, others may not agree, and the argument may wind up in court.
- Insufficient assets are funding your trust. You may have created your trust years ago, and its assets may have decreased in value and be insufficient to cover the costs of all the gifts associated with your trust. Your good intentions in creating the trust can evaporate, leaving some inheritors short-changed or receiving nothing at all without proper management and preservation of the trust’s assets. It is good to remember the rule that cash gifts get paid first. For example, if you leave your sister one million dollars and the rest in trust to your children, and you die with assets totaling $1,100,000, your sister will receive her cash outright while only $100,000 will remain in trust for your children. If there is no cash to fund the trust, the trust provisions are zero-sum, and the unlucky heir will have to learn of the unfortunate circumstances.
- All assets do not pass through your will. Your estate division is primarily likely to be probate and non-probate assets. Just because you believe your assets’ aggregate is enough to satisfy your gifting, not all assets will pass through the will. You must understand the difference between probate and non-probate assets. Non-probate assets often pass as a beneficiary designation or joint ownership outside of a will. Also, consider the need to deduct any outstanding debts, expenses, and taxes in the valuation of your assets.
- You are adding a joint owner of accounts or real estate. Joint ownership seems a simple solution bypassing excessive planning; however, adding a joint owner can create serious problems. Yes, the bank account or piece of real estate will quickly become wholly owned by the survivor, and yet if your will is reliant on that asset to pay other inheritors, debts, expenses, or taxes, there may be a cascade of problems after you die. Adding a joint owner will often lead to will contests and even prolonged court battles, so be sure your estate planning attorney agrees that the option of joint ownership is a sound one in your particular situation.
- Changes to your beneficiary designations. If you make changes to your beneficiaries without speaking to your estate planning attorney, you can create all sorts of unintended results. This situation is particularly true in the case of life insurance. For instance, the policy can pay your trust in order to meet bequests, shelter money from estate taxes, or pay those taxes. However, if you change the beneficiary, you will have to designate the money elsewhere to cover the existing bequests and estate taxes. In another case, if you have a retirement account payable to an individual inheritor but you change the beneficiary to your trust, you may create adverse income tax consequences.
These are just five of the more commonplace mistakes that can occur in your estate plan. Sadly, there are many others, and so caution and professional legal advice are crucial. While it is essential to review your estate planning documents regularly and perhaps make changes, it is imperative to do so under the advice of your attorney. What may seem like a harmless amendment or change may create unintended tax consequences, cut someone out of receiving an inheritance, or worse yet, set into motion a lengthy court battle that harms family relationships.
Reviewing your estate planning documents with your attorney will ensure that your desired changes will address your new need without negatively impacting your overall intentions. If you need assistance or would like to talk about your specific situation, contact our Cincinnati office at (513) 815-7006.
