This afternoon I was able to visit with a client when he came in to pick up his estate planning portfolio. He remarked that “we sure did have to get a lot of things cleaned up. Thank goodness we found out about that. We would have hated to leave that mess for our daughter.” What he meant by that is that in the processing of transferring property to his trust, we discovered several issues with land he owned in Kentucky. Now I am a Missouri attorney and focus on Missouri law so when clients need a real estate deed drawn up to transfer land in a different state to their revocable living trust, we often work with attorneys in the state where the land is located to get the real estate transferred.
In this instance, the land was a vacation house located near Kentucky Lake. While working to transfer the lake house to the client’s trust, several issues with the current deed were discovered. It took a couple hundred dollars and about 3 weeks to get these issues cleared up. Yet, had my clients not taken care of these issues and left it for the daughter to deal with, it would have likely cost her thousands of dollars and taken months! There is an important lesson here – if not addressed by you, issues typically become more expensive and difficult to fix, not easier.
So often my clients tell me that they have procrastinated doing estate planning for years. Perhaps in part because of that procrastination, when they finally choose to get their affairs in order, they almost always report feeling relief! If the time is right for you or a loved one to get your affairs in order, we’re here to help. Each day we help educate individuals what their options are and help them implement solutions that make things easier on their spouse and children.
In March, I moved law offices. As anyone who has ever moved knows, it takes a little bit of time to get unpacked and set up. Yet, after several weeks of late nights and working weekends, we are full-speed ahead at our new location at 2007 Independence Street in Cape Girardeau.
This afternoon I have a young client coming in. In fact, she just celebrated her 18th birthday. So you may be asking yourself, why would a young woman need to come see an estate planning and elder law attorney shortly after her 18th birthday?
The reason: because her deceased father didn’t do any estate planning, now his 18-year-old daughter has to handle getting his affairs in order. Perhaps that sentence is a little blunt, perhaps even harsh. Yet, it is also true.
An Estate Plan serves as a blue print for you and your family. It puts you in control. Yet, without it, you may leave a mess that your loved ones have to sort out.
As so often is the case, the father in this scenario didn’t have a great deal of wealth. By most economic standards, he would have been considered lower middle class. Yet, regardless of one’s wealth, there are a few foundational estate planning documents everyone needs: A Durable Power of Attorney, a Healthcare Directive, and some type of transfer instrument like a Will or Trust. By not having these, the little property he did pass on to his children created a legal mess… complete with underage beneficiaries, unintended beneficiaries, and completely unnecessary court costs and probate fees.
Planning is better – not only for you, but especially for your loved ones.
On the door of my new law office, it says “Estate Planning & Elder Law”. It didn’t take long for someone to ask the question, “So what is Elder Law?”
Elder Law means that we strive to serve a broad range of legal issues that affect seniors including business succession planning, estate planning, long-term care planning, Medicaid planning, and asset protection. Two examples will illustrate the type of issues that we help clients with on a day-to-day basis.
Recently I had a single client who owned an apartment building and a few other pieces of real estate. He needed a Limited Liability Company created for his real estate holdings, and then he wanted a trust to ensure that things were simple and easy for his two children. That’s more of a classic estate planning client. That’s one type of case we work on each day.
Another recent client was a husband and wife. The husband was 11 years older than the wife. Also, the husband’s family had a history of experiencing health issues about age 70. The husband’s father had required skilled nursing home care for several years and it had wiped out all of his parent’s savings except for his mom’s house. What this couple wanted, especially the husband, was a plan or strategy, so that if one of them went into a nursing home, the other would not end up broke. This is more of an elder law client. For them, we were able to use a trust as part of a strategy to protect their assets.
More and more, individuals are telling us that they want to be proactive and do what they can to protect their hard-earned assets. We can help you do that. Our clients often report how much they learned about strategies they didn’t even know existed during their initial consultation. If you would like to schedule an initial consultation, give us a call at 573-334-5125.
The Law Office of Mark McMullin – Estate Planning & Elder Law
Recently four guys from the area contacted me. Together they planned on purchasing over a dozen rental properties. Each brought something to the table: capital to finance the project, construction and rehab skills, accounting and paperwork, and experience with rental properties. The one with the experience was the one who insisted they set up a Limited Liability Company (LLC) and carefully design their Operating Agreement.
The partner with experience knew that often times businesses don’t work out as planned, and reality often differs from projections. So these partners asked me to draft an Operating Agreement that not only detailed how the LLC was to be managed, who had decision making power, what decisions required only one partner’s signature and what decisions required all partners to sign, but also what we call “off ramps”.
“Off Ramps” are designed exit strategies from the business. These can be voluntary or involuntary. If a partner decides to retire and move from the area, an “off ramp” has already been designed in the LLC’s Operating Agreement to allow for voluntary withdrawal. Or if a partner stops pulling his weight and decides to let his other partners do all of the work, an involuntary “off ramp” exists where that partner’s interest can be bought out based on a pre-determined formula.
