Month: March 2024

Understanding the Intersection of Love and Law

Post author By Sara Thomas
Post date March 29, 2024
No Comments on Understanding the Intersection of Love and Law

Love is wonderful—joyful moments, shared dreams for the future, and yes, some legal considerations too. For married couples, the law has default provisions in place for what happens to your assets if one of you dies, but those default plans may not align with your personal preferences or the life you’ve built with your partner.

If you’re an unmarried couple, the absence of a plan could leave you vulnerable, risking the loss of assets or the inability to make crucial decisions about your property or your medical choices.

To better understand how a lack of planning can leave you and your partner out in the rain, let’s look closer at these important areas that are affected when a relationship ends through death or divorce.

1 | Property Ownership

Let’s say you and your partner purchase a home and other assets together. Without clear documentation outlining ownership rights, a dispute can arise if the relationship ends in a breakup. But breakups aren’t the only danger.

If you aren’t married and one of you passes away, the other partner might find themselves without a rightful claim to the property, potentially facing homelessness or a significant financial loss.

If you own any property with anyone else or if you want to ensure your property lands in the hands you choose in the event of your death, plan for that property as soon as possible.

2 | Healthcare Decisions

In the unfortunate event of a medical emergency where one partner becomes incapacitated, lacking appropriate legal documentation could impede the other partner’s ability to make critical healthcare decisions on their behalf. This can lead to delays in medical treatment or disagreements among family members over the person’s treatment, causing unnecessary stress and complications during an already challenging time.

3 | Guardianship for Children

For couples with children, failing to establish guardianship arrangements in the event of both parents’ incapacity or death can have devastating consequences. Without a designated guardian, children may be placed in the care of individuals who may not align with your wishes or values, leading to potential custody battles and emotional upheaval for the children and your extended family.

If you and your partner end your relationship without coming to a mutual agreement on a guardian for your children, things could get even more chaotic – especially if one of you has documented your desired guardian and the other partner hasn’t.

Worst of all, typical wills don’t cover planning for the needs of minor children sufficiently. It’s why we offer the Kids Protection Plan®, specifically designed to ensure your children are never raised by anyone other than people you know, love and trust, and are never taken from your home, into the care of strangers.

4 | Business Interests

If you and your partner share business interests or investments, the lack of a solid plan could jeopardize the future of these assets. Without clear instructions, the surviving partner may face challenges in managing or transferring ownership of these assets, potentially leading to financial instability or the dissolution of the business.

Be Proactive, No Matter What the Future Holds

In each of the scenarios above, the absence of proactive estate planning measures leaves individuals vulnerable to legal and financial uncertainties. By taking proactive steps that consider what will happen when your relationship ends, couples can safeguard their assets, ensure their wishes are honored, and provide peace of mind for themselves and their loved ones.

Not sure how to start the conversation with your partner?

Start by explaining to your partner your desire to safeguard the life you’re building together. Just as relationships evolve over time, your wishes and how they are documented should too. Continuously engaging in dialogue and revisiting your plans ensures they remain aligned with your evolving needs and aspirations.

Let Us Make It Easy to Plan Ahead

Whether you’ve already started the conversation with your partner or need more guidance, planning for the future of your relationship can feel overwhelming. We can help.

At our firm, we don’t merely dispense legal counsel; we safeguard your love story. We comprehend the profound significance of your relationship and are dedicated to ensuring its protection. And whenever (and however) your relationship ends, we’ll work with you to create a plan that considers these contingencies ahead of time so you and your loved ones can avoid the stress, conflict, and chaos that comes with incomplete planning.

To learn more about how we approach estate planning from a place of heart, schedule a complimentary 15-minute call with our office.

This article is a service of August Law, a Personal Family Lawyer® Firm. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Life & Legacy Planning™ Session, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love.

The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

Tags Divorce, Estate Planning, Marriage, Personal Family Lawyer®

3 Estate Planning Documents Your Parents Need

Post author By Sara Thomas
Post date March 19, 2024
No Comments on 3 Estate Planning Documents Your Parents Need

As your parents gracefully navigate their golden years, ensuring their peace of mind (and yours!) becomes a priority. One of the very best things you can do for your own future, and that of your entire future lineage – your children, grandchildren, and beyond – is to take great care of the people you were born to or raised by.

