Every February, American Heart Month begins as a friendly reminder to think about your heart health. This commemorative month was established in 1963 and prompts us to combat heart disease, the leading cause of death in America. Even with the high mortality rate of Covid-19, heart disease continues to be the dominant cause of death in the United States. Ultimately, American Heart Month is a great time to review your heart health and build healthy habits for the future. Of course, don't forget to consider who will act as your medical agent if you are unexpectedly stricken with a heart attack.
Various states have differing titles for medical agents, including a medical power of attorney, an advanced health care directive agent, a health surrogate, a health or medical proxy, and more. Regardless of the title your state uses, this person will make all medical decisions for you if you ever become too ill to communicate your wishes.
This person plays an essential role in making critical decisions regarding your health. Your medical agent should understand your medical wishes because they decide what care you will or won’t receive by communicating with providers caring for you. Also, keep in mind this person gains access to your private information, so you should consider all these factors before deciding who will act on your behalf.
It is easy to assume anyone close to you is fit to be your medical agent, but this is not the case. Consider someone you know will stay level-headed in emotional situations since everyone handles stress differently. Your medical agent should be reasonably assertive because of the many family opinions and doctor recommendations they will have to navigate. This person should be comfortable silencing others opinion to focus on your wants and needs when making decisions.
Your medical agent should live close to you because something unexpected can come up at any moment. This person will have to act on your behalf quickly and efficiently so that you don’t have to wait for care if you are incapable of speaking for yourself.
It is crucial to make sure your medical agent is willing to set time aside in case of a medical emergency. Having this title is both time-consuming and emotionally draining, so reach out to the person you’d like to act as your medical agent and address any concerns. Doing this in advance will help you choose someone willing to take on this responsibility.
You must choose a medical agent who will make decisions following your wishes. The person you choose needs to set aside their own wants to focus on making the decisions you expressed previously. Your medical agent acts as your voice even if they don't agree with your course of action, so be sure to find someone you can trust to follow your wishes if you are incapable.
Remember, even if you believe someone is right for the title, some states prohibit certain individuals from acting as a medical agent.
Many states don’t allow minors to be patient advocates, but there can be exceptions. Also, remember not everyone over the age of 18 qualifies to act as a medical agent so talking with a professional can help clarify state restrictions.
Not every state restricts health care providers from acting as medical agents, but most do. These restrictions can be overlooked if the health care provider is a family member, but make sure to take the proper steps to allow this. Furthermore, Kansas, Missouri, and Kentucky allow your health care provider to act as your medical agent if they are an active member of your religious organization.
If you haven’t decided who will act as your medical agent, Anderson, Dorn, and Rader can help determine the best fit. If you need someone to act as a backup, our attorneys are willing to build a strong relationship with you to understand your needs in case of an emergency. We will ensure that your wishes are carried out and written as required by state law.
Contact us now to discuss how to properly name a medical agent, as well as discuss other advance care directives.
An estate plan consists of several parts and considerations, including a living trust. A living trust is a legal arrangement set up during a person’s lifetime that places their assets into a trust overseen by a trustee. The living trust also determines how the trustor’s assets will be distributed once they pass or become incapacitated. Some factors that may cause someone to create a trust range from tax benefits and avoiding probate to caring for family members with special needs. See how working with an estate planning attorney to create a living trust will help your family.
Avoiding probate is the most common reason for seeking out a living trust. Probate is the courts’ process of proving a will is accepted as a valid document that can be used to effectively distribute assets. There are several reasons in which you would want to avoid probate. The first is that probate can be a costly way to transfer your assets upon death. There are multiple parties that may need to be paid out during a probate proceeding, including the court, which add up quickly.
Probate is also a very lengthy process. It can take six to nine months (sometimes longer) to fully go through probate. There are many factors, documents, and people involved in the probate process, so it’s easy for complications to arise. Problems such as a contested will or an inability to find clear records of all of the deceased's assets and debts can extend this timeline.
Lastly, your probate proceedings will be publicly recorded for the court, meaning your case will become public knowledge and will be available to anyone. This significantly limits you and your family’s privacy which is not ideal during a family member's death.
A living trust provides tax savings to those estates that are subject to estate or gift taxes. There are many types of trusts to choose from, but the most common are irrevocable trusts and revocable trusts. A revocable living trust allows you to make amendments and changes to the documents as necessary, even during the trustor’s life. An irrevocable trust cannot be amended after the document has been signed, but it does offer significant transfer tax benefits that are not subject to the typical gift tax requirements. When you work with us, we'll make sure to align the type of trust with your family's tax-saving needs and other goals.