If you’re in business with partners, you need to have a carefully crafted partnership agreement. Local area accountants often refer individuals interested in creating an LLC or other business entity to our office. If you’re thinking of starting a business, let us help you get started on the right foot. We can assist you with getting your Missouri LLC up and running quickly.
While trusts can be confusing at first to the lay person, trusts can be a valuable estate planning tool. Common types of trusts in Missouri include:
• Revocable Living Trusts. Becoming increasingly popular for Missouri residents because it allows families to avoid the court-supervised Probate procedure at death and provides for a faster and less-costly estate settlement at death. A Revocable Living Trust (RLT) can be extra beneficial if you own real estate in other states allowing your family to avoid multiple probates.
• Trusts for Minors. If there’s a chance your minor child or minor grandchild will inherit assets from you, then you need to make sure those assets will be placed in trust so the courts won’t need to supervise the minor’s assets and so that the minor will be protected from squandering the assets when he or she reaches the age of 18.
• Trusts to Minimize Estate Tax. Not as popular now since the estate tax exemption has increased from $600,000 to $5,490,000, but if estate taxes are a concern, you need to consider these irrevocable trusts.
• Special Needs Trusts. If you have a child or loved one with special needs, make sure any inheritance you leave that child is placed in a Special Needs Trust. This will help the child continue to receive government benefits (Medicaid and/or Medicare) while using the funds you put in their Special Needs Trust to supplement their care.
• Trusts for Blended Families. These are especially popular when a spouse has children from a prior marriage. A trust for a blended family is a way to make your assets available for your spouse after you die, but when your spouse later dies, the trust assets will revert back to your heirs, not your spouse’s heirs.
• Charitable Trust. A vehicle which allows you to transfer appreciated assets to a charity, have them sold with no tax consequences, receive an income off those assets for your lifetime, and at your death the remaining trust assets are passed along to your favorite charity or charities.
If you are interested in learning more about planning options for you and you loved ones, I’m happy to help. You can reach me at my law office in Cape Girardeau at 573-334-5125.
Been working with a New Madrid family that has worked hard over the last several decades and have accumulated an estate that is likely to cause there to be federal estate tax when they die. They were anxious to determine what needed to be done to reduce the ultimate federal estate tax burden.
We had a fairly in depth discussion about the pros and cons of annual gifting to their descendants – and perhaps even the spouses of their descendants. In particular, they wanted to know if they could back-date transfers so that it would appear that the transfers were made last year – enabling them to reduce the value of their estate even further.
I hated to burst their bubble, but I had to be the bearer of bad news. They could not, this year, do transactions that would appear to have been made last year or the year before. They thought, just maybe, that if the check was dated last year, that would be OK even though the check was deposited by the donee until this year.
That’s why it is so important that you get the education you need so that you can take advantage of tax reduction and other estate protection techniques that can be taken advantage of if you act early in the process.
Today I had a phone call from a potential client. She had just received a notice that her wages were going to be garnished. She was concerned that if her wages were garnished her family wouldn’t be able to pay their remaining bills to keep the lights on and food in the pantry. A co-worker of hers had suggested a Chapter 7 bankruptcy. She was interested in the “fresh start” that offered but was concerned if she could keep her vehicle if she filed bankruptcy. She explained that her vehicle was only a year old, she was current on her payments, and some other details.
I was able to assure that if she wanted to, she could keep her car. The choice was hers.
If you are considering bankruptcy, it is important to consider the different factors in your specific case that will affect the answer for you. These factors include:
The amount of equity you have in the vehicle. Equity is the amount your car is worth minus any debt you owe on it.
Whether you are current (or can get current) on your car payments.
Whether you want to keep your car. You have the option of surrendering your vehicle as part of your fresh start.
Recently I worked with a family who had a family farm just outside Cape Girardeau county. They told me they had three main estate planning concerns.
First, they had two kids. They wanted to make sure that when they were gone, their son and daughter would be treated fairly. It was also important to them that no decision regarding their property could be made without both their son and daughter agreeing to it.
Second, they had about 150 acres. The husband’s father had gone spent several years in a nursing home so he had first-hand experience with his family having to “spend down” their hard-earned savings to pay for his nursing home care. The husband wanted to know what was available so that his wife and kids wouldn’t have to go through a similar experience.
Third, they were involved in a small business and wanted to arrange their affairs so that if they were sued, that no one could take their home away from them.
There are certain types of revocable trusts, irrevocable trusts, and limited liability companies that can be set up in Missouri which can help families solve these problems.
Last week we held 2 estate planning workshops – one in Cape Girardeau and one in Jackson. The major purpose of these workshops is to educate individuals about what happens with no planning and the difference planning can make. I have yet to have someone attend the workshop and tell me that they didn’t learn something of benefit to them.
At the most recent workshop we covered topics that we often get questions about:
What happens to me and my property if I can’t manage it anymore?
What is probate?
I’ve got a Last Will & Testament. I’m fine, right?
What is a trust and why are they so popular?
How can I protect my property from the nursing home?
Our next workshop will be in April. If you would like to attend, call our office at 573-334-5125 or send us an email at firstname.lastname@example.org.