The questions to start asking are:

How will you help them if they become ill or injured?
Who will take care of their bills and make sure their health needs are met?
How do they want to be cared for, if and when they cannot care for themselves?

The starting place is open conversation and a power trio of estate planning tools swoop in to save the day: the General Power of Attorney, the Power of Attorney for Healthcare (including a Living Will), and the HIPAA Waiver.

Let’s break down why these tools are the unsung heroes of comprehensive estate planning for your parents, and how to bring them up so you can support your parents to get them created or updated, no matter their net worth.

1. General Power of Attorney (POA)

A General Power of Attorney (or POA) grants a person you name (often a family member or trusted friend) the authority to manage your financial affairs if you become unable to do so yourself. From handling bills to making investment decisions, the General POA ensures that your financial matters are handled, whether you’re experiencing a temporary illness or a long-term inability to manage your money, such as in the case of memory problems.

If your parents have assets that you must be able to access easily in the event of their incapacity, you may decide that a POA for accessing their accounts is not sufficient, as it can be difficult to get access to bank accounts even with a POA in place, and will require court action. In that case, the best course of action is to ensure that their assets are titled in the name of a trust, with you or someone you trust as the named successor Trustee, who can step in and handle financial matters for your parents, without any court involvement, when needed.

2. Power of Attorney for Healthcare and Living Will

It’s possible your parents already lean on you for guidance with their healthcare decisions, and it’s equally possible they don’t share details of their healthcare with you at all. No matter which side of the spectrum your parents stand on, the question of what will happen to their healthcare needs if they become seriously ill can feel overwhelming — and trust me, it’s even more overwhelming during moments of medical crisis.

Thankfully, a Power of Attorney for Healthcare and Living Will allow your parents to explain their medical wishes to guide medical providers and family members on what treatments and life-saving measures they’d like to have, even in the toughest of times.

The Power of Attorney for Healthcare designates someone to make these medical decisions on behalf of your parents if they’re unable to do so. This trusted individual becomes the advocate, ensuring that healthcare choices align with your parents’ values and preferences.

Meanwhile, the Living Will – also known as a Declaration to Physicians – outlines your parents’ wishes regarding life-sustaining treatments in the event they’re unable to communicate. From CPR to artificial hydration, this document provides clarity amidst uncertainty, giving both your parents and their loved ones peace of mind that the decisions being made around their care are what they themselves would want.

3. HIPAA Waiver

In the digital age, privacy is paramount – but what happens when privacy becomes a barrier to essential healthcare-related communication? Enter the HIPAA Waiver, the ultimate tool for opening communication roadblocks in times of need.

HIPAA (the Health Insurance Portability and Accountability Act) protects the privacy of individuals’ medical records. While this is crucial for safeguarding sensitive medical information, it can sometimes hinder the flow of communication between healthcare providers and family members, especially for the elderly and those incapacitated by an illness or injury.

By signing a HIPAA Waiver, your parents authorize specific individuals to access their medical information and speak directly to their medical providers, ensuring seamless communication and informed decision-making. This is essential in medical emergencies but is also extremely helpful if your parents need help hearing their doctor or understanding their medical advice.

How to Bring Up Estate Planning With Your Parents

The best way to bring up estate planning with your parents is to get your own planning handled first. Then, let your parents know that in the process of handling your own planning, your lawyer raised the question of whether you were an agent under anyone else’s power of attorney, or named as a successor Trustee in your parents’ Trust, or if you are going to be caring for aging parents at some point.

And, if you have worked with a lawyer and they didn’t ask you those questions, give us a call and let’s review your plan and your parents’ planning to make sure that everything you’ll need is dialed in. This can all get quite messy very quickly, and now is the time to talk with your parents.

The Sooner the Better

You might be thinking, “Why the rush? Can’t we tackle this later?” Here’s the scoop: Life is unpredictable, and procrastination can be a costly gamble. Waiting until a crisis strikes to get these tools in place can lead to a whirlwind of legal and emotional chaos, leaving your parents’ wishes unfulfilled and their affairs in disarray.