When it comes to your trust, it’s important for you to understand that a trust only controls assets that are put, or funded, into the trust. Living trusts need to be continually updated to accommodate changes such as marriage, childbirth, home purchases, and tax laws that could affect the trust. With a living trust, the trustor is able to amend the document to reflect their wishes. Because of this, it’s crucial that you work closely with your estate planning attorney to make sure your assets are properly aligned with your trust. This will not only help you get organized, but it will also make things easier for your heirs when you pass away.
Call our office at (775) 823-9455 or visit us online at wealth-counselors.com to schedule a complimentary consultation.
The field of estate planning contains many different legal instruments that most people have never heard of, so it can be kind of confusing when you start to do your research. On the other hand, there are some estate planning tools that are commonly used that most people have heard of that exist in some variations. As they say, a little bit of knowledge can sometimes lead to misconceptions, so we would like to clear up the difference between some of the basic terms that are often confused.
Everyone has heard of the last will, which is of course the most commonly used vehicle of asset transfer when a person dies. Many individuals are aware of the fact that there is an alternative to the will that prepares assets for eventual distribution while you are still alive. Since the last will is a vehicle of asset transfer, when some people hear the term "living will" they assume that this must be the way that you prepare assets for distribution while you are alive, but this is not the case.
A living trust is the vehicle of asset transfer that is executed while you are still alive. You can actually serve as both the trustee and the beneficiary while you are living so that you retain full control of the resources. But you name secondary beneficiaries and a successor trustee who will distribute the assets to your beneficiaries upon your death or incapacitation in accordance with your wishes.
The living will, on the other hand, is an advance health care directive. It is used to express your preferences with regard to the medical procedures you would accept and those that that you would prefer to deny in the event of your incapacitation. The matter of being kept alive through the utilization of life support systems is at the core of most living wills.
When you are in a position to leave behind inheritances that can have life changing consequences for your loves ones you have a pleasant problem. You may want to make life easier on your family than they were for you, but at the same time you don't want to adversely impact one's motivation and work ethic.
By the time you have reached your twilight years it is likely that your children have become established in their own right. Leaving an inheritance out right to those who have already made it can be done with confidence. But you may have children with creditor problems or you may have younger children or family members that have not yet established themselves. Also, there could be someone in the family with a substance abuse problem, or an individual with a gambling problem. These factors present special planning considerations as you plan your estate.
One way that these types of concerns can be addressed is through the creation of an incentive trust. These instruments involve the naming of a beneficiary and the appointment of a trustee like other trusts, but there is one key difference. You as the grantor of the trust attach stipulations that must be met before distributions from the trust will be made.
If you have a younger heir these may be educational. You could allow for regular monthly distributions as long as the beneficiary remained a student in good standing. Perhaps you could offer an additional lump sum distribution upon attainment of an advanced degree. There are those who take it a step further and stipulate that the trust will match every dollar that the beneficiary earns on the job once he or she enters the workforce to encourage a strong work ethic.
You can include many variations of conditions that you see fit. Incentive trusts can go a long way toward alleviating concerns that you may have about your beneficiaries. It is important however to keep in mind that too many "strings attached" to an inheritance can result in resentment. Compelled behavior may not always be psychologically beneficial. Still incentive trusts are powerful tools and can be effective motivators in many circumstances.
We have all been involved in situations at various points in our lives when we decided to try to fix something on our own. There are times when you can indeed get out your basic tool kit and get the job done, but there are other instances when you learn an important lesson. As you are engaged in the task you see what is necessary, and then you look in your kit and recognize that you don't have the right tool. Knowing the right tools for each job and having access to them is one of the differences between a professional and a dabbler.
Estate planning is one of those jobs that requires the utilization of the proper tools for each circumstance. The one that we would like to take a look at today is the GRAT or grantor retained annuity trust. These vehicles are useful for gaining estate tax efficiency and gifting appreciating assets free of taxation.
The strategy that is employed to make this happen is called the "zeroed out" GRAT. You fund the trust with appreciable assets like securities, real property, or business interests, appoint a trustee, and name a beneficiary. You also decide on the duration of the trust term and the amount of the annuity payments that you would like to receive out of the trust for the term period.
When you fund the GRAT you remove the assets transferred to the trust from your estate for tax purposes, but the IRS does consider the donation to be a taxable gift. However, the taxable value of the gift is calculated using 120% of the federal midterm rate as it stands during the month the trust is created. So, when you set your annuity payments you want them to equal the total taxable value of the trust according to the IRS' valuation methodology. Because your retained interest is 100% of the taxable value, you owe no gift tax on the contribution into the trust. But, any appreciation that exceeds that valuation passes to your beneficiary at the end of the trust term tax-free.
If you have any questions regarding GRATs or other advanced planning techniques, please do not hesitate to contact our firm at any time.