By proactively planning ahead, you’re not just checking items off a to-do list – you’re investing in your parents’ peace of mind and yours.

Don’t wait for a storm to hit – schedule a 15-minute call today to learn how our unique Life & Legacy Planning process is designed with your family’s well-being in mind, offering personalized guidance and support every step of the way.

Tags Estate Plan, Health Care Directives, HIPAA Waiver, Parents, Power of Attorney, Sandwich Generation

Estate Planning

13 Ways to Show Your Finances Some Love This Year – Part 2

Post author By Sara Thomas
Post date March 14, 2024
No Comments on 13 Ways to Show Your Finances Some Love This Year – Part 2

Last week we explored seven ways to show your finances and your family some love with smart, tax-advantaged financial tips for the new year:

Make a Qualified Charitable Distribution (QCD)
Front-load Your 401(k) Contributions
Set Up a Roth IRA for a Child
Make Donations During Spring Cleaning
Give the Gift of Appreciated Stock Shares
Establish a 529 College Plan
Make a Roth Conversion

If you missed it, check out Part 1. This week, we are continuing the financial love with 6 more tips you can use to benefit your family this month and the year ahead.

Let’s dive in.

8 | Spread The Love With The Annual Gift Exemption

Do not underestimate the power of spreading love through financial generosity. By leveraging your lifetime gift tax exemption, you can minimize estate taxes and provide a significant financial boost to your heirs during your lifetime. Did you know you can gift up to $18,000 per person to an unlimited number of people each year without having to file a gift tax return? This allows you to share your wealth with family and friends in a tax-efficient manner. These gifts not only escape the estate tax but also foster stronger connections and deepen relationships with your loved ones. Whether it’s helping with educational expenses, supporting a dream vacation, or simply offering a helping hand, using this exemption allows you to share your wealth and make a lasting impact on those you cherish most. The current high exemption amount of $13.61 million is set to sunset in 2025, so if your estate is greater than $5M, now is the time to plan.

9 | Allocate More Funds To The Generation Skipping Tax Exemption

As you plan for the future, it’s essential to consider the next generation. By allocating additional funds towards your generation-skipping transfer tax exemption (of up to $13.61 million), you provide a seamless transfer of assets to your grandchildren or future beneficiaries. This strategic move not only minimizes tax implications but also lays the groundwork for preserving your family’s wealth for generations to come.

10 | Make an Extra Mortgage Payment

Your home is more than just a place to live—it’s also a valuable asset that can offer tax advantages. By making an extra mortgage payment on your primary home loan, you can increase your mortgage interest deductions on your tax return. Not only does this reduce your taxable income, but it also accelerates your path to homeownership, saving you money in the long run.

11 | Complete Repairs on Rental Property

Investing in your rental property not only enhances its value but also offers tax benefits. By completing repairs on your rental property, you can offset rental income on your tax return while providing a better living environment for your tenants. It’s a win-win situation that improves your property’s profitability and strengthens your relationship with your renters.

12 | Create a Lifetime Asset Protection Trust

Planning for the unexpected is an act of love towards your spouse and children, and when you know the right tools to use (like we do) you can make sure your family is provided for and protected for generations to come. One of my favorite ways to do this is using a Lifetime Asset Protection Trust. This tool allows you to protect the assets you leave for your children from any future financial trouble, like lawsuits or divorces.

13 | Create Your Estate Plan

Finally, don’t overlook the importance of estate planning in showing love to your family. By finalizing your Will, Revocable Trust, Power of Attorney, and Advance Medical Directive, you ensure that your wishes are carried out and that both you and your loved ones are protected in the event of incapacity or death. It’s a vital step towards providing peace of mind for you and your family, allowing you to focus on enjoying life’s precious moments together. And remember, a plan is more than a set of documents. It’s a lifetime of wise decisions about your life and legacy.

Show Your Love Where It Matters Most

It’s never too late to make loving financial and planning decisions for your loved ones – and yourself!

We know the value of planning for the future. But we also know the value of planning for the life you want today and the legacy that extends far beyond your assets.

Schedule a complimentary 15-minute call to learn how we can help you create a Life & Legacy Plan that will take care of everyone and everything you love.

Tags Annual Gift Exclusion, Estate Plan, Family Finances, Generation Skipping Tax Exclusion, LAPT, Mortgage, Personal Family Lawyer, Rental Maintenance

Estate Planning

13 Ways to Show Your Finances Some Love This Year – Part 1

Post author By Sara Thomas
Post date March 7, 2024
No Comments on 13 Ways to Show Your Finances Some Love This Year – Part 1

While thoughtful financial planning doesn’t sound as fun as a fancy night out or a night in with Netflix, making smart planning decisions with your assets is one of the best gifts you can give – and a gift that keeps giving over time.

This week, we explore seven tax planning tips that not only secure your financial future but also spread love and prosperity to those you cherish most.

1 | Make a Qualified Charitable Distribution (QCD)

Want to spread love to a charity you’re passionate about? Is your retirement account looking good? Consider making a Qualified Charitable Distribution from your account directly to charity. Not only does this fulfill your required minimum distributions, but it also exempts the amount from your taxable income. By giving back to causes close to your heart, you can make a meaningful impact while reducing your tax burden.

2 | Front-load your 401(k) contributions

Show love to your future self by maximizing your 401(k) contributions early in the year as opposed to spreading them out evenly over 12 months. By reaching the 2024 limits of $23,000 sooner, your investments will have more time to grow, potentially enhancing your retirement nest egg even more. It’s a proactive step toward securing financial stability for yourself and your family down the road.

3 | Set Up a Roth IRA for a Child

Want to inspire financial skills in your kids while getting a tax advantage? Teach the next generation the value of financial planning and responsibility by setting up and contributing to aRoth IRA for a child who has earned income. If your child has earned from babysitting or odd jobs, you (and they!) can contribute to a custodial Roth for their benefit, and every dollar invested grows tax-free, providing a solid foundation for their future financial well-being.

4 | Make Donations During Spring Cleaning

Ah, the annual ritual of spring cleaning. This year, let’s infuse this mundane task with a dose of love and generosity. As you sift through your belongings, consider the items that no longer serve you but could bring joy to others. From gently used household furnishings to clothing and books, each item holds the potential to make a difference in someone’s life.

Here’s the cherry on top: for items in good condition, you may claim a charitable deduction on your 2024 income tax return, making your act of kindness even sweeter. So, as you purge the old and welcome the new, keep receipts of your donations – it may add up to some real tax savings.

5 | Give the Gift of Appreciated Stock Shares

Strengthen familial bonds while supporting charitable causes by giving appreciated securities and stock shares directly to your sibling’s favorite charity. By donating your appreciated stock instead of selling it, you can potentially avoid recognizing the gain as your income, maximizing the impact of your charitable giving while minimizing your tax liability. Sweet deal, right?

6 | Establish a 529 College Plan

Invest in the educational future of your loved ones by setting up a 529 plan. While the contributions you make to a 529 account aren’t tax deductible, contributions to these plans grow tax-free and can be withdrawn tax-free when used by your loved one for qualified education expenses like housing, books, tuition, and more. Whether it’s for your child, grandchild, niece, nephew, or another family member, a 529 plan is a gift that keeps on giving.

7 | Roth Conversion

Show love to your retirement savings by considering a Roth conversion on a traditional IRA. If your traditional IRA has declined in value, now is the ideal time to convert it to a tax-saving Roth. Doing so can reduce your income tax liability later on and let you potentially enjoy tax-free withdrawals in retirement. It’s a strategic move that can optimize your retirement income while minimizing tax obligations.

Let Us Help You Show Your Finances Some Love

There’s no time like the present to demonstrate love through practical Life & Legacy Planning®. By incorporating these tax planning tips into your overall planning strategy, you can secure a brighter future for yourself and your loved ones while making a positive impact on your community.

Not sure where to start? We’re here to guide you through every step of your planning journey, from taking inventory of what you have and what’s important to you, to the practical steps of how to plan for the life and legacy you dream of.

Schedule a complimentary 15-minute call with our office to learn more.

Tags 401(k), 529, Appreciated Stock Shares, Assets, Donation, Estate Plan, Finances, IRA, Personal Family Lawyer, QCD

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